The importance of getting your entitlement ducks in a row

By Miriam Stiel
Industrials Intellectual Property Patents & Trade Marks

In brief

Ownership and inventorship disputes are a hot topic before the Australian Patent Office (the APO) in 2018. Earlier this year, we reported on the APO decision in Khoury v Sherrard Pty Ltd [2018] APO 20, which highlighted the need to carefully assess the contributions of all those involved in developing a new invention. Since then, a number of APO decisions have further emphasised the importance of getting your entitlement ducks in a row from the outset, to avoid costly disputes down the line. Associate Claire Gregg reports.

Timing can be everything

Entitlement is the right to ownership of a patent. There are several roads to ownership, but each must ultimately derive from inventorship. An inventor is any person who makes a material contribution to the inventive concept. Conception occurs when an idea is 'so clearly defined in the inventor's mind that only ordinary skill would be necessary to reduce the invention to practice without extensive research or experimentation', and timing can be key.

In 1414 Degrees Limited v Climate Change Technologies Pty Ltd [2018] APO 28 (1414 Degrees), the invention at issue was conceived while the inventors were employed by the applicant, Climate Change Technologies. However, it was found that the inventive concept could not have been reached without the knowledge the inventors had acquired while engaged under an earlier service agreement for the opponent's predecessor company. For this reason, 1414 Degrees Limited was held to be jointly entitled to the invention with Climate Change Technologies.

Quality over quantity

In Shaun Gregory Power v Dale Arthur John Long [2018] APO 57, Mr Long had filed a patent application naming himself and Mr Power as co-inventors, but naming only himself as the applicant. Mr Long argued that Mr Power had not been named as an applicant because he had made only a minor contribution to the development of the invention. While the APO found that the weight of evidence suggested a more substantial contribution by Mr Power, this was ultimately of little relevance because 'the role of co-inventors does not have to be equal; the assessment is qualitative, not quantitative'. Accordingly, the APO held that Mr Power and Mr Long were both entitled to be co-applicants.

Duty to invent

Inventors may enter into agreements to transfer entitlement to an invention to another party for valuable consideration, or there may a fiduciary obligation to transfer their rights. In 1414 Degrees, for example, a verbal service agreement between the inventors and the opponent's predecessor company was found to contain an implied term that any IP generated by the inventors in the course of the agreement belonged to the company.

In contrast, an aspect of the decision in William Kyunghwan Kwon v William John Trickett [2018] APO 51 concerned an application filed in the name of the sole listed inventor, Mr Trickett. Realising that one of his employees, Mr Kwon, had also contributed to the inventive concept, Mr Trickett requested that Mr Kwon be listed as a co-inventor, but asserted that Mr Kwon's rights to the invention belonged to Mr Trickett's company by virtue of his employment contract. However, the APO found that there was no contractual or fiduciary duty for Mr Kwon to assign his patent rights to his employer, because he did not have a duty to invent as part of his employment as a warehouse manager. Thus, Mr Trickett and Mr Kwon were joint inventors and joint applicants of the relevant application.

Don't be a sitting duck

While the failure to identify the correct inventors or owners is not necessarily fatal to a patent in Australia, the Commissioner of Patents and the courts can direct that the Patents Register be amended to reflect the correct entitlement details. This can involve long and costly disputes, and can also have far-reaching consequences for any commercial agreements (eg licences, assignments), which may be invalid. Past and future revenues and royalties distributions may also be affected.

If there is any doubt over who is entitled to the grant of a patent, don't be a sitting duck. Talk to a patent attorney before it's too late!