Most people think that if you pay for something, it is yours to do with whatever you want. That is not necessarily the case with building plans, as a case decided in the Supreme Court of Western Australia recently demonstrated. We discuss this further below.
In Milankov Designs & Project Management Pty Ltd -v- Di Latte  WASC 14, clients engaged a building design and project management firm to prepare house plans for them, and to obtain the necessary approvals and licenses to allow them to build their house. The designer prepared plans to the standard required for an application for development approval, and lodged them with the local authority as part of an application for approval.
Around the time that the local authority was granting development approval, the clients and the designer fell out and terminated their contract. The clients subsequently took their plans to a new architect, who used them to prepare plans and a specification for use in obtaining a building permit. The original designer learned of this and sued both the clients and the new architect for infringement of his copyright in his original plans and drawings.
The defendants argued that the designer had given the clients a licence to use the plans and drawings he had prepared as part of his original contract with the clients. The designer disagreed.
The Court, applying the law as established in previous decisions, held that contracts between architects (or building designers) and clients contained as a matter of law, implied terms granting the client a licence to use the plans and drawings in the manner and for the purpose which the parties contemplated at the time the client engaged the designer/architect. Relevantly, the Court observed as follows: “…
if the owner employs a builder or another architect the implied licence extends so as to enable them to make copies of the plans and to use them for that very building on that site, but for no other purpose …”.
However, if the contract contains express terms that exclude or are inconsistent with this implied licence, the express terms will prevail, and the implied licence will be narrowed or even excluded accordingly.
In this case, the contract contemplated the preparation of plans and drawings in two stages. In stage 1, the designer would prepare plans for use in obtaining development approval, whereas stage 2 involved preparing working drawings and specification documentation. The Court found that this contractual plan of work was inconsistent with a licence to use the stage 1 plans for the building of a house. The implied licence did not, therefore, extent that far and the owners’ use of the plans was indeed an infringement of the designer’s copyright. The new architect was found to have infringed the designer’s copyright as well. As one might expect, he had no greater coverage by the implied licence than the owners.
Copyright argument raised
Interestingly, the new architect argued that his infringement was an innocent infringement within the meaning of s. 115(3) of the Copyright Act 1968 and that he should not be liable to pay damages.
Section 115(3) provides that an infringer who was not aware that he or she was infringing copyright, and had no reasonable grounds for suspecting that he or she was infringing copyright, is not liable to pay damages in respect of the infringement. A person who innocently infringes someone else’s copyright may still be liable to make an account of profits, and may still be subject to non-financial orders.
In this case, before he would use the plans the new architect asked the owners whether all moneys owing to the designer had been paid, and whether their contract with the designer obliged them to use that designer for further work on the project. He was told that no money was owing and there was no ongoing contractual obligation. He also took advice from peers. But what he did not do was ask to see a copy of the contract between the owners and the designers.
In those circumstances, the Court was prepared to accept that the new architect had no (subjective) knowledge that he was infringing copyright in using the plans in question. However, the Court was not prepared to accept that the new architect had no (objective) grounds for suspecting infringement.
The architect was aware that there had been a contract. The issue of whether or not there was a licence to use the plans turned on that contract. The architect could have, but did not, ask the owner for a copy of it. Nor did he contact the designer and ask whether in the designer’s view the proposed use of the plans would infringe the designer’s copyright. In the absence of those enquiries, the assurances given by the owners did not amount to an objective basis for having no reasonable grounds to suspect infringement.
Conclusion and Key Takeaway
In light of the above, a client who has had plans drawn up, and has paid for them, should not assume that he or she has the right to use or reproduce those plans for any purpose they see fit.
Further, the same can be said for architects and building designers, who ought not assume that just because a client has paid for plans, the architect or designer has no further right to the plans. The client will usually have some kind of licence to use the plans, but the extent of use that is allowable may vary and has to be determined in each case. Ultimately, it will turn on the terms of the relevant governing contract under which the plans were prepared.
For further advice or assistance, please contact Sonia Edwards.