Carbon Copies Composites Pty Ltd (the Company) was incorporated to develop, and then sell commercially, an all-electric carbon fibre aircraft known as the E75 Electron (“Aircraft”). Mr Wellington and Mr Hutchison were the directors of the Company and through associated entities held 98.5% of the shares in the Company.
Mr Hutchison had the idea for the Aircraft and worked on its design and development, and Mr Wellington provided the necessary funding to the Company. At all material times Mr Hutchison was also an employee of the Company.
The Company was in the process of being wound up when a dispute arose about the ownership of the intellectual property in the Aircraft. There was no written agreement between the parties to clarify who owned the intellectual property in the Aircraft. Mr Hutchison commenced proceedings in the Supreme Court of NSW.
The hearing took 7 days, and the Company was held to own the intellectual property in the Aircraft.
We recommend the first step in developing an idea is to document who owns the intellectual property in the product being developed.
We recommend the owner of the intellectual property be a person or entity with less risk than a sole trader or trading company. A sole trader or trading company is more vulnerable to being bankrupted or wound up involuntarily.