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When shopping around for house plans leads to a breach of copyright – Copyright



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The pitfalls of ‘shopping around’ in the pursuit of
building the great Australian dream came to light in the recent
District Court of Queensland decision Look Design and
Development Pty Ltd v Edge Developments Pty Ltd & Flaton

[2022] QDC 116.

In this case, a couple seeking to build a home
(the Flatons) were found to have
infringed the copyright of house plans prepared by Look Design and
Development Pty Ltd (Look Design) when they
authorised another homebuilder, Edge Developments Pty Ltd
(Edge), to modify and use those plans. However,
only nominal damages were awarded against the Flatons because Look
Design failed to show that it had suffered any loss.

Background

Before building their home, the Flatons consulted with Look
Design, a project homebuilder, about the design of their dream
home. Look Design presented the Flatons with their ‘standard
plans’, which they then amended to incorporate the Flatons’
preferences. Look Design then produced a series of plans in
accordance with the Flatons’ instructions. Once the Flatons
were satisfied with the plans, Look Design began discussing the
price of constructing the house according to those plans.

At around this time, the Flatons approached and engaged Edge,
another project homebuilder, to construct the house. Edge made
minor changes to the plans prepared by Look Design and proceeded to
build the Flatons’ home.

The Court proceeding

Look Design commenced a claim against both Edge and the Flatons
for breach of copyright. Early in the proceedings, Edge settled its
case with Look Design with a payment of $30,000, but the case
against the Flatons continued to trial.

District Court Judge Long SC found that Look Design did have
copyright in the plans that it produced, even though the plans were
adapted from ‘standard’ plans prepared with a computer
drafting program, and were ‘rudimentary’ in nature (not
being fully dimensioned). His Honour noted that it was clear that
the preparation of the plans 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 “artistic
work” under the Copyright Act 1968 (Cth) (Copyright
Act
).

Given the correlation between the Look Design plans and the
plans used by Edge, Judge Long SC determined that there had been
substantial reproduction or copying of the Look Design plans.

Because of the pre-trial settlement agreement between Look
Design and Edge, His Honour was not required to make a finding in
relation to whether Edge had infringed Look Design’s copyright
in the plans. Instead, His Honour had to consider whether the
Flatons had infringed Look Design’s copyright by authorising
Edge to reproduce the Look Design plan in material form, both in
the form of the adapted plans and the house built on the
Flatons’ land.

Section 36(1A) of the Copyright Act provides that, in
determining whether a person has ‘authorised’ the
infringing conduct, the court must take into account:

  • the extent of the person’s power to prevent the doing of
    the infringing act

  • the nature of any relationship existing between the person and
    the person who did the infringing act

  • whether the person took any reasonable steps to prevent or
    avoid the infringing act.

His Honour found that it was clear the Flatons had provided the
Look Design plans to Edge for the purpose of substantial
reproduction, and it did not matter whether or not the Flatons had
any power to prevent Edge from substantially reproducing the
plans.

The Flatons gave evidence that Edge had assured them that they
only needed to modify the plans by 10 per cent to avoid infringing
copyright, and that the plans had been modified accordingly. His
Honour was not persuaded by this evidence and found that the
Flatons had infringed Look Design’ copyright by authorising the
substantial reproduction of the plans.

Damages

Look Design sought compensation for the loss of the opportunity
to profit from the construction of the Flatons’ house and
additional damages pursuant to section 115(4) of the Copyright
Act.

Look Design contended that it would have made a $40,000 profit
had the Flatons chosen to build with them. Accepting that any
compensation it was entitled to for lost opportunity should be
reduced by the $30,000 paid pre-trial by Edge, Look Design claimed
$10,000 in compensation.

His Honour found that Look Design had not suffered any damage
resulting from a loss of opportunity. Instead, he held that it was
clear on the evidence that the Flatons were never going to build
their house with Look Design, regardless of whether they infringed
Look Design’s copyright or not, and that the Flatons were never
precluded from seeking another builder to construct their house
according to a similar design.

His Honour also found that Look Designs would not have sold or
licensed the plans to another builder, and could not be compensated
for a loss of opportunity on that basis.

Section 115(4) of the Copyright Act allows the court, in its
discretion, to order additional damages considering, among other
things, the flagrancy of the infringement. His Honour accepted that
an award of additional damages, or exemplary or punitive damages,
is in punishment of “conscious wrongdoing in contumelious
disregard of another’s rights”.

His Honour found, in this case, that the evidence did not
support an award of additional damages. This was because there was
nothing to suggest that the Flatons were aware that they were
acting wrongly and taking unfair advantage of the work produced by
Look Design. His Honour referred particularly to the Flatons’
reliance on Edge’s advice about amending the plans by 10 per
cent in this regard.

His Honour did, however, consider it appropriate in the
circumstance of the case to award Look Design nominal damages of
$500.

Key takeaways

  1. Whilst ‘shopping around’ for a home building contract
    can save significant amounts of money, designers, architects,
    builders and potential homeowners should be aware that any plans
    prepared on the owner’s behalf may be subject to copyright or
    other licensing restrictions. Homeowners should discuss
    ‘ownership’ of any such plans up-front to avoid situations
    where they cannot use those plans, or they infringe copyright when
    building a home according to those plans.

  2. As in any litigation, it is important for plaintiffs in
    copyright actions to properly consider the likelihood that they
    will be awarded damages if a finding of copyright infringement is
    made in their favour. The commercial reality facing the plaintiff
    in this case is that, unless it is successful in obtaining an
    indemnity costs order (the prospects of which are unknown), it will
    likely be left out-of-pocket, having expended significant time and
    money into the proceeding and achieving what can only be described
    as a pyrrhic victory.

This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader’s
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
individuals listed.



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