Scenario 1: Employed designers

For designs created in-house by an employee, the general position is that the employer owns the intellectual property in work performed in the course of employment.

However, it all hinges on what is “in the course of employment”. As seen in the Australian Federal Court case University of Western Australia v Gray, the line can be fine. The university thought that it owned all of the intellectual property rights in patentable inventions created by the professor while he was employed by the university.

However, the court held that the professor owned those rights. This was despite the fact that under his employment contract he had a duty to perform research and the inventions arose out of that research.

This case highlights the importance of having an employment contract that specifies what duties fall in (or out of) the scope of employment. In the absence of an express term in the employment contract, a duty to research does not signify a “duty to invent”
(ie, make or discover inventions).

So, an employee’s work may not necessarily be owned by the employer. Who owns what may depend on factors such as the extent to which an employee was being directed or had freedom to act, the nature of the work being performed and whether the employee could have been in breach by not performing the specific tasks.

Scenario 2: Clients

What about work commissioned by a client? The term ‘intellectual property’ captures a bundle of rights. The ability of such intellectual property rights to operate discretely is often not appreciated.

A specific product design may involve copyright, design rights, trade mark rights, patent rights and/or other intellectual property rights.

Who owns the intellectual property in a product design created in response to a client brief? It is not uncommon for the commissioning party (the client) to think they own and can use all of the intellectual property rights in a commissioned work.

Generally, ownership of copyright in commissioned works (including drawings, moulds and technical descriptions/specifications) belongs to the author (or author’s employer), not the commissioning party. The commissioning party may be acquiring a licence (and no more) to use the work for the purpose for which it was commissioned.

The general position regarding registrable design rights, however, is reversed. Thus, in the absence of an agreement to the contrary, registrable design rights are generally owned by the commissioning party (the client).

So, unless you expressly agree about ownership of all intellectual property rights, the position about who owns what rights, and what each party can do with them, is not always clear. This can be the source of considerable grief.

The best way to address these issues is to agree upfront in a written contract about who will be the owner of all (or of the relevant) rights. You might be happy for the other party to own work commissioned from (or by) you, but you will know in advance what rights you retain (if any) and agree on pricing accordingly. 

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