In recent years, more than a few homebuilders have been unpleasantly surprised when they discover that another builder is building one of “their” models, often in the same subdivision. This is particularly true when the builder has spent many hours and tens of thousands of dollars attempting to create a unique product which appeals to prospective purchasers. Due to the common misunderstanding that builders are free to “borrow” or even use other builder’s designs, this column will address copyright protection of architectural works and will provide some guidance as to how builders can protect themselves against potential infringement.
Copyright law is governed exclusively by federal, rather than state, law. Generally, a copyright protects the manner in which an idea is expressed. Although architectural plans and drawings have enjoyed copyright protection for many years, in 1990, the Architectural Works Copyright Protection Act was enacted (the “Act”). The Act granted additional protection to “architectural works,” including the building design as embodied in the building itself. Thus, for the first time a party with a copyright in an “architectural work” could recover damage in the event an “architectural work” was misappropriated.
Who holds the copyright in a work? Generally, copyright protection is created when “the pen is put to paper” and a new idea is expressed. The “author” of the work holds the copyright. If the builder creates its own designs and prepares drawings based upon those designs, it is the “author” under the Act. Likewise, if the design is created by one of the builders’ employees, it is a “work made for hire” and the “author” of the work is still the builder. However, if the builder engages a third party such as a draftsman to create the designs, the third-party is the author unless they transfer their rights in the design to the builder. Thus, in the absence of an agreement to the contrary, a draftsman could resell the same drawings to numerous builders with impunity. Therefore, a builder which desires to avoid having this occur should obtain ownership of the copyright by executing appropriate transfer documents.
In order to protect its copyright, although not required, builders should always indicate on their drawings and marketing materials, that they are the copyright holder by placing a ©, the abbreviation “copr.” or the word “copyright” followed by the first year of publication and their name. For instance, © 2004, ABC Custom Homes. Doing so will negate any claim of “innocent infringement.” Additionally, the builder should register their copyright with the Library of Congress Copyright Office. This can be done by completing Copyright Office Form VA and providing it with a copy of the work and the nominal filing fee to the Copyright Office. Information Circular 41 provides detailed information regarding the filing process and requirements. It can be found at www.copyright.gov/circs/circ41.html. If a copyright is registered, in the event of a later infringement, the author may be entitled to substantial statutory penalties as well as attorney’s fees from the offending party. Registration is also required prior to bringing an infringement action. However, if registered after the infringement, statutory damages and attorney’s fees are unavailable.
Generally, if a copyright is infringed upon, the author is entitled to the fair market value of the plans and all profits attributable to the infringement. Importantly, a party cannot avoid liability for copyright infringement by making minor changes in the design. If a builder typically makes $25,000 profit on a particular model and it is infringed upon, it should be entitled to those profits from the infringing party as well as the value of the plans themselves.
In conclusion, all builders should understand that they cannot reproduce other builders’ designs as they have no rights in those designs. Additionally, builders which value their designs should protect them against misappropriation and place themselves in a position to recover substantial damages if it does occur.
Disclaimer: The foregoing discussion is not intended to constitute legal advice but is provided solely for informational purposes. You should consult with a competent construction attorney regarding any of the issues discussed herein.
Karl Berg is a Colorado Springs construction lawyer and a partner at Mulliken Weiner Karsh Berg & Jolivet, P.C.. He can be contacted at kberg@mullikenlaw.com or 719-635-8750.
