Imitation may be the sincerest form of flattery, but in the home building business it means losing a competitive advantage.
That's why the Roseville, Minn.–based Rottlund Homes is taking legal pains to secure copyright protection for its back-to-back townhome design in the Twin Cities market. Rottlund alleges that its competitor, Town & Country Homes, copied its architectural designs for Villa II, which Rottlund introduced to the Minneapolis market in 1988 and attributes to its success there.
Recently the builder gained ground in its pursuit of $32 million in copyright infringement damages for roughly 600 townhomes built by Town & Country between 2000 and 2001 in Minnesota and Illinois. In mid-July, the Eighth Circuit Court of Appeals reversed a 2004 jury verdict that determined that Town & Country had not infringed upon Rottlund's design copyrights. The case will be retried in the U.S. District court in Minneapolis.
Currently, Rottlund is the Twin Cities sixth largest builder. Town & Country, which has been acquired by K. Hovnanian Homes since the original suit was filed in 2001, takes the ninth seat in the market, according to Hanley Wood Market Intelligence data.
Bob Weinstine, one of Rottlund's attorneys, says the reversal both forces builders to be innovative with product design and affirms that the resulting intellectual property is protected. “[The reversal] will be of enormous significance to builders because, at least in the Twin Cities, as suburban rings develop, land is getting to be so expensive that town-houses are big,” he explains.
The reversal got its traction from the court's opinion that there had been a misuse of an expert witness's testimony in the original trial.
The testimony included a side-by-side comparison of the competing builders' two-story, two-bedroom townhomes. Weinstine says that the direct comparison was in violation of standing case law because it focused on many of the cosmetic details and ignored the substantial similarities in the total look and feel of the homes.
Weinstine says the industry is ripe for more copyright infringement cases as intellectual property becomes one of the hottest legal areas. “I think there's going to be a lot more of these cases because if you have a winner, people want to copy it … so [other builders are] like why don't we sit back and let Rottlund pave the way?” Weinstine adds.