Not so intangible: IP rights and real estate

Clare Reddy, Stephanie Kay and Michael Szlesinger outline copyright, trade marks and other rights pertinent to property. From trophy buildings that dominate the skyline to uniquely designed work and living spaces, distinctiveness is a significant driver of real estate value. Key to developers’ ability to leverage and protect that value are intellectual property rights.  For the most part, the intellectual property right most often at the centre of construction law conversations – and disputes – is copyright. Even for showcase buildings, invariably this comes down to a licence to use and reproduce (and sometimes adapt) materials, such as an architect’s design drawings, for any purpose relating to the development.  Occasionally, a developer may seek an assignment of some or all copyright – essentially transferring the rights to a new owner. But all this belies a more complex picture, with multiple other rights providing alternative or more valuable protections, as well as providing scope for disputes to emerge.  Copyright Copyright subsists for a period of 70 years after an author’s death (there are some exceptions) and is a useful intellectual property tool to deploy in protecting a building’s image.  Copyright is the architect’s key protection over their design documents. It may subsist in sketches, diagrams, maps, charts, models and plans as artistic works, and in written directions and specs as literary works. Importantly, copyright protects against the creation of 3D works from 2D works and vice versa (ie “dimensional shift” copying).  Ownership of copyright by the onward developers can be important to allow commercialisation of the building’s copyright, for instance in publications. However, if a developer wishes to prevent an architect from designing a substantially similar iconic building elsewhere or wants to pursue a third party for infringement, it should obtain more than the industry standard non-exclusive licence.  Copyright infringement claims can occur where one firm of architects alters or amends another firm’s design documents that were drawn up for the purpose of marketing, tendering, or obtaining planning permission (see Signature Realty Ltd v Fortis Developments Ltd and another [2016] EWHC 3583 (Ch); [2017] PLSCS 55).  If a developer is buying a site with the benefit of planning, for example, it is crucial that it obtains a copyright licence to allow it to build out the scheme.  Demonstrating the appropriate permission to use copyright protected material is important for all parties to a development to avoid potential infringement claims and to clearly set out which party has the right to do what with the plans, for what purpose, and who has the right to take action against third party infringers. Trade marks  Trade marks are valuable registered rights which may provide indefinite protection (provided they are renewed every 10 years) to a building’s name and image.  Many iconic London landmarks are famously known by nicknames, and some, including the Shard, Gherkin and London Eye, have registered them as marks.  If a name meets the distinctiveness requirements for registration, a mark may be filed at the outset of a building’s design. Should the name lack distinctiveness, or it catches on following completion, it may still be possible to register the mark by providing evidence of acquired distinctiveness.  Filing a logo mark with an image or 2D drawing of a building may side-step refusal on the basis that a name is generic or lacks distinctiveness. The UK Intellectual Property Office and certain overseas registry offices will also accept 3D marks of iconic buildings.  While unconventional and difficult to obtain, marks may also be registered to protect the layout and design of an iconic store or business. For instance, Apple successfully registered 3D marks for the design and layout of its retail stores.  Ownership of a registered mark facilitates the commercialisation of a building’s goodwill by licensing use of its name and image for merchandise, publications and souvenirs, as well as protection against unauthorised use. For example, in 2016 the Empire State Realty Trust successfully sued a brewery which featured the iconic Empire State Building on its logo (ESRT Empire State Building LLC v Michael Liang). Design rights Design rights are a lesser known IP right, similar to copyright, but which protect the shape and configuration (visual appearance) of a product or design.  There are limitations to their applicability for developers or designers of traditionally built assets (see Re Concrete Ltd’s Application (1939) 57 RPC 121) but, importantly, in the UK registered design rights can apply to manufactured works, making them a potentially appropriate protection for the burgeoning off-site industry in pre‑formed, portable buildings. Although RDR applications are inexpensive and straightforward, such rights may be difficult to enforce due to the nebulous principle of “overall impression”, which defines the originality, and protectability, of the design.  Moral rights Finally, moral rights grant additional rights to the author of a copyright work to be identified as the author of the work, to object to derogatory treatment of the work, and not to have work falsely attributed to them. While not always given due consideration, they can cause considerable headaches where matters of professional reputation are involved. This is a personal right of most relevance to architects and other designers, and which, unlike copyright, cannot be assigned to third parties. This latter point is especially important in scenarios where a site changes hands before construction.  Standard practice is for a developer to seek a waiver of the architect’s moral rights, although the exact scope of waiver may be specific to the parties and building involved. For iconic buildings, an architect may actually seek a clause asserting their right to be identified as author of the work of architecture.  Pay attention to IP Fundamentally, whether the developer’s aim is distinctiveness as a unique selling point, or designs that can be rolled out at scale, failure to consider IP rights properly may, at best, result in lost opportunity for commercialisation (particularly of a “trophy” building) or, at worst, lead to the parties becoming embroiled in a dispute.  Clare Reddy is a partner in real estate, Stephanie Kay is a senior associate in intellectual property and Michael Szlesinger is a trainee solicitor at Lewis Silkin