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Our firm appeared in the Federal Court on behalf of Wayne Bloomer and Bloomer Constructions (Qld) Pty Ltd in the successful defence against copyright claims made by Tamawood Homes.  The case provides some insight for builders and architects of the potential hazards when dealing with developers who previously received services from other designers.

The facts are as follows:

1. The applicant, Tamawood Homes (“Tamawood”) , claimed that it was the copyright owner of various drawings of residential duplex housing.
2. Its drawings were used by the developer to obtain development approval from Council to build 87 dwellings.
3. Tamawood believed it would be also be the builder but the business relationship between it and the developer ended.
4. The developer engaged an architect to provide new drawings for building approval which it did.
5. Our client was eventually engaged to build the dwellings based on the new architect’s drawings which it did.
6. Tamawood became aware of the construction.

Tamawood commenced court proceedings claiming, among other things, that:

1. The architect, in producing the new drawings, had reproduced a substantial part of Tamawood’s drawings without Tamawood’s consent.
2. The developer, architect and the builder knew that copyright subsisted in the drawings and that Tamawood did not consent to any reproduction.
3. Alternatively, the developer, architect and the builder were recklessly indifferent because they knew Tamawood was a well-known builder in Brisbane and did not make inquiries of Tamawood as to whether it permitted its drawings to be substantially reproduced or used for the building of the dwellings.

Her Honour handed down her findings on liability on 7 May 2013 and then her decision on costs on 17 December 2013.

Her Honour Justice Collier found, among other things, that:

1. There was infringement of only one of the four applicant’s designs.
2. Our client was successful in its proving its defence of innocent infringement.
3. Tamawood pay our client’s costs of and incidental to the proceeding on an indemnity basis from 2 September 2011 being the date our client offered to Tamawood to walk away from the proceeding with each party bearing their own costs.
4. Tamawood pay our client’s costs of and incidental to the proceeding on a party and party basis prior to 2 September 2011.

What can we take from this case?

Every case is different because no facts are identical but there are principles that one can take from each contested matter.

1. Our client made its defence of innocent infringement by establishing that:
   1. The building approved plans it relied on to construct the dwellings bore no mark of Tamawood;
   2. It was not involved in the development approval phase and was not the original builder who commenced the construction; and
   3. It was unaware of any infringement.
2. Developers need to take great care in negotiating with initial designers when engaging them to provide drawings used for development approval.  The designers may want or expect more than just a fee for the drawings.  Thorough contractual discussions should be had to ensure that expectations are met.  Legal advice should be sought.
3. Architects that become involved in the development process should also take great care to ensure that they are not infringing any copyright by using previous drawings without consent. Full and frank discussions should be had with the developer about such issues.  Legal advice should be sought.
4. Builders that are engaged by the developer are normally indemnified by the developer with respect to copyright but even this protection may not stop the builder being joined to a court proceeding, especially if the developer’s indemnity becomes financially worthless.  Even though the Court determined that the builder was not required to investigate as to who prepared the development approval drawings, it may be prudent that builders make those enquiries with the developer.  If those enquiries reveal that a different designer prepared those drawings then the builder should be wary of potential copyright disputes and possible infringement.  Legal advice should be sought.
5. Making an offer to settle before trial can set yourself up to receive an indemnity costs order (rather than the regular party and party costs) .  Should a party not accept a reasonable offer to settle, they run the risk of paying indemnity costs if they lose at trial.  The difference in obtaining party and party costs and indemnity costs can be thousands of dollars.

The Full Court of the Federal Court has delivered its judgement on 18 May 2015 with respect to various appeals by the parties. The parties are to submit draft orders to the Court within 14 days. Tamawood’s appeal was allowed in part (excluding its appeal that Her Honour erred in finding that Wayne Bloomer and Bloomer Constructions (Qld) Pty Ltd innocently infringed.) The Full Court reasoned that the costs orders made against Tamawood should be set aside. We will analyse the reasons after the final orders are made.”

Greg Romans – Legal Practitioner Director