and agreed to provide him with plans for a timber-framed home for his consideration. Istibitski was not required to purchase the plans or a package.
Timberpeg and Istibitski agreed, in writing, that Timberpeg would retain the copyright to the construction drawings. If Istibitski decided not to purchase the drawings, he agreed to return them and pay an hourly rate for the time spent drafting the plans.
Pursuant to their agreement, Timberpeg provided Istibitski a set of preliminary construction drawings (which did not show a final completed architectural design). At the request of Istibitski, Timberpeg provided a revised set of preliminary plans and, subsequently, foundation plans. The revised plans were registered and Istibitski obtained building permits with the revised drawings. Concurrent with these requests, Istibitski also contacted the defendant, Vermont Timber Works (“VTW”), to construct a timber house. Istibitski showed VTW saw the first set (unregistered) preliminary plans, apparently claiming he legally owned these plans. Nevertheless, VTW claimed that Timberpeg’s plans played no part in the ultimate construction of the home. Timberpeg filed a copyright infringement lawsuit against Istibitski and VTW. Istibitski was never found, so the only participating defendant in the lawsuit was VTW.
The court noted that in order to establish copyright infringement, a plaintiff must demonstrate (1) he or she is the owner of a valid copyright, and (2) the defendant copied the constituent elements of the work that are original. The second prong of this copyright infringement test has two elements that have to be proven: (a) the plaintiff must show the defendant copied the copyrighted material; and (b) that the copying was so extensive that the copyrighted work and the infringing work are substantially similar.
VTW filed for summary judgment based on the premise that the drawings were not substantially similar, as there were numerous and significant differences between VTW’s plans and Timberpeg’s plans. In a motion for summary judgment, the trial court must look at the facts presented in the light most favorable to the non-moving party – which here, was Timberpeg. The trial judge agreed with VTW and dismissed the lawsuit, holding that no reasonable jury could find the house as constructed by VTW was substantially similar to Timberpeg’s design. The Court of Appeals disagreed and reversed the trial court. The Court of Appeals noted that whether one plan is substantially similar to another should be measured by the “ordinary observer” test, i.e., if an ordinary, reasonable observer would “conclude that the defendant unlawfully appropriated the plaintiff’s protectable expression.”
The court further found that although differences in the two designs are significant, those differences are not the be all, end all to deciding the motion. In fact, despite some significant differences between VTW’s and Timberpeg’s designs, the Court of Appeals found that there were numerous similarities that would, therefore, bar a motion for summary judgment. Accordingly, the Court of Appeals found it was improper for the court to grant summary judgment to VTW under this scenario. Thus, the case against VTW was allowed to continue.
So, how can a design professional protect themselves from a copyright lawsuit? There are some lessons to be learned from this court decision:
If you are asked by a client to revise plans, ask where they came from – and find out where they came from. If possible get this in writing from the owner of the plans;
Even if your client claims ownership, if the drawings look professional, ask who drew them and check with the design professional to insure they were not based on other plans;
Get permission to use the plans in writing; and
Include a defense and indemnity clause in your contract with your client specifically related to potential copyright issues.
California Enacts Legislation Making Type 1 Indemnities Unenforceable in Public Entity Contracts
California has passed legislation (AB 573) that makes Type 1 Indemnity provisions in public entity contracts for design services unenforceable. A type 1 indemnity clause is one that allows for indemnification regardless of the indemnitee’s active or passive negligence, as long as the loss was not caused by the indemnitee’s sole negligence or willful misconduct. This also is referred to as a broad-form indemnity.
The primary problem with this type of indemnity from an insurance coverage standpoint is that most professional liability policies contain what is known as a contract exclusion. A typical contract exclusion reads as follows: This insurance does