UWA v Gray

The Full Court in University of Western Australia v Gray [2009] FCAFC 116 has dismissed UWA's appeal against the Federal Court trial judge's findings that the University did not own the intellectual property in work by Gray while employed by that institution as a professor. 

Bruce Gray, the respondent, was a full time employee of UWA as its Professor of Surgery from 1985 until 1997, when he went part time ("a fractional thirty percent appointment) focussing on clinical work at the Royal Perth Hospital. He was Head of UWA's Department of Surgery from October 1988 to December 1989. He resigned from UWA effective November 1999. As a full time employee the terms of his appointment required him to teach, conduct examinations, direct and supervise the work in his field. He was also required to undertake research, to organize research and generally to stimulate research among the staff and students. UWA claimed that by reason of his employment Gray had obligations to UWA regarding inventions (the production and use of microparticles or "microspheres" for the targeted treatment of cancerous tumours in humans, particularly in the liver) that were said to have been made wholly or in part by Dr Gray. As a consequence it claimed proprietary rights in respect of those inventions and of associated patent applications and patents. 

Gray indicated that research leading to his initial (1988) patent had been undertaken prior to employment by UWA. The primary Judge (now French CJ of the High Court) dismissed UWA's claim in its entirety. In that instance the Court found that the University's case depended on the proposition that an implied term of Gray's contract of employment gave UWA ownership of intellectual property developed in the course of Gray's employment. 

 The Court rejected that proposition, concluding that - in the absence of express agreement to the contrary - rights regarding inventions made by academic staff in the course of research (whether or not made with the use of UWA resources) ordinarily belong to the academic staff as the inventors under the Patents Act 1990 (Cth). The position would be different if staff had a contractual duty to produce inventions but "put simply, the duty to research did not signify a duty to invent". The University's intellectual property Regulations asserted ownership by UWA of all IP developed by its staff (apart from most copyright). The Court held that such provisions of the IP Regulations as purported to vest intellectual property rights in UWA or to interfere with the intellectual property generated by its academic staff were beyond the University's regulation-making power and that the Regulations did not come into effect until the invention period. 

 The Full Court held that in relation to Gray's employment as a professor of surgery

there was no "duty to invent" and the conditions required for the implication of a term at law were not satisfied; - in absence of implication of terms in law, there was no independent fiduciary obligation of a kind and scope that made Gray as an employee accountable to UWA for the inventions, applications for patents, or patents; - on the evidence, UWA university had abandoned its patent committee mechanism (a feature of the contract betwen Gray and the University) and the term incorporating the patent regulations did not avail university

The Full Court's decision is a reminder that the default position for patents differs from that of copyright created by employees, something that may surprise people who assume that all inventions created by employees areautomatically be owned by the employer. The decision highlights the need for research organisations to articulate coherent intellectual property policies and give effect to those policies through employment terms and administrative procedures. One implication is that universities and other research institutions will move to remind staff of existing policies, assert a particular interpretation of policies and procedures, and respond to greater activism by staff in contract negotiations. Another implication is that the decision will raise questions among current/former employees, university commercialisation units and business partners about the ownership of intellectual property created in the past. UWA v Gray has already prompted one high-tech business to seek reassurance from its public sector partner. The case isn't revolutionary but does present a 'wake up call' for institutions that haven't bothered to get their paperwork in order or that have assumed paperwork obviates any need to follow-through with actions.