Property developers, architects and builders should be aware that using a third party’s plans may result in copyright infringement.
In a recent decision in the Habitare Developments case1, the Full Court of the Federal Court found that:
Habitare Developments engaged Tamawood (a company that constructs low-cost housing) to produce plans for a residential development in Brisbane. Unfortunately, there was no written agreement between the parties.
Tamawood did not charge for the drawings in the hope it would be retained to construct the development. Tamawood assumed that it would be appointed as the builder for the projects. But, instead, the following events took place:
Clearly there was a lack of contractual certainty governing the relationship between Habitare and Tamawood. Despite this, the court found that a bare licence did exist and that it governed Habitare’s right to use the Tamawood plans. This right was held to have terminated when Tamawood was not appointed as the builder.
Tamawood had created an original artistic work in the plans. Further, a sufficient degree of objective similarity existed between those plans and the Mondo plans to support a finding of substantial reproduction. On this basis, it was found that copyright in the Tamawood plans had been infringed by Habitare. In reaching this decision the Federal Court was satisfied that there was a sufficient ‘causal connection’ between Tamawood’s original plans and Mondo’s ‘updated’ plans.
In fact, the Federal Court went a step further and held that the directors of Habitare were also liable. Given that they were aware of the risk of infringement but had proceeded with it nevertheless, the directors were liable for authorising the copyright infringement. Lucky for the subsequent builder, its defence of innocent infringement was upheld as it was unaware of (and had no reasonable grounds for suspecting) any potential infringement of copyright in the drawings prepared by the subsequent architect.
Industry players should always document the terms of a copyright licence in architectural plans in writing by way of a formal contract or terms of engagement. These should be carefully drafted to capture various contingencies and implemented in an enforceable manner. This will remove a lot of the uncertainty and potential unfavourable outcomes, and, above all, avoid the need for a costly legal spat. Shortcuts are rarely the best route to take. In fact, Habitare’s shortcut appears to have come at a great cost as it has since entered the world of liquidation.
This case is the latest in a long line of cases involving copyright in building plans. In the world of architects, property developers and planners, the Habitare case highlights that a ‘causal connection’ may exist between different versions of the same plans, even if changes have been made to the design.
1 Tamawood Limited v Habitare Developments Pty Ltd (Administrators appointed) (Receivers and Managers Appointed) (No 3) FCAFC 65 
Posted on: 6 April 2016