Watermark

The technology in question was the use of microspheres specifically to target a radioactive payload to kill liver cancer cells while sparing normal liver tissue. The microspheres which deliver ‘selective internal radiation’ became known as SIR-spheres, now successfully marketed by Sirtex which floated on the ASX in 2000.

UWA sued Professor Gray and Sirtex, seeking ownership rights in the intellectual property. More than 20 years of evidence from the commencement of Professor Gray’s appointment at UWA as Professor of Surgery in 1985 through to the development and commercialisation of the cancer therapy was examined in the case.

No assignment agreements existed between  UWA and Professor Gray or Sirtex, so the court initially looked to the University of Western Australia Act 1911 (the UWA Act), the Australian Patents Act 1990 and common law decisions to see if they were relevant to the transfer of ownership in the IP.

The UWA Act defines how statutes and regulations can be made by UWA. Notably, the UWA Act stipulates that a new regulation can come into force only from the date when it is ‘promulgated’. Although there was much discussion during the case about the date of promulgation of the IP regulations, this was ultimately futile in light of the judge’s decision that UWA could not acquire ownership of intellectual property purely through its statutes and regulations. The regulations provided a procedure ‘to enable the orderly identification’ of intellectual property; however, the judge found that the regulations by themselves were not sufficient to acquire or transfer ownership of intellectual property from employees to the university.

Similarly, the Patents Act 1990 does not include any mechanism for an employer to attain ownership of an employee’s inventions. Justice French therefore reviewed previous court decisions from Australia and from around the world. He concluded that, in the absence of an assignment agreement to the contrary, an employer would generally own inventions made by employees during the course of their employment.

So did Professor Gray make inventions ‘during the course of this employment’? If so, then the prevailing common law would say that UWA had a valid claim to ownership. Professor Gray and the various members of his team were employed under contracts which included obligations to teach, undertake research and to stimulate research among staff and students. Justice French was of the opinion that, even though one might think that inventions could reasonably be expected to arise from research, a duty to research does not equate to a duty to invent. This notion was raised particularly in reference to the university academic environment where the concept of ‘academic freedom’ is one of free exchange of results, and commercialisation is a ‘by-product’. Professor Gray’s results were published, patients were treated with new techniques and the entire research focus was on getting better outcomes to treat those patients. It was concluded that this environment was inconsistent with the secrecy required for patenting inventions.

Justice French stated that he did ‘not consider as a general proposition that there is a presumption at law that the university will be entitled to the rights of inventions developed by such [academic] staff in the course of their research’, and also that Professor Gray ‘had no duty to invent anything’. Even if there had been an explicit statement in the contract of employment that inventions made during the course of employment belonged to the university, this would not have been enough. Ultimately, it appeared that the ‘evidence was insufficient to establish that the inventive concept … was developed by Dr Gray while he was an employee or in the course of his employment at UWA’.

This decision may cause some alarm among the university community and prompt a review of university legislation, regulations and employment contracts. The case underscores the importance of ongoing vigilance in creating and maintaining processes for rigorous intellectual asset management in the academic sector.

A final take-home message from Justice French:

‘[U]niversities might well consider the alternative of deriving benefits from inventions produced by their staff by offering highly competent and experienced commercialisation services in exchange for a negotiated interest in the relevant intellectual property’.

Dr Lachlan Wilson