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Intellectual property and what it means for construction

The Intellectual Property Act came into force late last year with some potential implications for construction. So what do contractors and designers need to consider?

Design rights in the construction industry can be an area of contention and a new law means designers have more rights than ever.

Current contracts may not offer sufficient protection to account for the changes.

In the latter part of 2014 the Intellectual Property Act came into force, with the aim to streamline and simplify the law relating to intellectual property rights.

The most notable reform introduced by the act as far as the construction industry is concerned is in relation to design ownership.

Registered designs

A UK-registered design can be a hugely important asset for a designer, as it gives the owner the exclusive right to use the design and prevent third parties from doing so for 25 years, although the registration will need to be renewed every five years.

Registered designs protect two-dimensional designs or surface patterns, as well as the shape and configuration of an original design.

Before the act came into force, the law governing registered (and unregistered) design rights stated that when a designer is commissioned to produce a design, the commissioner is the first owner of the design right, not the designer.

Interestingly, this position worked in the opposite way to the default position under copyright law, where the ‘author’ (the person who creates the work) is the first owner of the copyright.

Changes to ownership

However, under the act the position regarding ownership of a commissioned design has changed.

Under the new default position, (subject to any contractual agreement to the contrary) the designer will be the first owner of the design, not the commissioner.

This amendment now brings the position into line with copyright law.

“Under the new default position, the designer will be the first owner of the design, not the commissioner”

As a result of the change, if a commissioner of a design wishes to own the rights to the design it will be necessary to have a contract in place which makes suitable provision for an assignment of the design rights.

This is of particular significance where part of the design work on a project is to be carried out by a subcontractor rather than a consultant.

Often a building contractor will use its own form of subcontract and these do not always contain a provision granting a sub-licence to, for example, the designers working on the project.

Subcontract licences

It is important to ensure that, where part of the design is to be subcontracted, the relevant subcontract should contain a licence back to the consultant/contractor/employer to use and reproduce the design.

Otherwise if a consultant or employer was to use the design they could breach the requirements of the act.

The exception to this general rule is in the employment context: if the design is produced by an employee in the course of employment, the employer will be the owner of the design and not the employee.

The act introduces a ‘good faith’ defence to parties that unintentionally use a registered design without realising they were doing so.

However, this protection is limited to continuing to use the design only for the purpose for which it was originally intended, therefore the use of the design cannot be expanded beyond its original purpose.

Many contracts will currently be in the course of updating due to the upcoming changes to the CDM Regulations.

This would be a good time to ensure copyright licences (with the right to grant sub-licences) are also included in your contracts.

Designers also need to think about how they treat the designs of others that they are given and asked to incorporate into their own, especially in the brave new world of BIM.

John Cleaveley is a partner and Lindsay Quinney is a solicitor in the construction and engineering team at Weightmans

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