The long awaited decision of the Full Federal Court of Australia in University of Western Australia v Gray was handed down yesterday. The decision adopted and endorsed French J's decision in the Federal Court at first instance, dismissing the University's claim that it owned a number of liver cancer treatment inventions in the field of targeted microsphere technology.
The Court's judgement is a strong pronouncement that because of the freedom to research university academics enjoy, as a matter of principle, employed academics own the intellectual property rights arising from the research free of any entitlement of the University. This principle can be displaced by express contractual obligations effecting an assignment of intellectual property arising from academic research to the University.
Dr Gray's role with the University
Dr Gray's history with the University was protracted. He was appointed Professor of Surgery at the University in 1985. He was a full time employee of the University in this capacity until 1997, and he resigned from the University in late 1999.
In 1997, Dr Gray assigned to Sirtex Medical Limited (another party to the proceedings) his patented inventions in the field of targeted microsphere technology for shares in the company. This company was subsequently floated on the ASX.
The University claimed that it beneficially owned Dr Gray's shares in Sirtex, and they should be transferred to it, and it sought against Sirtex and order that Sirtex transfer the Microsphere patents to the University.
The University's claim to ownership
The principle ground of the University's claim was that the law should imply into Dr Gray's contract of employment a term that the University owns the Microsphere patents, on a general principle that an invention developed by an employee as a result of research carried out or caused to be carried out by that employee in the course of employment belongs to the employer (so that the employee is a trustee of the invention for the employer). The University submitted that this type of term should be implied into any employment contract where the employee is engaged to solve technical problems, improve the employer's technology or undertake research.
The Full Court upheld the earlier findings that the University's earlier legislative attempts by way of "Patent Regulations" passed by the University Senate in 1971 to claim ownership of employee inventions were ineffective. They were an attempt to "appropriate property" to the University (and this could not be done constitutionally by regulations). This regulation could not be incorporated into staff contracts if it was not valid. New "IP Regulations" which may have impacted on Dr Gray's employment terms did not come into effect until after the Microsphere patents were assigned in 1997. This in part explained the University's reliance on the implication of a term into Dr Gray's employment contract.
The Court's findings
The Full Court examined Dr Gray's employment environment at the University and identified these factors as the key indicia that the law would not imply that the University owned the fruits of Dr Gray's research:
- Dr Gray did not have any duty to invent under his contract. A duty to research and stimulate research was not tantamount to a duty to invent. This was notwithstanding that the research carried with it the possibility of inventions capable of patent protection
- Dr Gray had complete freedom to publish his research outcomes, regardless of the possibility that publication could destroy patentability of the inventions
- Dr Gray and his researchers were expected to solicit independent research funding, and they did with the devotion of great time and effort
- the collaborative nature of the research, involving external organisations and researchers, told against any agreed exclusive appropriation of the fruits of the research to one institution only.
However, most poignantly, the Court adopted French J's findings and comments that the specific freedom to publish and collaborative nature of academic research told against the asserted implication of ownership by the University. This freedom to publish was described by the Court as "an importance value in the setting of a university given its nature and publish purposes".
The employment of university academics was distinguished from other employees outside institutions where these features are not prevalent.
The Court urged universities determining similar competing claims of ownership to aim for a result that was "less crude and more fair and reasonable", and to adopt these measures by legislation or an express contractual regime.
- Most universities in Australia have comprehensive IP policies which are the measured and fair approach the Court counselled. However, the decision flags the potential that claims could be made to challenge policies which are not fair and reasonable and can be considered as appropriation of property.
- The typecasting of academics who invent as a special class of employee could be extended to other research institutions, especially those funded by the public purse. Unfettered freedom of publication and collaboration are key indicators of this potential.
- Third parties engaging in collaborative research with university academics and other public institutions should conduct due diligence to ensure that clear title to research outcomes can be achieved and seek appropriate warranties to cover this type of situation.
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