As many design professionals are aware, the standard AIA contract between an owner and architect was significantly revised in 2007. One of the most important areas of revision, and an area often overlooked by the contracting parties, was the section on copyrights and licenses. While both the current and 1997 version of B1011 expressly grant the owner a nonexclusive license in the architect's instruments of service, only the 1997 document terminates the license automatically upon the agreement's termination.2
Regardless of the reason for termination, the 1997 AIA expressly prevents the owner "from making further reproductions of the Instruments of Service" and requires it to "return to the Architect within seven days of termination" all originals and reproductions in the Owner's possession or control. The only exception is where the Owner terminates for cause. In such a case, the Owner is granted a "non-exclusive license" that allows a subsequent design professional to make changes, corrections or additions to the Instruments of Service "solely for purposes of completing, using and maintaining the Project."
However, and as a precondition to obtaining this non-exclusive license, the Owner must obtain an "adjudication" of the architect's default under the agreement. Even in contracts with mandatory arbitration, securing such an "adjudication" could take months” all the while the project would remain on hold as the existing contractors and any subsequent architect would be prohibited by copyright law from using the existing plans. For the design professional, and especially those involved in large and/or phased construction projects, this "adjudication requirement" was a welcome safe haven. It effectively limited the Owner's ability to fire the design professional after receipt of plans but before contract administration.
The 2007 AIA B101 is far less protective of the design professional's instruments of service than its predecessor. First, the license no longer terminates whenever the underlying contract is terminated. In addition, the requirement of an "adjudication" has been removed. Instead, the license is revoked only when the architect terminates for cause, e.g., non-payment. The newer version is silent, however, as to whether the license continues when the owner terminates for cause. Such silence has been taken by the courts as proof that the license was intended to survive a termination for cause by the owner.3 Finally, the newer version adds a specific provision that addresses an Owner's termination for convenience.4
If the Owner terminated the Architect for its convenience . . . the Owner shall pay a licensing fee as compensation for the Owner's continued use of the Architects Instruments of Service solely for purposes of completing, using and maintaining the Project as follows: ($_______.).
If filled out and agreed upon by the parties, this clause can save time and money should the relationship sour. Unfortunately, a number of architects and owners have minimal experience in setting license fee prices. It further can be difficult to separate out the value of the plan's use from their production.
As the above discussion shows, owners and design professionals alike need to be aware of changes to standard AIA contracts. An experienced construction attorney can not only help identify these changes, but further provide legally tested revisions to protect your particular interests on a project.