Do you own your store design or does your contractor? You may not want to know the answer

Franchisors and multi-unit operators hire architects and design firms on a regular basis in an attempt to develop and implement new store design concepts that will act as a part of an overall effort to attract new customers and sustain their customer base. These store designs become an integral part of the image of the company and the company brand. Significant resources are directed toward these efforts, including significant monetary resources.

However, even though such architects/design firms are well compensated as a part of the development and implementation of new store design concepts, if the architect/design firm agreements are not properly drafted or negotiated, the well-compensated architect/design firms may end up owning the intellectual property rights in the new store designs. If that happens, no additional stores can be implemented using the same or similar store design without consent from, and likely additional payment to, the architects/design firms. This occurrence happens much more than you would think.

Merely paying an architect to conceptualize and design stores, including the plans and drawings for such stores, does not automatically entitle the contractor to the ownership of the copyrights in such store designs. The work made for hire doctrine under U.S. copyright law does not automatically confer ownership to the contracting party for architectural works. As such, if the an agreement lacks an express copyright assignment, you may not be able to reuse the design at other locations, modify the store designs for a different use, or authorize others to build another store based on the initial design.

This article addresses copyright protection for architectural works, the “work made for hire” doctrine, and offers essential contract guidance.

Copyright protects only certain aspects of architectural works

An architectural work is “the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings.” (17 U.S.C. § 101). An author can claim copyright in any humanly habitable structure, such as houses, museums, and restaurants. (U.S. Copyright Office, Circular 41, Copyright Registration of Architectural Works).

Protection extends to all original design elements. As a hallmark of copyright protection, design originality requires a work interpedently created by the author that possesses a minimal degree of creativity. (Design Basics, LLC v. Signature Construction, Inc., 994 F.3d 879, 885 (7th Cir. 2021)). Original design elements include the overall form of the building, such as the exterior, from all sides and elevations, and the interior, consisting of arrangements and structures that divide the space (U.S. Copyright Office, Circular 41, Copyright Registration of Architectural Works).

Store exterior

Authorship in an architectural work covers the overall form, including the exterior elevations of the building when viewed from the front, rear, and sides. This focuses on the specific visual design of the building, that does not extend to individual standard features. Individual standard features are not individually copyrightable. (T-Peg, Inc. v. Vermont Timber Works, Inc., 459 F.3d 97, 110 (1st Cir. 2006)). These standard features include common windows, doors, and other staple building components, as well as standard configurations of spaces, such as a square bathroom. (U.S. Copyright Office, Circular 41, Copyright Registration of Architectural Works). However, courts have held that a combination of such standard features may be copyrightable, which may depend on unique and original arrangements of exterior architectural features (T-Peg, Inc. v. Vermont Timber Works, Inc., 459 F.3d 97, 110 (1st Cir. 2006)).

Purely functional features are not afforded protection, such as building codes, topography, existing site structures, or engineering necessities. (Home Design Services, Inc. v. Turner Hertiage Homes Inc., 825 F.3d 1314, 1323 (11th Cir. 2016)). Additionally, any design features that are used by all architects, such as those for consumer demand, or customary styles, such as colonial homes or modern high-rises, cannot rely on copyright protection. (Home Design Services, Inc. v. Turner Hertiage Homes Inc., 825 F.3d 1314, 1323 (11th Cir. 2016)).

Store interior

Interior designs, such as the selection and placement of furniture, lighting, paint, or similar items are not protected by copyright. (U.S. Copyright Office, Circular 41, Copyright Registration of Architectural Works). Interior protection focuses on the arrangement and composition of internal spaces. Differences in wall placement, dimensions, and the arrangement or function of particular features can support originality and avoid potential infringement contentions. (Home Design Services, Inc. v. Turner Hertiage Homes Inc., 825 F.3d 1314, 1324 (11th Cir. 2016)).

Store floor plans: Real but limited protection

In the particular architectural genre of floor plans, copyright protection is “thin.” This occurs when an architectural work is built on substantially unprotectable elements. In copyright law, these elements are called scènes à faire, which are so rudimentary or commonplace that to distinguish one work within a class of works from another is unavailing. (Design Basics, LLC v. Signature Construction, Inc., 994 F.3d 879, 889 (7th Cir. 2021)).

Floor plans, like any other work, must qualify as an original work of authorship, subject to the fundamental copyright principle that protection does not extend to an idea, procedure, principle, or concept, but protects only their expression. (Design Basics, LLC v. Signature Construction, Inc., 994 F.3d 879, 889 (7th Cir. 2021)). For example, a floor plan for a house may include a kitchen close to a dining room and bedrooms adjacent to bathrooms, these are familiar arrangements that lean into functionality. Therefore, when floor plans are largely scènes à faire, copyright protection thins out and proving unlawful appropriation requires more than a substantial similarity between floor plans, they must be “virtually identical.” (Design Basics, LLC v. Signature Construction, Inc., 994 F.3d 879, 889-90 (7th Cir. 2021)).

Franchise systems and multi-unit operators at risk

The franchise model depends on the ability to reuse store designs at new locations, modify works for different needs, and authorize others to build from those designs. Most foreseeable uses for store designs, and significant aspects thereof, likely implicate the copyright owner’s exclusive rights in such designs. Only the copyright owner has the right to prepare, or to authorize someone else to create, the same or similar work, or an adaption thereof (U.S. Copyright Office, Circular 14, Copyright in Derivative Works and Compilations). Franchisors and multi-unit operators must beware that the rights to reproduce store plan designs, reuse such designs, or create adapted versions of such designs all rest with the copyright owner. (See U.S. Copyright Office, Circular 14, Copyright in Derivative Works and Compilations).

Agreement including a work made for hire clause: Not a complete solution

Under the U.S. Copyright Act, the party that owns the copyright in a work is the person who actually created the work. (U.S. Copyright Office, Circular 30, Works Made for Hire). However, the work made for hire doctrine acts as an exception in limited circumstances.

A work made for hire is either (1) a work prepared by an employee within the scope of his or her employment or (2) a work that falls within nine enumerated categories that are specially commissioned. (17 U.S.C. § 101). Architectural works are not one of the nine enumerated categories; as such, when an architect is an independent contractor, the commissioning party cannot claim work for hire status for any of the architectural work. (See Richard J. Zitz, Inc. v. Pereira, 225 F.3d 646, 2000 WL 1239830, at *4 (2nd Cir. 2000)) (emphasis added).

Thus, in agreements between a contracting party and the designer, such as an architect, the work made for hire clause alone will not transfer copyright ownership in the contracted for architectural design. (See Richard J. Zitz, Inc. v. Pereira, 225 F.3d 646, 2000 WL 1239830, at *4 (2nd Cir. 2000)). Franchisors and multi-unit operators must ensure to include an assignment rights provision in all contracts, including all right, title, and interest in all architectural works, including related designs, drawings, and plans. Without a written assignment, the architect, not the commissioning party, will own the copyright in any and all architectural works and designs, a result which should certainly be avoided.

Should you have any questions concerning your intellectual property matters, do not hesitate to contact the attorney listed above or any member of the McDonald Hopkins Intellectual Property Department.