Architectural Copyright Series Part 7

Received a Letter of Demand About Your House Design?

Received a letter of demand?

Letters of demand about house plans and façades are becoming more common in Australia. The good news is that receiving one is not the end of the story, and many can be resolved. Here are the questions we hear most often.

What is a letter of demand anyway?

It is a formal letter, usually from a copyright owner’s lawyers, alleging infringement under the Copyright Act 1968 (Cth) and asking you to take certain steps by a deadline. It is not a court order, and it does not mean you have been sued.

Can a house really be “copied”?

It sure can.

House plans are protected as drawings, and the building itself is protected too (section 10(1)). Building a house from a plan can count as copying the plan (section 21(3)).

Even the outside of a home can matter: in Coles v Dormer [2015] QSC 224, the owners of a near-replica house in Port Douglas were ordered to change its exterior.

Does looking similar mean I copied?

Not necessarily and in a court case this can be the million dollar question.

The copyright owner must prove actual copying, not just a resemblance. In Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd [2008] FCA 912, Justice Weinberg visited both homes and remarked:

“I did not experience … a sense of déjà vu when entering the Villa View.”

At the end, that claim was dismissed.

Can I rely on what my builder told me?

Not so fast – you need to be careful here. For example, in Henley Arch Pty Ltd v Lucky Homes Pty Ltd [2016] FCA 1217, Justice Beach found it was not credible that the builder believed he could “overcome copyright by simply making 15 to 20 alterations to the plan.”

The builder, its director and the homeowners were all found liable.

House design claims seem to be on the rise

It has never been easier for a builder to spot a home that looks like one of theirs.

Real estate listings, Google Street View, aerial imagery services and social media mean a house can be photographed, dated and compared without anyone leaving their desk. Aerial images can even show when a house was built, stage by stage.

And as earlier articles in this series show, copyright can protect not only floor plans but also the building itself, including its façade.

What is usually in a letter of demand?

Most letters of demand about house designs follow a similar pattern. They usually:

• identify the client, often a builder or designer, and describe its reputation and designs;
• identify the “copyright works”, such as a set of plans, a façade design or a display home, and say who created them and who owns the copyright;
• set out the facts as the client sees them, such as who bought the land, who built the house and when, and whether it has been sold;
• include evidence, such as photos, listings, street views, aerial images, social media posts and a side-by-side comparison;
• list the similarities between the two designs, sometimes feature by feature;
• explain the legal basis of the claim, usually referring to the Copyright Act 1968 (Cth);
• make demands with a deadline, often 7 to 14 days; and
• warn of court action if the demands are not met, often saying the letter will be shown to the court when it comes to deciding legal costs.

What do these letters usually ask for?

The demands vary, but common ones include:

1. An admission. A written acknowledgement that you have infringed copyright.
2. Undertakings. A written promise to stop using the design and not to authorise anyone else to use it. An undertaking is a serious, binding promise, and breaking it can have consequences.
3. Information and documents. For example, who designed your house, the plans and drafts, any briefing materials or reference images, and the contracts with your designer and builder. Sometimes this must be given as a statutory declaration, which is a formal written statement made under penalty of law.
4. Financial information. Such as what the plans cost, what the house cost to build and any profit made on its sale.
5. Money. Either straight away, or later once the information has been provided, in the form of damages or an “account of profits” (handing over the profits made from the infringement).
6. Delivery up or destruction of plans or marketing materials.

It is important to understand that these are demands, not orders. Some may be reasonable in the circumstances. Others may go further than the law would require. Working out which is which is exactly what legal advice is for. Also all letters are different so the above list is a very rough guide.

Who can receive one?

Letters of demand in house design disputes may be sent to:

• the builder or building company;
• the company’s directors, personally;
• the designer, draftsperson or architect who drew the plans;
• the homeowner who commissioned or built the house; and
• sometimes a person who has sold the house, if it is claimed they knew, or ought reasonably to have known, that it infringed copyright.

That last point surprises many people.

Copyright infringement is not limited to copying. In certain circumstances, dealing with an infringing item, including selling it, can also be infringement.

Ten things to keep in mind

This is general guidance only. The right approach depends entirely on your circumstances.

1. Don’t ignore it. Letting the deadline pass without a response can make court action more likely and may count against you on legal costs.
2. Don’t panic either. A letter of demand is one side’s version of events. Claims are sometimes overstated, and similarities can have innocent explanations.
3. Note the deadline. Diarise it straight away. If you need more time to get advice, it is common to ask for an extension.
4. Don’t admit anything or sign anything yet. Don’t sign an acknowledgement, undertaking or statutory declaration before getting advice. These documents can have lasting legal effects.
5. Don’t contact the other side informally. Phone calls, emails or social media messages to the builder or its staff can be used as evidence.
6. Don’t delete anything. Removing posts, plans or emails after receiving a letter can look bad and may cause serious problems if the matter goes to court. Keep everything.
7. Gather your documents. Collect your plans and drafts, design briefs, emails with your designer or builder, contracts, invoices, council approvals and any inspiration images. These tell the story of how your design came about.
8. Check your contracts. Your contract with your designer or builder may contain promises about who owns the plans, or an agreement that one party will cover the other’s losses if there is a copyright problem.
9. Get advice from someone who knows copyright. Copyright in buildings is a specialised area. An early review can help you understand how strong the claim really is and what your options are.

There is no single path, and this is where a lawyer can make a real difference.

A lawyer’s first job is to test the claim. Who really owns the design, and when was it created? Could you have seen it? Do the similarities go beyond features found in many homes? Often the best first step is simply to ask the other side for more detail, such as the actual plans they rely on.

If there is a good answer, such as independent design or permission to use the plans, your lawyer can set it out in a clear, measured response. Many claims end there.

If the claim has some force, a lawyer can negotiate a practical outcome. That might be a promise about future use, a payment or licence fee, or changes to a design that hasn’t been built yet. Your lawyer will also make sure any agreement is properly documented, so the matter is genuinely closed.

If the dispute can’t be resolved, the copyright owner may go to court, usually the Federal Court or the Federal Circuit and Family Court. A court can order injunctions, damages or an account of profits, and legal costs (section 115). Getting a lawyer involved early means you’ll be well prepared if it ever gets that far.

It is worth knowing that the law also protects people from groundless threats. If someone threatens copyright proceedings without proper justification, the person threatened may in some circumstances be able to take action themselves.

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Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.