How Copying a Design Cost a Developer $2.8M

skyscrapercity.comCapital Group's design, which Erick van Egeraat says is a copy of his work.
In a landmark decision for intellectual property rights, the Stockholm International Arbitration Court has ordered developer Capital Group to pay Dutch architect Erick van Egeraat $2.8 million over the unauthorized use of his design for two Moscow skyscrapers.

Van Egeraat had accused Capital Group of illegally promoting itself by using a 2004 design it had commissioned from him for the Capital-City project, an imposing pair of cube-like high-rise towers within the Moskva-City development in central Moscow.

Van Egeraat also said Capital Group had handed his completed design for the towers, scheduled for completion later this year, over to another architect, Seattle-based firm NBBJ Architects, without his consent.

Van Egeraat said Capital Group had claimed that his design did not meet its required standard and had refused to pay for his work on the same grounds.

"What matters is not the money -- the main point is the infringement of copyright," van Egeraat said by telephone Tuesday from the Netherlands. "To use other people's nice pictures and graphics to advertise your company without the owners' consent is not good for the economy and it's not good for the country."

Van Egeraat is one of a growing band of internationally renowned architects recruited by Russian developers to design a slew of modern business centers, shopping malls and residential estates in the city. Other famous names behind some of the city's most ambitious construction projects include Britain's Norman Foster and Zaha Hadid, Rem Koolhaas of the Netherlands, and France's Dominique Perrault.

Bruce Faris, NBBJ's marketing director for Russia and Eastern Europe, said Tuesday that the firm "did not copy van Egeraat's work per se, although we are willing to give credit for any similarities in design."

"Our company was explained the concepts that City Hall approved, and we proceeded with our design based on that," Faris said by telephone from the United States.

Faris said the similarities in van Egeraat's design to NBBJ's arose from City Hall's requirements for the project.

vladimir filonov / mt
Mayor Yury Luzhkov looking at a model of van Egeraat's Capital-City design.

Maxim Kulkov, a partner with law firm Pepeliaev, Goltsblat & Partners, which represented van Egeraat in the Stockholm case, said it was the first major copyright infringement ruling against a Russian real estate developer.

"The practice is for real estate developers to invite a famous designer or architect and use his works to promote their projects," Kulkov said. "In many cases, they refuse to pay the architect after taking possession of his work."

The Stockholm court last week ordered Capital Group to pay van Egeraat $2.8 million to cover project costs, as well as penalties for using van Egeraat's artworks and name for promotional purposes. It also ordered the developer to desist from using artists' impressions and diagrams from the project for promotional purposes.

Capital Group said Tuesday that the court's decision was unacceptable but declined to indicate whether it would appeal.

"Capital Croup never agreed that the case was within the competence of Stockholm Arbitration court," spokeswoman Anna Shadrina said in an e-mail response to questions Tuesday. "It is both illegal and baseless, and, in practice, preconceived as far as the Russian side is concerned."

Kulkov said the case was decided in Stockholm because the initial contract contained a clause that any disputes relating to the contract would only be decided there.

"The defendant is dissatisfied because it could not argue against the case on its merits," Kulkov said. "Happily, the court's decision is final."

Since 2003, Van Egeraat has completed a number of luxury design projects for Capital Group, including Russky Avangard, a grandiose, 100-apartment high-rise on Krymsky Val in central Moscow, Yacht City, a development on the Moscow River, and the housing development Barvikha Hills west of the city.

Kulkov said his firm was also pursuing another case of copyright infringement against Capital Group on van Egeraat's behalf, over the developer's handling of the Barvikha Hills project, but declined to give further details about the case.

Van Egeraat said that, while copyright infringement cases were very widespread in the country, because of the huge construction boom going on, he was pressing ahead with several large-scale projects here.

"Generally, [copyright infringement] happens worldwide, from America to my own country," van Egeraat said. "But both private developers and governments now scrutinize the quality of work more closely and there is more focus on infringers."

He added, however, "It would simply be unfair to say rights infringement is a general tendency here."