Ian Shanks v (1) Unilever Plc (2) Unilever NV (3) Unilever UK Central Resources Ltd O/259/13

Case Summary  |  Judgment  |   7 February 2014

The Intellectual Property Office has made public its substantive decision dismissing Professor Shanks’ long-running claim that patents resulting from an invention he made for his former employer Unilever had proved to be of “outstanding benefit” to Unilever and that he was therefore entitled to inventor’s compensation under s.40 Patents Act 1977. Daniel Alexander QC and Jonathan Hill, instructed by Herbert Smith Freehills, acted for Unilever.

Professor Shanks, while employed by Unilever in the mid 1980s, was an inventor of an electrochemical test device which used capillary action to draw a set volume of analyte into the device. Unilever patented the invention in a number of countries. Although Unilever did not manage to commercialise the invention itself, the device turned out to have significant commercial application for testing blood glucose levels in diabetics and Unilever concluded substantial licensing deals under the patents with major businesses in that field before selling the patents in 2001.

The Hearing Officer concluded that the benefit Unilever had derived from the patents was £24 million in money terms. While that was a significant sum, he found that when considered in light of Unilever’s commercial activities taken as a whole, including the size and nature of its business, it was not “outstanding”.

The Hearing Officer went on to express his views on what would have constituted a fair share of the benefit had he held it to be “outstanding”, concluding that a fair share would have been 5%.