In a decision that has surprised many, given earlier decisions to the contrary by the Patent Office, the High Court and the Court of Appeal, Professor Ian Shanks has won his case in the Supreme Court against his former employer, Unilever.

Whilst working for a Unilever subsidiary in the 1980s, Professor Shanks invented technology – the electrochemical capillary fill device (ECFD) – for measuring glucose levels in blood samples. However, having been told that Unilever owned his invention, the company patented it and made millions from licensing it around the world. Professor Shanks did not receive any payment or compensation beyond his usual salary.

After a thirteen-year legal battle for compensation, Professor Shanks has finally achieved victory in the Supreme Court, winning a £2 million payout.

Bethan Hopewell, Partner at IP law firm Powell Gilbert, comments:

“The decision had been eagerly anticipated, as few cases of this type ever make it to trial (most are settled before they come to judgment) and fewer still are appealed all the way to the country’s highest court.

Upending expectations, the Supreme Court … [found] that Professor Shanks was entitled to £2 million in additional compensation from his former employer, Unilever, over and above his regular earnings when he was previously employed by their research and development arm. The normal rule under UK law is that where an employee is employed to invent as part of their job description, any inventions that arise during their employment will be the property of their employer. However, where an invention has been of ‘outstanding benefit’ to their employer, the inventor is entitled to apply for additional compensation, with the legislation setting out the rules and procedures for establishing when such additional compensation is owed.

Although exactly how much money Professor Shank’s inventions generated was hotly disputed by the parties, it was common ground that they produced a large profit for Unilever, with the Court of Appeal upholding the first instance judge’s valuation of £24 million. The main issue which the Supreme Court had to decide was whether such a sum could truly be called ‘outstanding’, when compared to the immense annual revenue and profits of a multinational corporation like Unilever. Although the legislation provides that due regard should be paid to the size and nature of the employer when deciding whether a benefit is ‘outstanding’, this is not a deciding factor but just one aspect to be taken into account, alongside others. The crux of this appeal therefore went to how much relative weight it should be afforded, when the overall picture is mixed.

While it is too early to say what effect this surprising decision will have on the wider field of employee inventor compensation, the success of what many observers regarded as a hopeless case raises the prospect that many more cases will now be brought by disgruntled inventors seeking additional compensation.”

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