February's article on the lawsuit between William Hablinski Architecture and Amir Construction (page 20) discussed the subjective, and thus unpredictable, aspect of lost-profit damages in architectural copyright infringement cases. In addition to financial relief, a plaintiff also can request that the infringing building(s) be destroyed. Although demolishing goods that violate copyrights is more suitable for portable things like bootleg CDs, the Copyright Act does not bar the destruction of a building that infringes a copyrighted architectural plan. Yet this remedy may be unavailable if razing the building would work an unjust hardship on the defendant or an innocent third party.
To be eligible for any kind of relief under the Copyright Act, the lawsuit must begin within three years of the alleged infringement. In Chirco, et al. v. Crosswinds Communities Inc., et al., the plaintiff s filed their lawsuit for infringement of their condominium design within the three-year statute of limitations, but the court nevertheless denied their request to destroy the allegedly infringing condominiums.
In December 2000, Chirco discovered that Charter Oak Homes was building condominiums according to plans that Chirco believed were based on its copyrighted design. About four months later, Chirco filed its first copyright infringement lawsuit against Charter Oak Homes and Bernard Glieberman.
During the course of preparing its case, Chirco learned that Glieberman intended to build another infringing condominium development called Jonathan's Landing through Crosswinds Communities, another company he controlled. In October 2001, Chirco requested and received copies of the plans for Jonathan's Landing from local government officials under the Michigan Freedom of Information Act.
Crosswinds Communities broke ground on the 252-unit Jonathan's Landing project in May 2002. Despite knowing about Glieberman's plan to construct more potentially infringing condominiums, Chirco took no steps to stop Glieberman until it filed a second lawsuit in November 2003. By that time, however, 168 of the planned 252 units had been constructed; of those, 141 had been sold, and 109 were already occupied by the buyers.
In view of Chirco's delay in bringing suit, Glieberman and Crosswinds Communities asked the court to dismiss the case on the legal principle of laches. In simple terms, laches is a negligent and unintentional failure to protect one's rights and is commonly referred to as “sleeping on your rights.”
The court found that Chirco's 18-month delay in filing suit showed a lack of diligence. As to Chirco's request to destroy the Jonathan's Landing project, the court decided that such a result would be harmful to the defendants and the innocent third parties who already had bought and occupied many of the units. The court did not prohibit Chirco from pursuing financial relief because its lawsuit was otherwise timely under the statute of limitations. Whether Chirco signals a trend in architectural infringement cases or is limited to its particular facts, it nonetheless provides a valuable lesson on how a court might decide the issue of destroying an infringing building when innocent buyers are involved.
Jeffrey C. Brown is an intellectual property attorney at the law firm of Merchant & Gould in Minneapolis.