Beware of Copyright Infringement in Construction Projects

On November 8, 2013, the Fifth Circuit Court of Appeals affirmed a $3.2 million jury award in favor of Kipp Flores Architects, L.L.C. ("KFA") against Hallmark Design Homes, L.P. (“Hallmark”), in a copyright infringement action.  The jury in the U.S. District Court in Houston found that Hallmark infringed KFA's copyrights by constructing hundreds of houses from KFA’s architectural plans without purchasing the plans for each house as required.  KFA alleged that Hallmark obtained copies of certain of its  copyrighted architectural designs pursuant to a license from KFA allowing Hallmark to build one home based upon each design.  According to KFA, the agreement expressly provided that additional licenses for additional units could be purchased, but Hallmark failed to pay the additional license fees in connection with its reuse of the licensed plans.  The jury returned a verdict compensating KFA for the amount of profits that Hallmark earned from the sales of the homes in question that were built based upon KFA’s architectural plans. The appellate court rejected Hallmark's arguments that the evidence was insufficient to support a jury finding of “substantial similarity” and concluded that the matter had been well tried at the district court.

This is a reminder for all architects and design professionals to take care in ensuring that they do not copy or otherwise infringe another professional's copyrighted designs.  It also creates an incentive for design professionals to take steps to register their designs with the U.S. Copyright Office to ensure that their hard work is not being copied and used without appropriate compensation.

For more information on professional liability matters contact attorney Nathan Fennessy at 603.410.1500 or a member of Preti Flaherty's Professional Liability Group.