Patent law states that if you create an invention while you’re employed, it belongs to your employer. But, if your employer receives an ‘outstanding benefit’ from a subsequent patent, you may be entitled to compensation.

This point was examined in the recent case of Shanks v Unilever Plc and others (2017). In this case, the Court of Appeal upheld an existing decision by the High Court and the Intellectual Property Office (IPO) that Professor Shanks, and employee of Unilever, was not entitled to this compensation.

Facts

Professor Shanks was employed at Unilever when he invented a device used for making medical diagnoses. Unilever patented the invention, and subsequently earned almost £25 million by licencing it to third parties. Professor Shanks sought compensation through the IPO for his contribution to that success.

Ruling

The court concluded that, although Unilever needed to have received an ‘outstanding’ benefit for Mr Shanks to get compensation, there was no statutory definition of ‘outstanding’. The court determined that Parliament must’ve intended the meaning to indicate an ‘exceptional’ nature of the benefit. Unilever didn’t argue that £24.5m was not inconsiderable, but said that – when considered as relative to their multi-billion-pound turnover – it wasn’t necessarily ‘exceptional’. The Court agreed that this comparison should be taken into account.

Implications

The sheer size of Unilever was certainly a factor in this case. And, this ruling might put future employee inventors from seeking compensation from a large corporation. The court has certainly set the bar very high.

For more information, please contact Nick De Figueiredo.

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