Former employee compensated for invention generating ‘substantial and significant rewards’

06 Nov 2019

After a 13-year legal battle, Professor Ian Shanks was awarded £2m in compensation by the Supreme Court for an invention now used by many diabetics. The Professor developed technology (now known as the electrochemical capillary fill device) to measure the concentration of glucose in the blood during his time as an employee at a subsidiary of Unilever, nearly 40 years ago. 

Despite the employer’s payment of salary, bonuses and benefits to its employee, the Supreme Court found that the invention produced “outstanding benefit” to the employer which entitled the Professor to a “fair share” of the company’s royalties, amounting to approximately £24m.

Very few cases have been heard by the Court on this issue and even fewer have succeeded. Professor Shanks commenced his legal action in 2006 which was subsequently dismissed until it reached the Supreme Court. Whilst this result shows the Court’s willingness to award compensation, the legal threshold outlined below, under s40 of the Patents Act 1977, is still significant.

Under s40 Patents Act 1977, the Court is willing to compensate employees who have created an invention where:
  1. the employee has made an invention belonging to the employer where a patent has been granted;
  2. that invention, taking into account the employer’s business, is of outstanding benefit to the employer; and
  3. it is just that the employee should be awarded compensation by the employer
Whilst employers should bear s40 in mind, each claim will be determined on a case-by-case basis and particularly when assessing “outstanding benefit”.  At an earlier hearing in the case, the Court of Appeal concluded  that the term “outstanding” should be measured against the facts in each case, with careful consideration of the turnover and profitability of the employer (Shanks v Unilever PLC [2017] EWCA Civ 2).

If you are concerned about a potential or historical claim  it is worth seeking advice on the specific circumstances. Please get in touch with our Technology, Media and Telecom’s team for an initial discussion.

Further reading

Commercial landlords face extended restrictions

Blog, Legal Updates
Landlords take another hit as tenants’ protection mandated to last two years; Lawrence Morley takes a look
Read more Read

New Homes Quality Code – consultation under way

Blog, Legal Updates
Now is the time for housing developers to contribute to the discussion about new quality code
Read more Read

Is changing terms of employment about to become more difficult?

Employers beware. It may become more difficult to change terms of employment through the process of dismissal and re-engagement or “fire and rehire”.
Read more Read

Is the menopause really a business issue?

Abigail Maino explores the extent to which employers should be supporting employees who may be struggling with symptoms of the menopause
Read more Read
  • Brighton Office

    1 Jubilee Street


    East Sussex

    BN1 1GE

  • Gatwick Office

    Griffin House

    135 High Street


    West Sussex

    RH10 1DQ

  • Guildford Office

    Wonersh House

    The Guildway

    Old Portsmouth Road



    GU3 1LR

  • Horsham Office

    Ridgeland House

    15 Carfax


    West Sussex

    RH12 1DY

  • London Office

    6 New Street Square

    New Fetter Lane


    EC4A 3BF

  • Get in touch