Construction and Copyright, Part 2: Practical Considerations

Construction attorneys need to be familiar with intellectual property principles and copyright matters associated with their client’s businesses. In part 2 of this two-part series, Bryan Kroes discusses additional practical copyright considerations, including trademarks and patents.

In Part 1, we discussed copyright basics and architectural plans as one asset that could be protected by copyright. See Construction and Copyright, Part 1: Don’t Forget about IP.

Here in Part 2, we discuss additional practical copyright considerations, including that designs and architectural works aren’t the only copyrightable material to come out of the construction process.

Photos and Videos

Many construction companies want to promote their business using “before and after” or progress photographs of their work. If the construction company hires a third-party photographer or videographer to photo-document the construction site, absent an understanding to the contrary, the photographer owns the photos or video, not the construction company.

In these situations, a contract should be developed identifying the construction company’s right to use the photographs and the rights that are conveyed and retained by the photographer or videographer.

In the construction contract with the owner, the construction company should also identify whether it has a right to use pictorial depictions of the owner’s property, and to what extent it can use those works.

Marketing Materials

Going hand and hand with photographs and videos are a construction company’s marketing materials.

If a construction company creates its own marketing materials – whether website content, pamphlets, presentations, sales sheets, or literature – all may be afforded copyright protection.

Although notice via a copyright symbol (©) is no longer required under U.S. copyright law, it is never a bad idea to label all copyrightable marketing materials with the copyright symbol, to put the public on notice as to the company’s ownership of the copyrighted works.

If a company utilizes its in-house staff to create its copyrightable works, whether designs, marketing materials, websites, presentations, contracts, templates, or company-specific literature, the company should establish either via employee handbook or separate agreement whether the works are works made for hire and as such, owned by the company or the individual author.

Using Outside Copyrighted Material

While a good deal of original content may be created for marketing purposes, companies should be careful to not use any elements in their marketing materials that are owned by someone else.

A common misperception is that if a photo, video or song is found online, then it is fair game to put it in your marketing materials or on your website. On the contrary, just because you found a nice photograph or song online that fits your marketing or presentation aesthetic, does not mean you can use it without permission from the owner. You will have to either obtain a license or find an alternate work to use.

Finding the perfect licensable photo, video, or music for your marketing materials is actually a lot easier than you may think. In fact, Wisconsin is an underrated hotbed of creativity, and there are many wonderfully talented artists, photographers, videographers, and musicians who would love to discuss using their services for your marketing materials.

Other Copyrightable Materials

Copyright protection can also extend to other items a construction company uses in its day-to-day business – including contracts, proprietary documents, and certain forms so long as there is a de minimis expression of originality. If you create an original use or arrangement of words, then there is no reason you cannot claim a copyright in that particular arrangement. In fact, many of the construction contract suites (i.e., AIA and ConsensusDocs®) claim copyright in their contracts.

While many companies use existing project management or accounting computer programs, or software such as ProCore® or QuickBooks®, occasionally, a construction or design company may have an in-house staff person who develops a new computer program or software to aid in project management or accounting.

In such cases, copyright protection for that new program or software – to the extent it is original and does not infringe on another copyright – can and should be explored. A word of warning, however: if the new program or software incorporates or interfaces with elements of another existing program or software to improve functionality, then that new program or software may actually be infringing.

What Cannot Be Copyrighted

While there are many things that can be given copyright protection, a few things cannot:

  • ideas – the expression of an idea can achieve copyright protection, but the idea itself cannot;
  • website domain names;
  • facts and commonly known information, including historical facts;
  • functional aspects of a work. For example, if an aesthetic design has been dictated by functional concerns, that design may not achieve copyright protection;
  • works of the U.S. government; and
  • blanks and forms that do not contain a degree of creativity or original expression.

This list is not exhaustive, but merely representative.

Trademark (Not Copyright)

Another misconception is that you can copyright a business name, title, slogan, or logo. Trademark, not copyright law, affords protection for those items.

Like copyrights, trademarks are a federally protected intellectual property right. The Lanham Act1 defines federal trademark protection and trademark registration rules, in addition to granting the United States Patent and Trademark Office (USPTO) administrative authority over trademark registration.

Trademarks – along with their closely-related cousins, service marks, and trade dress – include any word, name, symbol, device (including even sounds and scents), or any combination thereof, used to or intended to identify and distinguish the goods or services of one seller or provider from those of others, and to indicate the source of goods or services.

Simply put, a trademark is a brand name. Generally, a person or entity obtains trademark rights and ownership via continued use – registration makes a public record that a mark is being used. To obtain a federal trademark registration, the registrant must show use of that source designator in interstate commerce.

Wisconsin also has its own state-specific trademark registration, codified in Wis. Stat. chapter 132.

Patent or Trade Secrets (Not Copyright)

Copyright law also does not cover methods or systems of operation – for those, look to patent or trade secret law.

United States patent law is codified in Title 35 of the U.S. Code, and is authorized by the U.S. Constitution, Article One, Section 8, clause 8. The United States Patent and Trademark Office (USPTO) holds administrative authority over granting patents.

Any person who invents or discovers a new or useful process, the machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent after a successful patent prosecution.

Wisconsin’s Uniform Trade Secret Act, located in Wis. Stat. section 134.90, is meant to provide rights and remedies for espionage, theft, bribery, misrepresentation, and breach or inducement of a breach of a duty to maintain secrecy over information, including a formula, pattern, compilation, program, device, method, technique, or process.

Conclusion: Something to Keep in Mind

Copyrights and other intellectual property may not be the first thing to come to mind in the context of construction law, but they certainly are important to ensure a well-rounded and complete set of legal services.

This article was originally published on the State Bar of Wisconsin’s Construction and Public Contract Law Section Blog. Visit the State Bar sections or the Construction and Public Contract Law Section web pages to learn more about the benefits of section membership.


Endnote

1 15 U.S.C. §1051, et seq.

Waiving lien rights without waiving your legal rights

In Wisconsin, construction liens are one of the most powerful means that general contractors, subcontractors and material suppliers have of securing payment for work on construction projects.

Often, a payment is exchanged at the same time that a contractor or supplier waives their rights to a lien against a project. Sometimes, however, lien waivers are submitted before payment is received.

The result is that contractors or suppliers give up their rights to a lien against the project, regardless of whether they ultimately receive payment. In January, The Daily Reporter ran an article in part questioning why someone would be willing to sign and submit a lien waiver before receiving payment.

The offered reason was “because they believe they have no other choice” – a statement which, if true, has detrimental legal repercussions for the unwary contractor or supplier. Although contractors and suppliers may hold this belief, the truth is that Wisconsin’s construction lien law offers protections to lien claimants.

Wisconsin lien law provides that anyone “who performs, furnishes, or procures any work, labor, service, materials, plans, or specifications, used or consumed for the improvement of land, and who complies with (the Wisconsin lien statute requirements), shall have a lien therefor on all interests in the land belonging to its owners.”

A lien claimant may waive his or her rights to a lien by signing a written statement waiving that lien, commonly known as a “lien waiver.” When it comes to lien waivers, the law is strict — a waiver of a construction lien is valid and binding, whether or not payment was made, and whether the document was signed before or after the work was performed, furnished, or procured, or contracted for.

A lien waiver is deemed to waive all lien rights of the signer for all work performed at any time on the project, except to the extent that the document specifically and expressly limits the waiver to apply to a particular portion of the work. Practically speaking, if someone submits a lien waiver without accepting any work, that person has effectively given up his or her right to file a lien against the owner’s property — even if the lien claimant has not yet been paid a dime.

Quite often, lien claimants are required to submit a waiver of lien rights along with an application for payment. Why? Perhaps it is because the title company, general contractor or owner require it as a prerequisite to payment. Or, perhaps it is just industry custom.

Problems arise, however, when the lien claimant does not receive the payment requested in its application for payment. Ordinarily, the lien claimant’s legal recourse would be to file a lien on the property to secure whatever is owed.

However, if the lien claimant already submitted a lien waiver along with its payment application, it may have voluntarily given up its rights to that lien, and as a result, the leverage and additional source of payment that a lien provides.

Wisconsin lien law has dealt with some of the difficulties facing contractors and suppliers. Contract provisions that require someone to waive a right to a construction lien before receipt of payment are unenforceable and deemed void.

The law also allows a subcontractor who has signed a contract containing a waiver provision to refuse to furnish the waiver unless paid in full. The Wisconsin Court of Appeals has interpreted Wisconsin lien law statues to give contractors a choice: they can either give a lien waiver before being paid (thereby extinguishing lien rights before payment is received) or refuse to give a lien waiver until paid. In addition, a contractor or supplier from which a waiver is requested is entitled to refuse to furnish a waiver unless paid in full for the labor, services, materials, plans, or specifications to which the waiver relates.

A word of caution is in order: Any ambiguity in a lien waiver is construed against the person signing it. As a result, lien claimants should be careful not to inadvertently waive lien rights for work that has not yet been performed or for which they have not yet been paid.

For example, a lien waiver that waives rights to work performed within a certain period of time could be held to cover retainage or change-order work that has not yet become due or billed.

To ensure that lien rights are properly preserved and to protect against the consequences of lower-tier lien claimants, all parties should be aware of the rules relating to construction liens and the waiver of rights to those liens.


Bryan Kroes is an attorney at Wauwatosa-based Hurtado Zimmerman and practices in the areas of commercial and residential real property development and acquisition, construction and real estate litigation, construction contract preparation and related intellectual property law.

The information in this column has been prepared for general information purposes and is not legal advice, is not to be acted on as such and should not be relied upon for legal advice in any particular circumstance or situation.

Reprinted from The Daily Reporter 02/28/2016 By BridgeTower Media Newswires