Construction, Architectural Works and a Primer for Copyright in Canada Pt. 2

I stayed at the famous Château Laurier on a recent trip to our nation’s capital. While exploring the halls of the Ottawa landmark, I stumbled across a framed print of a 1908 article that commented on the similarity between the original plans for the hotel and the plans eventual used for the project.

As the story goes, the hotel, along with an adjoining train station, was commissioned by Grand Trunk Railway president Charles Melville Hays. American architect Bradford Gilbert completed the original design for the hotel and adjoining train station, which were slated to costs a combined $2.5 million. Six days before Ottawa City Council examined them, Hays ordered Gilbert to re-design the buildings to cost $1 million less. Gilbert refused the re-designs and was fired. A new firm, Ross & MacFarlane, soon unveiled designs that an editorial in the Architectural Record claimed were “identical” to Gilbert’s. The author of the editorial summarized his displeasure with the copying by stating, “if this be ‘architecture,’ a supply of tracing paper and a brazen front are the main requisites for [. . .] that noble art”.

Architecture is an art that is protected by copyright. That’s why the second part of our primer for copyright in Canada focuses on architectural works and building designs and aims to again review basic copyright law in Canada as applied in the context of construction. In case you missed it, you can find the first part, which identified the emerging trend of everyday Canadians being increasingly exposed to copyright litigation, here.

How a Soccer Complex Changed the Field

Copyright litigation involving architectural works and building designs was an almost unheard-of phenomenon until the Federal Court’s 2017 decision in Lainco Inc v Commission Scolaire Des Bois-Francs et al. The plaintiff, Lainco Inc., a company specializing in the design and construction of steel structures, had designed and built an indoor soccer complex in Granby, Quebec. The complex featured a steel structure that allowed for a more open design than conventional structures. The defendants had collaborated to design and build their own indoor soccer complex in Victoriaville, Quebec, featuring a similar steel structure.

For the first time in nearly 50 years, a building structure was found to benefit from copyright protection as an architectural work under the Copyright Act. The Federal Court held that Lainco’s design involving a unique visible steel structure of an indoor soccer complex had been infringed by the commissioning school board, engineering firm, architecture firm and general contractor, who together designed and built a nearly identical structure.

As such, the Lainco decision will serve as the backdrop to the second part of our foray into the world of copyright law.

Protection of Architectural Works under the Copyright Act

The Copyright Act provides copyright holders with the exclusive right to copy works including blueprints, architectural plans, drawings, project descriptions, and interior designs, among other things. Section 2 of the Copyright Act defines an architectural work as any building, structure, or model.

Fixation

In order for a work to be protectable, it must be fixed in a tangible medium of expression. A work is considered fixed when it is stored on some medium in which it can be perceived, reproduced, or otherwise communicated. Aside from blueprints, architectural plans, and drawings, section 2.2(1)(a) of the Copyright Act stipulates that fixation can occur with the construction of an architectural work.

Originality

The threshold of originality is a concept in copyright law that is used to assess whether a particular work can be copyrighted. The test for originality was laid out by the Supreme Court of Canada in CCH Canadian Ltd. v. Law Society of Upper Canada. There, the Court stipulated that:

… an original work must be the product of an author’s exercise of skill and judgment.  The exercise of skill and judgment required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise. While creative works will by definition be “original” and covered by copyright, creativity is not required to make a work “original”.

One of the defences raised in the above mentioned Lainco case was that the soccer complex’s steel structure was not entitled to copyright protection because it consisted merely of an arrangement of well-known structural elements and did not require any special talent or judgment to design.

The Federal Court in Lainco relied on the testimony of Lainco’s head engineer, who explained that the design of the structure resulted from lengthy trial and error with regard to the arrangement of various structural elements in order to provide a cost-efficient and aesthetically looking structure. As a result, the Court held that the design of Lainco’s structure was the consequence of talent and judgment benefiting from protection as an original architectural work under the Copyright Act

Utilitarian Function and What Copyright Protects

In the Lainco case, two of the defendants raised the defence that the steel structure performed a utilitarian function and was not inherently protectable by copyright. This defence was based on the exception provided at s. 64.1(1)(a) of the Copyright Act, which stipulates that it is not infringement to applying to a useful article features that are dictated solely by a utilitarian function of the article.

At the heart of this defence is the question of what kind of intellectual property copyright is intended to protect. In essence, copyright is not intended to protect an idea such as the function of newly developed technology or improvements on products or processes. Instead, such inventions fall into the realm of patents. Patents provide a time-limited, legally protected, exclusive right to make, use and sell an invention. In this way, patents serve as a reward for ingenuity.

The other intellectual property protection to consider is that of trademark. A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s goods or services from those of others. In recent years, trademarks have begun to cross into the realm of the construction world. For example, in 2013, Apple successfully registered a trademark in the US for the Apple Store’s “distinctive design and layout”.

The Federal Court in Lainco rejected the utilitarian function defence and found that while the individual elements of the steel structure were not novel, and that any architectural work was to a degree functional or utilitarian, the overall design deserved copyright protection. The Court’s ruling was based on the finding that the selection and arrangement of the various elements required significant trial and error testing, and the exercise of skill and judgment on the part of engineers.

The defendants in Lainco also argued that even if the steel structure was protected by copyright, the infringing complex featured engineering differences which meant that it did not infringe. The Court rejected this defence noting that representatives of the defendant school board and engineering firm had admitted visiting and photographing the original complex prior to designing the infringing complex and that any differences between the two structures were insignificant.

Ownership Issues

Ownership issues are always ripe in any allegation of copyright infringement, perhaps even more in the construction context. Our firm has seen a recent increase in copyright ownership concerns being brought up by our construction clients and our municipal clients while approving building plans and other project details.

As quoted by the Ontario Superior Court of Justice in Endplex Investments Inc. v. Derrydale Golf Course Ltd., McLachlin, Wallace and Grant, The Canadian Law of Architecture and Engineering, 2d ed. (Toronto: Butterworths, 1994), at p. 264 outlines:

Ownership of drawings, specifications and other documents used in the construction of a work is frequently confused with ownership of copyright. The ownership of drawings and related documents refers to the ownership of the drawings themselves, and is governed by the contract between the architect or engineer and the client. The ownership of copyright, on the other hand, refers to the ownership of the expression of the idea embodied in the drawings and the right to reproduce that expression. Architects or engineers who create the copyright work retain copyright in the work unless they expressly assign it to another.

Pursuant to section 3(1) of the Copyright Act, architects or engineers who own copyright have the sole right to reproduce their work in whole or in part.

This issue was front and centre in Bemben & Kuzych Architects v. Greenhaven-Carnagy Developments Ltd., 1992 CarswellBC 884, where the plaintiff architect prepared plans for a 24-unit townhouse project in 1981. Seven years later, the architect noticed that an additional 24 units had been constructed on an adjoining site. The additional units were identical to the first 24 units. The architect brought an action in tort against the defendant developers for breach of copyright, based on their unauthorized use of his architectural plans and drawings.

The British Columbia Supreme Court held that the unauthorized use of an architect’s drawings was an infringement of copyright. The individual defendants were liable because they directly ordered or authorized the use of the plans by their company. The plaintiff was therefore awarded damages of $15,000 against all defendants.

Potential ownership issues in the construction context are best dealt with through an assignment or license agreement with the copyright holder. There are many things to consider when drafting such agreements, and it is always best to work with a lawyer familiar with the complexities around drafting and negotiating assignment or license agreement.

Available Remedies and Damages

In the normal course of copyright infringement, section 34(1) of the Copyright Act provides that the owner of the copyright is entitled to all remedies by way of injunction, damages, accounts, delivery up and otherwise that are, or may be, conferred by law for the infringement of a right.

An exception does apply to any infringing building or other structure. Pursuant to section 40(1) of the Copyright Act, where the construction of a building or other structure that infringes or that, if completed, would infringe the copyright in some other work has been commenced, the owner of the copyright is not entitled to obtain an injunction in respect of the construction of that building or structure or to order its demolition.

In terms of damages, copyright holders have the ability to receive an award of statutory damages in lieu of actual damages and profits. The copyright holder has the option to make such an election at any time before final judgment.

The ranges of statutory damages are outlined in section 38.1 of the Copyright Act as the following:

(a) in a sum of not less than $500 and not more than $20,000 that the court considers just, with respect to all infringements involved in the proceedings for each work or other subject-matter, if the infringements are for commercial purposes; and

(b) in a sum of not less than $100 and not more than $5,000 that the court considers just, with respect to all infringements involved in the proceedings for all works or other subject-matter, if the infringements are for non-commercial purposes.

In the Lainco case, the plaintiff did not elect to receive an award of statutory damages since the $20,000 max for commercial infringement would have been much less than potential actual damages and profits.

This decision to not elect statutory damages in Lainco definitely paid off. Upon finding that all of the defendants were responsible for the infringement, given their roles in producing infringing structural engineering and architectural plans, building the infringing structure, and authorizing and enabling these various acts, the Federal Court awarded damages of over $700,000, based on profits Lainco would have earned had it won the call for tender for the infringing complex.

Conclusion

It’s not just large construction projects that can lead to copyright litigation. Shortly after the Lainco decision was released, another case alleging copyright infringement of the design of a private residence in Toronto, Ontario was widely reported in the media. The owner of a new build home in Toronto’s Cedarvale neighbourhood, along with her builder (her husband), architect (her brother-in-law), real estate agent, and various contractors were sued for copyright infringement after another homeowner in the same neighbourhood claimed the new build home was strikingly similar to theirs. The allegations were never proven in court as the parties agreed to settle out of court and the terms of the settlement were not disclosed.

Canadian courts will recognize copyright in architectural works, and grant significant monetary awards and other remedies, when just, if copyright is infringed. As a result, all those involved in designing and constructing buildings and structures need to be aware of both of their rights as the owners of copyright in the architectural and the rights of others to avoid liability for infringement.

If you have concerns about a possible breach of copyright or any other potential legal claim, Duncan, Linton LLP can help. Do not hesitate to reach out and speak with one of our lawyers. Contact us online or call 519-886-3340 to make an appointment.