The parties to a recent Federal Court case could have avoided a lot of time and expense if they had simply put their intellectual property ownership arrangements in writing.
Max Scott came up with a new and less costly way of making “clean wine spirits” for Bacchus Distillery. Bacchus applied for a patent in its own name, and also named one of its employees as co-inventor. Scott believed Bacchus needed to be the sole named owner so it could receive government grants, but the arrangement was never put in writing.
Bacchus later fell into financial trouble, and the administrators wanted to sell the business. When Scott found out about the potential sale, he turned to the Court to resolve the ownership question (Neobrev Pty Ltd v Bacchus Distillery Pty Ltd (No 3) 2014 FCA 4).
Without a written agreement, the Court had to pull together the facts from decade-old recollections of the parties. The Court ultimately found that:
- Scott was the sole inventor; and
- Bacchus and Scott had a verbal agreement that the patent would be jointly owned. Bacchus therefore held the patent on trust for itself and Scott as joint owners.
What started out as a lucrative invention became an expensive and time-consuming case to untangle something that could have been set out in a simple agreement. In the context of a sale of business, litigation can deter potential purchasers, and the value of a business decreases when the business loses an asset and royalty stream that it thought it owned.
Sladen Legal can help you to avoid this type of outcome, by working with you to ensure that you have the right agreements in place to protect your intellectual property.
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