Addressing the issue of implied copyright licenses, the U.S. Court of Appeals for the First Circuit affirmed a district court’s holding that a deceased designer had given his partner an implied nonexclusive license to use his copyright works. Estate of Roberto Hevia et al. v. Portrio Corp. et al., Case Nos. 09-1096; -1097 (1st Cir., Apr. 20, 2010) (Selya, J.).

Designer Roberto Hevia-Acosta (RHA) worked with a partner, Francisco Valcarce, in an architectural business, and solely worked on the architectural plans for Rio Grande Village, a planned residential community in Puerto Rico. After completing the plans, RHA passed away, giving his shares and interests in the companies that he worked for to his heirs. The heirs later sold the shares and interests to Valcarce (but purported to not sell their copyright in the plans). The heirs sued Valcarce for copyright infringement.

The issue was whether RHA granted Valcarce an implied non-exclusive license to Valcarce to developed the architectural plans for Rio Grande Village. The court found that the touchstone for finding an implied license is intent under the totality of circumstances. The test the court used is whether the parties were engaged in a short-term discrete transaction as opposed to an ongoing relationship, whether the creator utilized written contracts providing that copyrighted materials could only be used with the creator’s future involvement or express permission and whether the creator’s conduct during the creation or delivery of the copyrighted material indicated that use of the material without the creator’s involvement or consent was permissible.

The court concluded that the evidence was overwhelming was that there was an implied non-exclusive license. Although courts sometime treat the existence of an ongoing relationship as weighing against the implication of a license, the court here found this was a scenario in which RHA was the partner of the defendant so the relationship favored the implied license. The court concluded that RHA clearly intended to license the plans to his partner because they were developed for purposes of the partnership’s use.

The plaintiffs also argued that any implied license had been revoked based on letters from RHA. However, the court held that none of the letters contained an effort to prohibit the defendant from using the plans in issue, but instead related to different plans.

Practice Note: Implied copyright licenses may arise when parties have a close business relationship, even though there is no explicit grant of a license.