Hard lesson to be learned

“On a practical level the lesson of this case may be there is a need for express arrangements” – Gummow J special leave hearing.

The impact of the recent decision of the High Court of Australia to refuse the University of Western Australia’s application for special leave to appeal from the Full Federal Court’s decision cannot be underestimated.  While it represented the end of a very lengthy battle that commenced in December 2004, this decision will have huge impact on universities and their commercial dealings with private sector groups.

Universities will now need to have in place effective procedures and clear contractual terms dealing with the ownership of inventions created by academic staff.  It is clear that the rule in Sterling v Patchett [1955] AC 534 that an employer is entitled to any product of the work which the employee is paid to do unless it is excluded by express agreement and whether that product is patentable or not, does not extend to academic staff employed by universities.

There is an immediate need for universities to review all existing projects to address the question of the ownership of IP and to resolve ownership, before entering into any commercial arrangement.  Likewise companies that rely on research conducted by universities will need to ensure the ownership of any IP generated in these projects has been adequately addressed.