Inventor’s ‘outstanding benefit’ worth £2m

In a unanimous ruling this week, the Supreme Court held Professor Shanks is entitled to compensation under the Patents Act 1977, s 40, on the basis the patents for the product he invented in 1982 have been of outstanding benefit to his employer and he is entitled to a fair share of that benefit, in Shanks v Unilever Plc [2019] UKSC 45.

Professor Shanks initially received a salary of £18,000 and a Volvo car for his work on biosensors, during which he conceived a system for measuring the glucose concentration in blood, serum or urine. He built the prototype at home using Mylar film and slides from his daughter’s toy microscope kit and bulldog clips to hold the assembly together. He accepts the rights to his inventions were owned by his employer, which sold them to Unilever for £100. The Shanks patents would later be worth more than £19m, and Unilever’s total earnings from the patents were about £24m.

The court considered the meaning of ‘outstanding benefit’ and what percentage of earnings should be allocated.

Giving the lead judgment, Lord Kitchin held it was fair to apply a 5% share of the £24m, which gave Professor Shanks £2m.

He said the statutory test required the benefit to be ‘outstanding’, which is ‘an ordinary English word meaning exceptional or such as to stand out and it refers here to the benefit (in terms of money or money’s worth) of the patent to the employer rather than the degree of inventiveness of the employee’. In determining the ‘benefit’ to Unilever, Lord Kitchin said the court must consider what is the employer’s undertaking for this purpose, and ‘what is the relevance of that undertaking’s size and nature?’