A developer employing a design and build contractor doesn't usually expect to own the design produced by that contractor - but they do expect to have a licence to use that design. The standard form contracts JCT, NEC, ICE all pretty much follow this premise, that: Design owned by the Contractor remains in the contractors ownership. The Employer has a licence to use that design for specific purposes.
What if the Contractor doesn't own the design? What if the Contractor subcontracted the design to a third party?
The law provides that the third party who created the original material is the owner of the copyright in that material unless they specifically agree to transfer ownership. Copyright protects the right to copy, issue or adapt the copyright material. The law also gives the original designer moral rights in their material. Moral rights protect the integrity of the copyright material, with special rules applying to architects.
If the design and build contractor is not the author of the copyright in the design he cannot give the Developer a licence to use that design.
For a Developer to be sure that they are getting a licence to use all the design produced in connection with their development, the Developer would need to make sure that they receive:-
- a licence from any third party who produced design; and
- a waiver of moral rights from any original author;
OR
- a warranty from the design and build contractor that he is the original author of all the design; and
- a licence from the design and build contractor for any of their design; preferably backed up with an indemnity.
If they have not received either of these combinations, they could find themselves receiving a claim under the Copyright, Design and Patents Act 1988 for infringement of copyright and facing liability for damages.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
