Buying a site with planning permission? Take heed!
The issue of copyright in architects drawings submitted as a part of a successful planning application has been revisited by the High Court in the recent decision of Signature Reality Limited v Fortis Developments Limited and Beaumont Morgan Developments Limited, 17 February 2017.
The background in brief
Signature had been engaged in a bid to purchase a plot of land with two existing office buildings. Signature had identified that the site would be suitable to be converted into residential student accommodation and, through its JV company, exchanged contacts for the purchase of the site.
In the period between exchange and the completion date, Signature obtained planning consent for the proposed development following the submission of, amongst other things, drawings which had been prepared by Signature’s appointed architects (“C&W”). Signature had a non-exclusive licence to use the drawings in connection with the development.
It was a term of the planning permission that the proposed development be carried out in accordance with C&W’s approved drawings. All documents pertaining to the planning application including the C&W drawings were available for public inspection through the relevant local authority’s Planning Portal, including downloading copies for limited purposes. The drawings themselves carried a copyright notice identifying C&W as the owner and prohibiting copying and reproducing without C&W’s consent.
Due to funding issues, Signature failed to complete and the site with planning permission was sold to Fortis. Together with its design and build contractors (the second defendants), Fortis appointed new architects and proceeded with the development subject to minor amendments to the permission granted. Having become aware of this, Signature acquired an assignment of copyright from C&W and brought infringement proceedings.
The court found that the copyright had been infringed in a number, albeit not all, of the C&W drawings by: (i) the tendering and estimating works undertaken; (ii) the marketing materials produced; (iii) making AutoCad versions of the C&W drawings; (iv) producing an altered version of the C&W drawings; and (v) by constructing a building substantially similar to the internal design disclosed in the C&W drawings.
Compensation could take the form of an award of damages or an account of profits plus legal costs. Unless the parties agree a sum between them, the matter will return to the court for a decision regarding the amount awarded to Signature.
Don’t make the same errors
Do not assume that you are at liberty to develop the site to those plans if you purchase a plot where a planning application has been submitted or planning has been granted:
- If it is the seller who engaged an architect to prepare the plans and drawings, generally, there will be an implied licence in place which can be transferred to the purchaser allowing for the use of those drawings for all purposes connected with the building of that development to those plans. If the developer wants to made changes to the design, permission from the architect may be required.
- If, as was the case here, it was a third party who engaged the architect to produce drawings for the purposes of a planning application, your ability to use those drawings will be very restricted.
It is best practice to always obtain an assignment of ownership of the copyright or an express licence to use the copyright work at the outset. Had the defendants gone straight to C&W, Signature would not have been able to pursue this claim.
It could have been worse…
The court rejected Signature’s application for additional damages having found that the defendants’ conduct did not amount to flagrant infringement and it was unclear what benefit was obtained from the infringement as distinct from the actual grant of planning permission (which carries no intellectual property rights in itself).
Do be aware that it is in the court’s power to make such an award, so undertake proper due diligence and address any issues of copyright ownership. If a dispute arises, your knowledge of any third party rights before that point and your conduct throughout will be scrutinized by the court.
Do also bear in mind that a copyright owner can apply to the court for injunctive relief which may take the form of bringing your planning, marketing, construction or sales activities to a halt following a finding of infringement or pending the trial where an interim injunction is awarded.