More compensation for employees

Like buses? After years – about 30 years – when employee compensation cases were mostly kept out of the UK courts, Professor Shank’s case follows closely on the heels of the GE Healthcare case, one which turned many people’s heads. In this case the subsidiary Professor Shank worked for assigned the rights to its parent for a nominal sum; the parent earned about £23 million in royalties.

Under UK patent legislation, an employee who makes a patented invention which belongs to his employer (because he is an employee) may be entitled to compensation. The invention and/or patent must be of outstanding benefit to his employer having regard to, among other things, the size and nature of the employer's undertaking.

However, an employer cannot get out of this by just transferring the patent or invention to an associated company. This case shows that any benefit gained by the associated company may be treated as the benefit gained by the employer – ie the amount which could reasonably be expected to be so derived by the employer if the assignee had not been so connected. The £23 million was deemed to have benefitted the subsidiary.

Unilever plc and others v Shanks (2010)