A family operating a collection of companies building single-family homes from their Indiana location found itself on the receiving end of a lawsuit by a court-described intellectual property troll called Design Basics, LLC. The Seventh Circuit Federal Appellate Court explained that Design Basics has filed numerous suits seeking to enforce copyrights in single-family home floor plans – over 100 such infringement suits against home builders in recent years. The goal, however, was not entirely to protect expression but to extract payments through litigation.
In Design Basics LLC, et al. vs Kerstiens Homes & Designs, Inc., et al., decided June 16, 2021, the Court explained that the home design companies license their plans through Design Basics, who acts as a sort of plan broker intermediary between home builders and design firms. Design Basics promotes the copyright designs through publications and materials placed in home improvement stores and other means.
At the heart of the appeal was the two-issue question in this copyright infringement case: whether the builder copied the protected work and whether the copying constituted an improper appropriation (whether the degree to which the design similarity was an unlawful appropriation of Design Basic’s copyright). Continuing a line of cases declining to enforce infringement actions brought by Design Basics, the Court pointed out that the similarities in the home floor plan design asserted by Design Basics were in fact bound up in standard features and functions found in many homes. Design Basics tried to argue that the Kerstiens’ placement of a garage or a laundry room off of the garage, and three standard bedrooms on the second floor of the home, were protectible layouts.
As the Court explained: “Pick any ordinary neighborhood in the Chicagoland area…. The industry standard suburban single-family home is rife with common features for many reasons, but copyright infringement is not among them….’There are only so many ways to arrange a few bedrooms, a kitchen, some common areas, and an attached garage, so not every nook and cranny of an architectural floor plan enjoys copyright protection.’”
The take-away? While the Builders/Developers won an important victory, homebuilders and others are still cautioned to keep an eye out for potential infringement issues. Simply copying another’s distinct layout and design features in toto may result in an expensive lawsuit and potential liability. The award of attorney fees and costs was more than $518,000, and the suit took more than 5 years to the Seventh Circuit’s decision. How many builder/developers are willing or able to defend such a case?
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