"..[A] duty to research does not carry with it a duty to invent". These words, handed down in a recent Federal Court judgement by Justice French, have many Australian employers (such as universities and other R&D facilities) now frantically reviewing their contractual arrangements with staff and IP ownership policies, which may no longer afford them the legal protection they once assumed.
The case of University of Western Australia v Gray (No.20) [2008] FCA 498 considered the validity of an employer's claim to IP developed by one of its employees during the course of their employment. The case relates to a claim by UWA that since Dr Bruce Gray had developed cancer-treating technologies on work time whilst an employee of the university, title in the derived IP rights was vested in the university. Gray's counterargument was that he was required by his terms of appointment to teach students and to conduct research – not to "invent", per se.
UWA, in turn, asserted that it was an implied term of Gray's employment contract that IP developed throughout the course of his employment belonged to UWA. Indeed, there appears a widespread assumption throughout academia that such an implied term generally governs research conducted by academic staff using university facilities. However, the Court concluded that this assumption is not well founded.
"Absent express agreement to the contrary, rights in relation to inventions made by academic staff in the course of research and whether or not they are using university resources will ordinarily belong to the academic staff," French J stated in ratio.
The Court further observed that the position would be different where employees have a contractual duty to attempt to produce inventions. However, in the view of the Court, a duty to "research" does not, of itself, carry with it a duty to "invent". Express provisions in an employment contract are therefore necessary for an employer to claim unequivocal ownership of the end product.
Notwithstanding, even if such provisions were to exist in one's employment contract, this case demonstrates that the transaction costs of administering and enforcing an employer's right, allied with uncertainty as to the scope and application of such rights, begs a real question as to their utility. Considering the length and complexity of this litigation (50 days, 517 pages and 1617 paragraphs of judgement), one can only imagine the scale of a scenario in which IP rights created by a team of research workers, using external funding and employing collaborative arrangements over extended periods of conceptual and practical development, were at stake.
UWA is apparently considering appealing the decision, whilst other employers watch with a vested interest. Whilst largely consistent with comparative cases in other jurisdictions, the decision nonetheless imposes pressures on the commercialisation of Australia's IP that larger economies do not have. If the judgement holds, it threatens to further complicate employer/employee relations within academia and provides a serious threat to the continued funding and provision of facilities so intrinsic to such research.
Shelston IP has considerable expertise in the drafting and interpretation of IP clauses within such employment contracts. We are well placed to advise both employers and employees of their legal entitlements and manoeuvrability within such contracts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
