AT WHAT POINT DOES A COMPETITOR'S ARCHITECTURAL design pass beyond “similar”? An ongoing court dispute between Minneapolis-based Rottlund Co. and Town and Country Homes (which builds in Minnesota and Illinois) could illuminate the tipping point and set a precedent for merchant-built housing.

In July, a federal appeals court reversed a 2004 jury verdict in favor of Town and Country and sent the case back to the U.S. District Court in Minneapolis for retrial. The reversal prolongs a copyright infringement suit filed by Rottlund in 2001 against Town and Country Homes; its parent company, Chicago-based Pinnacle Corp.; and the architecture firm Bloodgood Sharp Buster (BSB), alleging that the companies unlawfully copied Rottlund's product designs for its Villa II “back-to-back” townhomes (see “Innocent Designs,” April 2005, page 51).

In copyright infringement cases, the jury must decide whether the designs at issue are “substantially similar” in the eyes of a layperson. The original verdict in favor of Town and Country found that the town-homes in question were not substantially similar to Rottlund's product. However, the 8th Circuit Court of Appeals subsequently ruled that the judge in that case erred in the admission of testimony by Pinnacle architectural expert Jeffrey Scherer, without which the jury might have rendered a different verdict.

As the case heads for another run in the U.S. District Court, arguments will likely focus once again on builders' ability to pursue similar site-planning strategies to meet certain density and affordability criteria.

“It's difficult to imagine a scenario in which one builder builds a product in one marketplace and essentially gets a monopoly over it,” says Holly Newman, of the law firm Mackall Crounse and Moore, representing BSB. “The push here is not to legalize copying, but to allow for fair competition.” Rottlund, which initially sought $32 million in damages in the first trial, will likely up the ante to account for continued sales of Town and Country's allegedly infringing townhomes since the suit's initial filing.

“Rottlund disagrees that [a ruling in its favor] would stifle competition,” says David A. Davenport, an attorney with Winthrop & Weinstine. “We think it would improve competition in the sense that creative design is better for consumers. To suggest there are only one or two ways to design a townhome is flawed.”

Learn more about markets featured in this article: Minneapolis-St. Paul, MN.