6 January, 2020
University of Sydney v ObjectiVision Pty Limited [2019] FCA 1625.
What you need to know
- The University of Sydney has prevailed in a long-running contract and copyright dispute with a former commercialisation partner.
- Justice Burley upheld the University's termination of its licence to the partner, after the partner failed to meet certain conditions.
- Justice Burley rejected the partner's claims of copyright infringement based on the University's subsequent development of the technology with a new partner.
What you need to do
- Ensure that any commercialisation or licensing arrangement, particularly one that grants exclusivity, contains clear and appropriate termination rights.
- If a copyright work is created by one or more people who are not your employees, ensure that you have obtained written copyright assignments signed by each author.
Background
In the late 1990s, researchers at the University of Sydney (University) developed technology to detect partial and complete blind spots associated with glaucoma. The University patented the technology and exclusively licensed it to ObjectiVision Pty Ltd (ObjectiVision) in 2000.
ObjectiVision worked on developing the technology into a commercial product called AccuMap, which utilised bespoke software called OPERA. However, the development of AccuMap and OPERA did not go well. The first prototype system was withdrawn from the market due to technical issues. By late 2007, ObjectiVision was in a dire financial position.
The University terminated the exclusivity of ObjectiVision's licence in 2008, citing ObjectiVision's failure to meet minimum performance requirements. The University then developed its own software to replace OPERA, called TERRA. In 2011, the University gave notice to terminate ObjectiVision's licence altogether.
The University found a new partner, Biogen Idec, and incorporated a new company, Visionsearch Pty Ltd (Visionsearch). Through Visionsearch, the University developed a new product using the patented technology and the TERRA software.
The claims
In 2014, the University commenced proceedings alleging that ObjectiVision's licence had been terminated and that ObjectiVision infringed the University's patents.
ObjectiVision cross-claimed on a number of grounds, including that its licence remained on foot and was breached by the University commercialising the technology with a new partner. ObjectiVision also cross-claimed that the University and Visionsearch infringed ObjectiVision's copyright in OPERA.
The University's patent infringement claim was put on hold while Justice Burley decided the other issues first.
Termination of ObjectiVision's licence
Justice Burley found that ObjectiVision's licence had been validity terminated.
After the parties' relationship broke down, a mediation was held in January 2010 and this led to a Heads of Agreement being signed. The Heads of Agreement provided for the reinstatement of ObjectiVision's exclusive licence for a limited period while ObjectiVision sought further funding. After ObjectiVision failed to fulfil the conditions in the Heads of Agreement, ObjectiVision's licence automatically terminated on 19 January 2011.
In the alternative, Justice Burley considered that ObjectiVision's licence was validly terminated on the following day (20 January 2011) for breach of contract for non-payment of monies due to the University.
No copyright ownership
ObjectiVision's copyright infringement cross-claim failed because Justice Burley held that ObjectiVision had not proven its ownership of copyright in the OPERA software source code.
Generally speaking, an author of a work owns copyright in that work, unless the author is an employee or has validly assigned their copyright to another person.
Justice Burley held that OPERA was a work of joint ownership because at least nine people had contributed to its development. His Honour found there was insufficient evidence that seven of the nine authors had assigned their copyright to ObjectiVision.
ObjectiVision argued it was still entitled to relief based on its fractional ownership of copyright, however Justice Burley did not consider it necessary to resolve this question because of his Honour's conclusions on infringement.
No copyright infringement
ObjectiVision argued that the University infringed its copyright by reproducing OPERA in the AccuMap devices that the University held. ObjectiVision's argument failed because Justice Burley found that the University had an implied licence to use, modify and make reproductions of OPERA. The implied licence was evidenced by an email demonstrating that ObjectiVision was aware the University was using and modifying OPERA for research.
ObjectiVision also argued that the University infringed its copyright by reproducing a substantial part of the OPERA source code in TERRA. Justice Burley rejected this claim as well.
Both OPERA and TERRA had a common programmer, named Mr Alkhimov, who had left ObjectiVision in 2007 and joined the University. Justice Burley accepted that any use of OPERA source code was unintentional and Mr Alkhimov intended to write TERRA "from scratch". While parts of OPERA were in TERRA, they were "fragmentary and inadvertent". Justice Burley accepted the University's evidence that only 0.07% of the 175,293 lines of original OPERA code were included in TERRA.
Because TERRA did not reproduce a substantial part of OPERA, ObjectiVision's copyright infringement claim against Visionsearch failed as well.
For further information, please contact:
Philippa Anstey, Ashurst
philippa.anstey@ashurst.com
