Key Points:

The Court has the power to award a substantial sum of additional damages for infringement of copyright that is flagrant.

It is not uncommon for families to strive to have the best home in the street, or to make amendments to their home, to keep up with the Joneses. However, the Supreme Court of Queensland recently found that replicating and building a new home based on the design of a home nearby infringed copyright.

In Coles v Dormer [2015] QSC 224, the Court held that the replication of a home design infringed the copyright that subsisted in the plans of a home in the same area. As we highlighted at the time, the assessment of damages was to wait for another day. That day has now arrived – and the result is a pertinent example of the Court's power to award a substantial sum of damages for copyright infringement that is flagrant (Coles v Dormer [2016] QSC 028).

What was the copyright infringement?

Mr Coles purchased a home in the Port Douglas region of Queensland, at auction, for its distinct features and particularly interesting architecture. Mr Coles narrowly outbid Mr and Mrs Breden, the third defendants. Mr Coles heard rumours that the Bredens were so disappointed that they missed out on the purchase of the home, that they engaged the original builders of the home to replicate the design of Mr Coles' home for them. Mr Coles was keen to ensure that his home was the only one of its kind in the area, so he acquired an assignment of copyright from the original designer of the home. Both prior to and during the construction of the Breden home, Mr Coles consulted the defendants and indicated that he was the owner of the copyright in the home's design and requested that the Bredens' home be modified. Mr Coles' communications were ignored and the defendants continued with the construction of the home.

The Court held that the defendants' infringement of the copyright in Mr Coles' home design was done with flagrancy – they had a "reckless indifference" to Mr Coles' copyright. The Court awarded damages in the sum of $70,000 against the defendants, of which $60,000 was awarded as "additional damages" for the defendants' disregard of Mr Coles' legitimate and good faith requests. The Court also ordered that the defendants alter, at their own cost, the external elements of the home that were the same or similar as Mr Coles' home.

Lessons to be learned

Although this case seems farfetched, there are important lessons to be learned for corporate entities and businesses.

In this case the court held that a modest sum of damages, $10,000, would adequately compensate Mr Coles for his temporary past loss of enjoyment of his locally unique residence prior to the Bredens' remedial works and any slight loss of future enjoyment. However, the Court can have regard to both the context of the infringement and subsequent conduct in assessing whether to award "additional damages", $60,000 in this case, that is not compensatory. The Court will consider, among other matters, the flagrancy of the infringement, the need to deter similar infringements of copyright, and the conduct of a defendant after they were informed of alleged infringement. There is precedent for additional damages awards as high as $780,000.

The key point for businesses is that their conduct when faced with an allegation of copyright infringement is important, and certain conduct could create the risk of an award of additional damages. In the event of receiving a claim it is thus important to obtain legal advice as soon as possible.