Keep the money, IP academic told

Australian ruling in favour of professor is likely to influence UK courts, writes Melanie Newman

November 20, 2008

A decision by an Australian judge has bolstered academics' claims to the money made from their inventions, according to a leading lawyer.

The judge in a dispute between the University of Western Australia (UWA) and one of its former professors has challenged the assumption that universities have ownership of inventions developed as part of their employees' research activities.

Sitting in the Australian Federal Court, Justice French ruled that this assumption is not necessarily correct where the academic has a contractual duty to carry out research, but has no contractual "duty to invent".

In London, Adrian Toutoungi, who is intellectual property expert at law firm Eversheds, said that while British courts are not obliged to follow Australian case law, they were in fact likely to be influenced by the judgment.

The case concerned Bruce Gray, a professor of surgery who had developed a novel system of delivering liver cancer treatment. Professor Gray filed patents in his own name, transferred them to a company of which he was director and then floated the company.

The university sued Professor Gray, claiming rights to the technology and to his shares in the company. But it lost the case after the judge ruled that the intellectual property did not belong to UWA.

In the UK, the Patents Act gives employers ownership over IP developed by staff while carrying out their duties.

"The Australian decision could be used to argue that normal duties do not include inventions," said Mr Toutoungi. When deciding whether the academic's normal duties included inventing, the Australian court looked at a range of factors, including whether the academic had invented anything in the past.

"Departments of engineering regularly churn out patents while other academics may produce one invention in a lifetime and are clearly not paid to invent," Mr Toutoungi said.

If the case is not overturned (UWA is appealing against the ruling), universities' collaborations with commercial companies will become more difficult, Mr Toutoungi predicted, as they may not be able to guarantee to business partners that they own the intellectual property that may arise from the partnership.


The judge's decision revolved around the terms of employment.

Justice French said that where an employee is doing that which the employee has been engaged to do, during work hours, and using the resources of the employer, intellectual property in inventions created in the course of employment will generally belong to the employer.

But he found that while Professor Gray was employed to conduct research, he was not employed to invent. It followed that no term vesting intellectual property in inventions developed by Professor Gray could be implied into his employment contract. The university's alternative arguments, based on breach of fiduciary duty and breach of university regulations, also failed.

Source: Lander and Rogers law firm, Melbourne.

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