Construction OberView: Word to the Wise: Owners, Beware the Architect

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In a perfect world, a project owner and its architect work as team to reach the successful completion of the project. Indeed, the architect can be invaluable in helping the owner achieve its vision for the project and in managing the construction so that it runs smoothly. However, in the event that a dispute arises between the owner and the architect, the owner should be aware that the cards are often stacked in favor of the architect, giving the architect an “unfair” advantage in negotiating a resolution to the dispute. That advantage relates to the copyrights that an architect obtains in the work that it produces for a project.

An owner of a project would understandably think that, because it had paid an architect for its services, it “owned” the drawings that the architect prepared. That is generally not the case. Specifically, pursuant to AIA B141 (1997) – one of the most commonly used form contracts between an owner and an architect – the architect retains all ownership rights, including copyrights, in the drawings, plans and specifications that it produces for a project. Conversely, the owner receives only a nonexclusive license to use and reproduce that material. If the contract is terminated for any reason, the owner’s license to use the architect’s work is also terminated – meaning the owner is barred from using or copying the architect’s work. Further, the owner must return the work to the architect within seven (7) days. A second license that enables the owner to use the architect’s work arises only after the architect is “adjudged” to have been in default of the contract. But the adjudication of the dispute can take months, if not years. A similar result occurs under the “common law” if the parties have an oral contract or if their written contract does not specifically address who holds the rights to the architect’s work.

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Published In: General Business Updates, Construction Updates, Intellectual Property Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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