A cautionary copyright tale for the property development sector: Signature Realty Limited v Fortis Developments Limited & Ors
Tuesday, 28th February 2017
A recent High Court decision highlights how easy it is for a developer to commit copyright infringement when developing land that is already the subject of planning permission.
Summary of the case
Signature is a property development company that had taken an interest in purchasing a site in Sheffield city centre. Signature did not own the site; nevertheless it engaged an architect ("C&W") to prepare design drawings, which were used as part of an application for planning permission to develop the site into residential apartments.
However, Fortis beat Signature in the race to purchase the site and, by the time the purchase completed, Signature's application for planning permission had been approved.
Fortis downloaded copies of the design drawings from Sheffield's online planning portal and then used them in the design, marketing and construction of property on the site.
Having purchased from C&W the copyright in the design drawings, Signature issued legal proceedings against Fortis for infringement of its copyright in the design drawings.
The Court found that Fortis had infringed Signature's copyright in the design drawings by using them for:
- marketing the properties developed on the site
- tendering and estimating purposes
- making altered versions of the design drawings
- making AutoCAD versions of the design drawings
- constructing a building in accordance with the design drawings
The question of how much Fortis will have to pay to Signature, to compensate Signature for Fortis' unauthorised use of its copyright, will be determined by the Court at a subsequent hearing, if the parties are unable to agree a figure.
How to avoid the same thing happening to you
- Purchase the intellectual property rights or obtain a licence to use them. Intellectual property rights (e.g. copyright) in respect of design drawings are usually first owned by the architect who created them, but they may have been assigned to someone else. The fact that design drawings are made available to download and view on a planning portal does not mean that they are free for anyone to use as they wish. Part of the pre-purchase due diligence for any development property should include identifying who owns the intellectual property rights in any applicable design drawings and establishing if you are legally free to use them in the development of the property. If not, you should investigate whether the owner will sell you their rights in the drawings or grant you a licence.
- The planning permission won't save you. There are no intellectual property rights in a grant of planning permission - but there may be intellectual property rights in respect of the design drawings used as part of the application. Thus, purchasing a property with the benefit of planning permission will not necessarily give you the right to exploit any related design drawings (e.g. by carrying out construction in accordance with the design drawings). You need the consent of the owner of the intellectual property rights in the design drawings before you can exploit them.
- Copying only small parts of a design drawing can be unlawful. What matters is whether what has been copied comprises a "substantial" part of the original copyright work. "Substantial" is a question of quality, rather than quantity. It is a myth that you will not infringe copyright if you change, say, five things about the original work.
- Ignore infringement risks at your peril. If you adopt a "couldn't care less" attitude to copyright infringement, then the Court has the power to award additional damages to the copyright owner. So, by wilfully ignoring the issue, you could make matters worse and find yourself on the end of a hefty damages claim.
Carl Steele (Partner) and Giles Lane (Solicitor) are specialists in Intellectual Property law. As part of Ashfords' IP Team, they have advised architects, property developers and agents in connection with the protection, exploitation and enforcement of intellectual property rights associated with property development projects.