Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Think of a copyright infringement suit and what comes to mind? A ripped-off lyric or tune? Perhaps a book chapter or magazine article? Think again. More and more these days, the alleged knockoff at issue in copyright litigation is a building. Under a little-known 1990 federal law, architectural works may be copyrighted — not only the plans but also the structures themselves. Though the 11-year-old law has been slow to catch on, that’s changing. Designers of copyrighted buildings are beginning to win big damages from copycats. “We have entered this new realm,” says Edward Samuels, who teaches copyright law at New York Law School and is author of “The Illustrated Story of Copyright.” Before the 1990 law, building plans could be copyrighted because they were drawings, says Samuels. The buildings they depicted could not be protected, however, because they were considered utilitarian. Now buildings are no longer merely functional, under the law. Disputes over them are ending in multimillion-dollar verdicts. In September, a Norfolk, Va., jury awarded $5.2 million to an Austin, Texas, architectural firm whose home designs were used by Virginia builders to construct more than 300 homes. Kipp Flores Architects LLC v. Signature Homes LLC, No. 2:00cv831 (E.D. Va.). The verdict is believed to be among the largest in architectural copyright cases, says plaintiff’s co-counsel Louis K. Bonham, of counsel at Houston’s Rosenthal & Osha. The damages are second only to the $7.7 million awarded last year by a California jury in a dispute over a truck stop’s floor plan, Bonham says. The verdicts are noteworthy, say attorneys who practice in this area, because most of these disputes settle for significantly smaller amounts. But even the settlements are nothing to sniff at. Bonham recently settled a case for a different architect client for $1.5 million plus an option to buy the copycat development. The Dallas architect alleged that his design for an upscale apartment complex was ripped off by an Indiana developer. The plaintiff had presented the design prospectively to the developer, but never heard whether it was selected. Ultimately, a former employee of the developer e-mailed the architect that his plan was being copied for the project. So what if the former employee saw the plaintiff’s plans on the desk of the defendant’s architect, says defense counsel Stephen E. Zlatos, partner at Woodard, Emhardt, Naughton, Moriarty & McNett in Indianapolis. The design was one of several considered for the project. The case settled because of the possibility of huge damages — from $10 million to $20 million, says Zlatos. “The risk was simply too great,” he says. Humphreys & Partners Architects LP v. Gibraltar Properties, No. IP00-0854-C-H/G (S.D. Ind.). TAKING A HIT Defendants can get slammed because the law allows for statutory damages, designed to deter future infringement, as high as $100,000 for willful violations. Damages add up when they include disgorged profits from the copycats. Take, for example, the $1.5 million settlement in Humphreys. The architectural fee would have been only a couple of hundred thousand dollars, Zlatos says. Factoring in the profits of a large, high-end rental property takes the potential damages into the tens of millions, he says. The prospect of taking a heavy hit is what prompts most defendants to settle, says Zlatos, noting that other clients, both plaintiffs and defendants, have resolved cases short of trial. In the case of the $5.2 million verdict in Kipp, the jury decided that the defendant’s profits for each house — with prices in the $200,000 range — were $17,000, says Bonham, the plaintiff’s attorney. The jury multiplied that figure by the 300 houses to arrive at its verdict. The defendants had access to the plans because they were prospective clients of the architects, Bonham says. But the defendants sought to copyright the plaintiff’s designs and filed three suits against other builders alleging infringement. At trial, says plaintiff’s lead trial attorney Patrick Zummo, partner at Zummo, Mitchell & Perry in Houston, the defendants claimed they had an implied license to use the plaintiff’s designs. But if that was so, they could not copyright the designs as a licensee, says Zummo. “I have never seen anything this outrageous,” says Bonham, who has handled upwards of 200 architectural infringement cases. The defendants are considering an appeal, says lead defender Allen S. Reynolds Sr., partner at the Norfolk, Va., firm of Reynolds, Smith & Winters, declining to discuss the case except to say, “We ought to win.” The law protects all habitable structures — “buildings not bridges” — built since 1990, says attorney Ralph Oman, former head of the copyright office who helped write the statute and now is in private practice. A copyright is valid for the individual’s life, plus 70 years, before it enters the public domain, says Oman. In the case of a corporation, the copyright would be valid for 95 years, he says. Most of the litigation involves homes, not commercial buildings, say attorneys handling the cases. ELEMENTS OF THE COPYING Evidence of direct copying is like a smoking gun in these cases, but it’s rare, says Bonham. Direct copying evidence would be proof that a plan was traced or taken from a copyrighted design. Without such proof, a plaintiff must show that the defendant had access to the plans and that the plaintiff’s building and the alleged rip-off are “substantially similar.” To a jury, “substantially similar” means that the buildings have such an uncanny resemblance that a reasonable person could conclude that one was copied from the other, Bonham notes. What often gets defendants in trouble is that they believe, wrongly, that they are protected if they tinker slightly with a copyrighted plan, says Frank R. Jakes, head of the intellectual property group at Johnson, Blakely, Pope, Bokor, Ruppel & Burns in Tampa, Fla. “That’s an absolute, bald-faced wives’ tale,” says Jakes. “It is a construction urban legend.” He has handled more than 100 of these cases, mostly representing Florida residential developers, including the Rutenberg companies that have aggressively gone after copycats. Informed defendants typically make the independent-creation argument, which is a complete defense. Under that theory, a defendant would be protected by showing that he came up with the design on his own. “It comes down to credibility,” says Samuels. Some builders knowingly use popular, proven plans belonging to competitors, says Kurt W. Wolfgang of Wolfgang & Buchanan in La Plata, Md. When they get caught, they settle and move on to infringe another plan. “Infringers don’t want to fight,” he says. “They make their money by not fighting.” Not all defendants are big corporations. Homeowners also can be on the hook. About 70 percent of cases involve one-time infringements where someone who has a homebuilder’s brochure tries to find a builder who will build the depicted house for less, says Jakes. These defendants often are judgment-proof and always settle, he says. REGISTRATIONS SOAR The number of copyrighted architectural works has soared — evidence that litigation also is rising because a work must be registered before its author may pursue an infringement suit, according to the copyright office. In 1991, when the law was new, 177 architectural works were copyrighted, according to a Westlaw database search conducted by copyright office staff. By 2000, the number had risen significantly to more than 2,300 registrations, the figures show. The number of architectural works registrations received this year by the copyright office is on track to exceed last year’s figures, the copyright office says. Architectural copyright suits are “burgeoning,” says George T. Schooff, partner at Harness, Dickey & Pierce in Troy, Mich., which represented the winning side in a 1998 federal appellate decision that helped put architectural copyright infringement on the map. The opinion says clearly that infringers must give up their profits. Johnson v. Jones, 149 F.3d 494 (6th Cir.). In the case, the court upheld damages of $16,560 won by an architect who sued when his drawings for a high-end home were altered and used without his permission. He had drafted plans for the house but was never formally hired because he and the homeowner couldn’t agree on terms. A new architect removed the plaintiff’s labels from the plans and used them to construct the house. “My personal view is that rip-offs have been, will be and will continue to be an element of the building industry,” says Jakes. “There will always be people who are going to take shortcuts.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.