EMERGING COPYRIGHT ISSUES IN THE RESIDENTIAL BUILDING INDUSTRY

An emerging issue facing builders involves the unauthorized use of building plans. Builders spend much time and effort working with architects and other design professionals developing floor plans for their models. It is important for builders to understand what their ownership interest is in these plans, and how to protect these plans from unauthorized use. It is also important for builders to know to what extent they can legally use other people's plans.

Generally, house plans are considered architectural drawings, which are protected by U.S. Copyright Law. Copyright is a form of protection provided by the laws of the United States to the authors of "original works of authorship" including house plans. This protection is available to both published and unpublished works. Copyright protection exists from the time the work is created in a fixed form. The copyright in the work of authorship immediately becomes the property of the author who created the work. Only the author or those deriving their rights through the author can rightfully claim copyright. In the case of "work made for hire," the employer, not the employee, is considered the author. In the case of "joint authorship," both authors are deemed the owners of the copyright. Details regarding both "work made for hire" and "joint authorship" are discussed further below.

Copyright Secured Automatically Upon Creation. The way in which copyright protection is secured is frequently misunderstood. No publication , registration, or other action in the copyright office is required to secure copyright. There are, however, certain definite advantages to registration. See infra. The use of a copyright notice is no longer required under U.S. Law; although it is often beneficial. Use of the notice may be important because it informs the public that the work is protected by copyright, identifies the copyright owner, and shows the year of first publication. Furthermore, in the event that a work is infringed, if a proper notice of copyright appears on the published copy or copies to which a defendant in a copyright infringement suit had access, then no weight shall be given to such defendant's interposition of a defense based on innocent infringement to mitigate actual or statutory damages. Innocent infringement occurs when the infringer did not realize the work was protected.

Form of Notice for Visually Perceptible Copies. The Notice for Visually Perceptible Copies should contain all of the following three elements:

1. The symbol which is ©, or the word copyright or the abbreviations copr.; and

2. The year of first publication of the work; and

3. The name of the copyright owner. Example: © 2004 John Doe.

Registration. In general, copyright registration is a legal formality intended to make a public record of the basic facts of a particular copyright. Registration, however, is not a condition of copyright protection. Even if the registration is not a requirement for protection, the copyright law provides several inducements or advantages to encourage copyright owners to make a registration. Among these advantages are the following:

1. Registration establishes a public record of the copyright claim.

2. Before an infringement suit may be filed in Federal Court, registration is necessary for works of U.S. origin. If made before within five years of publication, the registration will establish prima facie evidence in Court of the validity of the copyright and of the facts stated in the Certificate.

3. The copyright owner is precluded from recovering attorneys' fees, otherwise allowed, for infringing activity that occurred prior to the date of registration.

To register a work, you need to send a properly completed application form, a non-refundable filing fee of $30.00, and a non-returnable deposit of the work being registered. The copyright registration is effective on the date the copyright office receives all the required elements in acceptable form, regardless of how long it takes to process the application and mail the certificate of registration. To register house plans, the builder should use Form VA.

Ownership of Copyright. As indicated in the opening of this discussion, ownership of a copyright vests in the "author" of the house plans. Who is deemed the author, and accordingly, who is able to claim ownership of copyright can be a complex endeavor given the commercial realities in the residential housing industry.

Work Made For Hire. Section 101 of the Copyright Law defines a work made for hire as "a work prepared by an employee within the scope of his or her employment." If the contractor has an in-house design team that prepares architectural drawings used in constructing homes, the contractor owns those plans under the work made for hire doctrine. The most common practice, however, is for the contractor to out-source plan development to an architectural firm, design firm, or even the local lumberyard. In these case, it is the architectural firm, design firm, or lumberyard that is the owner of the copyright, not the contractor. Accordingly, unless the contractor arranges for the transfer of copyright ownership regarding the completed plans, the contractor will not have standing to initiate a copyright infringement action against a competing contractor that is also using the plans.

Joint Authorship. Section 201 of the Copyright Law provides that where a work is prepared by two or more authors, with the intention that their contributions will be merged into inseparable or interdependent parts of the unitary whole, both authors are deemed the owner of copyright in the work. Accordingly, where a contractor and architectural firm, design firm, or lumberyard work together to create a plan, it is possible for both the contractor and other party to be deemed to own the copyright. In these cases, however, even if the contractor contributes ideas to the design, directs changes, exercises approval power at the completion of each stage of development of the plans, where the architect or deign professional controls how the ideas/changes are incorporated into the written plan, the Courts do not conclude the contractor is a joint author, but rather merely an involved customer - which precludes initial copyright ownership in the contractor.

Transfer of Copyright. Any or all copyright owner's exclusive rights or any subdivision of those rights may be transferred, but the transfer of exclusive rights is not valid unless that transfer is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent. A way for contractors to protect their ability to bring an infringement action based on plans they pay for, but are authored by an out-sourced design professional, is to arrange for an assignment of the copyright from the design professional.

Copyright Infringement Cases. In order to prove a copyright infringement case, the plaintiff must show: (1) ownership of the copyright; and (2) copying. In order to show copying, case law mandates that the plaintiff show access and substantial similarity. Access is defined as the opportunity to view the copyrighted work. Substantially similar is viewed as whether an ordinary observer would conclude that the defendant's work was taken from the copyrighted source. This test focuses on the overall similarities, rather than minute differences. Another way of proving copying is where the works are so strikingly similar as to preclude the possibility of independent creation.

In Ronald Mayotte & Associates v. MGC Building Co., 885 F.Supp. 148 (U.S. D.C., Ed. Mich. 1994), the Federal District Court found that the house constructed by defendant builder was "substantially similar" to the house that was the subject of the architectural firm's copyright floor plans, for the purpose of determining whether inference of copying was established in the infringement action in light of identical placement of rooms, fireplace, garage, angled main entrance and circular stairwell, similar arrangement of kitchens and bathrooms, and similar dimensions.

Likewise, in Arthur Ruttenberg Corporation v. Parrino, the U.S. District Court in Florida found that a comparison of the final plans for defendant's new home and the copyrighted plaintiff's architectural drawings revealed a remarkable number of similarities, including, but not limited to: the wall angels, the placement and number of rooms, the fireplace, the miter glass in the entrance way, the placement of skylights, the kitchen design, and the three car garage and t.v. niche. In fact, the Court found that "[a]n average lay observer would recognize defendant's new home plans as having been appropriated from the copyrighted plaintiff's plans.

Damages. In a copyright case, the plaintiff may elect between two different kinds of damages. One, actual damages and any additional profits of the infringer attributable to the defendant; or statutory damages between $750.00 and $30,000.00 for all infringements with respect to any one work. Further, the Courts have the discretion to award costs and attorney's fees to the prevailing party in any copyright infringement action.

Ideas Not Subject to Copyright Protection. Ideas such as french doors, vaulted ceilings, kitchen islands, spiral stair cases, main-floor laundries, and three-car garages are not subject to copyright protection. Whereas, the particular expression of an idea can be copyrighted (incorporation into a total design scheme). Contractors and design professional are free to borrow and incorporate novel ideas into their own plans without fear of copyright infringement. The line between merely borrowing ideas and stealing copyrighted architectural drawings is a grey one, which the Courts have likened to obscenity: "we can't tell you exactly where the line is, but we know it when we see it." While this is not a particularly helpful standard, contractors should be aware that where substantial similarities related to "non-functional" aspects of copyrighted expressions, as opposed to functional ideas (sinks in bathrooms) exist, there is risk of infringement.