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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Shanks v Unilever Plc & Ors  EWCA Civ 787 (17 June 2015)
Cite as:  EWCA Civ 787
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ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION (PATENTS COURT)
(MR JUSTICE ARNOLD)
London, WC2A 2LL
B e f o r e :
|IAN ALEXANDER SHANKS||Appellant/Claimant|
|UNILEVER PLC & ORS||Respondents/Defendants|
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
The Respondents did not attend and were not represented
Crown Copyright ©
Lord Justice Floyd: 1. This is a renewed application for permission to appeal from the judgment of Arnold J dated 23 May 2014 and his orders of 23 May and 15 July 2014 which he made in consequence of his judgment. By the 23 May order he dismissed an appeal in an employee inventor's compensation case brought by the applicant, Professor Ian Shanks, from a decision of Mr Julian Elbro, a hearing officer acting on behalf of the Comptroller of Patents dated 21 June 2013. This is therefore a second appeal. The provisions of CPR 52.13(2) do not apply to it directly. Nevertheless it is material to bear in mind that the claim has already been considered twice by specialist tribunals, namely the IPO and the Patents Court.
"222. Considering the totality of the evidence, I was left with a clear impression. The benefit provided by the Shanks patents was a substantial and significant one in money terms – the sort of sum Unilever would, on the evidence, worry about (cf. Project Hyacinth). Furthermore, in comparison to the benefit from other patents to Unilever, from the evidence before me it does, in Mr Emmanuel's words 'stand out'. But Unilever makes profits at an order of magnitude greater on other inventions – albeit primarily by manufacture and at a much lower rate of return than was provided by the Shanks patents. Further, this is not such a case as Kelly, where Floyd J held that without the patents in that case, Amersham would have faced a crisis. There was no suggestion from either party that the Shanks patents were crucial to Unilever's success.
223. In my view, taking account of the size and nature of Unilever's business, the benefit provided by the Shanks patents falls short of being outstanding."
"Unilever were (and according to Mr Alexander still are) contending that although £23m royalties might be a lot for some companies, by Unilever standards it is not a lot and so the patent was not of outstanding benefit to Unilever. He pointed to the words in s.40(1) 'having regard to the size and nature of the employer's undertaking', suggesting they meant that inventor/employees of big companies had to show a larger benefit to their employer than inventor/employees of smaller companies. I am far from convinced that Parliament meant that inventor/employees of large companies should get less or no compensation for a particular invention compared with what they would get if they had been employed by a small company. It may indeed be the other way round in that a large payment may be too much for a small company to able to afford and that was what Parliament had in mind..."
"207. I agree with Mr Green to the extent that I think it is too simplistic to simply look at overall turnover, or profits, of an employer's undertaking and then simply state that a given benefit is a small percentage of that. At the same time, it is necessary, as the statute says, to take account of the size and nature of the employer's undertaking. Different undertakings will have different leverage to be able to make more or less benefit out of their activities. I see this as being illustrated by Mr Emmanuel's comment in evidence that £50,000 would be an excellent return for a small company to get from licensing its patents. Clearly, that would not be an excellent return for Unilever, which by its nature, for example by being able to contemplate greater expenditure on litigation, is able to get higher returns in negotiations than a smaller entity would, as Mr Emmanuel conceded. So it seems totally logical to me that a given monetary benefit might be outstanding for a small entity, but not for a larger one.
208. Ultimately, I do not think this reduces to a simpler test than that laid down in the statute – it is a matter of looking at the benefit in the overall context and determining whether in view of all the facts the benefit to the employer was outstanding. Sometimes that might be because of the benefit being in fact a large portion of the employer's profits or turnover. Other times it may be possible to see the outstanding nature from the effect it had – for example in Kelly, where Floyd J is able to determine the benefit is outstanding before determining its precise value in money terms."
"In my judgment it is clear both from this passage and from his subsequent reasoning leading to his conclusion in  that the hearing officer did not make the error he is accused of. He did not decide that Unilever was too big to pay or that no benefit could be outstanding however large because of the size and nature of Unilever's business. Nor did he decide that £24.5 million was not an outstanding benefit simply because it was an arithmetically small sum compared to Unilever's profits over the same period. On the contrary, the hearing officer undertook a multi-factorial assessment which including having regard to the size and nature of the relevant undertaking, as the statute required him to do."