Does a university own the goodwill and trade marks of an associated research laboratory, when the employee academic who established that laboratory resigns and moves to another university?
In Deakin University v Macreadie [2026] FCA 481, Wheelahan J answered ‘yes’, at least where goodwill was built under the university’s name and funding, through significant commercial contract work in which the university was the contracting party, and the lab was found to have had no independent reputation or goodwill.
The facts
Deakin University (Deakin) brought proceedings against its former employee Professor Peter Macreadie and Blue Carbon Lab Pty Ltd (Blue Carbon Entity) (together, the Respondents) over ownership of the goodwill associated with the Blue Carbon Lab name and logo, and the ownership of related trade marks.
Macreadie was a marine biologist who conceived the name ‘Blue Carbon Lab’ before commencing full-time employment as a senior lecturer at Deakin. He was employed by Deakin between 2016 and 2024 and during this time, headed a research group known as the Blue Carbon Lab.
From the commencement of Professor Macreadie’s employment at Deakin, the Blue Carbon Lab operated from Deakin’s campus, was staffed by Deakin employees, and attracted substantial external research funding under contracts in which Deakin was the contracting party. Deakin paid for the logo’s design and redesign and the website’s development, and marketed the lab as ‘Deakin’s Blue Carbon Lab’.
In March 2023, while still employed by Deakin, Macreadie incorporated the Blue Carbon Entity, of which he was the sole director. In August 2023, the Blue Carbon Entity filed trade mark applications for the Blue Carbon Lab name and logo without Deakin’s authorisation. In March 2024, the mark (Logo Mark):
was subsequently registered in the name of the Blue Carbon Entity.
In May 2024, Macreadie resigned from Deakin to take up employment at RMIT University.
The claims
In the proceedings, Deakin alleged that:
- the Respondents engaged in misleading or deceptive conduct by representing that the Blue Carbon Entity owned the goodwill and logo associated with the Blue Carbon Lab and
- the registration of the Logo Mark was liable to cancellation on the basis that the Blue Carbon Entity applied for registration of the Logo Mark in bad faith (s 62A of the Trade Marks Act 1995 (Cth) (TMA)) and Deakin was the first user and owner of the Logo Mark (TMA, s 58).
The decision
Deakin is the owner of the goodwill
Wheelahan J held that Deakin, and not Professor Macreadie, owned the goodwill associated with the Blue Carbon Lab. It is now well established that goodwill attaches to the activities of a business, and not to an unregistered trade mark or name: Federal Commissioner of Taxation v Murry [1998] HCA 42; 193 CLR 605 (Murry). In Murry, it was held that the disposition of an asset that is a source of goodwill might reduce the value of the goodwill, but unless the business itself is sold, there is no disposition of goodwill. The same has been found to apply to employees: the employees of a business may be a source of goodwill and contribute to the value of the goodwill of a business, however the employees’ departure does not sever the goodwill from the business.
In the present case, his Honour’s reasoning that Deakin was the owner of the relevant goodwill turned on several key findings:
- No pre-existing independent goodwill: The Court found that Blue Carbon Lab was not associated with any independent reputation or goodwill that attached to any business conducted by Macreadie prior to commencing his employment at Deakin in 2016. Even if it was, his Honour found that any goodwill in the activities of that business prior to February 2016 was subsumed by the goodwill Deakin developed in the business of the Blue Carbon Lab over the following eight years.
- Employee use is employer use: Blue Carbon Lab’s activities were undertaken by Deakin employees using Deakin’s resources in furtherance of Deakin’s statutory objects.
- Goodwill is not divisible or shared: Goodwill depends on proof that a business generates earnings from identifiable assets, people and processes, and is not divisible or shared.
The Court found that the Blue Carbon Entity’s representations (that it owned Blue Carbon Lab’s Logo Mark and the goodwill associated with the Blue Carbon Lab and its Logo Mark, and that it had the right to use the Logo Mark) constituted misleading or deceptive conduct under s 18 of the Australian Consumer Law.
Section 58 ground established: Deakin is the owner of the Logo Mark
The Court was satisfied that Deakin was the first user and owner of the Logo Mark based on Deakin’s evidence of use on its website, in email footers and on contract documentation. While Macreadie had worked on the website before joining Deakin, this was considered to be in anticipation of his employment at Deakin. Other Deakin employees were also involved in the website’s redevelopment, and professional design work on the logo was paid for by Deakin. The registration of the Logo Mark was ordered to be cancelled on this basis.
Bad faith under s 62A was not established
Deakin failed in establishing its alternative ground of cancellation of the Logo Mark, namely that the trade mark application was filed by the Blue Carbon Entity in bad faith within the meaning of s 62A of the TMA. The Court accepted that Macreadie genuinely believed he was entitled to use and register the Logo Mark, noting he is a scientist and not a lawyer. While that belief was objectively wrong, a mistaken belief in entitlement does not, without more, amount to bad faith.
Final orders
The Court declared that the Blue Carbon Entity’s use and threatened use of the Blue Carbon Lab name and logo was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law, permanently restrained the Blue Carbon Entity from representing that it owned the Blue Carbon Lab IP and goodwill, and also from using that IP to indicate the commercial origin of any provision of environmental research services. Professor Macreadie was permanently restrained from being involved in any conduct of the Blue Carbon Entity that would contravene the Court’s injunctions.
The Court also ordered cancellation of the trade mark registration for the Logo Mark and ordered the Blue Carbon Entity to change its company name to a name that did not include ‘Blue Carbon Lab’.
Costs were awarded in Deakin’s favour, in part on an indemnity basis.
Key takeaways
This case is a timely reminder that goodwill does not walk out the door with departing employees.
For universities and research institutions, the decision underscores the importance of ensuring that the activities undertaken by research groups within the university, and the branding used by those groups, consistently reflect an association with the university (as Deakin did through co-branded logos and taglines).
For IP practitioners, the case confirms that bad faith under s 62A requires more than a genuine but mistaken belief in entitlement to register.
