{"id":891151,"date":"2016-10-19T15:51:03","date_gmt":"2016-10-19T21:51:03","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891151"},"modified":"2016-10-19T15:51:03","modified_gmt":"2016-10-19T21:51:03","slug":"contractors-exposed-copyright-liability-owner-breaches-agreement-architect","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contractors-exposed-copyright-liability-owner-breaches-agreement-architect\/","title":{"rendered":"Contractors Exposed to Copyright Liability Where Owner Breaches Agreement with Architect"},"content":{"rendered":"<p>Katherine E. Kohm | <a href=\"http:\/\/abaconstructionforumdivision1.blogspot.com\/2016\/10\/contractors-exposed-to-copyright.html?utm_source=feedburner&amp;utm_medium=email&amp;utm_campaign=Feed%3A+TheDisputeResolver+%28The+Dispute+Resolver%29\" target=\"_blank\">The Dispute Resolver<\/a> | October 16, 2016<\/p>\n<p>A federal court in the case Eberhard Architects, LLC v. Bogart Architecture, Inc. et al., 314 F.R.D. 567 (N.D.Ohio 2016) recently held that contractors and subcontractors cannot, as a matter of law, avoid liability if an owner uses an architect&#8217;s plans and drawings\u00a0without a license.<\/p>\n<p>In <u>Eberhard<\/u>, the Architect entered into an\u00a0AIA\u00a0contract with the Owner to provide architectural services in connection with the design of a 12-bed hospital facility.\u00a0 Per the contract the Architect granted the Owner a &#8220;nonexclusive license&#8221; to use\u00a0its plans and drawings, the &#8220;instruments of service,&#8221; for the hospital project unless Owner failed to make payments.\u00a0 In such instance, the contract stated that the\u00a0license\u00a0in favor of the Owner would be cancelled.<\/p>\n<p>When the Owner\u00a0failed to make\u00a0payment to the Architect, the Architect issued cease and desist letters to all project participants &#8211; Owner, Contractor, Subcontractor &#8211; to stop using\u00a0its instruments of service as they were protected by copyright law.\u00a0 The Contractor and Subcontractors, who did not have a contractual relationship with the Architect and who did not have a basis in their contract with the Owner to stop work, continued to use the drawings and plans.\u00a0 The Architect then filed a lawsuit\u00a0against all project participants.\u00a0 The Contractor and Subcontractors moved to dismiss. The federal court denied the motion.<\/p>\n<p>The\u00a0Contractor and Subcontractors first argued that case did not \u201carise\u201d under the Copyright Act and was really a contract dispute concerning nonpayment of fees.\u00a0The court disagreed holding that the complaint sounded in infringement by Contractor and Subcontractors and therefore arises under the Act.\u00a0The court commented that it did not matter that the Defendants would raise an affirmative defense that they were not infringers in light of the nonexclusive license.<\/p>\n<p>Then the court likewise discarded the arguments from the Contractor and Subcontractors that they did not exceed the scope of the license because the instruments of service were used on the exact project that the architect had intended.\u00a0 According to the Contractor and Subcontractors, the Owner did not breach its agreement with the Architect (entitling the Architect to withdraw the license in full) because <u>complete<\/u> payment was not a condition precedent to the Owner-Architect Agreement.\u00a0 The court pointed out that\u00a0the Architect-Owner contract granted the license \u201cupon execution\u201d and &#8220;therefore, by granting the license before full payment was due, the parties clearly did not intend the full payment to be a condition precedent to the license itself.&#8221; And furthermore, by agreement of the parties, the license indeed &#8220;ceased to exist&#8221; upon\u00a0the architect&#8217;s\u00a0rightful termination of which non-payment was rightful reason.\u00a0In sum, the\u00a0Owner and Architect had<u>agreed<\/u> that the license \u00a0would be extinguished.Accordingly, by proceeding to use the instruments of service without a license all project participants, including the Contractor and Subcontractors,\u00a0were potentially liable under the Copyright Act.<\/p>\n<p>Beyond this case&#8211;where, in light of the cease and desist letters, the Contractors and Subcontractors arguably were aware that the license was potentially expired&#8211;it is important to note that civil violations of the Copyright Act need not be willful or knowing.\u00a0<em>See generally<\/em> R. Anthony Reese, <em>Innocent\u00a0Infringement in US Copyright Law: A History<\/em>,\u00a030 Colum. J.L. &amp; Arts 133 (2007).\u00a0 As such, contractors and subcontractors who use plans and drawings that are unlicensed, whether they\u00a0know so\u00a0or not,\u00a0may\u00a0expose\u00a0themselves to liability.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Katherine E. Kohm | The Dispute Resolver | October 16, 2016 A federal court in the case Eberhard Architects, LLC v. Bogart Architecture, Inc. et al., 314 F.R.D. 567 (N.D.Ohio 2016) recently held that contractors and subcontractors cannot, as a matter of law, avoid liability if an owner uses an architect&#8217;s plans and drawings\u00a0without a&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contractors-exposed-copyright-liability-owner-breaches-agreement-architect\/\">Continue reading <span class=\"screen-reader-text\">Contractors Exposed to Copyright Liability Where Owner Breaches Agreement with Architect<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,9009],"tags":[118,52,9833],"class_list":["post-891151","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-design-professionals","tag-architect","tag-contractors","tag-liabilty","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Contractors Exposed to Copyright Liability Where Owner Breaches Agreement with Architect - Advise &amp; 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