24 April, 2008
Spruson

IP ownership in university employment - A duty to conduct general research distinguished from a duty to invent

IP ownership in university employment - A duty to conduct general research distinguished from a duty to invent

A recent decision of the Federal Court has undermined the certainty of ownership of intellectual property by universities, and highlighted the importance of employment contracts having express provisions governing intellectual property generated by staff during the course of their employment.

In University of Western Australia (UWA) v Gray (No 20) [2008] FCA 49, the Federal Court dismissed UWA’s claim to ownership of intellectual property held in the name of its former Professor of Surgery, Dr Bruce Gray.

Facts

Dr Gray was appointed by UWA in 1985. He was required by his terms of appointment “to teach, to conduct examinations” and “to undertake...and generally stimulate research among the staff and students”.

In the years that followed Dr Gray’s appointment, Dr Gray was the inventor of various inventions in relation to microsphere technologies for targeted cancer treatment and a series of patent applications were filed. The patent applications were subsequently acquired by Sirtex Medical Limited.

Issues and Decision

No implied term in contract regarding IP ownership

UWA had claimed ownership of the microsphere patent applications, on the basis that it was an implied term of Dr Gray’s contract of employment that intellectual property developed in the course of his employment belonged to UWA. Justice French dismissed UWA’s claim and held that any presumed general operation of such an implied term, in the case of academic staff who perform research and use university facilities, is ill founded unless the staff have a contractual duty to produce inventions.

A duty to research may not include a duty to invent

The critical question in IP ownership disputes amongst researchers, scientists and engineers in a variety of institutional settings had always been the role for which the employees were employed. Importantly, Justice French held that a duty to research does not necessarily carry with it a duty to invent, on the basis that academic staff conducting research for a university are given a choice whether to invent or not to invent. Given the nature of, and the public purposes served by, universities he also held that there is no basis for universities to imply into their contracts of employment with academic staff a duty not to disclose the results of research where such disclosure could destroy the patentability of an invention.

UWA’s IP Regulations

Justice French further considered the validity of IP Regulations made by UWA purporting to allocate ownership of the intellectual property generated by its academic staff. In his opinion, these were not valid. While UWA is empowered by the University of Western Australia Act 1911 (WA) to make regulations relating to the control and management of its own property. Justice French held that it is not authorised by the Act to make regulations acquiring property from others or interfering with their rights.

Comments

This case suggests that, absent express agreement to the contrary, rights in inventions made by academic staff in the course of research (whether or not they are using university resources) may belong to the academic staff. The position is different if the staff have a contractual duty to try to produce inventions. The decision will cause concern, if not alarm, in many research institutions, and will be viewed by many as contrary to their current understanding of the legal position. The case may be subject to appeal, which UWA must lodge within 21 days.

The decision also affects universities and research institutions which seek to rely on their policies and statutes to claim ownership of inventions created by research staff, although the nature of the power governing the creation of such instruments appears to have had a direct role in these circumstances and outcomes may vary for other institutions.

Justice French’s decision seems to have been based on a particular historical view of the roles of universities and academic researchers, which many would see as having been superseded by the increased focus on commercialisation of university-based research in recent decades. Such commercialisation has become a significant driver of economic growth and opportunity, and has resulted in valuable new products that clearly benefit society at large (not least in the field of medicine). This decision is likely to lead to significant uncertainty which will inhibit the processes of commercialisation of university technologies, and it is to be hoped that its effect will be limited or reversed by an appeal.


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