The University of Western Australia’s challenge for ownership rights to Dr Bruce Gray’s microsphere inventions used in the treatment of cancer may have come to an end with the Full Court of the Federal Court dismissing the University’s appeal earlier this month.

The long-running dispute between Dr Gray and the University of Western Australia began in late 2004, and has seen many interlocutory forays regarding issues involving points of legal procedure along the way. Some three and a half years or so later, the first substantive judgment on the issue of whether the University could claim rights to Dr Gray’s inventions by virtue of its employer/employee relationship was handed down by French J (the current Chief Justice of the High Court) in a massive 1619-paragraph decision. Thankfully, in a “mere” 380-paragraph joint decision, the Full Court of the Federal Court has upheld French J’s original decision, emphasising that Dr Gray had no “duty to invent” (a phrase coined by French J in his original decision), essentially leaving the University with no claim over Dr Gray’s inventions.

Prior to the Gray case, it was commonly assumed that employers owned the rights to any inventions invented by employees. Generally speaking, post-Gray, nothing has changed. What has been made clear by the Gray case, however, is that a duty to undertake unspecified research and to stimulate research amongst others does not equate to the elusive “duty to invent” which would entitle an employer to claim rights over an employee’s inventions. The Gray case also highlights the importance of not looking at the employer/employee relationship in isolation, as other aspects of the relationship will come to bear on the question of whether a “duty to invent” exists. Both the Federal Court and the Full Court placed a lot of emphasis on the existence of a duty of confidence and the obligation to obtain funding for one’s own research, for example, as factors which may indicate the presence of a “duty to invent”. The Full Court also made it clear that, to consider an employment relationship without taking into account any other relationship between the parties would be to “contrive the context” in which the primary question needed to be answered.

It has long been a practice of the courts to imply into contracts of a certain type, terms which would more or less reflect the custom of those involved in those types of contracts day to day. This is known as an implication in law. On occasion, courts would also be inclined to imply terms into a contract for parties finding themselves in specific circumstances, where the inclusion of that term was a “necessity” to the sustenance of the agreement itself (usually for reasons of business efficacy). This is known as an implication in fact. It was not argued by the University that a term should be implied in fact to declare the University as the rightful owner of Dr Gray’s inventions - the case may have been decided differently if those arguments were made. Instead, the University tried to argue that a term should be implied by law to give the University such rights, as a University contract of employment to perform research (amongst other duties) necessary demanded that the employee be under a “duty to invent”.

What the Gray case means practically for university bodies and other similar research institutions is that more care needs to be taken to defining properly the scope of its employee’s duties. It might also help if employers who are looking to employ someone to create a solution for a problem (whatever that may be) that there be an express provision to specifically oblige that person to resolve that problem through any inventive means.

- Daniel Lo

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