Former University of Western Australia academic Dr Bruce Gray had a big win over his erstwhile employer in a landmark Federal Court ruling handed down last week but faces the prospect of further legal action from the company he founded, Sirtex Medical Ltd
Former University of Western Australia academic Dr Bruce Gray had a big win over his erstwhile employer in a landmark Federal Court ruling handed down last week but faces the prospect of further legal action from the company he founded, Sirtex Medical Ltd.
The ruling is also likely to prompt universities and other organisations involved in research to review their intellectual property policies.
The case was instigated by UWA, which argued that a cancer treatment technology developed by Dr Gray and subsequently commercialised by Sirtex rightfully belonged to the university.
Specifically, it was seeking to gain ownership of Dr Gray’s shareholding in Sirtex, valued at about $90 million.
In a 544-page judgement, Justice Robert French dismissed the university’s claims against Sirtex and Dr Gray. UWA said it was considering an appeal.
While Dr Gray won the substantive case, he failed to defeat a cross-claim launched by Sirtex, which was concerned about whether Dr Gray owned the intellectual property when it was sold to Sirtex.
Justice French found that Dr Gray deliberately failed to disclose to Sirtex correspondence with UWA’s vice-chancellor in 1999.
This constituted a breach of his duties as a director and was misleading and deceptive conduct, Sirtex said in a statement.
Justice French found that, had Sirtex been aware of this correspondence, it would in all probability have been advised to make further inquiries of UWA.
UWA’s current vice-chancellor, Professor Alan Robson, said the university initiated the action following independent legal advice.
“The university’s course of action was a matter of principle that had important ramifications for the protection of intellectual property and the flow-on benefits of university-initiated research to the broader community,” Professor Robson said.
Mallon & Co director and intellectual property lawyer Paul Mallon said the judgement could have serious ramifications for organisations involved in research.
The crucial passage in Justice French’s judgement was that, in the absence of an express agreement to the contrary, “rights in relation to inventions made by academic staff in the course of research and whether or not they are using university resources, will ordinarily belong to the academic staff as the inventors under the [Patents] 1990 Act”.
“The position is different if staff have a contractual duty to try to produce inventions,” Justice French said.
“But a duty to research does not carry with it a duty to invent.”
Mr Mallon said this meant that many businesses, including universities, may not own inventions created by their employees, unless the employees either have a duty to invent, or have agreed to assign their right to inventions through their employers.
“Many employment agreements simply deal with research and development obligations, not inventorship,” Mr Mallon said.
“In Australia, very few employees would have a duty to invent, or have provisions in their contract of employment assigning rights to inventions to the employer.”
Mr Mallon said the reality in many Australian workplaces was that inventions were commonly discovered by members of staff performing routine tasks.
This could include engineers and tradesmen, through their initiative, discovering better or more efficient ways of doing things, or which solve hitherto unresolved problems.
The “presumption” that such patentable inventions are owned by the employer is seriously questionable, according to Justice French’s decision.
The day-to-day implications of the UWA v Gray case are that patentable improvements made by employees may be owned by the employees and not the businesses for which they work.
