Intellectual Property in Construction Law: Carlisle Homes v Tick Homes

Intellectual property (IP) is a key asset in today’s construction industry, helping businesses safeguard their competitive edge in an increasingly tech-driven landscape. As construction evolves with the introduction of high-tech products, materials, and digital platforms, understanding how to protect new and innovative ideas is crucial. This blog post will look at the Federal Court Case Carlisle Homes Pty Ltd v Tick Homes Pty Ltd [2018] FCA 973 (‘Carlisle Homes’) as it demonstrates the critical role of copyright in the construction sector.

The Carlisle Homes Case

Carlisle Homes Pty Ltd (‘Carlisle’), a large residential developer, claimed that Tick Homes Pty Ltd (‘Tick’), a competitor, had copied its original house designs. The case was founded on the fact that in 2017, a former employee of Carlisle, who had contributed to the creation of these designs, was made redundant and subsequently employed by Tick, a newly incorporated competitor.

Carlisle had developed and created nine original house designs, Tick had developed house plans that were very similar to Carlisle’s original design. Carlisle claimed that Tick had infringed its copyright by copying its house designs and filed for an immediate injunction to stop Tick from selling homes.

The Court was asked to determine whether or not to grant injunctive relief. This required an assessment of:

• Whether the applicant has established a prima facie case (that the claim being presented to a court has merit, when taken at face value); and

• Whether the inconvenience or injury likely to be suffered by the applicant (Carlisle here) if injunctive relief is refused outweighs the injury which the respondent would suffer if an injunction were granted.

While Justice Murphy found that Carlisle was able to establish a prima facie case, he remained unconvinced on the second question. On that that basis Justice Murphy refused injunctive relief, instead ordering a speedy hearing of the substantive proceedings. The decision was based on the fact that Tick, a newer business, would suffer significant harm if it were restrained from using the designs.

The case highlights the potential complications when enforcing IP rights, particularly in industries like construction, where designs are often shared across various parties and projects.

The Importance of Intellectual Property in a Competitive Construction Market

This case demonstrates the importance of having a clear understanding of copyright law, especially when it comes to protecting original designs. Builders, architects, and developers should be aware that even small changes or similarities in design can lead to copyright disputes.

Intellectual property rights play a large role in helping construction businesses and suppliers maintain their competitive advantage. As the construction sector increasingly embraces technology, including digital platforms, tech-led construction, and new materials, protecting innovative ideas becomes more important than ever. IP allows businesses to secure their brand, designs, technologies, and other proprietary assets, ensuring they remain ahead of the competition.

For example, a company that creates a unique construction technique, innovative building materials, or a ground breaking design is able to protect those innovations through patents, copyrights, or trademarks. This not only helps protect the company’s original work but also strengthens its position in the marketplace by preventing competitors from copying or exploiting those innovations.

Protecting your IP Rights in Construction: Key Considerations

To protect IP, construction companies should include specific clauses in contracts that clearly outline how IP rights are handled. Here are some key IP clauses to include in construction agreements:

1. Ownership of IP
   An ownership of IP clause determines who owns the IP created during the project. Often, the principal will seek to own all IP upon completion, but this may not be acceptable for contractors who wish to retain certain rights.
   

2. Licensing of IP
   Contractors may need to grant licenses to the principal or subcontractors to use certain IP during the project. This could include licenses to use specific designs, materials, or technologies. The scope and duration of these licenses should be clearly defined to avoid disputes later on.
   

3. Confidentiality
   Construction projects often involve sensitive information. Contractors and subcontractors should ensure that confidentiality and non-disclosure agreements (NDAs) are in place to protect parties from disclosing information without proper authorisation.
   

4. Dispute Resolution
   Since IP disputes can arise during or after the completion of a project, it’s crucial to have a clear protocol and processes for resolving conflicts.

Practical Tips for Builders Concerned about IP Breaches

To protect their business and ensure they respect the IP rights of others, builders, developers, and subcontractors should consider the following tips:

• Keep Records
  Retain all early drafts, sketches, and communications related to your designs. These things can serve as evidence of your ownership if there is ever a dispute over copyright infringement.
  

• Review Contracts Carefully
  Ensure that your contracts clearly define the ownership and licensing of IP.
  

• Use Clear IP Clauses
  In addition to ownership and licensing clauses, include provisions about confidentiality and protection against infringement in your contracts. This can help mitigate potential risks of IP breaches.
  

• Seek Legal Advice
  Intellectual property law can be complex, especially in construction. Regular consultation with a lawyer is best practice.

To learn more about any of the matters discussed here, or if you require legal assistance, please contact Chris Moshidis, Director and Principal Lawyer on +61 9521 7956 or chris@urbanlawyers.com.au.