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A Cautionary Copyright Tale Pertinent to Property Developers

Written by Mustapha Shaldoum on 04 May 2017

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Summary
In a recent High Court case (Signature Realty Ltd v Fortis Development Ltd and Beaumont Morgan Developments Ltd), it was found Copyright in an architect's drawings may be infringed where the property developer whom obtained the planning permission and commissioned the drawings was neither the original landowner nor the developer who built the building in accordance with the drawings.

Facts
Property developer, Signature Realty Ltd (SRL), obtained planning permission for a block of flats on the basis of the drawings of its architect, Corstorphine & Wright (C&W), but was unable to secure finance required to complete the project. Subsequently, the site was sold to Fortis Developments Ltd (FDL). Copyright in the drawings was originally owned by C&W but was assigned to SRL in order that it might issue proceedings.

The planning permission was granted on condition that the development was carried out in accordance with C's drawings. The drawings were published on the local authority’s portal with a copyright notice that limited their use to consultation purposes, for comparing current applications with previous schemes and for checking whether developments had been completed in accordance with approved plans. 

SRL sued FDL for infringement of copyright in the drawings in relation to the promotion, marketing and construction of the development on the site.

Decision
The court found that FDL had infringed SRL's copyright in a number of the drawings by using them for marketing the properties developed on the site, tendering and estimating purposes, making altered versions of the drawings, making AutoCAD versions of the drawings, and constructing a building in accordance with the drawings.

There is no statutory or intellectual property right in planning permission. The permission relates to the land and anyone may make use of it so long as they satisfy its conditions.

Copyright did subsist in the drawings despite FDL's arguments that they lacked sufficient originality because they were based on a previous set of drawings, were dictated to some extent by the shape of the building and the position of the lift shafts and stairs and because the remaining divisions of the space were entirely commonplace, logical and utilitarian. The bar for the subsistence of copyright is not high. So, the court found there was sufficient intellectual skill in the drawings for copyright to subsist.

The court rejected FDL's argument that it had an implied licence from the architect to use the drawings as it had paid a premium for the planning permission. FDL had not itself engaged the architect. It had also not bought the land from the copyright owner, SRL, which had applied for the planning permission but rather a third-party land proprietor. 

FDL admitted it had obtained the drawings from the local authority’s portal, but claimed it did not copy the drawings as it had engaged its own architects, whom produced their own drawings. However, because the build had to satisfy the conditions of the planning consent, there were instances in their use of the drawings where the new architects’ drawings were sufficiently similar to constitute copyright infringement.

Comment
This decision demonstrates the dangers in buying land with the benefit of planning permission where the development is not carried out by the party who obtained the planning permission. In particular, it illustrates the importance of paying for an appropriate assignment of copyright, or a licence to use, the relevant drawings in order to avoid infringing copyright in the drawings that form the basis for the planning permission.

Where a site owner instructs architects to prepare design drawings on the basis of which planning permission is granted and then sells the site to a third party, normally that party can use the drawings without infringing copyright on the basis of an implied licence to use these for all purposes connected with the erection on the site of the development to which the plans relate.

In this instance however, FDL did not buy the land from the property developer SRL, who had instructed the architect and obtained the planning permission, as SRL did not own the land. So the landowner had no implied licence which he could transfer to FDL.

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