Real Estate Lenders and Developers: Beware of IP infringement for architectural drawings and copycat build projects
The recent High Court decision in Signature Realty Ltd v Fortis Developments Ltd [2016] EWHC 3583 (Ch), focused on the IP rights and commercial value that exists in the architectural drawings for buildings.
In this case, both Signature Reality and Fortis Developments wanted to purchase a site in Sheffield. Signature Reality was granted an application for planning permission prior to completion based on a number of architectural drawings from a firm of architects called (C&W). The application was granted on the condition that the site was developed "in complete accordance with" C&W drawings, which was published on the planning portal. Signature Realty was granted a licence to use the drawings in connection with the development.
Unfortunately Signature Realty were unable to purchase the site and it was later purchased by Fortis Developments. Fortis Developments used the drawings published by C&W for their promotion, marketing and construction purpose. Once Signature Reality became aware of this they purchased an assignment of rights from C&W in the drawings and then issued proceedings against Fortis Developments for copyright infringement.
The High Court ruled in favour of Signature Realty and found that Fortis Developments had infringed the copyright in the drawings and awarded damages to Signature Realty.
The lessons from this case are clear, firstly, it is essential to check the rights to architectural and design drawings before using the information. The fact that material is available online does not mean that it can be used indiscriminately. Secondly, the case demonstrates the commercial value of rights in intellectual property and how such rights may become the subject of strategic use in relation to future developments.
Note that in the real estate market, we increasingly see developers using IP to protect design value and Kent Gardner, Chief Executive Officer of Evans Randall (previous co-owners of the Gherkin) told Fieldfisher:
"The idea that a building can be a brand is comparatively new but it’s one that we as building owners have recognised for some time. We believe that the commercial value of a property is determined not merely by its income stream or by capital appreciation. It can also be a function of its brand, its design or its iconic appearance. That is why during our ownership of the Gherkin we trademarked its nickname and distinctive shape. As investors we wanted to protect inherent value from potential erosion by inappropriate use of the asset’s name, appearance or any other manifestation of its unique brand.”
With thanks to Leighton Cassidy, Head of Fieldfisher's Trademark and Brand Protection Team, for this contribution. Please contact us should you have concerns in relation to IP with which Fieldfisher can assist.
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