On 17 April 2008, Justice French of the Federal Court of
Australia handed down a decision that will potentially have
significant implications for organisations with staff that
create intellectual property that their employer wishes to
claim as its own.
University of Western Australia (UWA) v Gray (No
20)  FCA 498 was an action between UWA and previous
employee, Dr Bruce Gray. There were additional parties to the
case and further causes of action which are not discussed in
this article due to the case's complexity.
Dr Gray had participated in the research and development of
technologies for the delivery of treatments for cancer while
working as an academic at UWA. After a long and difficult
relationship with UWA, Dr Gray left to form the biotechnology
company Sirtex. UWA commenced legal proceedings against Dr Gray
alleging that applications for patents were for inventions made
while Dr Gray was an employee of the UWA, and were the property
The critical issue for the judge was Dr Gray's
obligations as an employee of UWA. The Court decided that Dr
Gray's employment gave rise to a duty to research, not
a duty to invent. This meant that Dr Gray had no express or
implied duty to produce inventions in the course of his
employment. Accordingly, even inventions made in the course of
employment remained the property of Dr Gray.
Importantly, Dr Gray's contract of employment with
the UWA did not contain any express provisions governing the
ownership of intellectual property created in the course of Dr
Gray's research. University Regulations did purport to
vest ownership of intellectual property in UWA, but these were
not effective. Consequently, the judge held that the UWA did
not have any interest in the inventions developed by Dr Gray in
the course of his employment.
The UWA is currently considering whether it will appeal.
Although the case involved a university and an academic, the
messages in the decision should be heeded by research
institutions, companies and other entities which seek to
develop and capitalise on intellectual property.
The decision is a timely reminder to all organisations to
review their employment contracts and arrangements in relation
to the ownership and management of intellectual property. It
identifies the importance of clear agreements between
organisations and their staff which expressly stipulate
ownership rights for intellectual property created in the
course of employment.
Where applicable, staff agreements should also deal with the
publishing of research findings by an employee. An
employee's rights to publish may infer that ownership
resides with the employee. In addition, publication of research
may constitute prior disclosure, potentially jeopardising any
future attempt to protect the intellectual property.
The waters may be further muddied where research commences
prior to employment of a researcher by a university, where
other entities contribute to or collaborate in the research or
where researchers cease employment with a university or other
employer to form their own "spin off" company.
Should you have any concerns regarding the implications of
this decision, please contact Sandy Donaldson, Partner
specialising in Intellectual Property. For a more detailed
commentary on this case and the issues it raises, please click
on the link below to read the full article "Who Owns the
IP You Use?".
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.
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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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