Have you developed or helped to develop an invention? If so, you may not be sure if you have any rights to the invention. This article discusses when you may and may not own your invention as an inventor. 

Who Is an Inventor of an Invention or a Patent?

For the purposes of getting patent protection, an inventor is a natural person who contributes to the conception of the invention. Conception refers to the practical application of an idea for an invention. The inventor of an invention is the owner of the invention, unless there is a written contract or agreement in place that states otherwise. If there is no such contract or agreement, the inventor is the owner of any subsequent legal rights that might be associated with the invention.

Inventorship vs Ownership 

When filing a patent application, you must name any person who makes a material contribution to the inventive concept as an inventor. However, being named as an inventor does not, of itself, give you rights in the patent. Indeed, the inventor will not have rights to the invention if they assign their rights to the person or entity that actually files the patent application of the invention.  However, irrespective of who owns the invention or what name the application is filed in, you must list any and all inventors as inventors on the application.  

Claims to inventorship depend on the quality of the contribution, as opposed to the quantity, and require you to identify the inventive concept (i.e., the “heart” of the invention).

It is often easier to review inventorship from the negative.

For example, factors that do not necessarily constitute material contributions to the inventive concept include:

  • contributions that could have been made by any non-inventive worker;
  • financial contributions;
  • actions under the direction of an inventor; and
  • identifying a problem to be solved without providing the solution.

Establishing inventorship in the positive can be a bit trickier. However, factors that could guide an inventorship decision in Australia include:

  • contributions that had a material effect on the final invention;
  • development of the idea to solve the identified problem or development of a means to put that idea into effect; and
  • a demonstration that the invention would not have happened or “would have been less” without a particular person.

Essentially, the Court would seek to find out whether the invention would have occurred without the person’s involvement or contribution.

Can IP Have Multiple Owners and Inventors?

The patent, or any type of IP, can have multiple inventors. Similarly, the patent or any type of IP can have more than one owner. You can also sell, transfer or licence the IP to more than one owner. An owner can be a natural person or any legal entity or business.

Who Owns the IP Created by Employees?

In general, employees will not own the IP for something they created as part of their work while their were: 

  • employed by someone else; or 
  • under a contract.  

This is because employment contracts will generally have clauses that indicate an obligation for the employee to assign any IP rights they generate during the course of their employment to the employer.  

In the absence of such clauses, past cases in Australia may indicate that an employer would own the IP generated by an employee if the IP was generated: 

  • during the normal course of work the employee undertook as part of their employment; or
  • under the specific direction of the employer.  

Of course, this area of law is filled with grey areas. Therefore, it is best not to rely on case law when you can deal with the issue in advance through an employment contract.

The employee effectively holds IP on trust (termed a “constructive trust”) for the employer when they create IP such as a: 

  • piece of software;
  • article; 
  • script;
  • architect’s plans or drawings;
  • business plan;
  • new logo;
  • new product or process;
  • product’s packaging;
  • new circuit layout;
  • new product design; or 
  • invention during their course of employment. 

However, an employee will generally need to agree through a contract to: 

  • assign IP to the employer; or 
  • hold IP on trust for the employer. 

This is usually included in an employment contract, but can also be in a specific IP contract, deed or other contract. If there is a contract, the terms of the contract should determine ownership of the IP.

Importantly, different rules may apply to inventions that university researchers or teachers create. This will depend on the IP policy of the university.

Who Owns the IP Created by a Contractor?

When hiring contractors such as advisors and consultants, it is the responsibility of the hirer and the contractor to take care when entering into an agreement to adequately address the ownership of IP.

If nothing specific is stated in the contract regarding ownership of the IP, then the IP created by a contractor is by law considered the property of the contractor in Australia.

It is always a good practice to deal with IP ownership issues at the beginning of a collaboration by creating a contract or a written agreement before work starts. The earliest stages of work can also create important IP rights.

The written agreement should clearly state who owns the IP rights to any material that is created by a contractor or an employee to reduce any unnecessary confusion later.

The agreement should clearly state: 

  • who has the right to exploit the IP; 
  • whether, and when, transfer of ownership will take place; and 
  • who is to pay for the IP.

Key Takeaways

Intellectual property can be a valuable commodity. However, protecting it is not always an easy task. It is essential to get the right advice about IP before entering into any agreement with employees or contractors. Ultimately, you should always ensure that any IP agreements you have in relation to employment and contract work are clear.

If you require assistance in gaining a better understanding of your intellectual property rights, including IP agreements and contracts with employees or contractors, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

As an inventor, do I own the patent rights to my invention?

Being named as an inventor on a patent application does not, of itself, give you rights in the patent. You will not have rights to the invention if you assign your rights to the person or entity that actually files the patent application of the invention. 

Can a patent have multiple inventors or owners?

The patent, or any type of IP, can have multiple inventors. Similarly, the patent or any type of IP can have more than one owner.

Who owns the IP a contractor creates?

If nothing specific is stated in the contract regarding ownership of the IP, then the IP created by a contractor is by law considered the property of the contractor in Australia. However, the agreement the contractor enters into may state otherwise.

Who owns the IP an employee creates?

In general, employees will not own the IP for something they created as part of their work while they are employed by someone else or working under a contract.  

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