When it comes to employee inventorship in Australia, understanding the interplay between the Patents Act 1990 (Cth) and employment law is critical. Many employees and employers assume ownership of intellectual property (IP) is straightforward, but the reality is often quite different.
Inventorship v. Ownership
A key distinction must be made between inventorship and ownership. Inventorship refers to the individual or individuals who contributed to the creation of an invention. Regardless of their employment, inventors must be named in a patent application as they are recognised under the Patents Act. Ownership, on the other hand, refers to the right to apply for, exploit and benefit from a patent. This is where employment relationships and contracts can play a significant role.
Ownership in Employment
In general, inventions created in the course of employment belong to the employer, provided that the invention falls within the scope of the employee’s normal duties. For example, if an engineer is hired to develop new technologies and invents a new widget then ownership of that invention is likely to reside with the employer.
However, if an employee develops an invention outside of their normal employment duties using their own resources and in their own time, then it is likely that the employee will retain ownership of their invention. For example, in the famous UK patent case Electrolux Ltd v Hudson, a senior storekeeper made an invention in their own time without using company resources. It was held that the storekeeper owned the invention rather than the company.1
The Role of Employment Contracts
Ownership of inventions is often clarified in employment contracts by including intellectual property clauses. These clauses typically state that inventions created during employment, particularly those using employer resources or related to the employer’s business, must be assigned to the employer. Without such provisions disputes can arise over ownership rights.
For instance, the Federal Court of Australia has held that an academic employee was not required to assign his inventions to the university because the employment contract did not explicitly impose this obligation2. The Court held that: “[the Judge] concluded that in the absence of express agreement to the contrary, rights in relation to inventions made by academic staff in the course of research, whether or not made with the use of [University] resources, ordinarily belong to the academic staff as the inventors under the Patents Act 1990 (Cth) (Patents Act). 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 …”
This case underscores the importance of clear contractual language to avoid misunderstandings.
Relevant Provisions in the Australian Patents Act
The Patents Act 1990 (Cth) specifies in Section 15(1) that a patent can only be granted to: (i) the inventor(s); (ii) a person deriving title from the inventor(s), such as an employer through a contractual agreement; (iii) a person to whom the inventor(s) have assigned their rights.
Although inventorship is based on contribution, ownership often depends on whether the employer has a legitimate claim to the invention through the employment relationship.
Common Disputes and Resolutions
Disputes over inventorship and ownership are not uncommon. These can arise when, for example, an invention is created outside regular working hours but the inventor has used company resources or when an employment contract lacks clarity regarding IP ownership.
Best Practice
It is recommended that employers include specific IP clauses in employment contracts requiring employees to disclose and assign inventions made in the course of employment. Furthermore, employment contracts should clearly set out the scope of an employee’s duties so that it is clear whether or not an employer is entitled to ownership of an invention made by an employee.
If you have any questions regarding inventorship or ownership, then please get in touch with MBIP’s patents team to discuss your circumstances.
Footnotes
- Electrolux Ltd v Hudson [1977] FSR 312. ↩︎
- University of Western Australia v Gray [2009] FCAFC 116. ↩︎
