Invention, Inventorship and Entitlement

Invention, Inventorship and Entitlement

Patents are granted for inventions. The only person entitled to the grant of a patent are the persons making the invention or persons claiming through them. These propositions are simply stated but can be complex and difficult in their application as will be seen from some of the recent Federal Court cases discussed below.

A patentable invention is any manner of manufacture which is new and not obvious in the light of the prior art. At the heart of almost all patent cases is the question of whether or not the invention claimed is in fact new and not obvious. That, however, is not what this note is about; it deals with the question of who is the actual inventor of an invention and to whom may a patent be granted in respect of it.

Who is an inventor?

Somewhat surprisingly there is little judicial authority in Anglo-Australian law on how inventorship is to be determined. There are many cases dealing with the question of who is entitled to the benefit of an invention and to the grant or ownership of a patent for it, but in most of these cases it is the ownership, not the inventorship which is an issue. There are, however, a number of Patent Office decisions dealing with this latter point.

There are a number of factors which complicate, in a practical sense, the determination of inventorship. Firstly, there is the somewhat metaphysical nature of what is "invention". It is more than the conception of an idea; it involves also the application of the idea to produce a practical result. The U.S. Court of Appeal put it in these words:

Invention is a conception; a thing evolved from the mind. It is not a revelation of something which exists and was unknown, but is the creation of something which did not exist before, possessing the elements of novelty and utility in kind and measure different from and greater than what the art might expect from its skilled workers.

Thus a person who propounds an hypothesis but does no more will not be an inventor. On the other hand, one who is merely engaged to construct an article to another's design will not be an inventor unless he makes a material contribution to the ultimate development of the underlying concept on which the invention is based.

Secondly, at the time when the Courts are determining whether or not there is a patentable invention, they do so primarily by reference to what is claimed in the patent claims, i.e. the patent draftsmen's distillation of what is perceived as the inventive concept in view of the known prior art. This may change markedly during the prosecution of the patent application.

Thirdly, particularly in the case of inventions developed with research institutions, the work from which the invention derives is often performed by a team of researchers all of whom make a contribution in some form or another. It is often difficult, but necessary, to isolate the person or persons responsible for the inventive concept from those whose contributions may be merely routine, or on the other hand, those who have merely "floated" an idea. Also the fluid nature of the patent claim during the prosecution of the application may necessitate changing criteria in the determination of inventorship. (To this may be added the further complication of the tradition in many academic institutions whereby the team leader or department head is routinely named as an author or inventor).

Fourthly, there is the question, interrelated to those discussed above, of determining when "the invention" is made, in the course of an ongoing development. This is particularly relevant where an inventor changes employment but continues to work on the same project in the new situation. An example of this is the case currently being litigated in the Federal Court in Western Australia in The University of Western Australia v Gray [2005] FCA 277 (17 March, 2005).

Having determined the question of inventorship there remains to be determined who is entitled to the benefit of any patent to be granted in respect of the invention. This in turn involves, in many cases, the determination of the respective rights of the inventor and third parties who may claim rights in the invention.

Entitlement to grant

Under the Patents Act 1990, any person may apply for a patent but the patent may be granted only to persons specified in section 15(1) of the Act, namely a person who:

(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

An application for a patent must name the person who is the inventor (or inventors) and also, before the application is accepted, name the person or persons who are entitled to the grant. These persons must fall within one or other of the categories specified in section 15(1) i.e. the inventor or some person deriving the right to the patent from the inventor. Where two or more persons are entitled to the patent, the patent must be granted to all of them unless they have parted with their entitlement, for example by assignment.

Where the inventor is an employee, rights to the employee's invention is determined by the nature of employment. If the invention is made in the normal course of employment or under specific provisions of a contract of employment, the invention and the entitlement to the patent will belong to the employer. If, however, the invention is made outside the scope of the employee's duties or by an independent contractor and rights to inventions are not specified in the contract, then the invention will belong to the inventor (but possibly subject to a right to a licence to the employer/contractor).

How important is it to get these issues sorted out? The answer to that is "very important" as the cases mentioned below will show.

In Conor Medsystems, Inc. v The University of British Columbia and Angiotech Pharmaceuticals, Inc in the Federal Court (No 2) [2006] FCA 32 (3 February 2006) Finkelstein J was asked to decide, as a preliminary question, whether patents granted jointly to the University and Angiotech should be revoked if it was shown that their claim to entitlement stemmed from some, only, but not all of the actual inventors of the invention. His Honour answered "yes".

A similar result was reached in Stack v Davies Shephard [2001] FCA 501 (4 May 2001). In that case two persons, Stack and Grieves, were the inventors but the application was filed in the name of Stack alone and nominating him as the person entitled to the patent. Even though the notice of entitlement filed in the application correctly named both Stack and Grieves as the inventors and even though the filing of the application in Stack's name only was with the knowledge and consent of Grieves, the patent was held invalid. The Court concluded that even though it was the intention of both Stack and Grieves that the patent would eventually be assigned to a company jointly owned and controlled by them that did not create a relationship pursuant to which Stack was alone entitled to the grant of the patent.

A similar fact situation arose in the case of Preston Erection Pty Ltd & Anor v Speedy Gantry Hire Pty Ltd [1998] 1615 FCA (18 December 1998) where the patent was granted to Speedy Gantry but this company was unable to show any formal assignment from the inventor, Neilson. In that case, however, the Court held that an assignment could be implied by the conduct of the parties and that Speedy Gantry would have been entitled to call for specific performance of Neilson's contractual promise.

As the above cases show, the consequences of error in entitlement can be dire.

There are provisions in the Patents Act 1990 (Cth) which may be invoked in cases of inadvertent or unintentional mistakes in the naming of inventors or in the establishment of entitlement to the grant of a patent, but reliance on these provisions to rectify mistakes can be risky and costly. Where error arises out of a clerical error or obvious mistake it is possible to apply to the Commissioner of Patents to amend the notice of entitlement filed on the application leading to the grant. The scope of this remedy is, however, very limited. First of all it is only applicable where the error arises out of a purely clerical act, such as a mis-transcription or mis-spelling or where it is clear on the face of the documents filed that there has been an error. Mere failure to properly identify the correct inventor or person entitled will not be enough. Secondly, even if it is possible to amend, post grant, the notice of entitlement, it is doubtful that the invalidity of the grant will be cured. Amendment of the document will not alter the fact that the patent was wrongly granted.

A more appropriate avenue would be to apply under section 192 of the Act to rectify the Register to correct an omission, error or defect or an entry wrongly made in the Register. The application must be made to the Court (usually the Federal Court) and it must be clearly demonstrated to the Court that the mistake was made unintentionally or inadvertently. A further avenue for correction may be open under section 34 of the Act which provides that in any proceedings in a Court relating to a patent, the Court may declare who is an eligible person under section 15(1). That person can then apply to the Commissioner for the grant of a patent which will have the same priority date as the original patent. Both of these possibilities were adverted to by Finkelstein J in the Conor Medsystems Case referred to above. Both, however, require proceedings in the Court which can be lengthy and costly.

Two recent cases concerning the rights to an invention as between an employer and an employee have gone in favour of the employee. In each case, Spencer Industries Pty Ltd v Collins [2003] FCA 542 and In the Matter of Application No. 71586/00 of Dale Victor McKay and Paul Taylor McKay (Australian Patent Office) the employee was a senior technical sales person who had made an invention relating to the product which he was employed to sell. The Court and the Commissioner's Delegate respectively decided in each case that it was not part of the normal duty of the employee to make inventive improvements to the product concerned and the invention was held to be the property of the employee.

The important messages are therefore:

  • to ensure that questions of inventorship are correctly determined and the person claiming entitlement to the patent can establish title from all of the inventors; and
  • for employers to ensure that their contracts with senior employees and outside contractors contain appropriate provisions relating to ownership of inventions made in the course of the contract.