LawStudy 7 | - Student
Sep 18, 2019 | #1
Introduction
In Australia the assumption is made that employees will defer to the interest of the employer. This is exhibited in an allocation of intellectual property rights. These rights have the possibility to arise through many different types of activities associated with employment. This legal right allows the owner of the intellectual property to exploit or use the ideas in any legal way they see fit. There are different types of intellectual property, including copyrights, patents, designs, and trademarks.
The copyright prevents unauthorized distribution or copying of ideas, which are represented in the form of broadcasts, video recordings, sound recordings, music, photographs, drawings, software, computer files, papers, or books. Patents applied to processes or products, which are unique1. Designs refer to specific types of visual presentations, which are used in association with commercial products. Trademarks can include labels, logos, or names. They indicate that a service or some goods have originated from a specific business or individual. The only one of these intellectual property rights which comes about automatically in Australia is the copyright. The other types of intellectual property rights must be obtained through formally registering the trademark, design, or invention.
In the case of a copyright or design any work, which is created as part of employment automatically belongs to the employer1. This is specified in the Copyright Act 1968 s 35 (3), (6) and the Designs Act 2003 s 13 (1) (b). However, these laws are subject to agreements between employers and employees. For example, a number of universities will allow academicians to retain the copyright on scholarly work they produce.
Patents have a similar rule. However, it is not clearly stated in the Patents Act 19901. Instead, it is implied by the common law that an invention which is produced during employment is only able to be patented by the employer. An important case which establishes this legal right is Sterling Engineering v Patchett (1955). An employee who chose to patent their invention would be required to assign the patent to the employer, unless some other agreement had previously been made.
Universities in Australia must abide by the same laws as other institutions regarding intellectual property rights of their employees. The University is legally able to claim the rights to any inventions, which are created by the employees, including academic staffs, which are developed as part of their employment at the institution. This is established by the common law in Australia as well as nearly all the Australian University intellectual property statutes and policies. Many of the statutes and policies also allow the University to have ownership of any invention, which is developed while using the resources of the University. This can include equipment, laboratories, and any other assets, which were necessary to develop the invention and are owned by the University. A university is also allowed to establish ownership of any invention, which is developed through publicly funded research.
The academic employees of a university in Australia have no rights according to the common law with regard to inventions, which are created during their employment. This is of course not the case if there is a pre-arranged agreement that the academic is allowed to have part or full ownership. This is the case in at least two universities in Australia.
It is generally the case that students do have a right to claim ownership to any inventions made while they are studying at the University. Again, this can be modified if there is a pre-existing arrangement. Several universities in Australia have policies and statutes regarding intellectual property, which allows them at least partial rights to inventions if the student was using University resources to create the invention.
Determining the right to ownership of patents, which are established by staff at a University can be difficult and is often determined by two general issues. The first issue is the type of employment relationship the staff member has with the University. The second issue is the terms of that employment relationship. Of particular concern in this regard is whether the invention was discovered during the normal course of employment.
With regard to the issue of the employment relationship there must be a distinction between independent contractors and employees of the University. An academic who is paid a salary by the University and works regularly would generally be considered an employee. Another individual that lectures on an irregular basis and invoices the University for their time would usually be considered an independent contractor. This would even be an even clearer case if the irregular lecturer invoices the University through a private consulting company. Unless previously agreed otherwise, the University would generally not have any right to the independent contractor's invention.
With regard to the terms of the employment relationship is important to know if there is a previous agreement. It is also important to know the type of duties for which the academic is serving the University. Some academics teach and do research, while others only perform one of these functions. Other academics may be involved in administration only. The University would have common law right to the discoveries of an academic doing research if something was discovered during this work. However, the case may not be as clear if the academic only serves an administrative function for the University and made a discovery without the use of the university's resources.
There has been a lengthy dispute between Professor Bruce Gray and the University of Western Australia regarding the professor's inventions3, see University of Western Australia v Gray (2008).
This is considered by some to be a landmark case regarding intellectual property rights within Australian universities. Gray was a full professor of surgery employed by the University of Western Australia. He signed an employment contract when he began working for the University. This contract included an agreement that he would teach and do examinations according to the statutes of the University and Senate. He would also conduct research and encourage this activity among staff and students. He was also employed to perform other works, which would be required by the Senate. Furthermore, the University has intellectual property regulations and rules regarding patents, which are applied to all academics employed by the institution.
Professor Gray did a great deal of research involving bowel and metastic liver cancers. While doing this research, he successfully developed technologies, which allowed the use of microspheres that provide a way to treat the tumors in a targeted fashion. This resulted in several patents, which were filed in a number of different names, including Gray's. During 1997 the professor discontinued his full-time work at the University. He assigned a number of property rights to a company called Sirtex Medical Limited. This company was established in order to market and commercialize the microsphere technology which had been developed by Gray. The company did an initial public offering in 2000, and the professor became a director of the company with a large number of shares.
The University claimed they had the sole rights to the inventions of Gray because they were developed as part of his employment3. The courts ruled in favor of the professor, and the University's final appeal was rejected in February of 2010, see University of Western Australia v Gray [2010] HCA Trans 11. This case is seen as showing the importance of monitoring contracts, which are used for employees and independent contractors. A universal declaration of the employer that they have intellectual property rights is not necessarily sufficient to establish a legal right. This is especially true regarding implied terms. T rights must be secured by expressly stated conditions, which are agreed upon by both parties prior to the employment.
Government research organizations also encounter instances when employees make significant discoveries. Examples of these types of organizations in Australia include the Defense Science and Technology Organization and the Commonwealth Scientific and Industrial Research Organization. Both groups receive public funds from the government in order to do their research. There is no uniform legislative or executive policy regarding the ownership of intellectual property for these organizations. Therefore, institutional policies and common law principles must be applied in order to determine property rights. Another important factor to consider is the level of commercialization for the invention.
According to the common law principles, the publicly funded government institution of research has the right of ownership to inventions, which are created by employees when the discoveries are made during their employment2. The same difficulties which apply to universities, also apply to these organizations. It is important to establish the type of relationship and the terms of employment. A number of government research institutions in Australia have developed intellectual property policies, which cover these situations.
The majority of government research organizations in Australia have formal intellectual property policies, which apply to all staff. They also generally have a section in the employment contracts which cover intellectual property rights regarding all employees. Most of these organizations have internal documents, which deal with the right of ownership to intellectual property and general business guidelines. These measures usually allow the research organization to have full ownership of any discoveries and inventions, which are developed by employees as part of their employment in the organization. This also includes activities, which are not done during normal working hours if they are clearly related to the employee's official duties. In other words, if a researcher extends their hours in the laboratory and makes a discovery after their usual time of work, but it is directly related to the work they are normally doing, the organization can still claim ownership of this discovery.
In regard to the intellectual property rights for inventions developed by employees, businesses in Australia have the same implied rights as a University or government research organization4. If the discovery is made as a part of the employee's job duties, then the right of ownership can be claimed by the employer. In the 21st century, the majority of businesses have more capital in their intangible goods than actual physical properties. The rights to these assets are secured with brands, trademarks, copyrights, and patents. However, this protection of assets comes at a cost.
The process of obtaining a patent or trademark can be a time-consuming and expensive process. Another cost which many businesses are now considering is the intangible factor of employee drive. In other words, if employees are not provided with sufficient incentives for making new discoveries, they will often stop expending energy toward this goal. While it is important for a business to protect its intellectual property assets, there must also be room for employees to benefit from their discoveries. Businesses can accomplish this task in a number of different ways. For example, employees who make discoveries on more effective methods of accomplishing a task can be given a rise in pay or assigned a more prestigious position.
Businesses which are based upon research may wish to make a more direct Association between the development of novel ideas and monetary gain. In this case, the company may wish to allow the discoverer of a new product or process to have a percentage share in the increased profits which are a direct result of this discovery. This is not a new strategy. Chief executive officers of major corporations have been receiving benefits packages, including shares of the company for many years. This means that a chief executive officer who develops new corporate strategies and methods of accomplishing a corporation's tasks more effectively will be compensated automatically by increased share prices.
It is generally the case that discoveries made by an employee of the company while performing their duties are the property of the employer5. It is also true that, unless there has been an arrangement made to the contrary, an independent contractor's discovery is the property of the individual. A third category of relationship with an organization is provided by a company director. Who is the owner of the intellectual property provided by discoveries made from a company director in the performance of their duties? This was recently decided in an Australian court of appeals in the case of Eastland Technology Australia Pty Ltd v Whisson [2005} WASCA 144. It was ruled that a company director must be treated like an independent contractor with regard to intellectual property rights.
Conclusion
In Australia any type of discovery made by an employee during the completion of their job duties is the property of the employer1. This is implicit in the employment relationship according to the common law. The legal right of ownership belongs to the employer. However, this is only automatic in the case of copyrights. The rule regarding patents is similar but there must be a reassignment done to the employer. Both universities and government research organizations which are publicly funded frequently have issues arise related to the rights regarding intellectual property of new discoveries.
There are two basic factors to be considered regarding the rights to intellectual property in these cases. The first is the nature of the employment relationship. The second is with regard to the terms of the employment. If the individual making the discovery is an employee of the organization and makes the discovery during the performance of their duties, then the property right belongs to the organization. If the individual is an independent contractor, they retain the right of ownership. This is also true for a company director5. However, as the case of University of Western Australia v Gray [2010] HCA Trans 11 made clear it is prudent to ensure that all ownership rights with regard to intellectual property are agreed upon in writing prior to employment. While it can be considered as implicit as part of the employment contract that discoveries will belong to the employer, this may not always be enforceable.
REFERENCES
Stewart, Andrew. Stewart's guide to employment law. Annandale, NSW, Australia: Federation Press, 2008.
Christie, Andrew F., Stuart D'Aloisio, Katerina L. Gaita, Melanie J. Howlett, and Elizabeth M. Webster. "Analysis of the legal framework for patent ownership in publicly funded research institutions." Commonwealth of Australia, Department of Education, Science & Training.
Still, Mary. "Employers, employees, and intellectual property: The saga of University of Western Australia v Gray." Clayton UTZ.
Hunter, Laurie. Intellectual capital: Accumulation and appropriation, Melbourne Institute working paper No. 22/02. Melbourne, Australia: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, 2002
Knight, Peter. "Who owns the IP devised by a company director?." Clayton UTZ. 14 Dec. 2005.
In Australia the assumption is made that employees will defer to the interest of the employer. This is exhibited in an allocation of intellectual property rights. These rights have the possibility to arise through many different types of activities associated with employment. This legal right allows the owner of the intellectual property to exploit or use the ideas in any legal way they see fit. There are different types of intellectual property, including copyrights, patents, designs, and trademarks.
The copyright prevents unauthorized distribution or copying of ideas, which are represented in the form of broadcasts, video recordings, sound recordings, music, photographs, drawings, software, computer files, papers, or books. Patents applied to processes or products, which are unique1. Designs refer to specific types of visual presentations, which are used in association with commercial products. Trademarks can include labels, logos, or names. They indicate that a service or some goods have originated from a specific business or individual. The only one of these intellectual property rights which comes about automatically in Australia is the copyright. The other types of intellectual property rights must be obtained through formally registering the trademark, design, or invention.In the case of a copyright or design any work, which is created as part of employment automatically belongs to the employer1. This is specified in the Copyright Act 1968 s 35 (3), (6) and the Designs Act 2003 s 13 (1) (b). However, these laws are subject to agreements between employers and employees. For example, a number of universities will allow academicians to retain the copyright on scholarly work they produce.
Patents have a similar rule. However, it is not clearly stated in the Patents Act 19901. Instead, it is implied by the common law that an invention which is produced during employment is only able to be patented by the employer. An important case which establishes this legal right is Sterling Engineering v Patchett (1955). An employee who chose to patent their invention would be required to assign the patent to the employer, unless some other agreement had previously been made.
Australian Universities
Universities in Australia must abide by the same laws as other institutions regarding intellectual property rights of their employees. The University is legally able to claim the rights to any inventions, which are created by the employees, including academic staffs, which are developed as part of their employment at the institution. This is established by the common law in Australia as well as nearly all the Australian University intellectual property statutes and policies. Many of the statutes and policies also allow the University to have ownership of any invention, which is developed while using the resources of the University. This can include equipment, laboratories, and any other assets, which were necessary to develop the invention and are owned by the University. A university is also allowed to establish ownership of any invention, which is developed through publicly funded research.
The academic employees of a university in Australia have no rights according to the common law with regard to inventions, which are created during their employment. This is of course not the case if there is a pre-arranged agreement that the academic is allowed to have part or full ownership. This is the case in at least two universities in Australia.
It is generally the case that students do have a right to claim ownership to any inventions made while they are studying at the University. Again, this can be modified if there is a pre-existing arrangement. Several universities in Australia have policies and statutes regarding intellectual property, which allows them at least partial rights to inventions if the student was using University resources to create the invention.
Determining the right to ownership of patents, which are established by staff at a University can be difficult and is often determined by two general issues. The first issue is the type of employment relationship the staff member has with the University. The second issue is the terms of that employment relationship. Of particular concern in this regard is whether the invention was discovered during the normal course of employment.
With regard to the issue of the employment relationship there must be a distinction between independent contractors and employees of the University. An academic who is paid a salary by the University and works regularly would generally be considered an employee. Another individual that lectures on an irregular basis and invoices the University for their time would usually be considered an independent contractor. This would even be an even clearer case if the irregular lecturer invoices the University through a private consulting company. Unless previously agreed otherwise, the University would generally not have any right to the independent contractor's invention.
With regard to the terms of the employment relationship is important to know if there is a previous agreement. It is also important to know the type of duties for which the academic is serving the University. Some academics teach and do research, while others only perform one of these functions. Other academics may be involved in administration only. The University would have common law right to the discoveries of an academic doing research if something was discovered during this work. However, the case may not be as clear if the academic only serves an administrative function for the University and made a discovery without the use of the university's resources.
University of Western Australia v Gray
There has been a lengthy dispute between Professor Bruce Gray and the University of Western Australia regarding the professor's inventions3, see University of Western Australia v Gray (2008).
This is considered by some to be a landmark case regarding intellectual property rights within Australian universities. Gray was a full professor of surgery employed by the University of Western Australia. He signed an employment contract when he began working for the University. This contract included an agreement that he would teach and do examinations according to the statutes of the University and Senate. He would also conduct research and encourage this activity among staff and students. He was also employed to perform other works, which would be required by the Senate. Furthermore, the University has intellectual property regulations and rules regarding patents, which are applied to all academics employed by the institution.
Professor Gray did a great deal of research involving bowel and metastic liver cancers. While doing this research, he successfully developed technologies, which allowed the use of microspheres that provide a way to treat the tumors in a targeted fashion. This resulted in several patents, which were filed in a number of different names, including Gray's. During 1997 the professor discontinued his full-time work at the University. He assigned a number of property rights to a company called Sirtex Medical Limited. This company was established in order to market and commercialize the microsphere technology which had been developed by Gray. The company did an initial public offering in 2000, and the professor became a director of the company with a large number of shares.
The University claimed they had the sole rights to the inventions of Gray because they were developed as part of his employment3. The courts ruled in favor of the professor, and the University's final appeal was rejected in February of 2010, see University of Western Australia v Gray [2010] HCA Trans 11. This case is seen as showing the importance of monitoring contracts, which are used for employees and independent contractors. A universal declaration of the employer that they have intellectual property rights is not necessarily sufficient to establish a legal right. This is especially true regarding implied terms. T rights must be secured by expressly stated conditions, which are agreed upon by both parties prior to the employment.
Government Research Organizations
Government research organizations also encounter instances when employees make significant discoveries. Examples of these types of organizations in Australia include the Defense Science and Technology Organization and the Commonwealth Scientific and Industrial Research Organization. Both groups receive public funds from the government in order to do their research. There is no uniform legislative or executive policy regarding the ownership of intellectual property for these organizations. Therefore, institutional policies and common law principles must be applied in order to determine property rights. Another important factor to consider is the level of commercialization for the invention.
According to the common law principles, the publicly funded government institution of research has the right of ownership to inventions, which are created by employees when the discoveries are made during their employment2. The same difficulties which apply to universities, also apply to these organizations. It is important to establish the type of relationship and the terms of employment. A number of government research institutions in Australia have developed intellectual property policies, which cover these situations.
The majority of government research organizations in Australia have formal intellectual property policies, which apply to all staff. They also generally have a section in the employment contracts which cover intellectual property rights regarding all employees. Most of these organizations have internal documents, which deal with the right of ownership to intellectual property and general business guidelines. These measures usually allow the research organization to have full ownership of any discoveries and inventions, which are developed by employees as part of their employment in the organization. This also includes activities, which are not done during normal working hours if they are clearly related to the employee's official duties. In other words, if a researcher extends their hours in the laboratory and makes a discovery after their usual time of work, but it is directly related to the work they are normally doing, the organization can still claim ownership of this discovery.
Business and the Strategic Use of Intellectual Property
In regard to the intellectual property rights for inventions developed by employees, businesses in Australia have the same implied rights as a University or government research organization4. If the discovery is made as a part of the employee's job duties, then the right of ownership can be claimed by the employer. In the 21st century, the majority of businesses have more capital in their intangible goods than actual physical properties. The rights to these assets are secured with brands, trademarks, copyrights, and patents. However, this protection of assets comes at a cost.
The process of obtaining a patent or trademark can be a time-consuming and expensive process. Another cost which many businesses are now considering is the intangible factor of employee drive. In other words, if employees are not provided with sufficient incentives for making new discoveries, they will often stop expending energy toward this goal. While it is important for a business to protect its intellectual property assets, there must also be room for employees to benefit from their discoveries. Businesses can accomplish this task in a number of different ways. For example, employees who make discoveries on more effective methods of accomplishing a task can be given a rise in pay or assigned a more prestigious position.
Businesses which are based upon research may wish to make a more direct Association between the development of novel ideas and monetary gain. In this case, the company may wish to allow the discoverer of a new product or process to have a percentage share in the increased profits which are a direct result of this discovery. This is not a new strategy. Chief executive officers of major corporations have been receiving benefits packages, including shares of the company for many years. This means that a chief executive officer who develops new corporate strategies and methods of accomplishing a corporation's tasks more effectively will be compensated automatically by increased share prices.
Company Directors and Intellectual Property
It is generally the case that discoveries made by an employee of the company while performing their duties are the property of the employer5. It is also true that, unless there has been an arrangement made to the contrary, an independent contractor's discovery is the property of the individual. A third category of relationship with an organization is provided by a company director. Who is the owner of the intellectual property provided by discoveries made from a company director in the performance of their duties? This was recently decided in an Australian court of appeals in the case of Eastland Technology Australia Pty Ltd v Whisson [2005} WASCA 144. It was ruled that a company director must be treated like an independent contractor with regard to intellectual property rights.
Conclusion
In Australia any type of discovery made by an employee during the completion of their job duties is the property of the employer1. This is implicit in the employment relationship according to the common law. The legal right of ownership belongs to the employer. However, this is only automatic in the case of copyrights. The rule regarding patents is similar but there must be a reassignment done to the employer. Both universities and government research organizations which are publicly funded frequently have issues arise related to the rights regarding intellectual property of new discoveries.
There are two basic factors to be considered regarding the rights to intellectual property in these cases. The first is the nature of the employment relationship. The second is with regard to the terms of the employment. If the individual making the discovery is an employee of the organization and makes the discovery during the performance of their duties, then the property right belongs to the organization. If the individual is an independent contractor, they retain the right of ownership. This is also true for a company director5. However, as the case of University of Western Australia v Gray [2010] HCA Trans 11 made clear it is prudent to ensure that all ownership rights with regard to intellectual property are agreed upon in writing prior to employment. While it can be considered as implicit as part of the employment contract that discoveries will belong to the employer, this may not always be enforceable.
REFERENCES
Stewart, Andrew. Stewart's guide to employment law. Annandale, NSW, Australia: Federation Press, 2008.
Christie, Andrew F., Stuart D'Aloisio, Katerina L. Gaita, Melanie J. Howlett, and Elizabeth M. Webster. "Analysis of the legal framework for patent ownership in publicly funded research institutions." Commonwealth of Australia, Department of Education, Science & Training.
Still, Mary. "Employers, employees, and intellectual property: The saga of University of Western Australia v Gray." Clayton UTZ.
Hunter, Laurie. Intellectual capital: Accumulation and appropriation, Melbourne Institute working paper No. 22/02. Melbourne, Australia: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, 2002
Knight, Peter. "Who owns the IP devised by a company director?." Clayton UTZ. 14 Dec. 2005.