Overview

This morning (12 February 2010), the High Court of Australia refused the University of Western Australia’s application for special leave to appeal from the Full Federal Court’s decision.

The issue in this case is whether the University or one its academics owns the intellectual property developed by that academic.

This means the Full Federal Court’s decision stands that Dr. Gray owns the intellectual property in the inventions he created while employed by the University.

More generally, this means universities and companies dealing with universities will need to review how universities have the rights to intellectual property developed by academics to ensure commercialisation of inventions can successfully occur.

High Court special leave decision

UWA’s submissions included:

  • there is no distinction between the duty to invent and the duty to research  
  • academics’ relationships with universities should not be split into a separate category in the general employer-employee relationship  
  • inventorship should be addressed by looking at an invention as claimed, rather than approaching it from an inventive concept.  

The primary reasons for the High Court to reject UWA’s special leave application were:

  • it is not appropriate to re-examine the facts of the case already determined by the Federal Court  
  • the questions of law raised by UWA are not such as to warrant the grant of special leave to appeal.

[This update is based on notes taken during the hearing. The transcript has not been released at the time of this update.]

Background

Dr. Gray was employed by University of Western Australia (UWA) to teach, to conduct and stimulate research in treatment of liver cancer. There was no express ownership clause in Dr. Gray’s employment contract with UWA regarding intellectual property. His employment contract was subject to the University of Western Australia Act and the relevant statutes and regulations under that legislation.

As a result of his research, Dr. Gray obtained a number of patents related to the use of microsphere technology for the treatment of liver cancer. The patent portfolio was later assigned to Sirtex, a company in which Dr. Gray held a substantial number of shares.

UWA’s claim

UWA commenced proceedings against Dr. Gray claiming the University owned the patents, seeking the imposition of a trust on Sirtex shares and patents for UWA. UWA contended that:

  • UWA’s IP Regulations required all university employees to disclose and assign their inventions to UWA and the Regulations formed a part of Dr. Gray’s employment contract  
  • the presumption that all intellectual property developed by Dr. Gray during the course of his employment belonged to UWA was implied in his employment contract and Dr. Gray also owed a fiduciary obligation to UWA.  

Federal Court decisions

The Federal Court found for Dr. Gray and Full Court of the Federal Court of Australia confirmed that decision that Dr. Gray owned the intellectual property in inventions he created while employed by the University.1 The Federal Court and Full Federal Court held that:

  • there was no effective express term in Dr. Gray’s contract about IP ownership – the reference to the University’s Patent Regulations was not effective  
  • there was no implied term in Dr. Gray’s employment contract that UWA owned the IP  
  • Dr. Gray did not have a duty to invent – Dr. Gray’s duty to research could not be transformed to a duty to invent, even though the research carried with it a possibility of patentable discoveries  
  • a duty to invent was inconsistent with the researcher’s freedom to share and to publish research results and its implication into the academic staff employment contracts was untenable, and  
  • the fact that financial grants were obtained by Dr. Gray for his research from external sources pointed against UWA’s intention to reap where various other funding entities had sown.  

UWA sought special leave to appeal to the High Court after the Full Federal Court and the Federal Court found for Dr. Gray.

Implications

The decision means that:

  • universities may need to review their employment contracts on ownership clauses, and whether their IP regulations are valid and in practice, and  
  • companies dealing with universities or academics should consider ways to ensure ownership issues are clear and not contested to ensure commercialisation of inventions can successfully occur.