Ian Alexander Shanks v. Unilever, High Court of England and Wales, Patents Court (Arnold J), London, UK, 23 May 2014, Case No.  EWHC 1647 (Pat)
In its judgment of 23 May 2014 the High Court of England and Wales decided a case regarding an employee’s claim for compensation in respect of patents concerning devices for use in chemical test procedures (ultimately used in blood testing kits for diabetics).
The relevant patents were filed in the 1980s hence the case was decided on the basis of the Patents Act 1977 as enacted (relevant sections later amended in 2004). The case has a detailed history: interim issues decided by the UKIPO were appealed all the way to the Court of Appeal ( EWCA Civ 1283). This current decision results from an appeal against the UKIPO’s substantive decision that the invention was not of outstanding benefit to Unilever.
The facts of this case differed from previous employee compensation cases in that Unilever did not exploit the patents itself, but profited from patent licences and assignments, making it somewhat easier to quantify the benefit. However, Arnold J still had to consider certain quantification issues, including the time value of money and Unilever’s tax position. Following the Court of Appeal’s earlier decision in this case Arnold J agreed with Unilever and the UKIPO that the relevant benefit was that obtained by the Unilever group as a whole, rather than the specific legal entity that employed Shanks.
In relation to whether the benefit was outstanding, Arnold J held that the UKIPO had not made any error of principle in concluding in the negative and the appeal should therefore be dismissed. However, for completeness Arnold J proceeded to consider what a fair share would have been, reducing the UKIPO’s 5% to 3%.