The Patry Copyright Blog Redux: Post Number 1

Thanks to my new employer, the litigation law firm of Quinn Emanuel Urquhart & Sullivan, I can restart my former blog. Naturally, the views expressed in this blog are solely mine and not the firm's. I hope the separation of personal from employer is respected. 

My goal is the same as it ever was (Hat Tip to Talking Heads): provide a civilized discussion of current issues in copyright law. Passion is well and fine but let's not let it led to discussing issues as  partisans.

Homilies out of the way, let's begin with the Eighth Circuit's January 14, 2025 opinion in Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc., 2025 WL 86370. Simplifying the facts and claims, Plaintiff was a residential home designer. In 1996, he designed a home featuring a triangular atrium and stairs. He obtained a registration for an unpublished architectural work. He later built a few additional homes using the design. There things sat until 2017, when one of the houses went up for resale. Enter the defendants - real estate agents -- eager to show prospective buyers the interior design of the existing homes. The copyright owner had not licensed his floor plans. The real estate agents appear not to have access to them because they created their own versions of them by viewing the interior of one of the houses. These versions were not replicas of Plaintiff's, having less detail. The trial court's initial opinion dismissed the case for lack of access, and pursuant to the exemption for architectural works in Section 120(a), rather than fair use. The Eighth Circuit reversed disagreeing on Section 120(a), but allowing the trial court to consider fair use on remand. It did and found fair use. The Eighth Circuit in our opinion affirmed. 

Why plaintiff sued is a mystery. At issue were already constructed houses, and defendants' reduced floor plans could not be used to construct new homes. In 2021, the Eighth Circuit affirmed a trial court's dismissal of another case brought by plaintiff against different defendants for the same design, but plaintiff does not seem to have been a serial litigant. In any event, this case allowed the court of appeals to make some interesting points about fair use. Given this is a blog and not a law review article, I limit myself to the first and fourth fair use factors. 

Defendants' floor plans were considered transformative because they were deemed to have an informational purpose: showing "the layouts and dimensions of the homes to potential buyers and help them decide whether they were interested in buying the homes at resale." This purpose "was new and went beyond the purpose of" the original. In the court's words: "The designs themselves, by contrast, facilitated the construction of the homes for sale and occupation. Use of the designs thus yielded end products with functional and aesthetic benefits, while use of the floorplans identified and advertised those products and benefits."

The design was certainly not "transformed" in the derivative works definitional of that term; the content was not altered, but that has never been a requirement for a use to be deemed "transformative."  It does show how the term "transformative" can be ill-suited to what is after all, an ad hoc defense in no need of labels that pigeonhole uses into those that actually change the content of the original. As Judge Leval -- the author of the label -- wrote in his Authors Guild v. Google opinion, the transformative label "cannot be taken too literally as a sufficient key to understanding the elements of fair use. It is rather a suggestive symbol for a complex thought, " 804 F.3d 202, 216.  

On the fourth factor, plaintiff's lack of licensing for the over 20 years after the work was created -- as well as the important fact that at issue was resale of existing homes rather than the creation of new homes that could compete with plaintiff's design -- led, understandably to the market harm factor being weighed in defendants' favor. The court's treatment of the licensing issue was nuanced, especially regarding the circularity problem: a finding of fair use means the use need not be licensed, but the statute includes potential losses, while the Supreme Court has emphasized that small, but widespread unauthorized uses can result in the requisite level of market harm tipping this factor against fair use. The Eighth Circuit got out of the circle by  considering the market factually to be hypothetical since plaintiff had had decades to license the plans, but didn't.  There was also a patina of the first sale thrown in, the court writing: " A buyer might purchase a home advertised with a floorplan in the resale market, but Designworks has no legitimate interest in preventing resales because the first sale doctrine allows homeowners to resell their homes without its permission. 17 U.S.C. § 109(a)."

Overall, the opinion, by Senior Judge Morris Arnold is a model of how to analyze fair use under unusual facts.

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