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Articles Commercial 23rd Oct 2019

Unilever not ‘too big to pay’ employee-inventor

Supreme Court orders Unilever to pay compensation to inventor of diabetic testing kit.

In a landmark decision handed down on Wednesday, 23 October 2019, in the case of Shanks v Unilever PLC & Others [2019] UKSC 45, the Supreme Court has awarded retired Professor Ian Shanks £2 million as a fair share of the “outstanding benefit” which Unilever received from his invention in 1982 of the capillary fill diabetes testing device since used by many millions of people all over the world.

This unanimous decision from the Supreme Court overturns the decisions of the IPO, the High Court and the Court of Appeal and fundamentally changes the established landscape in employee-inventor compensation cases under s.40 of the Patents Act 1977.

The courts below had essentially found that Unilever was ‘too big to pay’ because profit of £24.3 million made on bare license fees for the patents on Professor Shanks’ invention was dwarfed by the worldwide profits and turnover of the entire Unilever Group.

The Supreme Court has now provided long-awaited clarification on the correct approach to be taken when assessing an outstanding benefit under the Act and in so doing has re-established the prospect of meaningful claims being brought by employee-inventors of large companies.

Professor Shanks was represented by Patrick Green QC and Chloe Campbell, instructed by Christopher JL Ryan (and by Beresford & Co in the courts below).

For more details please see the alerter here.

The Supreme Court judgment can be found here.

A link to Lord Kitchin delivering the summary can be seen here.

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