The importance of accurately recording inventorship on patent applications is illustrated in a recent judgement by the Federal Court of Australia. Inventor Max Scott developed a new production process for “Clean Wine Spirits” used by Bacchus Distillery (makers of cream liqueurs and other beverage products), and Bacchus asked for their representative to be named on the patent application as a co-inventor in order to qualify for government funding. The patent was granted in June 2011.

When Bacchus later fell into financial trouble, administrators looked to sell the business and the associated intellectual property, and the entitlements suddenly came into dispute (Neobev Pty Ltd v Bacchus Distillery Pty Ltd). With a lack of written records detailing the agreement between the parties, the court found Mr Scott was the only party with the necessary knowledge and background to conceive of the invention and named him as the sole inventor.

The result is not only a significant investment of time and energy to reach agreement and adjust the records, but also a negative impact on the value of Bacchus and its intellectual property assets as most buyers will be put off by the legal quagmire. The take-away lessons from this case study? Correctly identify inventors on patent applications, make sure everyone identified as an inventor has a clear chain of title to the owner and put all business structures in writing.