Following the construction industry and related legal topics in the United States.

Wednesday, July 25, 2007

Builder’s Dream Home a Bit of a Nightmare

A Lake Norman, North Carolina homeowner gave a builder "consent" to use plans copyrighted by an architect as long as he built 30 miles away, because "[she] felt with all we had paid, we owned the plans at that time." All was fine until the builder’s subcontractor asked the architect for clarification on how to build the windows in the French-country style house. Well, the homeowner did not own the copyright, the architect sued in federal district court and was awarded $20,000 from the builder for unauthorized use of the copyrighted plans. Not satisfied, the architect appealed, wanting additional damages and an injunction prohibiting sale of the house. See Christopher Phelps & Associates, LLC v. Galloway, --- F.3d ---, 2007 WL 1933594 (4th Cir. 2007); North Carolina Lawyers Weekly, July 16, 2007.

The 4th Circuit Court of Appeals agreed with the lower court’s discretionary ruling that the architect had been adequately compensated with the $20,000 award, and that taking away the builder’s right to lease or sell the house would be a "draconian burden." In addition, the injunction would be overbroad since it would encumber a great deal of property unrelated to infringement.

However, the Court of Appeals disagreed with the lower court’s discretionary ruling that the builder did not have to return or destroy the infringing plans, since the builder did not need the plans to complete the house since it was substantially constructed except for interior finish work.

What is the lesson learned? While the decision is filled with detailed legal analysis of copyright law, the lesson is simple -- if plans include on each page the words "© 2000 Copyright – Christopher Phelps & Assoc., L.L.C. these plans are protected under the federal copyright laws. The original purchaser of this plan is authorized to construct one and only one home using this plan. Modifications or reuse of this plan is prohibited.", then you will need consent from the architect, not the homeowner who "felt with all we had paid, we owned the plans at that time." (This entry published by Ken Michael, a member of Womble Carlyle's construction and real estate development group.)

Source: North Carolina Lawyers Weekly


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