Valuators of professional firms many times run into complicated rights with respect to intellectual property. One esoteric issue relates to architectural drawings that predate the Architectural Works Copyright Protection Act (read about the extent of protections offered by the AWCPA here). Ron Coleman, in his Likelihood of Confusion blog, brought to our attention a case that reinforces the fact that copyright protections existed for architectural plans, as a whole, prior to AWCPA, even though at that time others could legally use those same plans to build replica structures.
BackgroundArchitect Scholz independently created house plans and registered them with the Copyright Office. Later Scholz agreed to design houses for a homebuilder. When that agreement terminated, the homebuilder unilaterally posted Scholz’s plans on the internet in the form of a promotion. Scholz sued the homebuilder for copyright infringement, and the homebuilder’s defense was that the plans pre-dated the AWCPA.
Nothing earth shattering here, but the focus was directly on architectural plans that predate AWCPA, something analysts will encounter. The Second Circuit Court of Appeals ruled on August 15th, in Scholz Design, Inc. v. Sard Custom Homes, LLC (Docket No. 11-3298), that AWCPA added to the copyright protections already enjoyed by architects, namely that their plans cannot be copied, as plans, without infringing, under the Copyright Act. (AWCPA added the protection against building the replica structure represented in a plan.)
Valuators looking at an engagement involving an architecture and engineering firm will benefit from the perspective of Ian Rusk, ASA and Michael O’Brien, ASA presented in the transcript of their 2010 BVR webinar.