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Research and IP Ownership
Dimitrios G. Eliades*
“If you create something and someone takes it, they should have to pay for it ……”
(Professor Hugh Hansen, Fordham University, N.Y. Aug. 2003)
1. Introduction
I have used the quote as a masthead on many occasions.
On this occasion it is a little provocative. Whilst the above
statement is correct legally, as a rationale and I believe
morally, it can be misleading because of the legal
relationships people enter into.
The most common of these relationships is that of
employment. In Australia, and subject to any agreement to
the contrary, a person who creates a literary, dramatic,
musical or artistic work, pursuant to the terms of his or her
contract of employment, does so for his/or her employer.1
That is, the employer is the owner of the work.
In relation to a design, if the designer created the design in the course of
employment, in the absence of any agreement to the contrary, the employer would
be entitled to be registered as owner.2
If we consider another stream, that of patentable inventions which might arise from
research projects, the principle is the same although not contained in any legislation.
The ownership of any patent application or granted patent will depend on an
examination of a number of factors to determine whether the invention arose
pursuant to the terms of employment.
That is not to say that all ‘works’ or inventions by an employed person belong to the
owner.3
2. Ownership of Ideas
Save for information which might be classified as confidential information or even a
trade secret, generally, ideas in themselves do not generate any proprietary or
ownership rights.
In the area of copyright, it is the expression of the idea which is ‘protectable’. In
patent law, the idea must manifest itself in a ‘patentable invention’; and designs look
at a product of aesthetic appeal.4 Ideas often come in the course of employment;
possibly as an answer to an identified need, to which someone has drawn their mind.
Once the work is created or the invention is made, the question of ownership
becomes all important.
This is where, generally, the problems usually begin. The parties have not addressed
the ownership issue in a written agreement, or where there exists some uncertainty
as to whether the work, invention or design arose pursuant to the terms of
employment.
3. Case study – Queensland v Pancreas (Dr K)
In one case, the question of employment itself became an issue as a threshold
question, before the ownership issue could be resolved. The case highlights some of
the difficulties in this area.
Background:
The Invention
The medical research which lead to an invention, related to the treatment of
pancreatic disease through the administration of cyanohydroxybutene (CHB). CHB is
said to be a glycosinolate breakdown product found in cruciferous vegetables, raw
canola and many stock feeds. Dr K found that when CHB was administered to rats, it
was said to cause, at particular dosage levels, severe pancreatic toxicity including,
amongst other things, acinar cell apoptosis and vacuolation.
The relationship between acinar cell apoptosis and the severity of pancreatitis in one
study was said to have shown that severity was reduced when the disease was
induced during the period in which apoptosis was most extensive.
The invention contained in the application, was said in the specification to arise from
the surprising discovery that subcutaneous injection of CHB produced an unusual
and unsuspected result of acinar cell apoptosis of normal acinar cells and acinar cell
carcinoma.
Furthermore,
"It was found that subcutaneous injection of CHB at an appropriate
sub-lethal dosage caused apoptosis of the substantially entire
population of acinar cells. The pancreatic lesion was unusual in that
there was observed a marked early edema with limited inflammatory
infiltration, rapid synchronous onset of acinar cell apoptosis and
advanced atrophy with only a severely limited regenerative response.
The application of this discovery to treat acinar cell carcinoma has led
to the development of the current invention."5
The Relationship
Initially, Dr K had applied for and was accepted as a trainee radiotherapist with the
Queensland Radium Institute (QRI), later to become the Royal Brisbane Hospital. A
letter of appointment confirmed salary and award conditions. Dr K accepted the
appointment.
Dr K’s duties at that time included the treatment of cancer patients using radiation
and chemotherapy and palliative care.
Dr K subsequently qualified as a specialist radiation oncologist and shortly after was
appointed to the position of a senior medical officer, specialist radiation oncologist at
the QRI.
Research Fellowship
A research fellowship had been established at QRI and the guidelines governing its
conduct were documented. The guidelines identified that the purpose of the
fellowship was to "provide the Institute with a means for encouraging specialist staff
to pursue training in research in fields involving or related to the activities of the
Institute."
The QRI considered that eligible research included the fields of:
o clinical or experimental oncology;
o radiobiology;
o cancer epidemiology, or
o such other endeavour as approved by the Institute.
The financial terms included a reviewable salary of A$30,000 per year, laboratory
and traveling expenses. In addition, the research fellow was permitted to undertake a
maximum of 3 X 3 hour paid clinical sessions per week provided:
• the earnings were capped;
• it was undertaken at an approved hospital or the QRI.
A letter of appointment was issued to Dr K indicating approval of the appointment to
the position of Research Fellow and that the "salary attaching to the position" was
$1,440.00 per fortnight. A further clarifying letter was issued indicating:
"You will work mornings Monday to Friday in radiation Oncology and
receive half your current salary for [the research] work.
Research will be performed on afternoons, Monday to Friday, as well
as a half day on each Saturday and Sunday for care of your animals,
and you will be paid a fellowship allowance of $1444.00 per fortnight
for these duties."
In subsequent budgets submitted by Dr K, a research assistant and equipment were
provided to Dr K.
Intellectual Property (“IP”) issues were not expressly addressed in the guidelines or
the letter of appointment.
The Dispute
Certain discoveries were made by Dr K in the course of the research fellowship. Dr K
brought the discovery to the notice of senior hospital staff. There was some dispute
between the parties in the evidence as to Queensland Health’s response.
It may be said however, that as a result of a failure by Queensland Health to apply as
requested by Dr K, Dr K filed an application as an international application under the
Patent Cooperation Treaty. Queensland Health evidence included a denial by the
Executive Director of Medical Services of Royal Brisbane and the Manager
Information Access, Legal Services, Royal Brisbane, that Queensland Health was
unable to make any claim to ownership, but admitted advising Dr K, that if the doctor
wanted to proceed to patent the invention, the doctor would have to personally fund
the application at that stage. The State challenged the application claiming it should
proceed in the name of the State or in the alternative, that the application proceed in
joint names as it was, like the inventor Dr K, an eligible person.
Decision and Reasons
There was a direction that the patent application proceed in the joint names of
Pancreas and Queensland Health.6
It was firstly found that the research fellowship, which was not available to nonemployees
of the hospital, was employment for the purpose of establishing
entitlement to the patent. The Deputy Commissioner further found that an inventive
contribution was made by Dr K in the course of the doctor’s employment as a
Research Fellow but later development of the invention after the fellowship had
ended, although supported by her employer, was not discovered in the course of her
normal employment as a part time clinical oncologist.
Queensland Health therefore derived entitlement from Dr K in part only. As Dr K had
consistently acted on the basis that Queensland Health did in fact have a claim,
Queensland Health could not be said to have expressly or by implication, waived its
rights or be prevented from claiming entitlement, there being no contrary agreement.
Comment
It is critical to address the issue of intellectual property creation, management and
ownership at an early stage when one is involved in research. Many agreements
involving research at advanced learning institutions contain an assignment provision
dealing with the intellectual property issues.
It is recommended that the intellectual property rights of ownership and licensing, be
addressed at the beginning of a relationship. The disputes seem to occur when there
is a development which appears to have value or potential value. In the absence of
clear agreement, many cases will depend on an interpretation of various indicia,
which tends to make the determination of ownership a more complex exercise.
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