A Gray day for UWA - ownership of inventions by university employees

In a keenly awaited decision, UWA v Gray [2009] FCAFC 116, the Full Federal Court upheld an earlier decision of Justice French that the University of Western Australia (UWA) did not own the rights to inventions made by one of its employees, Dr Bruce Gray. 

Background
Gray was appointed as a professor of surgery by UWA in 1985. In the course of his research, he developed some cancer treatment technologies, the subject of three patent families. The patents were subsequently assigned to Sirtex Medical Ltd in exchange for shares in the company. Gray’s terms of employment by UWA required him to teach and to conduct research. He was also obliged to comply with obligations under the UWA statutes.

Decision
Key Issues from the decision included:

• Although Gray was employed by UWA to conduct research, that did not amount to an implied duty to invent.
• Gray had freedom to publish the results of his research even if such publication could affect the patentability of inventions arising from the research.
• Gray was expected to raise funds for his research, and was dependent upon funding from sources outside UWA. This also weakened UWA’s claim to ownership of IP developed from the research.
• Gray had not breached his employment contract by failing to disclose the inventions to UWA. UWA’s patent regulations, which required academics to notify its patents committee of inventions, could not be imported into Gray’s employment contract, because the patents committee ceased to exist in 1988.
• When determining conception of invention, the whole of the patent specification should be considered, not specific claims, following the approach by the Full Federal Court in Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC.

Ramifications for universities and other research Institutions
There were complex, possibly unique circumstances in this particular case (the decision of French was over 600 pages long), and the Full Federal Court recognised a distinction between the ownership of employee inventions in universities and in private sector business entities.

UWA may seek leave to appeal the decision of the Full Federal Court to the High Court of Australia.

Nevertheless, there are some important lessons to be learned from the decision by universities and organisations in relation to the management of intellectual assets. 

• Universities (and other organisations) need to review their employment contracts with research staff to ensure they deal adequately with IP developed by employees. 
• Universities should also review their IP policies and procedures to ensure that they comply with the university’s statutes and regulations. In particular, the regulations and policies should require academic staff to disclose research that may involve patentable subject matter to the university before publication of academic papers on the research.
• Companies and external organisations collaborating with universities that wish to own IP relating to research by university employees should ensure that ownership issues are clear.
• Researchers should maintain good records of their research (eg, laboratory notebooks) to assist in determining the date of conception of invention in the event that validity or ownership of patents resulting from the research is contested at a later date.