During the course of a construction project, contractors and consultants produce material that will be subject to copyright - documents, photographs, drawings, plans and models.
Clients may need them in future to maintain, repair and extend a building, but if there are restrictions on how the client can use them, this may cause considerable problems.
It is very important in construction contracts and appointments to ensure that copyright is dealt with, and a number of points need to be considered. The precise description of the material the client is permitted to use, how that material is to be used (for example for alterations or extensions or both), and whether a licence will be required in future (for example whether or not a licensee can grant a sub-licence).
For a client, a licence which is broad in scope is always preferrable.
It is usual for consultants and contractors to want to keep ownership of copyright and to issue a licence allowing a client certain rights to use them. Therefore, an express licence in writing is essential, whether it is a single clause in a construction contract between parties or a specific form of licence.
Verbal copyright licences should be avoided, as these can be problematic if the agreement is disputed at a later date. Ideally, the licence should be non-exclusive, irrevocable, and royalty-free.
A consultant is likely to want to make a licence subject to payment of a fee. In principle this is reasonable, but can cause problems for a client. If there is a dispute or uncertainty about the fee, the client may not have an effective licence.
Fees can also cause unexpected copyright complications. Recently, a contractor agreed to give a licence to a third party, but was unable to obtain the licence from his consultant without paying the consultant's fee, which the contractor disputed. The third party was left with no effective licence and a problem he was powerless to sort out.
A similar issue can arise in relation to collateral warranties. For example, a prospective buyer of a building may negotiate warranties on the purchase of it. If any of the warranties contain a copyright licence (which they are likely to) the buyer may have no right to exercise that licence if it is subject to payment of a consultant's fees.
The buyer would not be in a position to resolve payment of those fees and so could be buying the building with the benefit of drawings it has no right to use. This could cause considerable problems in relation to maintenance, extension and repair at a future date.
Finally, moral rights - such as the right to be identified as author of a copyright work - can pose problems, too.
These require slightly different treatment to copyright, as moral rights remain with their author even if the copyright in them is assigned or licensed.
A consultant may be asked to waive moral rights so that it cannot exercise them in the future, but it may be unwilling to do so, particularly in the case of a high profile construction project where good publicity will be lost if the consultant is not identified as the author of the designs. Clarification is needed as to ownership of moral rights.
For further advice in connection with copyright and other intellectual property rights please contact Gary Assim on 03700 868411 or email email@example.com
Shoosmiths regularly advise on issues relating to copyright licences in construction contracts. If you have any questions relating construction issues please contact the author, Adam Hiscox on 03700 864074 or email firstname.lastname@example.org