Metroll Queensland Pty Ltd ("Metroll") is a manufacturer and supplier of metal building products, including rainwater tanks.
Mark Collymore is the author of three registered designs, nos. 310528, 312217 and 312218, for rainwater tanks. At all relevant times, Mr Collymore was employed by Metroll. He had "risen up through the ranks" of the company, and had reached the position of factory foreman.
Both parties appealed.
ENTITLEMENT ON APPEAL
The appeal was heard before Justice Spender in the Federal Court of Australia on 2-4 March 2010.
The judge found, as did the hearing office, that the parties’ evidence was contradictory, and that there was a lack of substantive corroboration. In relation to the absence of evidence from other members of the tank-making team at Metroll, Spender J commented (at ) that “[t]heir absence is unexplained, and I infer that none of those witnesses would have provided evidence helpful to Metroll.”
As regards entitlement, Spender J referred to prior case law in relation to patents, namely Spencer Industries Pty Ltd v Collins  FCA 542 and Patchett v Sterling Engineering Co Ltd (1955) 72 RPC 50.
The general principle established in these prior cases is that “any product of the work which the servant [employee] is paid to do belongs to the master [employee]. I can find neither principle nor authority for holding that this rule ceases to apply if a product of that work happens to be a patentable invention.” (Patchett at 58, emphasis added.)
The issue therefore arose as to whether the creative work of authoring new designs fell with the scope of work for which Mr Collymore was paid by Metroll:
28. … in relation to the first design, the issues are whether, (a) Mr Collymore was solely responsible for creating the design; and (b) the first design was created in the course of Mr Collymore’s employment, in that it was created pursuant to either a general expectation of creativity as part of Mr Collymore’s employment, or a specific direction from Metroll.
The court found in favour of Mr Collymore on all points:29. …in relation to the second and third designs, the applicant does not accept that the designs were created pursuant to a specific direction from Metroll and … in the course of Mr Collymore’s employment. …what occurred was a negotiation between Metroll and Mr Collymore about the basis upon which Mr Collymore would make his design available to Metroll. However, even if it were to be found that the prototype tanks were manufactured pursuant to a specific direction, the applicant maintains that there was an agreement between Metroll and Mr Collymore, either express or to be inferred from Metroll’s conduct, that Mr Collymore would retain ownership of the designs….
I am satisfied Mr Collymore was never employed to design tanks for Metroll, and did not, in fact, design tanks during the course of his employment at Metroll.At :
I am quite satisfied that the first design was not created pursuant to any direction by Mr Morrison [production manager/assistant manager of Metroll Toowoomba].At :
I am satisfied that the design of the modular tanks with corrugated sides, which became designs 312217 and 312218, were authored by Mr Collymore. Those designs were not produced as a result of a direction or instruction by either Mr Morrison or Mr Harland [manager of Metroll Toowoomba], whether that direction or instruction was to come up with a design for modular tanks with corrugated sides, or otherwise.And at :
I am not satisfied that there was an express agreement between Metroll and Mr Collymore at the meeting between Mr Harland, Mr Morrison and Mr Collymore before the sample modular tanks were constructed, that Mr Collymore would remain the owner of the modular designs. I am satisfied, however, that in all the circumstances of the case, an agreement between Mr Collymore and Metroll that Mr Collymore would remain the owner of the designs should be inferred from Metroll’s conduct.As a result, the revocation of design nos. 312217 and 312218 was reversed, and reinstatement of the registrations ordered by the court.
On the evidence, as interpreted by the court, this appears to be a case in which the employer Metroll has attempted to renege on an express (though verbal) agreement with the employee Mr Collymore, perhaps not realizing initially that Mr Collymore would obtain registered design rights and seek to extract royalties for use of his tank designs.
More generally, however, the case serves as a reminder of good practice for both employers and employees who may find themselves in similar situations:
- maintain written employment contracts, including formal position descriptions setting out the duties and responsibilities of each employee, and to keep these up-to-date as those duties change; and
- any variations to an employment contract, or express agreement outside the terms of a contract of employment, should be put in writing.