Compensation for employee inventors in the Patents Court
Written by Jane Coyle on 09 May 2009« Return to Reading Room
The Patents Court recently handed down judgment in Kelly v GE Healthcare (1), the first ever successful claim by employee inventors to claim compensation for their contribution to making patentable inventions. The case applied a provision of the Patents Act 1977 which entitles employees named as inventors on patents to seek compensation if the patent has been of "outstanding benefit" to the employer. Where the benefit to the employer is found to be outstanding, the employee inventor is then entitled to a fair share. of that benefit.
The present case involved two former employees of Amersham plc (now GE Healthcare Limited) who were named as inventors on two patents protecting the heart imaging product, Myoview. The Court found that the "outstanding benefit" hurdle had been overcome and assessed the monetary value of the patents to GE Healthcare at £50M. The inventors were awarded a 3% share of that benefit, to be split between them, £1 million to one inventor and £0.5 million to the other.
The court felt that it was important not to underrate the contribution of the employer in bringing the final product to the market and therefore set the outstanding benefit for any potential claimant at a high level. While the compensation obtained by the employee inventors appears significant, it is much less than was originally claimed. This coupled with the specific facts of the case and the high "outstanding benefit" hurdle suggests the case may not be easily applied to modern research and development where numerous patents often protect one product.
This case was decided under the law as it was before the Patents Act 2004 came into force. Following implementation of the 2004 Act, employee inventors are now entitled to a fair share when the invention has been of outstanding benefit to the employer. This change was aimed at making it easier for inventors to make claims, but the consequences of this amendment remain unclear. The limited success of these inventors is in reality likely to be few and far between.
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