## Facts

- An architectural firm created and copyrighted residential house plans bearing a copyright notice.
- A builder used the plans for an original client’s house.
- R. Wayne Galloway obtained a copy of the plans and, without a license from the architect, used them to build a retirement home in North Carolina, believing he had permission from the original homeowner.
- After construction was more than halfway complete, the firm sued for copyright infringement seeking actual damages, disgorgement of profits, and injunctive relief (including a ban on leasing/selling the house and destruction/return of infringing plans).
- A jury found infringement, awarded $20,000 in actual damages (the firm’s customary fee for such plans), and found no profits to disgorge.
- The district court denied injunctive relief, reasoning the verdict fully compensated the plaintiff.
- The firm appealed, challenging the damages-phase jury instruction characterizing its copyright as only a “derivative work” and the denial of injunctive relief.

## Issues

1. Whether the district court erred by instructing the jury that the plaintiff’s copyrighted architectural plans were a “derivative work,” and, if so, whether the error required a new trial on damages.
2. Whether the plaintiff was entitled to a permanent injunction prohibiting future lease or sale of the completed house and requiring destruction or return of infringing copies of the plans.

## Decision

- The Fourth Circuit affirmed the damages judgment.
- The court held the “derivative work” instruction was erroneous because the plaintiff held copyright in the entire architectural work embodied in the plans and the house, but the error was harmless.
- The court affirmed the denial of a permanent injunction barring Galloway from leasing or selling the completed house.
- The court vacated in part and remanded on injunctive relief to the extent the plaintiff sought an order requiring delivery up for destruction of infringing plan copies remaining in Galloway’s possession.
- The court rejected the plaintiff’s evidentiary challenges.

## Legal Principles

- Architectural plans may embody an original architectural work protected by copyright; constructing a house from copied plans can infringe the copyright in the architectural work.
- Actual damages for copyright infringement may be measured by the fair market value of the license fee the copyright owner customarily charges for authorized use.
- A plaintiff seeking a permanent injunction must satisfy the traditional four-factor test: irreparable injury, inadequacy of legal remedies, balance of hardships, and public interest.
- Injunctive relief in copyright is discretionary; even after proven infringement, a court may deny an injunction when monetary relief adequately compensates the injury and equitable factors weigh against restrictive relief.
- Courts may distinguish between equitable relief aimed at preventing continued copying (e.g., destruction/return of infringing plan copies) and extraordinary relief burdening a completed, functional structure (e.g., restricting sale or lease).

## Conclusion

The Fourth Circuit upheld a $20,000 damages award for unauthorized use of copyrighted house plans, found an incorrect “derivative work” instruction harmless, and held that equitable principles did not require barring the sale or lease of a completed home, while permitting narrower relief directed at eliminating remaining infringing copies of the plans.


Christopher Phelps & Assocs., LLC v. Galloway, 492 F.3d 532 (4th Cir. 2007)