31 January 2012

‘Shades of Gray’ Moves Up to the Federal Court

Virus Goes to CourtLast November we wrote about a dispute between Robert Alexander and the Royal Children’s Hospital (RCH) over ownership of an invention – and corresponding patent application – relating to improvements in a medium used to inoculate and grow viruses (see Shades of Gray as Dispute Over Invention Ownership Goes Viral).

At the relevant times, Dr Alexander was Head of Virology at RCH where his primary role was to maintain the Virology/Tissue Culture and Molecular Diagnostics service, which conducts viral diagnostic work on upwards of 10,000 clinical samples at the hospital each year.  The dispute played out before the Australian Patent Office, where a Hearing Officer found that it was one of Dr Alexander’s duties to improve the viral diagnostic techniques used at the hospital, so as to enable RCH to better diagnose viral diseases.  She also found that the ‘growth medium’ invention was made in the course of those duties, and thus belonged to his employer, RCH.

We wrote at the time that:

The decision is subject to appeal to the Federal Court. While this is an expensive option, if the RCH’s example of over 10,000 clinical samples per year is typical, there is potential for the invention of the ‘051 application to be quite valuable, and so an appeal by Dr Alexander may not be out of the question.

We can now confirm that Dr Alexander has indeed appealed to the Federal Court of Australia.

The appeal was filed in the Melbourne Registry on 1 December 2011, and was initially listed before Justice Jessup on 21 December 2011.  A directions hearing is currently set down for 10 February 2012.  The case is file no. VID1352/2011.

We stand by our opinion that the Patent Office got this one right.  It would be incongruous if an invention made by an employee, which improves the effectiveness of his area of operations and which – as in this case – is subsequently put into use by the employer, could be found to belong to the employee.  Firstly, this would appear to be the very definition of ‘in the course of duty’.  Furthermore, if Dr alexander were to end up as the owner of a patent on the invention, then he would be able to extract royalties from, or even obtain an injunction against, the very organisation which employed him at the time the invention was made.

Despite Dr Alexander’s arguments to the contrary, this seems to be a very different situation from that in University of Western Australia v Gray [2009] FCAFC 116.  Dr Gray was a researcher, with a great deal of freedom in relation to the funding and direction of his research.  While the University of Western Australia clearly felt it was entitled to some benefit from the commercialisation of Dr Gray’s inventions, it was not itself practising the inventions, nor did they form any part of the University’s core activities of education and research.  In the absence of an express agreement or assignment of rights, therefore, the University was unable to establish any entitlement.

Despite these differences, however, the RCH has better things to be doing – and spending its money on – than fighting a case in the Federal Court.  Its primary purpose is caring for sick children, and taxpayers and citizens who donate money annually through the Good Friday Appeal naturally expect that their contributions will be spent on activities which further this purpose, and not on expensive intellectual property disputes.

An out-of-court settlement to the dispute must therefore be a real possibility.  For example, RCH might agree to drop its ownership claim in exchange for a perpetual royalty-free license to practice the invention, either with our without a share of income subsequently generated from any patent that may be granted.

We will continue to watch this case with interest.


Post a Comment

Copyright © 2014
Creative Commons License
The Patentology Blog by Dr Mark A Summerfield is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Australia License.