For the first time ever, the English High Court has awarded compensation to employee inventors in recognition of their efforts in inventing a patented product.   Kelly and Chiu v. GE Healthcare Limited, (EWHC, Feb. 11, 2009) (Floyd, J.).

The claimants were employed by the defendant as research scientists and, as part of that work, they were co-inventors on two patent families covering a radiopharmaceutical heart imaging agent known as Myoview, which went on to generate sales in excess of £1.3 billion.   They claimed under a UK provision which provides that a court may award compensation to an employee inventor when a patent is of “outstanding benefit to the employer.”

The court reasoned that, in order to assess the level of benefit to the defendant, it was necessary to assume that the Myoview had been put on the market without patent protection and then to compare an estimate of how it would have performed with the actual benefit obtained by the defendant.   The court further reasoned that, in addition to patent protection, Myoview was also protected by regulatory data exclusivity and that this had to be taken into account when considering the scenario without patent protection. 

Nevertheless, the court found that the defendant had obtained an outstanding benefit from the patents in at least two ways:  protecting sales of the product against generic competition after the expiry of regulatory data exclusivity (and the consequent reduced profits); the patented blockbuster product was a major factor in securing various mergers which have transformed the defendant. 

The court assessed the benefit of the patents to the employer to be £50 million as an “absolute rock bottom figure.”   The court rejected the defendant’s argument that any award to the claimants should be based on their existing remuneration and instead awarded the two claimants £1 million and £500,000 respectively, as their percentage of the benefit obtained by the defendant.

Practice Note:   This case is significant as it is the first time that the UK courts have awarded compensation to employee inventors under this law, even though it has been in force since 1977.  Indeed, the relevant law was amended in 2005 so as to widen the scope of the relevant benefit obtained by the defendant to include the invention as well as the patent itself.  This case, however, was decided on the old law and will inevitably lead to increased interest in employee inventor compensation in the UK.