New WA State Government Intellectual Property Policy – what does it mean for employees who are inventors?

By Ebony Sweetnam

5 September 2023

In May 2023, the Western Australian government published a policy aimed at encouraging innovation within the public sector and unlocking opportunities for commercialisation.

The policy recognises the value of intellectual property as a state asset, and provides guidance on the creation, management and use of IP to assist WA government agencies. The three key guiding principles are:

a. Identify and facilitate opportunities to obtain maximum benefit to WA from Government IP.
b. Consider the commercialisation of Government IP where appropriate and financially viable.
c. Consider how Government IP can facilitate positive outcomes for the community and the State.

The policy is relevant to all entities in the public sector. Universities, police and local and regional governments are some of the exempt entities.

Importantly for state government employees, the policy specifically deals with recognition of creation. “Agencies are required to implement the Policy’s position statements except for Section 8 -Employee Recognition for IP Development which is discretionary and will depend on the particular circumstances of each agency.”

The policy goes on to note:

Agencies should ensure its employees are provided with information concerning:

• ownership of IP developed by employees in the course of their employment or pursuant to the terms of their employment;
• confidentiality obligations relating to IP creation; and
• the requirement to comply with this Policy and internal policies, practices and procedures relating to IP identification, reporting, protection and management.
• Job description forms should specifically address IP creation aspects of a position and the obligation of confidentiality.
• Review employment contracts and job description forms for those positions which have, or should include, a function, role or duty to create IP.

Where required, agencies should seek legal advice regarding the inclusion of terms relating to IP rights, confidentiality and moral rights consents in employment contracts, as relevant to their employment framework

The “function, role or duty to create IP” comes out of University of Western Australia v Gray [2009] FCAFC 116. The general position at common law is that the employer will have no automatic rights over the inventions of an employee without an express or implied term in the contract of employment. One exception to this is where is there is an “implied duty to invent”. This is especially important for patents. The Patents Act 1990 identifies those entitled to seek a patent in the following way:

Subject to this Act, a patent for an invention may only be granted to 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).

While sect 15(1)(b) may appear to give an employer, including a WA State government agency, a right to seek assignment of an invention of an employee, this is not an automatic right.

The policy is keen on encouragement, but at the discretion of the Treasurer or delegate minister:

Providing appropriate recognition or reward encourages a culture of innovation and will help attract and retain talented employees.

Rewards to employees who meet the eligibility criteria are wholly at the discretion of the Treasurer or delegate Minister.

A reward must not be given as an entitlement or included in the terms and conditions of employment.

Agencies are encouraged to recognise and, as appropriate, and subject to the law and all legal requirements, reward outstanding achievement by employees who create original, significant and valuable IP.

This means that government employee contracts cannot contain express financial incentives to innovate. Reward comes down at the end of the day to ministerial largesse.

Rewards to government employees an act of grace payment under section 80 of the Financial Management Act 2006 (WA):

Monetary rewards for eligible employees may be considered where State owned IP has been successfully commercialised resulting in extraordinary outcomes and exceptional and realised net revenue for the State. Monetary rewards may take the form of:

a. lump sum payment; or
b. periodic payment of fixed amounts over a set number of instalments.

Criteria for a reward leaves little wiggle room:

Employees may be considered for a monetary reward by the Treasurer or delegated Minister where they meet the following criteria:

a. the employee is engaged on a permanent or fixed-term basis;
b. the employee has made a direct and significant contribution to the creation of original IP rights (and not simply modifications, adaptions and improvements of existing IP rights);
c. there has been outstanding and extraordinary achievement by the employee far exceeding that generally expected from a person with the same or similar duties;
d. the creation of significant, inventive (not simply innovative) and valuable State owned IP by the employee;
e. extraordinary outcomes; and
f. the successful commercialisation of the State owned IP rights resulting in exceptional Net Revenue for the State.

The policy is not where consideration of IP issues by WA government agencies begins and ends. The policy specifically notes, “[Ea]ch agency is encouraged to develop its own internal IP policy and procedures. Any such policy should be consistent with this Policy, unless the agency’s enabling legislation provides for specific IP rights and obligations, in which case those specific rights and obligations, if inconsistent with this IP Policy, will take precedence.”

Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.