The Federal Court's 2008 decision in University of Western Australia v Gray (No 20) challenged the long-held assumption that a university would implicitly own the rights to any intellectual property developed by an academic who conducts research for the university whilst they are an employee.
On 4 September 2009, the Full Federal Court of Australia dismissed an appeal by the University of Western Australia (UWA) and confirmed the limited scope for employers to rely on implied terms in employment contracts to confer ownership of any inventions created by employees.
Dr Gray was employed by the UWA. The terms of his employment contract required him to (among other things) undertake, organise and generally stimulate research among UWA's staff and students. As a result of his research, Dr Gray developed a number of cancer treatment technologies (the inventions).
The inventions were developed by Dr Gray with the assistance of Sirtex Medical Limited (Sirtex), a publicly listed company of which Dr Gray was a major shareholder and director. Dr Gray assigned the intellectual property rights for his inventions to Sirtex for commercial purposes.
UWA argued that it was the rightful owner of Dr Gray's inventions. It argued that there was a term implied by law that any technology developed as a result of Dr Gray's research, whilst an employee of UWA, was held by Dr Gray on trust for the university.
The Court's findings
In rejecting UWA's claim, the Court upheld the findings of French J at first instance:
- Dr Gray was not engaged to invent on behalf of UWA. Therefore, Dr Gray's duty to conduct research could not be 'transformed into a duty to invent' in the event that the research had the potential to develop technologies capable of being protected by patent.
- Dr Gray was completely free to publish the result of his research. Notwithstanding that any such publication could invalidate his right to patent his invention, the Court found that his right to publish his research was inconsistent with an implied duty to invent.
- UWA's role in funding of the research was limited. Dr Gray and his team procured most of the funds from many different bodies outside of the University.
- The need for Dr Gray to enter into collaborative arrangements with external organisations (such as CSIRO) in order to conduct his research meant that the Court was reluctant to award the benefit of Dr Gray's research only to UWA.
Also of significance to the Court was that Dr Gray had conducted research of this kind before joining UWA.
Implications of the decision
This decision therefore reaffirms the importance for employers who wish to claim ownership of intellectual property which is created by their employees to expressly state in employment contracts:
- (particularly in the case of patents) that the role of an employee includes a duty to invent; and
- that any existing and future intellectual property rights in inventions are assigned to the employer.
Notably, the Court did recognise that there might be a distinction between inventions created in the private sector and those created in Universities, with the former more likely to give rise to an implied right of ownership to any invention.
However, the judgement also suggested that it is undesirable to rely on implied rights.
The University may seek leave to appeal the decision to the High Court. Hall & Wilcox will provide an update if the decision is appealed.