UK: Shanks V Unilever, Inventor Of Diabetes Testing System Finally Rewarded For His "Outstanding" Contribution

Last Updated: 6 November 2019
Article by Gregor Grant and Will Jensen

The Supreme Court yesterday handed down its judgment in the long-running employee compensation case of Shanks v Unilever Plc. The claim was brought under s.40 of the Patents Act 1977 by an inventor seeking a share of the benefit gained by his employer, a division of Unilever, on the basis that the patents resulting from his invention provided it with an “outstanding benefit”.

Professor Shanks had invented a system in 1982 for measuring the glucose concentration in blood, serum or urine using capillary action.

The patents were not exploited by Unilever itself. Instead, it granted licences to various companies at a total consideration of just over £20 million. It later sold the patent portfolio for a sum, so the total benefit from the patents was around £24 million.

Professor Shanks applied for compensation at the UKIPO in 2006. The UKIPO found that the benefit provided by the patents fell short of being outstanding. Shanks appealed to the High Court and then the Court of Appeal but was unsuccessful on both occasions.

The Supreme Court gave permission to appeal – the first time an employee compensation case had got this far – and found that Professor Shanks’ patents were of outstanding benefit to Unilever, and he was entitled to a fair share of that benefit. The court decided to assess that fair share there and then, without referring the case back down for a rehearing, and arrived at a figure of £2 million. The judgment was delivered by Lord Kitchin, a former Patents Court Judge now elevated to the Supreme Court.

Section 40 does not provide a precise formula to use in assessing whether an invention is of outstanding benefit, nor does it give any useful clues about the mechanism to use in assessing fair compensation. These questions have been left to the courts, and the few cases that have gone to trial do not provide much assistance in extracting general principles.

So far as “outstanding” is concerned, the Supreme Court emphasised that it is an ordinary English word meaning exceptional or “such as to stand out”. Many potential claims would be against larger corporations, which are frequently structured in ways that make it difficult to quantify the “outstanding benefit”. The Patents Act seeks to put this in context by requiring the assessment to have regard to “the size and nature of the employer’s undertaking”. Doing this is difficult where, as in the Shanks case, the invention was made within a small research subdivision (CRL) of a large multinational, Unilever, and it was the multinational that took the benefit, not the research company.

The relevant benefit was also necessarily limited to that which accrued to the employer. After Unilever disposed of the patents, other companies used the invention in the development of biosensors, including those for detecting blood glucose levels in diabetes. Those products have been hugely successful, but the revenue from them was not part of the enquiry.

In comparison to Unilever’s income and profits, the benefit from this patent, even though a tidy sum of some £24 million, was insignificant. The inventor’s counsel complained that if one had to consider the revenue of the parent company alone, then the inventor would get nothing because the parent was “too big to pay”. The Supreme Court approached this issue in a flexible way. It said :

“….Many different aspects of the size and nature of the employer’s business may be relevant to the enquiry. For example, the benefit may be more than would normally have been expected to arise from the duties for which the employee was paid; it may have been arrived at without any risk to the business; it may represent an extraordinarily high rate of return; or it may have been the opportunity to develop a new line of business or to engage in unforeseen licensing opportunities. In the circumstances of this case and for the reasons I have given, a highly material consideration must be the extent of the benefit of the Shanks patents to the Unilever group and how that compares with the benefits the group derived from other patents resulting from the work carried out at CRL.”

The Court was unhappy about the notion that a patent is not of outstanding benefit simply because it has had no significant impact on the company’s overall profitability. It said of Unilever:

 “….the rewards it enjoyed were substantial and significant, were generated at no significant risk, reflected a very high rate of return, and stood out in comparison with the benefit Unilever derived from other patents. What was more, they could not be attributed to the deployment or application of Unilever’s wider business assets or infrastructure.”

In the hearings below the “fair share” (if there had been an exceptional benefit) was assessed at 5%. In the Court of Appeal this figure was reduced to 3% but the Supreme Court preferred the original figure, with an adjustment to take account of the time that had passed.

The Supreme Court's decision in this case improves the prospects of employee inventors being able to obtain compensation for the outstanding benefits generated by their inventions, particularly in circumstances where they are employed by large corporations.

The clarity provided by the Court's judgment also means that future claims by employee inventors should be resolved much more quickly and at lesser expense than that suffered by Professor Shanks, who has indicated that after fighting the case for thirteen years a significant proportion of the compensation he has eventually been awarded will go towards his legal costs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Phillips & Leigh
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Phillips & Leigh
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions