Intellectual Property in Building Plans and Development Approvals: Who Owns the Copyright?

Significant complications can often arise in relation to the infringement of copyright linked to company-specific building plans, as has been made evident in the recent Federal Court case of Carlisle Homes Pty Ltd v Tick Homes Pty Ltd [2018] FCA 973.

With this said, it is possible for both architects and landowners, as well as those who have purchased land with pre-existing development applications (and who are looking to use the approved building plans) to protect themselves by following a few simple steps, and by seeking appropriate legal advice wherever necessary.

The decision handed down in the case of Carlisle Homes Pty Ltd v Tick Homes Pty Ltd [2018] has refused injunctive relief for a building company which had claimed that intellectual property linked to their custom building plans had been substantially copied and sold by a competitor.

This case looked at whether Tick Homes Pty Ltd (‘Tick Homes’), a subsidiary of Resimax Group Pty Ltd (‘Resimax’), had infringed copyright by producing “objectively similar” building plans to those owned by Carlisle Homes Pty Ltd (‘Carlisle Homes’).  Instead of granting the injunctive relief, Justice Murphy made orders for a swift hearing of the substantive proceedings.

The Facts

Carlisle Homes is a substantially sized home building company, which has constructed over 8,000 homes since commencing operations in 2004.  Between 2014 and 2016, Carlisle Homes designed and developed nine original house plans (‘the Carlisle Homes Plans’).  In April 2017, Carlisle Homes’ General Manager Darren Mehl was made redundant, and he was subsequently employed by Resimax as Chief Operating Officer with responsibility for Tick Homes.

Between July and September 2017, Mr Mehl oversaw the preparation of 15 different home building plans, nine of which were the subject of complaint in this case (‘the Tick Homes Plans’).  As part of proceedings, Carlisle Homes made the claim that the Tick Homes Plans were objectively similar to the Carlisle Homes Plans, noting a number of examples:

• The location and dimensions of the alfresco dining area;
   
• The open plan kitchen, meals and living space running lengthwise within the home to increase the spacious feel of the home;
   
• The location and dimension of the master bedroom with en suite bathroom; and
   
• The layout and arrangement of the other rooms and features.

The Decision

When considering whether or not to grant injunctive relief, the court is required to conduct an assessment of:

1. Whether the applicant has established a prima facie case (i.e. there is a probability that the applicant would succeed at trial); and
    
2. Whether the inconvenience or injury likely to be suffered by the applicant if injunctive relief is refused either outweighs or is outweighed by the injury which the respondent would suffer if an injunction were granted.

(Australian Broadcasting Corporation v O’Neill [2006] HCA 46)

While Justice Murphy found that Carlisle Homes was able to establish a prima facie case, he remained unconvinced that the balance of convenience favoured Carlisle Homes.  On that basis.  Justice Murphy refused injunctive relief, instead ordering a speedy hearing of the substantive proceedings.

The decision demonstrates that injunctive relief is unlikely to be granted in intellectual property cases concerning copyright infringements of building plans.  However, it is still too early to predict the outcome of the substantive proceedings regarding whether the Carlisle Homes Plans were copied by Tick Homes.  

What does the Case Law say?

It is well established in common law that when determining infringement of copyright in building plans, the court will firstly consider whether there is a causal connection between the two similar sets of building plans, and then consider the degree of resemblance bettom deardween the plans.^[1]
When determining the degree of resemblance, the court will focus on whether the new plan copies distinctive or important elements of the original plan, even if the new plan contains additions or modifications.  Even small replications of the original plan may be viewed as infringing copyright, if the replication is a distinctive element of the original plans.

The Exception: Implied Licence

In some circumstances, the defendant may be able to claim that they had an implied licence to use the copyrighted building plans.  While architects own the copyright in any building plans that they create, the architect’s clients have an implied licence to use the work of the architect that they have commissioned, unless it is expressly prohibited in their contract.^[2]

This licence can only be revoked by way of an express agreement between the parties, and can be passed on to a third party such as a developer who purchases a property where the plans have already been approved by council as part of the development application.^[3]

Making Sure You’re Protected

1. If you are an architect, you should ensure that you retain all early sketches and draft building plans.  This will demonstrate that you designed the building plans yourself, rather than copying them from another design.  You may also wish to obtain legal advice regarding your terms and conditions, to ensure that they protect your copyright in your building plans.
    
2. If you are a landowner who retains an architect to design building plans, you should ensure that your implied licence to use the building plans is not excluded in your contract with the architect.  If you are wishing to sell the land prior to development, you should also ensure that the contract does not exclude an implied licence to third parties who purchase the land.
    
3. If you purchase land subject to a pre-existing development approval and want to use the approved building plans, you should ensure that the vendor has disclosed whether there is any agreement between the vendor and the architect that the building plans cannot be licenced to a third party. If there is no such agreement, then you can assume an implied licence to use the plans subject to the development approval.

If you require advice regarding the use of building plans included in an existing development approval, please do not hesitate to contact Coleman Greig Lawyers’ Building and Construction Law team.

^{[1] Tamawood Limited v Habitare Developments Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2015] FCAFC 65.}

^{[2] Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 16 IPR 87.}

^{[3] Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd [2006] HCA 55.}