Federal Appeals Court Rules Against Home Designer Claiming Copyright Infringement for Use of Floorplans in Real Estate Listings
In Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc., 126 F.4th 589 (8th Cir. 2025), the United States Court of Appeals for the Eighth Circuit upheld the dismissal of a home designer’s claim “that real estate agents infringed his copyrights by including floorplans of his homes in resale listings.” Charles James is a home designer, and almost thirty years ago he “designed a home featuring a triangular atrium and stairs. He built six homes using the design or variations of it, and, over many years, he registered copyrights in the design and its derivatives, depositing photographs and detailed architectural plans with the Copyright Office.” He did not have licensed floorplans for any of the homes. In 2010 and 2017, real estate agents listed James’ triangular atrium homes for resale, and they prepared floorplans for the homes that they included with the listings. James discovered the listings in 2017, and he and his company, Designworks Homes, Inc., sued the real estate agents for copyright infringement. The district court dismissed the copyright claims, and James appealed.
In upholding dismissal of the claims, the Eighth Circuit concluded that “the agents' use of floorplans to resell existing Designworks homes was a fair use of the homes' designs.” The Court explained that, under the Copyright Act, to determine whether a fair use exists courts must consider “(1) ‘the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes,’ (2) ‘the nature of the copyrighted work,’ (3) ‘the amount and substantiality of the portion used in relation to the copyrighted work as a whole,’ (4) and ‘the effect of the use upon the potential market for or value of the copyrighted work.’”
Under the first factor, a court must ask “[w]hether the purpose and character of a new use of a work favor a finding of fair use depends on whether the resulting ‘new work merely supersedes the objects of the original creation’ or ‘instead adds something new, with a further purpose or different character.’ ‘A use that has a further purpose or different character is said to be transformative,’ though ‘transformativeness is a matter of degree.’ A transformative use furthers the goals of copyright by promoting ‘the progress of science and the arts, without diminishing the incentive to create.’ If a use is commercial, this weighs against the degree to which it is transformative.” In this case, the Court concluded that “the agents' use of Designworks's home designs was transformative to a degree that outweighs the commerciality of the use and other purportedly countervailing circumstances Designworks cites.” As to the “transformative” factors, the Court concluded that the “agents' use of the designs to make and share floorplans was transformative because the floorplans had an informational purpose that the designs lacked. The agents created floorplans from the designs to show the layouts and dimensions of the homes to potential buyers and help them decide whether they were interested in buying the homes at resale. 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. This informational purpose of the floorplans was new and went beyond the purpose of the designs.”
As to the “commerciality of use,” the Court acknowledged that “[c]ommercial uses of a work are less favored than noncommercial uses, and we view commercial advertising uses with some skepticism,” and indicated that “the commerciality of a use is troubling primarily when the use displaces the work or derivative works in the market” because “[t]hen, the use might frustrate the objectives of copyright by reducing the incentive to create new works.” However, the Court reasoned that “this concern about market substitution is absent here, [so] we weigh the commerciality of the agents' use of floorplans less heavily than the transformativeness of the use. The agents did not copy advertisements to produce their own advertisements. Nor did they use their advertisements to promote the sale of new or otherwise infringing homes in competition with Designworks. They used floorplans for existing homes to resell the homes. Any substitution in the resale market for similar homes is substitution blessed by copyright's first sale doctrine, which allows the owner of a home to resell it ‘without the authority of the copyright owner’ so long as the home was ‘lawfully made.’ And any substitution in the market for floorplans is speculative because Designworks has long abstained from that market.” The Court also rejected James’ argument that “the agents' public use of floorplans weighs against them” because “[p]ublic dissemination of the floorplans did not alter their purpose or character. The floorplans showed information about homes no matter how many people saw them. If anything, wider dissemination of the floorplans brought this information to more people it could benefit.”
Under the second factor, the Court considered “the nature of Designworks's designs and conclude[ed] that it weighs slightly against a finding of fair use.” The Court explained that “[t]he nature of the designs matters because ‘some works are closer to the core of intended copyright protection than others.’ Thus, use of a work is less likely to be fair when the work ‘serves an artistic rather than a utilitarian function.’ In evaluating the nature of a work, we focus at least primarily on the portion of the work actually copied.” The Court acknowledged that “Designworks's designs contain some artistry that disfavors a finding of fair use. As do many works, the designs mix creative features, like a triangular atrium, with standard utilitarian features, like rectangular bedrooms,” and it concluded that “[o]n the whole, the designs are not so utilitarian as to occupy merely the periphery of copyright protection.” However, the Court explained that “the nature of the designs carries little weight. The nature of a work has ‘rarely played a significant role in the determination of a fair use dispute.’”
The Court also rejected James’ request for invocation of “the rule that ‘the scope of fair use is narrower with respect to unpublished works,’ [because] we think it a poor fit for the facts.” The relevant question, the Court explained, was “whether a use of a work deprives the work's owner of control over ‘the first public appearance of its expression.’. In this case the answer is no. Designworks built six homes using its designs, and there is no indication it restricted the homeowners' right to open the homes to the public. This sharing of the designs and surrender of control over the public's access to them confirms that the nature of the designs weighs only slightly against a finding of fair use.”
Under the third factor, courts ask “‘whether the amount and substantiality of the portion’ of each of the designs copied by the agents, judged in relation to the design as a whole, were ‘reasonable in relation to the purpose of the copying.’” Here, the Court concluded “that the extent of the agents' copying of Designworks's designs does not significantly favor or disfavor a finding of fair use” because “the agents tailored their copying from Designworks's designs to make floorplans to their legitimate purpose of supplying information to potential homebuyers.” The Court explained that “what the agents did was less substantial than complete copying because they reproduced only the top-down layout and dimensions of the designs. Substantiality usually varies with the extent to which copying reproduces distinctive creative expression, or material that substitutes for the copied work or derivative works. The agents' two-dimensional floorplans omit at least some of the three-dimensional creativity of Designworks's designs, and they do not substitute for homes built using the designs or for the detailed plans used to build such homes. At most, they might substitute for other floorplans of the designs, but Designworks does not compete in the market for floorplans. While the agents still copied a nontrivial portion of the designs, and we decline to weigh the extent of their copying strongly in favor of a finding of fair use, these facts further persuade us that the extent of their copying does not strongly disfavor such a finding either.”
Under the fourth and last factor, the Court stated that “the effect of the agents' use of floorplans on the market for and value of Designworks's designs favors a finding of fair use. In weighing this final consideration, we look not only to the extent of the market harm caused by the use but also to whether ‘unrestricted and widespread’ conduct of the same type would result in ‘a substantially adverse impact on the potential market.’ Additionally, we consider ‘harm to the market for derivative works,’ and benefits to the public.” The Court concluded that “use of floorplans in home resale listings like the agents' does not harm Designworks in its existing markets, threatens at most speculative harm to Designworks in its potential markets, and likely benefits Designworks outright by increasing the resale value of its designs. Accordingly, the market effects of the use weigh solidly in the agents' favor.” Emphasizing the benefit to James and his company, the Court stated, “we would be remiss if we did not mention the benefits that the use of floorplans offers Designworks. Because putting floorplans in listings for existing Designworks homes makes it less costly for potential buyers to discover the homes' layouts and dimensions, it tends to increase the number of potential buyers willing to consider buying the homes. The result is that the homes should, on average, resell more quickly or for a higher price than they would absent the use of floorplans. This benefits Designworks because it can capture a share of the price or liquidity premium by charging more for its designs and homes in the initial markets for these products. A buyer in the initial markets expects homes built using the designs will ultimately return the price or liquidity premium at resale and is therefore more likely to pay the higher charge. Considering the market benefits to Designworks from unrestricted and widespread use of floorplans in home resale listings and the absence of nonspeculative market harms to Designworks from such use, we conclude that the effect of such use on the market for and value of Designworks's designs decidedly favors a finding of fair use.”
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