On Friday, November 8, 2013, the United States Circuit Court of Appeals for the Fifth Circuit, which comprises Texas, Louisiana, and Mississippi, affirmed a $3.2 million damages award for copyright infringement in favor of Kipp Flores Architects, L.L.C. against Hallmark Design Homes, L.P. The jury’s award is based upon the alleged profits earned by Hallmark from sales of homes that the jury found infringe Kipp Flores’ copyrighted architectural drawings.

Kipp Flores is an architectural firm that creates, markets, and licenses architectural designs, many of which are registered with the United States Copyright Office. Hallmark obtained copies of certain copyrighted architectural designs pursuant to a license from Kipp Flores. The license entitled Hallmark to build one home based upon each design. The agreement expressly provided that additional licenses for additional units could be purchased but, according to Kipp Flores, Hallmark failed to pay additional license fees in connection with its reuse of the licensed plans.

Kipp Flores’ initial complaint for copyright infringement alleged that Hallmark infringed its copyrights by making digital and paper drawings and plans based upon them, constructing houses based upon them, and selling homes that are copies of or derivatives of the copyrighted designs. Joined in the suit along with Hallmark were its limited liability partners, who were alleged to be individually liable for copyright infringement by virtue of the fact that they had legal power and ability to supervise and control Hallmark’s activities and had a financial interest in them.

Kipp Flores has successfully sued for infringement of its copyrighted designs at least once before; it obtained a substantial verdict against home builders in Virginia in 2001.

Architectural works receive copyright protection under the Architectural Works Copyright Protection Act of 1990, which provides copyright protection to original architectural designs in various formats, including designs embodied in structures. Prior to the AWCPA, copyright protection was given only to original architectural plans and technical drawings, not to designs embodied in buildings.

Builders and architects should take care not to copy others’ copyrighted designs, and those who seek to protect their designs should register them with the United States Copyright Office.