Construction Company Had Implied License to Use Architect's Copyrighted Plans: Fifth Circuit | Practical Law

Construction Company Had Implied License to Use Architect's Copyrighted Plans: Fifth Circuit | Practical Law

In Hunn v. Dan Wilson Homes, Inc., the US Court of Appeals for the Fifth Circuit affirmed the district court's judgment that a construction company did not infringe an architectural design firm's copyright in plans for custom homes prepared by the firm's former at-will employee because the construction company had an implied license to use the plans.

Construction Company Had Implied License to Use Architect's Copyrighted Plans: Fifth Circuit

by Practical Law Intellectual Property & Technology
Published on 18 Jun 2015USA (National/Federal)
In Hunn v. Dan Wilson Homes, Inc., the US Court of Appeals for the Fifth Circuit affirmed the district court's judgment that a construction company did not infringe an architectural design firm's copyright in plans for custom homes prepared by the firm's former at-will employee because the construction company had an implied license to use the plans.
On June 15, 2015, in Hunn v. Dan Wilson Homes, Inc., the US Court of Appeals for the Fifth Circuit affirmed the US District Court for the Northern District of Texas's holding that the accused corporate infringer, a home construction company, did not infringe the plaintiff architectural firm's copyrights in draft home designs by using the designs to build custom homes without the plaintiff's authorization because the construction company had an implied license to do so (Nos. 13-11297, 14-10365, (5th Cir. June 15, 2015)).
Dan Wilson Homes, a custom home construction company, hired Hunn Designs, an architectural design firm, to provide plans for four custom homes. Wilson hired Hunn because it wanted the plans to be drafted by Ben Lack, who at the time was employed as an at-will draftsman at Hunn. Lack began to draft the designs but resigned from his position at Hunn before the plans were completed. Though Lack returned Wilson's physical project files to Hunn after leaving the firm, he retained copies of digital AutoCAD files of the four draft design plans he prepared for Wilson. Wilson also had physical drafts of all four design plans in the same stage of completion. Hunn and Wilson were unable to agree to terms for completing the project, and Wilson asked Lack to complete the plans, which Lack did.
In response, Hunn registered copyrights in the plans. Hunn then asserted multiple claims against Wilson and Lack in federal district court, including claims alleging that, by using the plans to complete the houses, Wilson and Lack infringed Hunn's copyrighted plans. After a bench trial, the district court ruled that the defendants did not infringe Hunn's copyrighted plans because, based on industry practice in the parties' area (Lubbock, Texas), the parties' imputed intent was that the builder, Wilson, have an implied license to use the plans for their intended purpose. The court also awarded Wilson and Lack attorneys' fees.
The Fifth Circuit affirmed. After noting that the existence of a license to use copyrighted material is an affirmative defense to an infringement claim, the Fifth Circuit ruled that Wilson had the benefit of an implied, non-exclusive license to use the plans, which Hunn created when Hunn authorized Lack (then acting as the firms' agent) to deliver the plans to Wilson without restrictions.
The Fifth Circuit further ruled that this license extended to use of the plans in digital, AutoCAD format, explaining that:
  • The AutoCAD files were the same as the physical files for which Wilson had an implied license.
  • Hunn only copyrighted print outs from AutoCAD, not the electronic AutoCAD files.
Citing the record before it and the practice of routinely awarding attorneys' fees to the prevailing party in a copyright infringement action, the Fifth Circuit also affirmed the district court's award of attorneys' fees to the defendants.