Henley Arch obtains significant damages award in copyright claim against home owner

Late last year, Judge Baird of the Australian Federal Circuit Court handed down a decision in the case of Henley Arch v Del Monaco, a copyright infringement matter in respect of a project home design.

The claim was brought by well-known Australian builder Henley Arch, who readers might also recall from the 2016 decision in Henley Arch v Lucky Homes. The respondent in this case was an individual who owned a property in Pakenham (Melbourne), Victoria.

In 2015, the Home Owner purchased a vacant plot of land in Pakenham and sought to build a large “ranch-style” home on the property. At this time, Henley Arch was promoting a style of project home known as the “Colorado”, which was based on floor plans created by an employee of Henley Arch.

Judge Baird found that in the course of the Home Owner’s search for an appropriate home to build on his Pakenham property, he had come across the Colorado design on Henley Arch’s website. The Home Owner proceeded to take a photo of the Colorado floorplan and send it to a third party builder, Elite Building Services. The photo did not bear any Henley Arch indicia and it was not contended at trial that Elite Building Services was aware of the association with Henley Arch, nor was Elite Building Services a party to the proceeding. Ultimately, plans were prepared for the Home Owner by reference to the Colorado plan in the photograph and a home based on those plans was built at the Pakenham property.

Henley Arch commenced proceedings against the Home Owner for copyright infringement. The court readily accepted that copyright existed in the Colorado plans and that the building of a house could constitute infringement of copyright in a floor plan. The Judge assessed the similarities between Henley Arch’s Colorado plans and the plans for the Home Owner’s Pakenham house, and found that the Pakenham house plans reproduced a substantial part of Henley Arch’s design. Judge Baird found that the Home Owner’s behaviour in commissioning the Pakenham home and his participation in the build process indicated that he had authorised the builder’s actions in reproducing Henley Arch’s design (in order to create the plans for the Pakenham house and also to build the house). The Home Owner had therefore infringed Henley Arch’s copyright. He had also infringed copyright by taking the photograph of Henley’s plan and by emailing it to Elite Building Services.

Henley Arch sought compensatory and additional damages from the Home Owner.

Evidence was given that had Henley Arch built a Colorado house for the Home Owner, its profits would have been in region of A$67,000. In order to arrive at the loss suffered by Henley Arch as a result of the infringing conduct, Judge Baird applied discounts to this figure to allow for contingencies and uncertainty as well as a reduction to account for the possibility that the Home Owner might not have actually contracted with Henley Arch to build him a home “but for” the infringing conduct, and arrived at a compensatory damages awarded of $42,000.

Judge Baird also ordered the Home Owner to pay $40,000 in additional damages, having regarding to factors including his failure to adequately engage with Henley after he was put on notice of its copyright infringement claims, his financial position and the need to deter similar infringements of copyright in the future.

In total, Henley Arch was awarded $82,000 in damages plus interest of almost $5,000. This award is substantial for a single house and shows that there is merit in designers and builders pursuing infringement claims for one off builds. In addition to recovering compensation, judgments like this are an effective way for designers and builders to signal to the market that they will not tolerate copying and will take action if their designs are used without permission.

By Savannah Hardingham and Karen Liu

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