Employees and Ownership of IP

The interpretation of employment contracts by the Australian courts with respect to the ownership of IP is a constantly changing area of Australian law.

In a 2002 case concerning patent ownership (Spencer Industries Pty Ltd v Collins1), an inventor, Mr Collins, who was an employee of the patentee, Spencer Industries, asserted that Spencer Industries was not rightfully entitled to an invention that Mr Collins created whilst employed by Spencer Industries. Mr Collins was ultimately successful, and it was upheld that the invention was made outside the course of his normal duties with the company, which included product sales and service.

It has since been interpreted by the Federal Court that regardless of the presence of a contract of employment, a company is generally not entitled to claim ownership of an invention, unless the inventor was employed in some inventive capacity. In addition, inventions made by an employee in his/her spare time, without the use of the employers facilities or equipment are generally not rightfully owned by the employer.

However, in a recent case (University of Western Australia v Gray2), an employee of the University, Dr Gray, developed cancer targeting technology on work time, whilst employed by the University. Dr Gray contested that his employment contract required him to teach students and conduct research, but not to “invent”. The University argued that it was an implied term of his employment contract that inventions developed by Dr Gray belonged to the University. Dr Gray was successful, and this case highlights the uncertainty surrounding ownership of inventions made by researchers, and employees in general.

Conclusions

On account of the ongoing uncertainty concerning this area of the law we recommend that employment contracts contain explicit provisions dictating the ownership of IP, to the effect that employees agree to assign to the employer all inventions (in the employer’s field of business) made during the period of employment.

We recommend that for each new invention a written assignment is executed by the inventor(s) and the employer, confirming that the ownership has transferred to the employer. Such an assignment will provide more certainty of ownership if ever contested. In addition, the lodgement of written assignments is required before many foreign patent offices if protection is sought overseas.

Please contact Cotters if you would like any further information about the changes or if you wish to request examination on any pending patent applications.

By Chris Atichian
Cotters Patent & Trade Mark Attorneys
13 October 2008

   Spencer Industries Pty Ltd v Collins (2002) 54 IPR 434
   University of Western Australia v Gray[2008] FCA 498