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Who owns employee inventions?

In University of Western Australia v Gray (No 20) [2008] FCA 498 the Federal Court of Australia rejected a claim by the University that ownership of an invention relating to cancer treatment belonged to it and not its employee who was appointed to teach and to conduct and stimulate research. Gray's conditions of appointment did not expressly reserve the ownership of inventions to the University.

It was a fiercely contested and complex matter: The trial of the action lasted some 50 days with the Court sitting extended hours most days to ensure that the trial was finished within the available time.  There were some 4,586 pages of transcript and more than 1,000 documentary exhibits.  Much of the case was based on the documentary evidence which related to a 20 year period.

The trial judge remarked: It would seem that the only secure way for UWA to acquire property rights from its academic staff in respect of intellectual property developed by them in the course of research at UWA is by express provision in their contracts of employment.  Even then, as this case demonstrates, the transaction costs of administering and enforcing such provisions and the uncertainty surrounding their scope and application, raises a real question as to their utility.

In this case the employee had no duty to invent and therefore the issue was whether his inventions were created in the course of his employment.

The common law provides that "Where an employer is entitled to the benefit of an employee’s invention by express provision or by implication, the employee will hold the invention in trust for the employer. " But the common law did not apply to this particular case of an academic employed by a university to undertake research and other duties with no duty to invent.

The judge concluded:

"Research of the kind that Dr Gray was engaged to do carried with it the possibility that he would develop inventions capable of attracting patent protection.  The duty to undertake research could be discharged in a variety of ways.  These were within the discretion of the researcher. One of the ways in which the duty could be discharged was the development and testing of new technologies. It could be said therefore that an invention made in the course of Dr Gray’s research activities as an employee of UWA was an invention made within the scope of his employment and doing what he was employed to do.  It does not follow that there was an implied term that the rights to which his invention gave rise belonged to UWA....

In my opinion the circumstances of Dr Gray’s employment at UWA and those of the other academics employed as researchers with him negated the implication of any term whereby UWA acquired rights in relation to inventions developed in the course of their research. In that respect the case demonstrates the validity of the cautionary observation by Monotti and Ricketson in their book Universities and Intellectual Property – Ownership and Exploitation (Oxford University Press, 2003) (at p 6.59):

... it will be unwise for a university to rely upon general principles if its intention is to claim title to inventions that are made by its academic employees during their working hours and using university facilities and funding."

June 6, 2008 in Intellectual Property | Permalink


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