For the first time ever, the High Court of England and Wales has awarded compensation to employee inventors in recognition of their efforts in inventing a patented product.

In Kelly and Chiu v GE Healthcare Limited [2009] EWHC 181 (Pat), the Claimants were employed by the Defendant as research scientists. As part of that work, they were coinventors 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 that provides that a court may award compensation to an employee inventor where a patent is of “outstanding benefit to the employer”.

Mr Justice Floyd held that, in order to assess the level of benefit to the Defendant, it was necessary to assume that 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. He noted that, as well as patent protection, Myoview was also protected by regulatory data exclusivity and, accordingly, this had to be taken in to account in the scenario without patent protection.

Nevertheless, the judge found that the Defendant had obtained outstanding benefits from the patents in at least three ways. As well as protecting sales of the product against generic competition after the expiry of regulatory data exclusivity and the consequent reduced profits, the judge found that the fact that the Defendant had a patented blockbuster product was also a major factor in securing various mergers that have since transformed it.

Floyd J assessed the benefit of the patents to the employer to be £50 million as an “absolute rock bottom figure”. He 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.

This case is highly 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 United Kingdom.