In August 2015, the Honourable Justice Henry of the Queensland Supreme Court made some unconventional orders concerning a copyright infringement matter. Coles v Dormer & Ors  QSC 224 was a case brought before the Court as a result of Dormer’s alleged copyright infringement of Coles’ copyright subsisting in the building plans of Coles’ home.
One-of-a-Kind House: the French Provincial with a Caribbean Influence
Coles won at auction a house described as ‘French provincial with a Caribbean influence’. The Dormers, unfortunately, lost to Coles at the auction, but then decided to build the same house in the same community. Coles became concerned that a replica in the same street would dilute the value and uniqueness of his home and contacted the architect of his new home, asking for an assignment of the copyright subsisting in the building plans. Coles approached the Dormers for their building plans so he could confirm whether they would be too similar to his own, but received no response. When construction on the Dormers’ new home began, Coles applied to the Supreme Court for an injunction to prevent the Dormers from building their new home which he claimed would be an infringement of his copyrighted building plans.
This matter was heard twice in the Supreme Court. Firstly to consider the injunction sought by plaintiff Coles, and secondly, for the Court to consider awarding and assessing damages against the defendants.
Copyright and Infringement Basics
Copyright is an automatic intellectual property right that attaches to original work to protect the expression of ideas through creative works such as music, images, or writing. The copyright owner has the exclusive right to use, reproduce or republish the copyright material. In Australia, copyright does not need to be formally registered.
In most cases, the author or creator of the copyright material owns the copyright, but there are situations where ownership of the copyright may be transferred to another party. This is called an intellectual property assignment, where the assignor transfers the ownership to the assignee (the new owner).
The new owner now has the exclusive right to exploit the copyright material. Others who reproduce or republish a substantial amount of the copyright material without the owner’s permission may be liable for infringement.
Round One: Injunction and Some Unusual Court Orders
In the first instance, the Court considered four primary issues:
- Whether the architect’s building plans were ‘original’ for copyright to subsist;
- Whether the assignment of copyright ownership from the architect to Coles was effective;
- If there was infringement of the copyright in the plans and whether the construction of the house based on the plans constituted infringement; and
- What appropriate remedies were available to the plaintiff (if any).
The defendants argued that copyright did not exist in the building plans because they were not an original artistic work. The Court dismissed this argument, however, stating that copyright did exist due to the effort he had put into developing the plans and the ‘professional expertise’ or ‘independent intellectual effort’ required to design the building based on the instructions he received from his clients. It was therefore considered an original artistic work and copyright subsisted.
2. Ownership and Assignment
The defendants in support of their argument for the lack of originality claimed that the plans were a work of joint authorship, shared between the architect and his clients. The Court examined this suggestion and determined that the clients’ input was limited to feedback and instructions and did not meet the definition of ‘joint authorship’ under the Copyright Act. To be considered a collaboration, the contribution of all authors must not be separate.
The defendant relied on the above argument to assert that the assignment of copyright was not effective. If there were joint authorship, then the architect would not be able to assign all of the copyright without his clients’ permission. The Court also dismissed this defence, and the assignment was found to be effective.
3. Infringement and Substantial Copying
After the Court had agreed that copyright subsisted in the building plans and that Coles was the copyright owner, it turned its attention to whether Dormers’ building plans infringed on Coles’. After hearing expert evidence about whether the Dormers’ plans were a ‘substantial copy’ of the original, the Court found that the Dormers’ plans were essentially a reproduction of Coles’ house. Consequently, the Dormers had infringed copyright in both the plans and the construction of the house based on the plans.
Justice Henry: The Architect of Remedies
The plaintiff had sought an injunction against the defendants, but by the time the Court came to a decision, the defendants’ home was in the final stages. Given that the defendants knew of the risk of court action as they built their home, the Court decided that injunction was appropriate and granted it.
Justice Henry went further and made orders for the Dormers to make specific changes to their almost-finished home including that the Dormers:
- Remove the dormer roofs;
- Replace arched and circular windows with rectangular or square windows; and
- Remove the stone edge trim.
Round Two: Damages
Dormers’ made the changes, however, Coles was not satisfied. Under section 115 of the Copyright Act (Cth), there are two types of damages that you can claim for copyright infringement:
- Compensatory damages; and
- Additional damages.
Coles brought new proceedings to the Court seeking both types.
Compensatory Damages and Loss of Enjoyment
Compensatory damages take into account factors such as loss of profit, loss of potential licence fee that could have been charged, and loss of reputation. The defendants tried to argue that the value of damages should be assessed by the loss incurred by the original copyright owner, the architect, rather than Coles. The Court rejected this argument because Coles owned the copyright at the time of the infringement. Consequently, it was the loss Coles suffered that the Court would take into account.
Coles claimed that he faced a loss of enjoyment because his initially unique house was no longer special, and he faced a potential loss of the value of the home diminishing. The Court considered the loss of enjoyment as lasting until the initial court orders of changes to the Domers’ home had been carried out and found the loss of value to the home only to be a potential and hypothetical loss. The defendants spent more than $40,000 over two years making the changes to their home, and the Court equated this to approximately $10,000 worth of compensatory damages awarded for the loss of enjoyment.
Additional damages exist on the principle that compensating the copyright owner for the loss incurred at an equivalent to what they should have been paid may not be enough to deter people from infringing copyright.
Under s 115(4) of the Copyright Act, the Court can take into account the flagrancy of the infringement and the behaviour of the infringers when deciding whether to grant additional damages. In this situation, the defendants attempted to show that they had mistakenly copied the building plans and had not intentionally infringed on copyright.
Unfortunately, the plaintiff was able to demonstrate that he had informed the Dormers that he owned the copyright and asked to see their building plans, and they ignored his requests. The Court found that the defendants had considered the risk of copying the building plans and weighed it against the cost of getting permission from the plaintiff and decided to go ahead.
In light of awarding damages as a deterrent, the Court awarded $60,000 in additional damages.
Coles v Dormer & Ors shows the court’s approach when considering the existence of copyright infringement as well as the assessment of damages. Copyright does subsist in building plans, even if they are not the end product but only a means to the constructed building.
The larger proportion of damages were awarded as additional damages rather than compensatory damages. It is important to note this for both copyright owners and potential copyright infringers. The plaintiff was able to show that he did take steps to let the Dormers know that he owned the copyright, and the Dormers ignored his warnings. Supported and enabled by copyright legislation, the Court does not take calculated risks like the Dormers’ lightly and will not hesitate to award damages to act as a deterrent for flagrant infringement.
Questions? Get in touch with our Intellectual Property lawyers on 1300 544 755.