Intellectual property

The Federal Government agency, Intellectual Property Australia, states that intellectual property (IP) "represents the property of your mind or intellect. It can be an invention, trade mark, original design or the practical application of a good idea". 

Examples of IP owned by public sector agencies include computer programs, advertising and promotional materials, publications and training documentation developed by an agency. Materials commissioned by the agency are also considered IP.

Intellectual property is often referred to as an intangible asset. Like any asset, it should be managed responsibly, in the same way that agencies manage tangible assets.

The Department of Premier and Cabinet's Intellectual Property Management Framework sets out mandatory principles for managing intellectual property in NSW public sector agencies. The NSW Department of Health has a policy for the management of intellectual property in health research that public health agencies are obliged to apply.

Corruption risks in relation to intellectual property are often connected with secondary employment or the private interests of employees and they can be managed with similar strategies.

The misuse of IP that is owned by a public sector agency could constitute corrupt conduct as defined by the Independent Commission Against Corruption 1988.  

Corruption risks

A risk assessment of intellectual property in a public sector agency may identify some or all of the following corruption risks:

  • An employee using an agency's IP for their secondary employment.
  • An employee soliciting a secret commission from a private individual or organisation in exchange for agency IP.
  • An employee providing IP to another organisation in the hope or expectation of securing employment. 
  • An employee responsible for managing the agency's IP, including implementing security measures for the protection of IP, deliberately failing to do so for the purpose of misusing this information for their own or another's benefit. 
  • A departing employee or consultant deliberately breaching the agreement by using the IP they gained for private benefit.   

Managing corruption risks

As a minimum an agency should:

  • Introduce policy and procedures for the IP that contain elements listed in the Policy Development Guide and Checklist (see Tips and tools below).
  • Include in the policy sanctions for any breach of the policy and procedures. 
  • Review the policy every two years.
  • Refer to IP in all corporate documents such as codes of conduct.
  • Train all relevant employees in the policy and procedures to ensure they are aware of their responsibilities.
  • Include IP as a risk to be assessed in the agency's internal audit and corruption risk management processes.

The following record-keeping requirements should be included in the policy:

  • Regularly assessing and reporting the financial value of IP which could appreciate or depreciate over time. 
  • Recording the name of the person who made the valuations and the date.
  • Assessing and recording financial and other costs if IP is misused, stolen or distorted.
  • Recording decisions about the use of IP. 

Risk management strategies

Following your risk assessment of the intellectual property of the agency you should consider these risk management strategies: 

  • Assessing whether sufficient resources have been assigned to the management of IP.
  • Including references to IP protections in contracts and information for external parties including the internet.
  • Maintaining a register of agency IP and IP that the agency has permission to use.
  • Considering possible IP issues in relation to prospective tenders or consultants.
  • Specifying in employment documentation the ownership of any IP developed by the employee in the course of their employment. 
  • Establishing an IP committee to manage the agency's IP interests.
  • Requiring employees to notify the committee of any IP they create in the course of their employment.
  • Including references to IP in conflicts of interest management procedures.
  • Ensuring departing employees sign an agreement about the use of the agency IP.

Case study

Case study 1: Authorised private use of IP 

A doctor, employed in a public hospital, established a private company to develop, market and sell health software. An allegation was made to the ICAC that he conducted work for his private company in normal working hours using resources and IP from the public hospital.

Enquiries made with the hospital found that the doctor had consulted the chief executive officer (CEO) in relation to the business and negotiated an agreement that a percentage of the business profits would be directed to the hospital.

The proposal had been approved by the CEO and reviewed by the hospital's solicitors and it was found to fall within the doctor's standard rights to private practice and of benefit to the hospital.


Frequently asked questions

If a research officer employed by a public agency has developed a new research tool, who owns the IP, the agency or research officer?

This will depend on the conditions of the officer's employment or contract. In the absence of any agreement prior to the research tool being developed, the IP belongs by law to the state, although the literature/adjuncts to the research tool might acknowledge the employee as its creator. 

To retain the ownership of the IP (or have joint ownership) the employee would need to determine this with the agency prior to the development of the tool and ratify this by contract.

In what situations is an agency most vulnerable to corruption risks that involve intellectual property?

Any agencies that creates new systems, processes, inventions, products or publications that have a commercial value will be exposed to corruption risks.

Agencies that engage temporary or contract staff in activities that produce IP may be more exposed to these risks.

Where can I get advice about protecting specific instances of the agency's IP?

The NSW Crown Solicitors' Office is available to advise and act for NSW government agencies on a wide range of commercial agreements including industry assistance agreements, general commercial agreements, IP agreements (including copyright, patents, trademarks and design agreements and licensing arrangements) as well as information technology contracts.


ICAC publications


Other publications

  • Intellectual Property Management Framework for the NSW Public Sector, NSW Department of Premier and Cabinet, Sydney, February 2005
  • Management of Intellectual Property - Guide to Better Practice, NSW Audit Office, October 2001
  • Policy on Intellectual Property arising from Health Research, NSW Department of Health, Sydney, January 2005
  • Total Asset Management Policy, NSW Treasury, June 2006
  • Working with Government Guidelines for Privately Financed Projects, NSW Treasury (updated December 2006).

Relevant websites

Related topics on the ICAC website