Australia: Inventorship And Employment: Securing Ownership Of The Outcomes Of Employees´ Research

Last Updated: 12 September 2008
Article by Jeremy Charlston

Key Point

  • Government agencies involved with R&D should review employment contracts to ensure that they expressly provide that intellectual property, particularly patent rights, are to vest in the employer upon creation.

A recent case regarding employer ownership of inventions created by employees has caused quite a stir in research and development circles. Though set in the context of an academic employed by a university, the decision should cause all those whose employees are involved with research and development, including government departments, to consider the way in which they assert ownership over employee-created inventions.

In University of Western Australia v Gray (No. 20) [2008] FCA 498, the Federal Court has taken a narrow approach in deciding that the University of Western Australia was not entitled to ownership of inventions developed by a member of its academic staff.

From 1985-1999, Dr. Gray was employed as a full time employee of the University as a professor of surgery. His work for the University involved researching technologies for use in treating liver cancer.

During his employment with the University, Dr. Gray's work produced a number of inventions which were patented and ultimately acquired and further developed by Sirtex Medical Limited, a publicly listed company of which Dr. Gray was a director and significant shareholder.

In 2004, the University initiated proceedings seeking a declaration that Dr. Gray had breached his contract of employment and that he held his shares and options in Sirtex (valued at approximately $150 million) on trust for the University, and that Sirtex Medical Limited held its patents on trust for the University.

Who owned the intellectual property?

The Court accepted the University's argument that a term was automatically implied into all employment contracts with academic research staff who used University facilities, to the effect that intellectual property developed in the course of employment belonged to the University.

However, the Court found that this is only the case where the employee is doing work which an employee is engaged and instructed to do. Inventions which are not the product of work which the employee was actually engaged to perform will not be the employer's property.

The Court found that while Dr. Gray was employed to conduct and stimulate research, he was not employed to invent. It followed that no term vesting ownership of intellectual property in inventions developed by Dr. Gray in the University could be implied into Dr. Gray's employment contract.

The Court did accept that while there was a possibility that Dr. Gray would develop inventions capable of attracting patent protection in the course of his research, it did not follow that a term that the University owned the rights to the invention should be implied into his employment contract.

The Court considered that Dr. Gray's employment obligations differed from those of a person employed by a private commercial entity, whose obligations include the advancement of the employer's commercial purpose. Dr. Gray was not required to advance a University commercial purpose when selecting the research he would undertake.

The University's alternative arguments, based on breach of fiduciary duty and breach of University regulations, also failed.


The decision is important as it highlights circumstances where an employer could be deprived of the benefit of ownership of valuable intellectual property created by an employee.

The decision indicates that a court will not readily imply a term vesting ownership of intellectual property in the employer into the employment contract of a public sector employee, whose activities do not include a duty to invent.

In the context of government departments, the decision is particularly relevant when considering patentable inventions created by employees, as the Patents Act 1995 (Cth) does not make provision for automatic crown ownership of inventions made under the direction and control of the State (unlike part VII of the Copyright Act 1968 (Cth) under which copyright in works made by, or under the direction of control of, the State, vests automatically in the State).

The ability of an employer (government department or otherwise) to take ownership of a patent is provided for by section 15(1)(b) of the Patents Act and requires that the employer be entitled to be assigned the patent. At common law whether an employer is entitled to an assignment of a patent from an employee is a question of whether the invention was made by the employee in the course of the employee's employment, ie. is it an invention that it was the employee's job to invent. This decision shows that a duty to invent is specific and distinct from a duty to research and where there is no duty to invent, an invention, though perhaps created using the employer's facilities or funding, will not be in the course of an employee's employment.

In the absence of an express provision assigning the intellectual property rights in patentable inventions made by an employee to the government department, the department is at risk of not being able to assert ownership over the invention.

What to do

Government departments involved with R&D should review employment contracts to ensure that they expressly provide that intellectual property, particularly patent rights, are to vest in the employer upon creation.

These terms should cover not only inventions made in the course of the performance of employment duties but any inventions which are made in the course of using department funding and resources.

The University is appealing the decision.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.