Employers should ensure employment agreements are clear
in providing that inventions or creations using information
belonging to an employer belong to the employer.
Determining who owns an employee's output might seem a
simple issue, but it can be surprisingly unclear when an
employee's work and non-work activities overlap. A recent
decision by the Federal Court has put the issue under the
spotlight, as it found the copyright in a questionnaire developed
by a psychologist, Dr Peter Hart, was owned by him, even
Dr Hart created the Questionnaire during the course of his
employment at the Workcare Policy Unit, Department of
Dr Hart developed the Questionnaire using data from teacher
surveys administered by the Department; and
other Department employees participated in developing draft
questions for inclusion in the Questionnaire.
(Insight SRC IP Holdings Pty Ltd v The Australian Council for
Educational Research Limited  FCA 779).
The Questionnaire consisted of questions addressing teacher
stress and morale. It was part of an article entitled
"Development of the School Organisational Health
Questionnaire: A measure for assessing morale and school
organisational climate", published in the British Journal of
Educational Psychology (2000) 70: 211-228.
From early 2006 to October 2009, the Australian Council for
Education Research (ACER) reproduced modules of
the Questionnaire as part of a project with Independent Schools
Victoria (ISV) called the Building Educational Effectiveness
Project. The Project involved ACER providing research services to
ISV for a certain fee per school.
Insight SRC IP Holdings Pty Ltd and Hart Cultural Lodges were
incorporated in 2009 by Dr Hart. He assigned the copyright in the
Questionnaire to Hart Cultural Lodges, which then assigned it to
Insight SRC IP Holdings. Insight SRC IP Holdings then granted an
exclusive licence with respect to the copyright to Insight SRC.
Insight SRC has carried on a business which has involved the use
of the Questionnaire, and indeed it is the key part of Insight
SRC's business. It has been used to ascertain the health of a
range of organisations, not just schools.
In the proceedings the applicants claimed the respondent
infringed their copyright in the Questionnaire and sought (among
other things) general damages and additional damages under section
115(4) of the Act.
ACER responded that the Crown in the right of the State of
Victoria owned the copyright in the Questionnaire and it had never
been owned by Dr Hart.
Why didn't the employer own the copyright?
Under section 35(6) of the Act, where a person creates a
copyright work in pursuance of the terms of their employment, the
copyright in that work will be owned by their employer. However,
Justice Besanko found that although Dr Hart created the
Questionnaire in April 1992 while employed by the Department,
including during his work hours, he was nevertheless the owner of
copyright in the Questionnaire.
One of the salient factors leading to this conclusion was that
the written documents concerning the terms of Dr Hart's
employment suggested that the making of the Questionnaire was not a
term of Dr Hart's employment.
There was also an agreement between Dr Hart and his immediate
supervisor, Dr Conn, that the Department could use the
Questionnaire for its own purposes and, in return, Dr Hart could
use data collected by the Department for the purposes of his
studies and research.
In view of the agreement between Dr Hart and Dr Conn, it could
not be said that Dr Hart made the Questionnaire in pursuance of the
terms of his employment. He was not required to produce it; in
fact, the arrangement was that he could prepare it for his own
purposes, albeit, the Department could use it.
Further, it was found that Dr Hart had not made the
Questionnaire under the direction or control of the Department. No
one directed him to make it and he did not make it under the
direction or control of any other member of the Department.
The Department's subsequent conduct also supported a
conclusion that it believed Dr Hart or interests associated with
him owned the copyright in the Questionnaire.
Points to note
If the Department had allowed Dr Hart access to its data on the
condition that copyright in the product from such use belonged to
the Department, there could have been little argument about the
outcome of this case.
Corporations and government entities should be careful to ensure
employment agreements are clear in providing that inventions or
creations using information belonging to an employer belong to the
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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