By Josh Emory, Esq.
Far too often, project owners and, sometimes, design professionals overlook documenting the ownership and use of project drawings and designs. Who owns them? Work product prepared by an architect or engineer, typically called, “Instruments of Service,” generally belong to the designer who created them unless and until the parties agree otherwise. And that can be very important. Although designers cannot claim copyrights in generic ideas, an original, tangible expression of that idea can be copyrighted Instruments of Service. And the failure to properly document the ownership of Instruments of Service can affect everyone involved in a project, including contractors, other third parties hired by the owner, and subsequent owners of the project.
Consider the following hypothetical: A project owner pays an initial designer to prepare plans for a new building. The design services agreement is silent on who owns the copyrights in the plans. The plans are prepared, but for some reason are rejected by a permitting authority. Frustrated, the owner then hires a second designer to prepare a revised set of plans that are based on the original plans. In connection with this, the owner asks the initial designer for his CAD files for the plans. The initial designer refuses to give the files to the owner or authorize the continued use of the plans. Thereafter, revised plans are prepared that are based on the original plans without authorization from the initial designer. The initial designer sues the owner, the second designer, and the contractor hired by the owner for copyright infringement for the unauthorized use of the plans created by the initial designer. Is the owner, second designer, and/or contractor subject to possible infringement claims by the initial designer? Ultimately, their potential liability will turn on unique facts and circumstances of that scenario. But the more useful take away is understanding how that problematic scenario could have been avoided altogether.
Under U.S. Copyright Law, a design professional is deemed to be the author and owner of the Instruments of Service that they create. Accordingly, copyrights are a type of personal property right that gives the copyright owner the exclusive right to control use of the Instruments of Service, including the right to make copies of the materials, the right to distribute copies, the right to perform or display the materials publicly, and the right to prepare derivative works. Generally, a copyright owner’s rights can be transferred to another party by written agreement. Questions about the ownership of the Instruments of Service often come up when the project ends, the designer’s services are terminated early, or when the initial designer is not hired for a project. What should California contractors look for in connection with such issues?
- Look to see that the design service agreement between the owner and designers (architects and engineers) addresses ownership and transfers rights in the Instruments of Service or, alternatively, grants the owner a license to use the Instruments of Service in connection with the project (and after the project is completed or the designer is terminated).
- Design service agreements should contain provisions relating to the ownership and continued use of the Instruments of Service. For example, if a designer is terminated, the owner’s right to use the Instruments of Service, will, ideally, extend past termination of the designer’s services.
- In situations where an owner pays a designer to prepare Instruments of Service and then the owner sells the property, can the new owner use those Instruments of Service? The new property owner has no contractual relationship with the designer. Authorization to use those Instruments of Service does not flow with the property. The answer lies in whether and how the ownership and assignability of the Instruments of Service are addressed in the original design services agreement.
- When in doubt, err on the side caution and seek legal counsel to evaluate whether you can use the Instruments of Service.
Josh Emory is an attorney with Dunn DeSantis Walt & Kendrick representing individuals, startups, small to large businesses and employers of all sizes in business and intellectual property representation, including intellectual property and corporate transactional matters as well as business litigation. He can be reached at email@example.com.
Dunn DeSantis Walt & Kendrick provides a broad spectrum of legal services to businesses of all sizes, from small, local start-ups and non-profits to large, national companies. DDWK’s real estate development and construction practice includes representing all segments of the development and construction industries on both private and public projects.
You can find additional information and resources related to helping business owners and their businesses on the DDWK website.