Curious case of the missing document: the importance of documentation in patent entitlement disputes

Services: Intellectual Property & Technology
Date: 14 February 2017
Author: Lucy Hartland, Senior Associate & Catherine Boxhall, Special Counsel
Senior Associate
T +61 2 8233 9589
T +61 2 8233 9554
M +61 417 299 634

What you need to know

  • A recent decision of the Federal Court has highlighted the importance of creating appropriate legal documentation when independent contractors are engaged to do work.

  • Equally important is the need for such documentation to be retained, since the entitlement to an invention may depend on being able to demonstrate the assignment of rights from an inventor to the applicant for the patent.

  • Given the long time periods involved in patent litigation, these contracts may need to be retained for decades.

When independent contractors are engaged to perform work, there are many reasons why their contracts should be carefully prepared.

One of those reasons has been highlighted by a recent Federal Court of Australia decision on the subject of entitlement to a patent. The case of Merial, Inc. v Intervet International B.V. (No 3) [2017] FCA 21 demonstrates the importance of creating and retaining appropriate legal documentation for independent contractors who are involved in the creation of patented technology. The case also serves as a reminder that independent contractor agreements may need to be retained for several decades, given that patent disputes can often be lengthy ordeals that develop after a patent has been granted.


Intervet filed a patent application which became the subject of an unsuccessful opposition in the Australian Patent Office by Merial.

On appeal to the Federal Court, Merial alleged (among other things) that Intervet was not a person to whom the patent could be granted.[1] This allegation was made on the basis that Intervet did not derive title to the claimed invention from one of the named inventors, Mr Pieloch.

Intervet argued that there was a written agreement between Pharma Chemie (Mr Pieloch’s company) and Intervet that assigned to Intervet the relevant rights to inventions arising from two projects. Pharma Chemie was presumed, for the purpose of this decision, to be entitled to assign any rights of Mr Pieloch.

However, this agreement between Intervet and Pharma Chemie was not in evidence and, during its discovery searches, Intervet was able to find only limited documentation in respect of the two projects. This wasn’t surprising, given that:

  • over 10 years had passed since that work was done

  • several acquisitions involving the Intervet group had occurred in that time (involving the transfer and loss of many files, including those of one of the named inventors)

  • key personnel had departed.

Although Intervet was unable to find a copy of the relevant contract, it argued that the agreement would have been similar to others that had been made with Pharma Chemie in relation to other projects. An example was a 2004 contract which included a clause in the following terms:

All inventions, improvements, discoveries and innovations (whether or not patentable) conceived or first actually reduced to practice in the performance of services under this Agreement shall be deemed to be, and shall be, the property of Intervet, and Consultant shall … cooperate with Intervet in the preparation, prosecution and enforcement of such patents and patent applications… .[2]

Merial’s position was that there was no such agreement covering the claimed invention. It relied on, among other things, a 2003 letter from Pharma Chemie’s United States lawyer which asserted that no such assignment existed, and Mr Pieloch gave oral testimony to the same effect. The 2003 correspondence concerned a related US patent application and an attempt by Intervet to have Mr Pieloch assign to it the invention that was the subject of that US application.


Moshinsky J found that there had been no express assignment from Pharma Chemie to Intervet of the rights to the invention claimed in the patent application in suit. This was partly on the basis that if there had been an agreement assigning the invention between Intervet and Pharma Chemie, as Intervet sought to argue, it would have been produced in response to the 2003 correspondence from Pharma Chemie’s lawyer. No such responses were in evidence, and ultimately a notice of abandonment was issued in relation to the US patent application.

A certain 'Manufacturing and Supply Agreement', referred to in the 2003 correspondence, was also not in evidence. Moshinsky J found that this agreement did not include an express assignment of rights, since the relevant correspondence stated that there was no such assignment.

Because the relevant law was that of the United States, both parties adduced expert evidence on the position under US law with respect to the assignment. Although Moshinsky J preferred the evidence of Intervet’s expert to that of Merial’s, his Honour found that an express assignment in writing was required under US law.[3] Although there are exceptions to that requirement under US law, these were not held to apply.

Key takeaways

The case highlights the importance of ensuring that appropriate agreements with independent contractors, including intellectual property assignment provisions, are documented. Equally important is the need for such documentation to be retained. Given the long time periods involved in patent litigation, these contracts may need to be retained for more than 20 years.

For more information, please contact:

Lucy Hartland | Senior Associate

T +61 2 8233 9589


Catherine Boxhall | Special Counsel

T +61 2 8233 9622


Scott Sloan | Consultant

T +61 2 8233 9554 | M +61 417 299 634



1. See section 15(1)(c) of the Patents Act 1990 which refers to a person who “derives title to the invention from the inventor”.

2. Ibid at [90].

3. 35 USC §261.

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by DibbsBarker for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, it may only be reproduced for internal business purposes, and may not otherwise be copied, adapted, amended, published, communicated or otherwise made available to third parties, in whole or in part, in any form or by any means, without the prior written consent of DibbsBarker.
Recent Publications
14 Feb 2018
In early 2017, the Federal Government announced in the 2017-2018 Budget a comprehensive package of reforms to strengthen accountability and competition in the banking sector.
06 Feb 2018
The recently enacted safe harbour legislation provides protection to company directors and officers from a claim for insolvent trading where they develop a course of action that is reasonably likely to result in a 'better outcome' for a company.
01 Feb 2018
On 14 December 2017, the Governor General established the Royal Commission by finalising its Terms of Reference and appointing former High Court Justice Kenneth Hayne as Commissioner. The pre-disclosure reports from larger organisations in the banking, superannuation and financial services sector were submitted on 29 January 2018. The Royal Commission will convene its first initial public hearing on 12 February 2018.