Clayton Utz Insights
16 August 2012
By Mary Still and Anastacia Totoeva.
Employers should ensure employment agreements are clear in providing that inventions or creations using information belonging to an employer belong to the employer.
Determining who owns an employee's output might seem a simple issue, but it can be surprisingly unclear when an employee's work and non-work activities overlap. A recent decision by the Federal Court has put the issue under the spotlight, as it found the copyright in a questionnaire developed by a psychologist, Dr Peter Hart, was owned by him, even though:
- Dr Hart created the Questionnaire during the course of his employment at the Workcare Policy Unit, Department of Education;
- Dr Hart developed the Questionnaire using data from teacher surveys administered by the Department; and
- other Department employees participated in developing draft questions for inclusion in the Questionnaire.
(Insight SRC IP Holdings Pty Ltd v The Australian Council for Educational Research Limited  FCA 779).
The Questionnaire consisted of questions addressing teacher stress and morale. It was part of an article entitled "Development of the School Organisational Health Questionnaire: A measure for assessing morale and school organisational climate", published in the British Journal of Educational Psychology (2000) 70: 211-228.
From early 2006 to October 2009, the Australian Council for Education Research (ACER) reproduced modules of the Questionnaire as part of a project with Independent Schools Victoria (ISV) called the Building Educational Effectiveness Project. The Project involved ACER providing research services to ISV for a certain fee per school.
Insight SRC IP Holdings Pty Ltd and Hart Cultural Lodges were incorporated in 2009 by Dr Hart. He assigned the copyright in the Questionnaire to Hart Cultural Lodges, which then assigned it to Insight SRC IP Holdings. Insight SRC IP Holdings then granted an exclusive licence with respect to the copyright to Insight SRC.
Insight SRC has carried on a business which has involved the use of the Questionnaire, and indeed it is the key part of Insight SRC's business. It has been used to ascertain the health of a range of organisations, not just schools.
In the proceedings the applicants claimed the respondent infringed their copyright in the Questionnaire and sought (among other things) general damages and additional damages under section 115(4) of the Act.
ACER responded that the Crown in the right of the State of Victoria owned the copyright in the Questionnaire and it had never been owned by Dr Hart.
Why didn't the employer own the copyright?
Under section 35(6) of the Act, where a person creates a copyright work in pursuance of the terms of their employment, the copyright in that work will be owned by their employer. However, Justice Besanko found that although Dr Hart created the Questionnaire in April 1992 while employed by the Department, including during his work hours, he was nevertheless the owner of copyright in the Questionnaire.
One of the salient factors leading to this conclusion was that the written documents concerning the terms of Dr Hart's employment suggested that the making of the Questionnaire was not a term of Dr Hart's employment.
There was also an agreement between Dr Hart and his immediate supervisor, Dr Conn, that the Department could use the Questionnaire for its own purposes and, in return, Dr Hart could use data collected by the Department for the purposes of his studies and research.
In view of the agreement between Dr Hart and Dr Conn, it could not be said that Dr Hart made the Questionnaire in pursuance of the terms of his employment. He was not required to produce it; in fact, the arrangement was that he could prepare it for his own purposes, albeit, the Department could use it.
Further, it was found that Dr Hart had not made the Questionnaire under the direction or control of the Department. No one directed him to make it and he did not make it under the direction or control of any other member of the Department.
The Department's subsequent conduct also supported a conclusion that it believed Dr Hart or interests associated with him owned the copyright in the Questionnaire.
Points to note
If the Department had allowed Dr Hart access to its data on the condition that copyright in the product from such use belonged to the Department, there could have been little argument about the outcome of this case.
Corporations and government entities should be careful to ensure employment agreements are clear in providing that inventions or creations using information belonging to an employer belong to the employer.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.