It took nearly six years, but a copyright infringement lawsuit brought by the Rottlund Co., No. 75 in the 2006 BUILDER 100, against Town & Country Homes (a subsidiary company of Hovnanian Enterprises, No. 6 in the 2006 BUILDER 100) and the architecture firm Bloodgood Sharp Buster Architects & Planners of Iowa Inc. settled for an undisclosed amount of money. Tuesday's settlement announcement comes just days before the case was going to be heard again for the third time in a courtroom.
Minnesota-based Rottlund Co. sought $32 million from Town & Country in 2001 after alleging that Town & Country copied the design of their popular townhome product Villa II's back-to-back design, first introduced to the Minneapolis market in 1988. At the time of the original lawsuit, Town & Country's parent company was Chicago-based Pinnacle Corp.
"Rottlund Homes spends an enormous amount of money and invests significant human capital developing new home designs" Rottlund Homes President David Rotter said in a press release. "We take a tremendous risk every time we release an unproven design in the marketplace."
The company, Rotter added, "has a zero tolerance policy on copyright infringement. We will not simply ignore architects and builders that sit back and wait for Rottlund to come up with original designs and take risks, and then copy our designs after they succeed in the marketplace."
The settlement comes after a federal jury in 2005 ruled that Town & Country's architect, Bloodgood Sharp Buster Architects & Planners, did not copy Rottlund's architectural designs. The ruling was reversed by a three-judge panel in June 2006 after they found that the judge in the first case, U.S. District Judge David Doty, should not have allowed the testimony of Town & Country's architectural expert, Jeffery Scherer. The panel said that Scherer's testimony went "too far"and had it been prohibited, the jury would have reached a different ruling.
In an interview with BUILDER Magazine, Rottlund Homes' attorney Craig Krummen, a shareholder at the Minneapolis law firm Winthrop & Weinstine, explained how this settlement sets a new legal precedent.
"A lot of prior copyright cases involving architectural designs were picking things apart one element at a time to determine whether or not there was infringement-what I called the 'atomization of design.' This case allows future [plaintiffs] to go forward with 'total look and feel' liability," Krummen says. "Basically, if the average person feels, upon first impression, that the total look and feel of the architectural design is substantially similar, then there is copyright infringement. The basis for that determination is now the overall look and feel, not element by element."
Moving forward, Krummen recommends that builders keep meticulous records of the creative process, including all preliminary sketches, CAD drawings, and construction documents leading up to the final architectural design.
"Safeguard in case you need to demonstrate your design is similar to someone else's, but not a copy," he warns. "Process work will demonstrate you were being independently creative, not copying someone else's work."
BUILDER Senior Editor Jenny Sullivan contributed to this report.
Learn more about markets featured in this article: Minneapolis-St. Paul, MN.