Under the Copyright Act 1968 (Cth) building plans are automatically protected by copyright the moment that they are put in material form, such as being reduced to paper.
Thousands of people visit display centres and take brochures away with them of the latest styles available. Builders even encourage it. However, these brochures often contain the building plans of the relevant display homes and many people fail to realise that using these plans without the builder’s permission may lead to copyright infringement and can have expensive legal consequences.
This can be seen in the following example. A builder (ABC Homes) provides a quote of one of its standard homes to a third party (Jeff). Jeff takes the plans away to think about it. Jeff then decides not to proceed with ABC Homes but instead to use XYZ Company to construct his house. XYZ Company makes the fatal mistake of not asking the question who created the plans; they simply assume that Jeff created them.
If ABC Homes finds out about the house, it may commence proceedings for copyright infringement against both XYZ Company and Jeff. In such a case, our advice would be that copyright subsists in the house plans prepared by ABC Homes and it is highly likely that XYZ Company has infringed copyright by using Jeff’s plans in the construction of the house.
Steps can be taken to avoid this scenario and the resulting risk of having to pay damages or comply with other remedial orders for breach of copyright.
What if you as the Builder have changed the Plans?
- The law of copyright is complex and simply changing the plans may not be enough to avoid copyright infringement.
- The Courts have indicated that the following factors are important when assessing whether there has been a breach of copyright:
- The common thought solution of changing 10% or a certain number of items is a myth. It is the quality of what is copied not the quantity that is important.
- What methods have you used when developing the plans, have you used your past experiences or simply copied some other party’s plans?
- When looked at objectively, what are the similarities and what are the differences between the plans? Are the differences significant differences as to structure or are they more aesthetic differences?
- Do your plans incorporate a unique design or feature which is substantial to the overall plans and design of the house?
- If the changes you make to the plans are significant changes to the design, they may be enough to avoid breaching another party’s copyright.
The following cases show the dangers of copying another house design and that (where relevant) opportunity costs and lost profit will be considered by a court as the measure of damages where infringement of copyright in a house plan results in the loss of a contract to build.
- In Coles v Dormer & Ors  QSC 224 a couple who substantially copied the design of a house situated 3 doors away (being a French Provincial style home which they had unsuccessfully sought to purchase) was ordered to strip away certain exterior features of the house they built - such as arched and round windows, stone edge trims and dormer roofs.
- In Henley Arch Pty Ltd v Lucky Homes Pty Ltd  FCA 1217, a couple who gave detailed plans prepared by building company A to building company B (in order to save $10,000 in build costs) was penalised for breaching copyright, by being ordered to pay company A $34,400 in compensatory damages (being the full amount they would have paid had they continued using company A). Company B was also ordered to pay over $35,000 in damages for its flagrant infringement of copyright. In that case the Federal Court found, amongst other things, firstly that ‘the substantial and essential features’ of the plan had been copied; and, secondly, that the couple knew or had reason to suspect that their conduct was an infringement – so ignorance could not be argued.
- In the recent case of Milankov Designs & Project Management Pty Ltd v Di Latte  WASC 14 an architectural firm which completed construction of a house for a couple by creating plans that substantially reproduced initial plans prepared by a home designer (whose contract had been terminated) had its defence of innocent infringement rejected and, together with the couple, was ordered to pay over $150,000 in damages to the home design business for copyright infringement, based on loss of profits.
So what can you do to avoid infringing copyright in the first place?
- Steps that a Builder can take:
- If you are provided with building plans by a client, before starting work you should request that the client provide written evidence that they own the plans or that they have permission from the owner to use the plans for the construction of their home.
- In the event that you do not receive evidence of permission, you should ensure that your building contract provides protection in circumstances where the client provides the plans.
- The building contract should provide that the client indemnifies you for all costs and expenses incurred if a claim relating to a breach of copyright is bought against you. Note however that in the Henley case, the builder was unable to rely on a contractual indemnity from the client as a defence.
- Steps that a Client can take:
- Do not take the risk of copying someone else’s design or relying on (non-legal) advice on how to avoid liability as a court may not be sympathetic to ‘innocent infringers’ in this area.
- If you see a design that you want to use in the newspaper, a brochure or constructed home, approach the builder or homeowner and (after confirming who in fact owns the copyright) ask for written permission to use all or certain aspects of that design. Alternatively, the copyright owner (usually the designer) may be able to make modifications to that design to ensure that copyright is not breached.
How can I find out more?
At IRDI Legal, our experienced and specialised Commercial team can assist you with the preparation, review and execution of any building or other commercial contracts.