Copying Building Plans – Cost Savings…or Costly Mistake?

3 November 2016
Adam Walker, Partner, Melbourne

A recent Federal Court decision1 serves as a reminder that copying building plans can be an infringement of copyright, which may attract significant financial imposts on both the landowner and the builder.

Background

Mr and Mrs Mistry (Mistrys) and building designer, Henley Arch Pty Ltd (Henley) were in discussions to design and build the “Amalfi Avenue” house. The Mistrys paid a deposit to Henley. However, the relationship soured before a building contract was signed. Lucky Homes Pty Ltd (Lucky) agreed to build a nearly identical house for the Mistrys at a cheaper price. Lucky in turn engaged a draftsperson to prepare a modified plan based on an annotated version of the “Amalfi Avenue” building plan.

Decision

The Court found that:

  • Henley owned the copyright in the “Amalfi Avenue” building plan.2
  • The Mistrys and Lucky had copied a substantial part of the “Amalfi Avenue” building plan in preparing the modified plan. The plans at issue can be found here in the judgment.
  • The modified plan and the house (built in accordance with such plan) amounted to copyright infringement.
  • Mr Mistry, Lucky and its sole director were required to pay $34,000 in compensatory damages3 and $35,500 in additional damages4 to Henley for copyright infringement. The compensatory damages were awarded based on Henley’s estimated loss, and the additional damages were awarded based on the parties’ flagrant infringement of copyright.5

Lessons

  • For builders: If a client provides you with a competitor’s building plans, assess who owns the copyright before using or developing those plans. In this case, the builder was unable to rely on a contractual indemnity provided by the owners.6
  • For consultants: Do not depart from your own copyright policies. In particular, it should raise alarm bells when clients provide you with building plans without a title block. In this case, the draftsperson gave evidence that she did not follow her usual process of insisting on written proof of copyright ownership in the building plan.7
  • For owners: Seek independent legal advice when it comes to copyright issues. In this case, the Court rejected the argument that the owners were “innocent infringers”8 . The builder was ill-informed in advising the owners that “copyright would not be an issue if they made 15 to 20 alterations to the Amalfi Avenue floorplan”9. Nevertheless, the owners ought to have known that copying the “Amalfi Avenue” building plan was an infringement of copyright.

1 Henley Arch Pty Ltd v Lucky Homes Pty Ltd [2016] FCA 1217 (‘Henley’). See also Coles v Dormer & Ors [2016] QSC 28.
2 See Copyright Act 1968, ss 32 and 35(2).
3 See Copyright Act 1968, ss 115(2).
4 See Copyright Act 1968, ss 115(4). Mr Mistry was required to pay $10,000 to Henley whereas Lucky and its sole director was required to pay $25,500.
5 Henley, [253] – [264].
6 Henley, [283] – [288].
7 Ibid, [71].
8 See Copyright Act 1968, ss 115(3).
9 Henley, [97].

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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