UK court holds employee-inventor entitled to “fair share” compensation

Companies who patent inventions developed in the United Kingdom should take note of a new UK court decision that awarded two inventor-employees 1.5 million (approximately $2.175 million in US dollars) for their contribution to an employer’s heart imaging diagnostic tool product. 

In the UK, the Patents Act of 1977 allows a court to award an employee compensation for an invention that the employer patented, if the invention or the patent has an “outstanding benefit” to the employer.   Prior to 2005, employees were only eligible for compensation if the patent had an outstanding benefit to the employer, and employees rarely (if ever) succeeded in a claim for compensation.  However, a 2005 amendment to the Patents Act also made employees eligible for compensation if the invention (and not merely the patent) had an outstanding benefit to the employer.

In what UK news outlets are reporting as the first successful claim under the 2005 amendment, the Patents Court of London awarded two employees of GE Heathcare a total of 1.5 million GBP after determining that the invention had at least a  50 million benefit to the company.

The UK court applied the 2005 amendments to determine the amount of compensation.  In particular, Section 41 of the UK Patents Act states that an award of compensation may be a “fair share”  of the benefit that the employer received from the patent, the invention, or assignment of any property or right in the patent or invention.   The fair share may take into account factors such as the employee-inventor’s duties and compensation, the effort and skill that the employee devoted to the invention, the effort and skill which others devoted to the invention, and the contribution made by the employer.

Hat tips to IAM Magazine and IP World for first reporting about this UK court decision.

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