The pitfalls of “looking around” in pursuit of the great Australian dream came to light in the Queensland District Court’s recent decision Look Design and Development Pty Ltd v Edge Developments Pty Ltd & Flaton [2022] QDC 116.
In this case a couple who want to build a house (the flatons) were found to have infringed the copyright of house plans made by Look Design and Development Pty Ltd (Look design) when they hired another home builder, Edge Developments Pty Ltd (edge) to modify and use these plans. However, the Flatons were only awarded nominal damages because Look Design could not prove any damage.
background
Before building their home, the Flatons consulted Look Design, a project home builder, about designing their dream home. Look Design presented the Flatons with their “standard plans”, which they then adapted to the Flatons’ preferences. Look Design then drew up a series of plans following the Flatons’ instructions. When the Flatons were happy with the plans, Look Design began discussing the price of building the house to those plans.
Around this time, the Flatons approached Edge, another project home builder, and hired him to build the home. Edge made minor changes to the plans created by Look Design and built the Flatons’ home.
The court case
Look Design sued Edge and the Flatons for copyright infringement. Earlier in the proceedings, Edge settled its case with Look Design for $30,000, but the case against the Flatons has continued to court.
The Long SC District Court Judge found that Look Design had copyright in the plans it created, even though the plans were adapted from “standard” plans made with a computer drawing program and were “rudimentary” in nature (not fully dimensioned). . His Honor noted that the creation of the plans clearly required time, effort and skill on the part of the draftsman employed by Look Design and that this supported the finding that the plans were an “art work” within the meaning of the Copyright Act 1968 (Cth) (copyright law).
Given the correlation between the Look design plans and the plans used by Edge, Judge Long SC found that the Look design plans had been extensively reproduced or copied.
Because of Look Design’s pre-trial settlement agreement with Edge, His Honor was not required to make a determination as to whether Edge infringed Look Design’s copyright in the plans. Instead, His Honor had to verify whether the Flatons had violated Look Design’s copyright by authorizing Edge to reproduce the Look Design plan in physical form, both the adapted plans and the house built on the Flatons’ land.
Section 36(1A) of the Copyright Act provides that in determining whether an individual “authorized” the infringing conduct, the court must consider the following:
- the extent of the person’s power to prevent the infringing act
- the nature of a relationship that exists between the person and the person who committed the infringing act
- whether the person took reasonable steps to prevent or avoid the infringing act.
His Honor noted that it was clear that the Flatons had provided Edge with the Look design plans for the purpose of material reproduction, and it did not matter whether the Flatons had the authority to prevent Edge from using the plans essentially reproduce.
The Flatons gave evidence that Edge had assured them that they only had to change the plans by 10 percent to avoid copyright infringement and that the plans had been changed accordingly. His Honors were unconvinced by this evidence and found that the Flatons had infringed Look Design’s copyright by authorizing substantial duplication of the plans.
damage
Look Design sought damages for loss of opportunity to benefit from the construction of the Flatons House and additional damages under Section 115(4) of the Copyright Act.
Look Design claimed it would have made a profit of $40,000 had the Flatons decided to build with them. Look Design accepted that any compensation it was entitled to for missed opportunities should be reduced by the $30,000 paid by Edge before the trial and sought $10,000 in damages.
His honor noted that Look Design was not harmed by a missed opportunity. Instead, he held that it was clear from the evidence that the Flatons would never build their home using Look Design, whether or not they infringed Look Design’s copyright, and that the Flatons were never prevented from making a Other contractors to build their house to look for a house of a similar design.
His Honor also noted that Look Designs would not have sold or licensed the plans to another developer and could not be compensated for a lost opportunity on that basis.
Section 115(4) of the Copyright Act allows the court to order additional damages at its discretion, including in view of the obviousness of the infringement. His honor accepted that an award of additional damages or exemplary or punitive damages constitutes punishment for “deliberate misconduct in contemptuous disregard for the rights of others.”
His Honor noted in this case that the evidence did not support an award of additional damages. Because nothing indicated that the Flatons were aware that they were doing wrong and taking unfair advantage of the work produced by Look Design. His Honor specifically noted the Flatons’ reliance on Edge’s advice to change plans by 10 percent in this regard.
However, under the circumstances of the case, His Honor deemed it appropriate to award Look Design nominal damages of $500.
The central theses
- While “looking around” for a home construction contract can save significant amounts of money, designers, architects, builders, and prospective homeowners should be aware that any plans created on behalf of the owner may be subject to copyright or other licensing restrictions. Homeowners should discuss the “ownership” of such plans in advance to avoid situations where they cannot use these plans or they infringe copyright when building a home from these plans.
- As in any litigation, it is important for plaintiffs in copyright lawsuits to consider the likelihood of being awarded damages if copyright infringement is found in their favor. The commercial reality faced by the plaintiff in this case is that unless he succeeds in obtaining a compensation expense order (the prospects of which are unknown), he will likely be left out of pocket after spending a great deal of time and money in invested in going on and achieving what can only be described as a Pyrrhic victory.
If you have any questions or need help protecting your copyright or making sure you aren’t infringing on copyright, contact us below or contact our team here.
Authors: Tanya Jackson & James Phillips
Disclaimer
The information in this article is general in nature and is not intended to address the circumstances of any particular person or entity. While we strive to provide accurate and timely information, we do not guarantee that the information in this article is correct at the time it is received or that it will continue to be accurate in the future.