Ownership of designs in an employment relationship

In the recent Federal Court case of Courier Pete Pty Ltd v Metroll Queensland Pty, the Federal Court held that an employee, Mr Collymore, and his company, Courier Pete Pty Ltd, were entitled to be the registered owners of various rainwater tank designs, which Collymore’s employer, Metroll, had argued were created during the course of his employment.

Background
Collymore was a factory foreman employed by Metroll, whose business activities included the manufacture and supply of rainwater tanks. Collymore designed and registered three designs for modular rainwater tanks. Although there was an employment agreement between Collymore and Metroll, the agreement did not specify the exact scope of Collymore’s employment, nor did it consider the issue of ownership of new designs.

Collymore claimed that he had found inspiration for his modular tank design while at his property watching one of his horses play with a hose in a water trough, and had developed the design in his own time over a period of 10 days. Collymore filed a design application for the tank on 21st September 2006 in his own name.

Shortly thereafter, Collymore informed Metroll of his new design. According to Collymore, a discussion took place with Metroll regarding the manufacture of a prototype modular tank based on Collymore’s design, on the understanding that Collymore would retain ownership of the design. The modular tanks produced subsequently led to Collymore filing two further design applications on 18th October 2010 in the name of his company, Courier Pete.

Metroll disputed that Collymore had asserted ownership and considered that it owned the design in view of a written contract of employment with Collymore. Metroll also asserted that Collymore was part of Metroll’s tank-making team and that his role included improving water tank products and designs. 

Before the Federal Court case, Metrol had sought revocation of the designs before the Designs Office on the grounds of lack of entitlement. The registrar of designs held that Collymore was entitled to the first design. However, in relation to the second and third designs, the registrar found that Collymore had created these designs in the course of his employment and revoked the designs on the basis that Courier Pete had no entitlement to be registered as the owner.

Findings
Metroll was unable to back up many of its claims with convincing evidence and the court noted that no member of the tank-making team was called by Metroll to give corroborating evidence. The court accepted that Collymore had created the first design in his own time, outside the course of his employment. The court acknowledged that Collymore’s contract of employment did not precisely specify his role, and accepted that Collymore was not employed to design water tanks for Metroll and had created the designs without direction or instruction from Metroll. The court further accepted that before the construction of the prototype modular tanks, Collymore had asserted ownership of the designs and communicated to Metroll that the prototype tanks would be built on the understanding that he was to remain the owner of the designs.

The court upheld the registrar's finding in relation to the first design, and ordered the reinstatement of the second and third designs based on the finding that Courier Pete was entitled to be the registered owner.

Lesson
This case highlights the importance of a detailed written employment agreement which clearly specifies an employee’s duties and addresses the issue of ownership of any intellectual property created. Employment agreements should also be reviewed and updated as necessary with changes in roles and responsibilities.