The 'outstanding benefit'​ of innovation

Who owns the rights to an invention: its inventor or the employer of that inventor? This is a question that was recently considered by the Supreme Court in London.

The Appellant, Professor Shanks, worked for a subsidiary of the Respondents. In the course of his employment, he conceived an invention to allow diabetic patients to monitor blood glucose levels in 1982. The rights to the ‘Devices for Use in Chemical Test Procedures’ belonged to his employer under the Patents Act 1977 (‘the Act’). Over time, the Respondents derived a net benefit from the Shanks patents’ of approximately £23.4 million.

In 2006, the Appellant sought compensation under the Act on the basis that the Shanks patents had been of ‘outstanding benefit’ to the Respondents and he was entitled to his fair share. This claim was rejected at first instance in 2013 on the basis that the benefit was not ‘outstanding’ for the Respondents given the nature and size of their business. This position was upheld by the High Court and the Court of Appeal.

The Supreme Court allowed the Appellant's appeal. The provisions of the Act allow for an employee who makes an invention which belongs to the employer from the outset and for which a patent has been granted to be entitled to compensation if they can establish that:

• the patent is, having regard among other things to the size and nature of the employer’s undertaking, of outstanding benefit to the employer; and
• it is just that he or she be awarded compensation. 

Delivering judgement, Lord Kitchen, determined that Professor Shanks was entitled to his fair share of £2m.

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