As the University of Western Australia seeks leave to appeal to the High Court over a blow to its intellectual property rights, universities and employers nationwide are wondering what they need to do to avoid a similar fate.
SUDDENLY, everyone is interested in intellectual property; and it has less to do with any particular area of new technology, although that has played its part.
Rather, universities and employers are wondering how to secure the rights that they previously thought were secure.
Lavan Legal counsel Martin Bennett, who appeared at trial and on appeal for Sirtex Medical founder Bruce Gray in his battle with the University of Western Australia, briefed a packed room last month on the impact of the case.
Mr Bennett told the legal fraternity, university representatives and an array of business people in attendance that the legal action had jeopardised the balance of UWA’s intellectual property and that the blanket attempt by academic institutions to claim rights over inventions needed to be reviewed.
Among the attendees, Curtin University of Technology’s Rohan McDougall told WA Business News the case had given academic institutions reason to pause.
“Definitely it’s thrown some doubt on some long-held beliefs in universities,” Curtin’s director of IP commercialisation said.
The long-held belief Mr McDougall is referring to is that universities operate much the same as private enterprise; where an invention uncovered during the course of paid employment would normally become the property of the employer.
But the court distinguished between university staff and private sector employment, and made the point in the lengthy decision that Dr Gray may have had a duty to research, but not to invent.
UWA vice-chancellor Alan Robson has previously said the court action was a matter of principle because the judgement could stem the potential flow of benefits of IP resulting from such research to the broader community.
One attendee at the briefing asked Mr Bennett what Dr Gray was doing using university resources to find a treatment for liver cancer if the university had no interest in the end product.
“He was exercising academic freedom,” Mr Bennett replied.
Unlike a private sector employee, Dr Gray had freedom to choose the line of research and freedom to decide when and how to publish the results of the research.
The decision and failed appeal has left universities to take a hard look at their staff employment contracts, as there was no implied term in Dr Gray’s employment contract that UWA owned the IP.
“Unless these matters are covered by carefully devised contracts dealing with the individual circumstances of each case, the blanket attempt by academic institutions to claim the benefit of inventions made by their staff will need to be significantly reviewed,” Mr Bennett wrote in a briefing on the issue.
Companies that partner with universities in research and development are arguably among those to be most affected by the case.
Law firm Freehills noted that companies dealing with universities would need to carefully consider who owns inventions arising out of research to ensure commercialisation could successfully occur.
This affects universities such as Murdoch that are involved in research funded by a variety of granting agencies.
As for the rest of the private sector, Monash University law professor Ann Monotti said the repercussions of the judgement and appeal wouldn’t extend to private enterprise in regards to employee entitlements over inventions.
“It would have no application outside of the university sector as [the judgements] were very specific,” Professor Monotti told WA Business News.
Professor Monotti, whose writings on IP were influential in the case, said the decision was consistent with her own work on the subject; namely that universities couldn’t rely on common law to claim IP ownership.
In his 2008 judgement, Justice Robert French found that the principle that an employer owns an employee’s invention, even when there isn’t an express clause in a contract that says so, could not be implied in all employment contracts, including those with university staff.
Professor Monotti said there was obviously a breakdown in the relationship between the university and the doctor.
“It is perhaps a lesson in future for working harmoniously,” she said.
Indeed, attempts to devise ironclad agreements stripping rights away with academic staff would only dissuade potential inventors from working at an academic institution.
Curtin’s Mr McDougall said universities had to have fair arrangements in place to remain competitive, and that when new staff join, all background IP should be disclosed and suitably documented.
“The major concern is to protect IP that is developed using significant university resources,” Mr McDougall said.
In its final throw of the dice, UWA has now sought leave to appeal the Full Federal Court decision handed down in September confirming Justice French’s 2008 decision.
Plenty of history behind dispute
IN 1985, Bruce Gray joined the University of Western Australia as a professor of surgery. As part of his role he was required to teach and "to undertake research and to organise and generally stimulate research among the staff and students".
During his employment he continued to develop technologies designed to treat liver cancer; a goal he was working towards before coming to UWA.
Dr Gray filed applications for patents as he progressed in his own name and in the name of the Cancer Research Institute, where he had an interest. The patents were not filed in the name of the university.
In 1997, Sirtex Medical (a company established by Dr Gray) took ownership of the intellectual property rights to the technologies. In 1999, the university indicated it may have a claim over the rights now owned by Sirtex.
The technology is used to treat liver cancer by injecting radioactive micro-particles in the bloodstream, which feed into the liver and attack the cancer cells.
Dr Gray left the university in 1999 and Sirtex was listed in 2000.
He is no longer a director of the company, and there have been some battles between the doctor and the listed entity over the years.
Nonetheless, Dr Gray's stake in the company is now worth about $75 million, following the successful commercialisation of the treatment.
After originally opting against taking legal action, UWA eventually went to the courts in 2004.
In 2008, former federal court judge Robert French rejected the university's claim it was the rightful owner of Dr Gray's equity in Sirtex.
The university unsuccessfully appealed that ruling to the full Federal Court. It has now lodged a plea for a High Court appeal.
