Being litigation ready: Getting Australian patent ownership and licensing right

Ownership and licensing arrangements relating to an Australian patent can have significant implications in infringement and revocation proceedings. Recent decisions delivered by the Federal Court of Australia have highlighted the need for patentees to consider carefully and formalise their chain of title and exclusive licensing arrangements, or else risk losing their patents and/or the markets they protect.

There are many commercial, legal and regulatory factors which inform and influence patent ownership and licensing arrangements. Often an Australian patent will be owned by a foreign company which does not itself exploit the invention in Australia, and instead licenses a related company or a third party to do so. The foreign patentee may be the parent company, or a related IP holding company which licenses the patent family globally, for administrative efficiency and/or for tax or other financial reasons. The foreign patentee may also be the company which developed the invention and then granted licences to a larger commercialisation partner with global distribution capabilities. In any of these situations, the ownership and licensing arrangements relating to an Australian patent are often part of global agreements which are not crafted or implemented with the idiosyncrasies of Australian patent or contract law in mind. Recent statutory amendments provide Australian patentees with a greater opportunity to correct the formal ownership of a patent post-grant. However recent cases have emphasised the importance of correcting ownership and licensing issues before infringement proceedings are commenced.

Standing to sue for infringement An Australian patent can be enforced against an alleged infringer by either "the patentee" or "an exclusive licensee", as recorded on the Register of Patents.1 The Register will record the first owner of a patent as the person named in the Notice of Entitlement, and will only record new patentees and any exclusive licensees, non-exclusive licensees and other interests (eg, mortgagors) upon provision of proof to the satisfaction of the Commissioner2 - typically an agreement or deed.

Patentees and Unregistered owners An Australian patent is personal property which can be assigned.3 An employer will automatically be entitled to apply for and be granted an Australian patent where the invention was created by its employee during the course of employment.4 Otherwise, patent assignments are only legally effective if they are in writing. Patent assignments also will not provide...