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MANAGING INTELLECTUAL PROPERTY IN GOVERNMENT AGENCIES

3. POLICY AND DIRECTION

3.1 The Australian legislative and policy framework

Figure 3A shows some of the international, national, state and organisational policies and guidelines that govern intellectual property (IP) management.

FIGURE 3A: AGREEMENTS, POLICIES AND LEGISLATION GOVERNING INTELLECTUAL PROPERTY MANAGEMENT

Source: Victorian Auditor-General's Office.

3.2 Do Victorian whole-of-government intellectual property guidelines and policies provide clear direction?

Victoria does not have a single policy governing the management of IP across government. The policy responsibility for public sector IP in Victoria is spread throughout various departments and agencies.

A number of Victorian policies or guidelines are relevant to aspects of IP management. We examined the relevant guidelines and considered the extent to which they provide a clear direction and advice for the Victorian public sector in managing elements of IP.

3.2.1 Guidelines relating to copyright

Copyright is the most common form of IP in the public sector. Effective management of copyright is important to:

• ensure the integrity of government materials

• control costs

• allow departments to ensure public access to government publications

• enable government to control the material it produces.

Copyright also covers one of the more high-risk forms of IP – software.

The Copyright Act 1968

Under the Copyright Act 1968 (Cwlth) the creator of literary, dramatic, musical or artistic works is usually the owner of the copyright. However, the Act states that where a work is created “by, or under the direction or control of, the Commonwealth or the state” 1, the copyright is owned by the Commonwealth or state2. This provision is known as “Crown Copyright”.

Crown Copyright

The scope and application of Crown Copyright is, in practice, a grey area. First, there are different views on what agencies are encompassed by “the state”. Whether or not a public body is part of the state will depend on several factors, including the wording of the statute establishing the body, and the degree of autonomy of the agency from state control. This issue becomes heated when public bodies receive funds from government departments. Agencies that do not consider themselves to be part of “the state”, tend to be less accepting of provisions regarding Crown Copyright in funding agreements.

Second, “the direction and control” requirement is unclear. The South Australian Auditor-General, for example, pointed out in 1997, that:

“Since under most outsourcing agreements the Government is contracting for ‘the delivery of a service’ it could well be argued that any material created under an outsourcing agreement is not developed under its ‘direction or control’ ”3.

In April 2005, the Commonwealth Copyright Law Review Committee recommended that the provisions relating to subsistence and ownership of Crown Copyright in sections 176–9 of the Copyright Act 1968 (Cwlth) be repealed4.

Victorian guidelines relating to Crown Copyright

The Attorney-General has responsibility for the management of Crown Copyright in Victoria. In 1991, the Department of Justice produced, and Cabinet endorsed, Guidelines relating to Victorian Crown Copyright5 (the guidelines).

The guidelines set down general principles relating to state copyright. They are limited in scope and concentrate on requests by third parties to reproduce, or obtain a licence to use, materials subject to Crown Copyright. The guidelines do not provide assistance on how to ascertain whether materials are subject to Crown Copyright.

As we discuss in later parts of this report, some departments interpret the guidelines in ways that go beyond their intended scope. For example, using the guidelines on Crown Copyright to give direction on ownership of non-copyright IP.

The guidelines require that the Attorney-General or authorised minister grants or refuses requests to reproduce copyright material produced or funded by government departments. A problem with the 1991 guidelines is that they do not consider the materiality of copyright to be released. Copyright material can range from something as trivial as a photograph from an old government publication to a million dollar software development. In most cases, the release of materials can be done as routine, and the requirement to put up every copyright licence request to the minister has potential to create considerable inefficiencies.

Audited departments expressed frustration with the 1991 guidelines, and considered the requirement for ministerial approval for all materials to be onerous and inefficient.

The Department of Justice advised that it is currently developing a comprehensive Victorian State Copyright Management Policy. We have examined the draft policy and found that it is clear and comprehensive, addressing many of the weaknesses identified in the current guidelines.

The policy is planned for consideration by Cabinet during 2005, pending the outcome of the Commonwealth review of Crown Copyright.

3.2.2 Innovation policy

The Department of Innovation, Industry and Regional Development (DIIRD) is the policy custodian for the Victorian Innovation Policy, Victorians. Bright Ideas. Brilliant Future. The policy makes the following commitment about government’s management of IP:

“The Government will follow new IP guidelines to ensure that the knowledge generated by innovation across government is developed and shared more broadly for the benefit of all Victorians”6.

In 2001, the Science, Technology and Innovation (STI) group in DIIRD produced a discussion paper as a beginning to a high-level, whole-of-government approach to the management of IP.

The discussion paper was updated in 2003, but has not yet been developed into formal guidelines.

DIIRD advised us that the discussion paper was produced in response to the STI group being approached by other government agencies to advise on IP. It is unclear whether DIIRD should be responsible for developing IP guidelines for whole-of-government.

3.2.3 Financial guidelines

Victoria’s Financial Management Act 1994 does not refer to intangible assets, or define the term “asset”. However, the Ministerial Directions under the Act state that:

“Public Sector Agencies must implement and maintain an effective internal control framework for asset management to ensure that assets are identified, recorded accurately and accounted for in accordance with Australian Accounting Standards … Records and details for intangible assets must be sufficient to ensure compliance with accounting standards and disclosure requirements, in addition to any operational needs of the business”7.

The Act also lays down broad directions for financial management and prudent management of financial risks, which may impact on agency considerations in managing IP, particularly at the commercialisation stage.

Under the same Act, the Victorian Government Purchasing Board (VGPB) issues supply policies, guidelines and standard form contracts that are binding for purchasing by departments and 10 administrative offices8. The standard form contracts include a number of IP provisions that should be included in contracts of those bound by the VGPB policies.

In 2001, Partnerships Victoria, a unit in the Department of Treasury and Finance, issued a practitioners’ guide that addresses IP arrangements in contracts for public private partnerships9.

3.3 Are agency level intellectual property policies and guidelines clear?

There is currently no requirement for Victorian public sector agencies to have specific IP policies and guidelines. The policy direction on IP in an agency can be derived from various materials, such as purchasing policies, funding directions, knowledge management policies etc.

In assessing whether agencies had policies and guidelines for IP, we considered:

Policy coverage:

• Are there clear and documented policies and procedures?

• Do documented policies cover all IP relevant to the agency?

• Is it clear to which functions and agencies the policies apply?

Policy accountability:

• Are accountabilities for implementation and policy oversight clear?

• Are accountabilities for procurement, licensing and transfer of IP clear?

Policy administration:

• Are policies revised as appropriate?

• How well are the policy requirements communicated to staff?

3.3.1 Policy coverage

In the audited agencies, we found that VicRoads and the Department of Education and Training (DET) had clear, documented and comprehensive, if slightly dated, policies on IP. DET’s policy covered state schools, but not technical and further education (TAFE) institutes, as these entities are self-governing bodies corporate that create and administer their own IP.

In the Department of Human Services (DHS), the documented policy was limited to statements relating to funded bodies.

Of the 26 agencies surveyed, 42 per cent have in place clear, documented and comprehensive IP policies. We examined these policies and found that they clearly define:

• what constitutes IP

• the types of IP covered by the policy

• the application of the policy to component parts of the agency.

3.3.2 Accountability

In VicRoads, the accountability for implementation, policy oversight and development is clear. The policy custodian is the Legal Services department with assistance from the Contract Services department. Responsibilities for procurement, licensing and transfer of IP are linked to financial delegations. Generally, contract managers have responsibility to manage IP created under contracts. In 1999, VicRoads took the decision that the delegation to release IP should be lower than the financial delegation. Should VicRoads relinquish ownership of IP in a contract valued at or over $100 000, the release must be approved by the chief executive.

In DET, the manager of Liability Management is the policy custodian.

As DHS has not developed an IP policy, there is no responsible policy custodian.

Under the Guidelines relating to Victorian Crown Copyright, which covers DET and DHS, there is a requirement that the minister should approve the release of copyright material.

Both departments receive many requests to use their materials, for example, old photos and requests from contractors for permission to use materials developed as part of the contract. In the interest of efficiency, the Minister for Education has authorised the secretary, deputy secretaries, general managers and regional directors in the department to release Crown Copyright on her behalf. In DHS, the requests were also commonly handled by the secretary, rather than passing every request to the minister.

3.3.3 Policy administration

Policy administration was ad hoc in the audited agencies. Policies had been updated from time-to-time, but have not been comprehensively reviewed recently. Only a third of policies in surveyed agencies contain time frames and review mechanisms.

Some policy requirements were not implemented in the agencies, for example, annual IP audits in VicRoads, and not all employees were aware of the policy.

In the audited agencies, we found that communication with staff on the IP policy was limited. VicRoads held training sessions when its policy was launched in 1999 and staff can email questions to the policy custodian. DET keeps its policy and other relevant information on its intranet, which is accessible to all staff. The surveyed agencies responded that they communicate with staff about their IP policies in a range of ways. These are outlined in Figure 3B.

FIGURE 3B: COMMUNICATION OF INTELLECTUAL PROPERTY POLICIES TO STAFF

Note: Number of agencies does not add up to 26 as multiple responses were permitted.

Source: Victorian Auditor-General's Office.

3.4 Are there clear directions on considerations in allocation of intellectual property rights?

IP differs from tangible assets in that the rights to access and to use the asset are divisible. Many core public sector activities such as contracting for goods and services, grants funding, funding for service delivery and IP created by employees require decisions about the allocation of these rights.

Most agencies in the Victorian public sector adopt the position that the state always owns IP created, purchased under contract arrangements or funded through agreements, as a default. In practice, this is not always possible or necessarily desirable. It may not be acceptable to the other party in a negotiation and may not always give the best outcomes for the agency or the community. In the absence of a whole-of-government policy on IP, agencies have more flexibility on vesting arrangements than many recognise.

Some of the ownership options are illustrated in Figure 3C.

FIGURE 3C: OPTIONS FOR OWNERSHIP AND USE OF INTELLECTUAL PROPERTY RIGHTS

Source: Victorian Auditor-General's Office.

In assessing agencies’ decision-making processes about the allocation of IP rights, we did not take the view that a particular position was desirable. However, the decision-making process should be transparent and decisions should be made to best achieve agency objectives.

We considered the following aspects of the agency decision-making process:

Direction

• Does the agency have a clear position on allocation of IP rights?

• Does this position consider IP that is created within the agency, created under contract or created under funding arrangements?

Decision-making

• Is there clear guidance for staff managing negotiations on when, how and why to consider negotiations away from the base position?

• Are key decision-making considerations documented/transparent?

• Are decisions timely?

Access to expertise

• Do staff have access to appropriate expertise and advice as required?

3.4.1 Direction

DET’s policy was that IP created in the department and purchased by the department should vest in the state. This was reflected in DET’s contract documentation and purchasing guidelines. In funding agreements, DET does not claim ownership of all IP but claims Crown Copyright over materials created. This position was reflected in DET’s funding guidelines and documentation.

VicRoads‘ policy was that IP should vest in itself. However, the VicRoads policy did not explicitly refer to IP created under funding arrangements and, for the 2 agencies that VicRoads provide funding to, the IP vests in the funded body. These arrangements were reached on a case-by-case basis to account for the multiple streams of funding and the collegiate nature of the funding partners. VicRoads acknowledged that it is likely to fund (as opposed to contract) more research in the future, and plans to upgrade its IP policy to outline its position on IP vesting in funded bodies.

DHS purchasing guidelines and contracts take the position that all IP shall vest in the state. DHS also has a number of statements and guidelines relating to funded agencies indicating that IP created under funding arrangements should vest in the state.

Generally, staff consulted in the 3 agencies had a strong view that the default position was that ownership of IP should vest in the state. Many believed that this was required under government guidelines.

Allocation of intellectual property rights in purchasing contracts and funding agreements

We found all 3 audited agencies consistently applied a principle that ownership should vest in the state, at least as a starting point for negotiations. This position was reflected in template contract terms and conditions used by the agencies.

The exception to this position was generally found in IT contracts, as these terms are rarely acceptable to the vendor (e.g. vendors are generally unwilling to release ownership of source code in development work).

In other situations, contract managers were conservative and tended to strictly implement a position of “we pay, we own”.

The IP conditions in funding agreements vary across government agencies. Some agencies claim ownership/vest all IP in the state as part of the funding conditions. Some agencies claim Crown Copyright over specific projects or funds. Some agencies make no claim on IP created, but leave it in the funded body. Generally, those that do claim ownership over copyright and/or all IP, see this as the correct implementation of the Crown Copyright provisions. As we discuss in Part 6 of this report, we believe that in some circumstances, this interpretation stretches the provisions for Crown Copyright beyond its mandate.

3.4.2 Decision-making

We found that other parties – either contractors or funded agencies –initiated any movement away from an agency’s stated position on the allocation of IP rights, rather than an agency considering the best position for delivery of the required outcome.

Where negotiations were initiated over IP rights, the audited agencies had no documented guidance available to staff on circumstances where it would be appropriate to consider alternative rights allocation. They had no guidance on what to take into account (e.g. risk management principles), or preferred models of rights allocation (e.g. whether joint ownership should be permitted or discouraged, how government could retain rights of access while relinquishing ownership).

Decision-making criteria need to take account of both government and agency objectives; so one size will not necessarily fit all. Figure 3D provides an example of decision-making guidance produced by DIIRD as part of its discussion paper considering issues for the development of a whole-of-government approach.

FIGURE 3D: THE DEPARTMENT OF INNOVATION, INDUSTRY AND REGIONAL DEVELOPMENT – SUGGESTED CONSIDERATIONS IN MANAGING INTELLECTUAL PROPERTY RIGHTS

DIIRD has produced a discussion paper which outlines some of the considerations it believes are appropriate for staff to consider in managing IP rights. These considerations include:

• agencies should seek economies in IP acquisition and management by obtaining and retaining only the IP rights that are necessary for operational activities. In some instances, however, government ownership of IP may be desirable

• IP rights should be in the hands of the party whose corporate mission is to exploit and improve such IP, and is best able and willing to do so

• when engaging external parties to develop IP that may have a commercial potential, and where the external party is able and willing to commercialise the IP, government is encouraged to grant ownership or commercialisation rights to the external party where to do so will result in a cost saving for government, especially where the external party is in a better position to do so

• joint ownership of IP should be discouraged. If unavoidable, steps (e.g. an IP agreement) should be taken to deal with potential problems associated with joint IP ownership
(e.g. blocking of sale or licensing of IP)

• where joint ownership of IP is agreed to by a public authority, the contract should contain appropriate provisions relating to the use, management and administration of IP assets.

Source: Department of Innovation, Industry and Regional Development 2001, Capitalising on Government Intellectual Property – An issues paper for the development of a Victorian government intellectual property management policy, Discussion Paper, revised August 2003.

Where there are no guidelines, staff involved in negotiations over IP frequently have to address the considerations as best they can, seeking advice, first from internal legal services and, if necessary, the Victorian Government Solicitor or other legal advisors. Occasionally, matters were escalated to the minister or staff sought advice from other departments. As a result of the wide consultations sometimes required, disputes over the contractual arrangements for allocation of IP rights tend to take a long time to resolve.

3.4.3 Access to expert advice

Decision-making and dispute resolution on allocation of IP rights and other IP issues require access to expert legal, financial and commercial advice.

The 3 audited agencies had good access to legal expertise, both internally through legal services and/or contract services, and through external legal advice from the whole-of-government panel.

Legal advice focused on risk management and ensuring that IP provisions in agreements and contracts were legally defensible.

Access to other kinds of advice - for example on financial, commercial and social implications of decisions - and assistance with evaluation of options for broader issues than legal risks was limited. At a whole-of-government level, as there is no agency nominated as a policy custodian, there is no central point for advice on IP issues that agencies can call on.

All audited agencies had experienced cases where IP-related disputes had been escalated to their legal services and/or external legal advice for action. On some of these occasions, we were concerned that the expert advice was brought in to fix a crisis or dispute once it had occurred, where earlier advice (e.g. in the project planning phase) may have prevented the dispute.

3.5 Conclusion

At a whole-of-government level, guidelines and directions on the management of IP in Victoria are piecemeal. The current policies and guidelines provide limited assistance in individual agencies’ management of IP. However, government has not clearly articulated how public IP assets should be managed to support the statewide policy direction provided by Growing Victoria Together, and Victorians. Bright Ideas. Brilliant Future.

The planned revision of the copyright policy by the Department of Justice will address some of the current gaps and weaknesses in the guiding framework for government agencies. However, this policy will not apply to all types of IP that public sector agencies manage; for example, trademarks, patents and registered designs. The draft copyright policy makes this clear, and agencies need to ensure that staff are aware of its applicability and limitations.

Although agencies are not required to have their own IP policies, we found that many have one. In the individual agencies where policies were further developed, we found that staff had a better understanding of, and were more consistent in, their approach to IP issues.

However, a number of agencies that have stewardship of significant IP resources do not have policies to guide staff. In these agencies, staff lack direction in managing one of the most valuable resources in today’s economy.

Decision-making on allocation of IP rights is a crucial and challenging part of managing IP. Agencies have a responsibility to manage resources in line with their organisational objectives and for the benefit of the community. Effective allocation of IP rights can protect the state’s interests while ensuring that IP is accessible by the parties best positioned to capitalise on it for the benefit of the state.

At an operational level, translating this general obligation to manage resources for the benefit of the state is not simple or straightforward. Agencies can assist staff by clarifying and documenting the kinds of considerations that should be taken into account.

The lack of documented decision-making criteria has an impact on the transparency and defensibility of decisions. Decisions on allocation of IP rights can have significant economic consequences, and the current lack of a clear framework exposes staff to risks that their decisions are not seen as fair and impartial.

Current advice on IP matters in the agencies we audited was generally limited to legal advice. This is essential, and we found it to be comprehensive and accessible. Legal advice needs to be obtained early, but should not drive the initial considerations. It should be complemented with other perspectives; taking into account financial, operational and social considerations.

Recommendations

    1. That the government nominate an agency to take responsibility for the development of a whole-of-government policy on all IP. This policy will need to be developed in conjunction with the Department of Treasury and Finance, the Department of Innovation, Industry and Regional Development, the Department of Justice, the Department of Premier and Cabinet, and line agencies.

    2. That the Department of Justice complete its planned revision of the copyright policy and guidelines for departments on copyright management as a priority.

    3. That government departments and agencies develop policies providing detailed guidance on managing IP in line with the whole-of-government direction and organisational objectives.

    RESPONSE provided by Secretary, Department of Innovation, Industry and Regional Development

    Recommendation 1

    The Department supports the development of a whole-of-government policy on all IP. This should be undertaken with a degree of urgency to ensure that policy development on specific aspects of IP management such as copyright and the allocation of IP rights in tendering and grant funding are developed in line with the whole-of-government direction and policy objectives. It is of particular importance that the policy established should be sufficiently robust and flexible to support the government’s aims of encouraging innovation and economic growth.

    As the planned revision of the copyright management policy and guidelines by the Department of Justice is near finalisation it would be advantageous not to hold up its completion but to have it inform the development of the whole-of-government IP policy, as best practice principles apply in both instances. The two processes could occur concurrently, with one informing the other.

    RESPONSE provided by Acting Secretary, Department of Justice

    The Department of Justice welcomes the Auditor-General’s review and agrees with the conclusions and recommendations of the report.

    Recommendation 1

    The Department will welcome the opportunity to be involved in the development of a whole-of-government policy on all intellectual property in conjunction with other Government agencies.

    Recommendation 2

    As recommended by the report, the Department is currently completing its revision of the Government’s policy and guidelines on copyright management. The policy is planned for Cabinet consideration during 2005, but cannot be finalised until the Commonwealth Attorney-General’s response to the Copyright Law Review Committee report on Crown copyright is known. The Review Committee recommended sweeping change to the law of Crown copyright and it would be premature to finalise the revised policy before the Commonwealth’s intentions in respect of the report are clear.

    RESPONSE provided by Secretary, Department of Premier and Cabinet

    Recommendations 1, 2, 3

    The Department of Premier and Cabinet agrees with the recommendations.

    RESPONSE provided by Secretary, Department of Education and Training

    Recommendation 3

    The Department accepts this recommendation.

    The Department of Education and Training recognises the need to provide guidance to employees with respect to any whole-of-government direction and organisational objectives. Existing copyright guidelines will be reviewed upon the establishment of a whole-of-government direction.

    RESPONSE provided by Secretary, Department of Human Services

    Recommendations 1, 2, 3

    The department strongly supports the need for a whole of government approach to IP. A whole of government IP policy should clearly articulate the policies applicable to IP but should be sufficiently flexible to allow the policy to be tailored to the particular needs of departments and the stakeholders that they serve.

    Clearly the bulk of IP developed by or for government consists of copyright works and other subject matter. In the light of the recommendation that a whole of government IP policy be developed, it is undesirable for a whole of government copyright policy to be completed separately. The department’s view is that the copyright policy should form part of a broader IP policy.

    It is not considered necessary, however, for this process to await the outcome of the Australian Government’s review of crown copyright. In practical terms, the crown copyright provisions of the Copyright Act 1968 are rarely, if ever, relied upon by government. Almost invariably government practice has been that its copyright rights and liabilities are governed by the general provisions of the Copyright Act. In this light, there is little to be gained by delaying development of a whole of government policy while crown copyright is reviewed.

    RESPONSE provided by Chief Executive, VicRoads

    Recommendation 1

    Agree. However, VicRoads suggests that the Department of Infrastructure and its agencies should be included in the list of Departments to be consulted.

    Recommendation 2, 3

    Agree.

    RESPONSE provided by Deputy Secretary, Department of Treasury and Finance

    Recommendations 1, 2

    The report concludes that many of the selected agencies audited, consistently take a default position in relation to Government ownership of intellectual property (IP) without any analysis of whether significant IP will be created or whether other access models would promote better project or organisational outcomes.

    The inference that adopting a default position on IP ownership does not generate benefit to government needs to be considered from the position that the contracting authority has contracted and paid for the IP related to the project objectives. In many instances departments also negotiate access to ‘back-end’ IP owned by the contractor to ensure the long-term applicability of the IP created during the contract.

    There is a presumption that there is significant foregone benefit to government in relation to IP management as a consequence of adopting a default position on IP management. The report suggests benefits from the application of other access models resulting in reduced tender prices or from commercial arrangements.

    The survey results reported a strong commitment to sharing the benefit of IP purchased or generated by government. Nine of the ten departments and 15 of the 18 agencies surveyed have given other parties authority to use IP belonging to an individual department/agency.

    The interchange of IP between State agencies and between national jurisdictions has a major impact on standardising procurement processes leading to efficiencies in agency transactional costs. The report does not recognise that the outcome of consistent processes across government agencies and jurisdictions has significant commercial benefits to suppliers to government. Consistent processes also reduce the transactional costs for government.

    The report recommends the development of a whole-of-government policy on IP which would have benefited if an analysis had been provided on the scope of foregone benefits or which access models could have applicability in different agency settings or sectors of procurement.

    DTF is of the opinion that any procurement recommendation flowing from the report must proceed on the basis of ‘value for money’ in line with project objects.

    Given the adoption of this principle, DTF supports proceeding with the following procurement related recommendations:

    • That the government nominate an agency to take responsibility for the development of a whole of government policy on all IP in conjunction with DTF, DIIRD, DOJ and DPC.

    • That the Department of Justice complete the revision of the copyright policy and guidelines.

    • That DTF will provide guidance on IP considerations in purchasing that take into account the whole-of-government policy.

3.6 Good practice principles

To assist agencies in developing IP policies and decision-making guidelines, we have collated some high-level good practice considerations. These are outlined in Figures 3E and 3F.

FIGURE 3E: GOOD PRACTICE FOR AGENCY INTELLECTUAL PROPERTY POLICES

The agency’s policy supports and guides the management of IP to ensure that:

• IP assets are managed for the benefit of the state

• the management of IP supports the agency’s objectives

• the risks associated with the use of IP are minimised and managed

• the control and custodianship of IP assets resides with the most appropriate agency or in the most appropriate part of the agency

• the accountability for IP management is aligned with control and custodianship of IP assets.

Policies and procedures should:

• be documented and user-friendly (e.g. in plain English and not excessively long)

• identify all forms of IP assets likely to be developed, used or managed by the agency

• identify who is accountable for implementation

• provide clear and appropriate guidance for staff

• be integrated with other agency policies and objectives

• be communicated to staff and readily accessible

• be periodically reviewed.

Source: Victorian Auditor-General's Office. Based on analysis of New South Wales Audit Office 2001, Better Practice Guide: Management of Intellectual Property, New South Wales Audit Office, Sydney; and Government of Western Australia 2003, Government Intellectual Property Policy and Best Practice Guidelines, Department of Industry and Resources, Perth.

FIGURE 3F: GOOD PRACTICE FOR DECISION-MAKING ON INTELLECTUAL PROPERTY ALLOCATION

The decision-making in the allocation of IP ownership and rights should:

• assess the benefits, costs and risks associated with any decision relating to the allocation of IP

• ensure that when allocating IP rights, both IP yet to be created and pre-existing IP are adequately considered and addressed to ensure that the IP can be effectively used or commercialised as intended

• record in a register, details regarding the allocation of all IP rights and all relevant conditions

• document the allocation of IP rights in a legally binding written contract before the IP is created

• where relevant, obtain a license to the IP where ownership is allocated away from the agency.

Source: Victorian Auditor General's Office. Based on analysis of New South Wales Audit Office 2001, Better Practice Guide: Management of Intellectual Property, New South Wales Audit Office, Sydney; and Government of Western Australia 2003, Government Intellectual Property Policy and Best Practice Guidelines, Department of Industry and Resources, Perth.

1 Copyright Act 1968 (Cwlth), Part VII, Division 1, s. 176(2).

2 Note that under s. 179 of the Copyright Act 1968 (Cwlth), Crown ownership of copyright can be modified by agreement.

3 Auditor-General of South Australia 1997, Managing Intellectual Property Assets and Government Information when Outsourcing, Report of the Auditor-General for the year ended 30 June 1997, Government of South Australia, Adelaide.

4 The Copyright Law Review Committee 2005, Crown Copyright, Commonwealth of Australia, Canberra, p. xxii.

5 Attorney-General 1991, Guidelines relating to Victorian Crown Copyright, Victorian Government, Melbourne.

6 Victorian Government 2002, Innovation Statement – Victorians. Bright Ideas. Brilliant Future. p. 74, Victorian Government, Melbourne, viewed on 21 April 2005, <http://192.148.120.96/CA256C530000A4BF/ImageLookup/PDFS/$file/Innov_all.pdf>

7 Minister for Finance 2003, Directions of the Minister for Finance - 3.4.9. Physical and Intangible Assets, Department of Treasury and Finance, Victorian Government, Melbourne.

8 Victorian Government Purchasing Board 2005, Public entities bound by VGPB procurement policy, Victorian Government, Melbourne, viewed on 21 April 2005, <http://www.vgpb.vic.gov.au/CA256C450016850B/0/686DA5B53FD13348CA256FC0001B05CC?OpenDocument>

9 Partnerships Victoria 2001, Practitioner’s Guide, pp. 90-1, Victorian Government, Melbourne.