In Shanks v Unilever [2014] EWHC 1647 (Pat) , Arnold J has dismissed Prof Shanks’ appeal against the IPO’s rejection of his long-running multi-million pound claim for inventor’s compensation against his former employer, Unilever, in respect of patents which he claimed to be of ‘outstanding benefit’ to Unilever. The patents were in for the so-called electrochemical capillary fill device. Unilever, after failing to commercialise the technology itself, managed to licence it to a number of large players in the field of blood glucose testing for diabetics, bringing in approximately £17m in net benefit from the patents.
On the threshold question of whether the patents were of ‘outstanding benefit’, Arnold J held that the IPO applied the correct legal test and there were no grounds for interfering with its decision. He went on to hold, however, that the IPO had overestimated the benefit, as it had not taken into account the effect of tax, and that its assessment of what would have been a fair share was too generous. On the latter point, he held that a maximum of 3% – the figure awarded in the previous leading case of Kelly v GE Healthcare – was appropriate, rather than 5%, indicating that Kelly is likely to set an upper limit on awards in claims of this type.
Daniel Alexander QC and Jonathan Hill, instructed by Herbert Smith Freehills LLP, acted for Unilever.