The Australian Full Federal Court has upheld the first instance decision of Justice French in University of Western Australia v Gray 9[2009] FCAFC 116 (3 September 2009)). This complex case resulted from the claim by the University of Western Australia (UWA) that it had proprietary rights in relation to three families of patents invented wholly or in part by Dr Bruce Gray (Dr Gray), which relate to the production and use of microspheres for targeted treatment of human tumours. The patents were subsequently transferred to a company now known as Sirtex Medical Ltd. in exchange for shares in the company, reportedly valued at A$60-90 million. It was UWA’s position that Dr Gray conducted the work leading to the inventions while he was employed by UWA as its Professor of Surgery. Under the terms of his employment contract Dr Gray was required to teach and to undertake research in his field. He was also required to comply with obligations under the University’s statues.

In a single judgment Full Court Justices Lindgren, Finn and Bennett agreed with Justice French that the duty to research in Dr Gray’s employment contract did not give rise to an implied duty to invent, even though the nature of Dr Gray’s research was such that inventions could quite likely result. In making this decision the Full Court noted the distinction between ownership of employee inventions in the University context, in contrast to that in the private sector. Supporting factors in reaching the decision were that Dr Gray was not under a duty to invent anything, he had the freedom to choose the direction of his research, he was not under an obligation of secrecy and was free to publish (even to the detriment of potential patent applications), he was dependent upon significant sources of external funding to support his research and was reliant upon collaborations with researchers in other institutions.

The Full Court also agreed with the primary judge’s finding that the obligations of the UWA Patent Regulations (which relevantly required University academics to notify it of inventions, thus allowing the University the opportunity to exercise its rights in relation to an invention) could not be imported into Dr Gray’s employment contract because UWA had failed to maintain the patent committee that was an essential part of UWA’s obligations under the Regulations. Although not a matter in dispute in the appeal the Full Court referred to Justice French’s finding that even if the Patent Regulations were in force they could not have validly caused appropriation of property that did not belong to UWA; only by express contractual terms could intellectual property rights be acquired.

In light of this decision, and although there is a prospect that leave to appeal to the High Court in this matter may be sought, Australian Universities and other research institutions will have grave concerns regarding the ownership of intellectual property invented by employees not bound by a specific duty to invent within their employment contracts or where assignments of intellectual property rights have not been made. However, a more fundamental question remains – can a researcher realistically be bound by a duty to invent? While inventions may reasonably be expected to arise from research, it does not necessarily follow that researchers can be expected to make inventions?