Shanks v Unilever – again – but this time before Justice Arnold

Professor Shanks, who was employed by Unilever UK Central Resources Ltd from 5 May 1982 to 3 October 1986, has failed in his recent appeal against the Comptroller of Patents decision as to whether his patents were of ‘outstanding benefit’ to Unilever, and therefore failed in his claim for compensation pursuant to section 40 of the Patents Act 1977. It seems that in spite of the benefit to the company of the Shanks’ patents (being in the sum of £24m), in the larger scheme of things, and the size of Unilever generally, this contribution to Unilever’s bottom line, was something of a drop in the ocean.

Professor Shanks had assigned his rights in the inventions (related to an Electrochemical Capillary Fill Device, an ECFD) – which were inventive in the blood glucose testing field, and were assigned by confirmatory patents to the company by the inventor in 1985 and 1990. It was common ground that the inventions belonged to Unilever as employer pursuant to section 39 of the Patents Act 1977.

This latest Shanks v Unilever case is an important addition to the paucity of cases examining the operation of the Patents Act 1977 sections 39 to 41 in respect of employee contributions. Prior to this recent case, it is arguable that GE Healthcare v Chiu was the single authority on the operation of sections 39 to 41 of the Act.

(Unilever) too big to pay?

On preliminary view, Justice Arnold – appears to answer his own ironic question at the subject heading above his paragraph 67, (at paragraph 65, quoting from the Hearing Officer’s decision at paragraphs 222 and 223) and does appear to support the Hearing Officer’s basic conclusion at 222 which was:

‘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.’

The coup de grace was delivered by the Hearing Officer at paragraph 223:
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.”
Although Justice Arnold at paragraph 71 emphasises that a multi-factorial test is what has been upheld, on another reading, cynics might be left unpersuaded by this, and that Unilever only succeeded because their economic clout did indeed make them ‘too big to pay’. This aspect of the Judgment requires closer reading to be sure.
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Patents/2014/1647.html&query=shanks+and+v+and+unilever&method=boolean

The GE Healthcare decision and the reference by Justice Floyd to Universities paying researchers’ one third exploitation income

There is insufficient space here to explore the decision in GE Healthcare, but it serves as a useful hook to emphasise that prior to this Arnoldian decision, the lead authority for employee compensation pursuant to sections 39 to 41 of the Patents Act 1977 was arguably the GE Healthcare decision. The ‘comparables’ and discussion in that case perhaps rightly concentrated on what Dr Chiu and his colleagues would have received were they University researchers who invented, and were employee inventors constrained by section 39. The reader can revisit Justice Floyd’s judgment using the link below.
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Patents/2009/181.html&query=ge+and+healthcare&method=boolean

Unjust enrichment

There is now in most ‘remuneration’ cases, always ‘an issue as to unjust enrichment’, in this case neatly closed off by Justice Arnold, as too lofty a cause for inclusion in the statutory compensation provided in the 1977 Act (see paragraphs 32 to 43 and his analysis of Sempra Metals [2007] UKHL 34, that although that case had generally recognised a right to recovery of sums made by mistake of law – ground-breaking to run alongside recovery of sums for causative mistakes of fact, and the right to claim compound interest, unjust enrichment in Sempra was only generally nodded to, but as a high level principle that the time value of money (or a right to interest) was generally recognised. But not here, alas.

Please find attached a link to a recent article about the current bid by Pfizer to take over the UK based pharmaceutical AstraZeneca; a company with Research based links with several UK Universities. Politicians of all political hue in the spectrum are currently embarking on a very keen debate as to whether there is a ‘national interest’ in science, research and manufacturing. The writer considers that in terms of the work engaged in by Universities, there is such a national interest worth preserving.

Should a takeover be about shareholder value (the value of any sale to the shareholders), and nothing but shareholder value? The current offer stands at £50 per share or thereabouts (currently totalling £63bn). A same or similar debate and process would receive a different answer in Europe – as the current takeover bid for Alstom by General Electric (and latterly Siemens) shows – the French Government supporting a bid by the subsequent offeror. UK politicians are, perhaps reluctantly, being drawn into taking sides about a process that is ordinarily resolved by the markets and the Takeover Code, and generally free of direct political involvement of Government. Perhaps the takeover process of AstraZeneca will change this and make things more ‘European’ in approach?

The current debate is evidently not solely confined to ‘shareholder value’ only, and the attached Newspaper article is as good a place as any, to start an inquiry about the issues, including the request by politicians of both sides for a commitment by any purchaser, hostile or otherwise (in ‘takeover’terms), to commit to continued investment in research and development involving Universities.

http://www.theguardian.com/business/2014/apr/28/pfizer-astrazeneca-takeover-bad-news-uk-research

Please find attached the link to a short lecture given by Lord Neuberger on Intellectual property themes related to English and European law.

Although the article would require a read of the cases referred to, some of the interesting comments include:

1. Paragraphs 4 to 10 is a very neat summary of basic elements of the UK Constitution and its relationship to Europe

2. Paragraphs 11 to 13 a toe in the water of the law of price-fixing and anti-competitive behaviour

3. Paragraphs 14 to 28 (Patents and Europe) sets out the policy aims and requirement of the UK Courts to absorb, follow and be enriched by the judicial reasoning of both the Enlarged Board of Appeal and the decisions of the Court of Justice of the European Union (the CJEU). Grounds for optimism in that regard are set out in paragraph 22 and reference to the case of Schutz v Werit [2013] 2 All ER 177, (the subject of a previous blog) in which the UK Supreme Court was greatly assisted by relatively parallel litigation involving the same litigating parties in the German Appeal Court (the Bundesgerichtshof) – Lord Neuberger cleverly concluding that this is a process of judicial decision-making, ‘a common law approach to life’ rather than following European civilian approaches with ‘masses of provisions’. An interesting way of looking at the jurisprudence.

4. Paragraphs 29 to 40: Trade Marks and Europe: I have never understood the judicial comment about the irrelevance of the Trade Marks Act 1994 as opposed to going straight to the Directive (Directive 89/104, now Regulation 2009/207) – but in light of the unequivocal explanation in paragraph 29 will now take the tip and do likewise. This section includes some useful explanation of the function of trade marks and the problems of interpreting decisions returning on reference from the CJEU, where it was unclear following reference (in cases such as L’Oreal v Bellure [2010] Bus LR 303, as to precisely ‘who has won?’ (see paragraphs 30 and 31).

5. Paragraphs 38 and 39: an entertaining and ‘scientific’ if not too serious discussion of the merits and demerits of single judgments from the CJEU (which is compulsory) and a common law system where multiple judgments (and the possibility of dissenting judgment) is possible.

The attached article seems to be as much intended to provoke discussion (in my view) about three huge subjects in intellectual property, and merits a close read, including some of the cases such as Norris v United States of America [2008] 1 AC 920 – time permitting.

the Link to the lecture:

Click to access speech-140401.pdf

Further to a recent enquiry from a University colleague about the forthcoming appeal in Barkas v North Yorkshire County Council, (registration of a town or village green under the Commons Act 2006) the Appeal (in the Supreme Court today) contains (in the view of the writer) a short point:

What is the legal status of use made by the public (or local inhabitants) of a recreation ground provided pursuant to an express statutory power (a raft of public statutes dating back to the Public Health Act 1875 and earlier – the last station on the branch line being the Commons Act 2006), and whether the use could be use ‘as of right’?

Application had been made by either North Yorkshire County Council or Scarborough Council to build houses and other local amenities on the playing field (at Helredale, Whitby). What are the conferred rights on the local inhabitants to ‘indulge in lawful sport and pastimes’? When does a statutory right or licence to use a ‘recreation ground’ arise? Those in the neighbourhood and inhabitants, having enforceable rights to use a recreation or sports ground, the question of when and how that right (by licence, trust or otherwise) arises, is core to this appeal.

This appeal runs today and tomorrow, and should be of great interest to those promoting Sport and Exercise in Education and to the public, and those interested in Public and administrative law.

First Instance decision:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Admin/2011/3653.html&query=barkas&method=boolean

Court of Appeal decision:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2012/1373.html&query=barkas&method=boolean

The live hearing in the Supreme Court today:

http://news.sky.com/info/supreme-court

Further to a recent inquiry as to whether any action could be taken against persons making groundless threats for infringement of a patent, I attach a recent decision of Judge Hacon QC, the case of Brundle v Perry [2014] CC 13 P 00980 (judgment handed down on 6 March 2014), in which a Claimant wholesaler of metal products and fences, brought proceedings against the Defendant, Mr Perry, as a company aggrieved by the threats of proceedings for infringement. The case is a good explanation of the procedure and issues in relation to the making of groundless threats.

It is possible for either party in such proceedings, to file a request at the Intellectual Property Office (the IPO) pursuant to section 74A of the Patents Act 1977, for an opinion, (in this case as to whether the Claimant’s suppliers of fences) had infringed the Defendant’s patent.

The test as to what constitutes threat of proceedings for patent infringement is set out in paragraph 22, 23 and following, of Judge Hacon’s judgment. In this case the threat in the Defendant’s letter was found to be ‘excplicit’and plainly contained a threat by the Defendant within the meaning of section 70 of the Act.

The Judgment is attached below:

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/IPEC/2014/475.html&query=brundle&method=boolean

Please find attached the Government’s response to the Witty Review on Universities and Growth. The recommendations include making as much information available to potential investors of Research information, encouragement of links with small to medium sized enterprises, funding from European Structural and Investment Funds to Local Enterprise Partnerships, and encouragement of the LEPs to have a ‘university presence’ on the University’s Board. The Universities will be encouraged by Government Ministers to take on ‘co-chairmanship’ of the LEP in suitable situations. The Government’s response to the 10 recommendations are set out at the end of the document.

bis-14-540-government-response-witty-review-british-invention-global-impact (2)

This case was the subject of a previous blog, the Judgment of the Supreme Court handed down this morning (link and useful Summary attached) and the brief facts of which are set out again for ease of reference.

The facts in the appeal of Mr Stott

The Appellant (Mr Stott) is disabled and a permanent wheelchair user. When he travels by air he relies on his wife to assist with his personal needs because he cannot move around the aircraft cabin. He and his wife made a booking with the Respondent to fly from East Midlands Airport to Zante departing on 22 September and returning on 29 September. After making the booking the Appellant spoke to the Respondent by telephone to say that he had booked and paid to sit next to his wife on both flights. On 19 September he telephoned again and was assured that he and his wife would be seated together.

At the check-in for the return flight they were informed that they would not be sitting together. When they protested, a supervisor told them that the problem would be solved at the departure gate, but at the gate they were told that other passengers had already boarded and the seat allocated could not be changed. The Appellant was then seated in an aisle seat in front of his wife. It was very difficult for her to assist with his catheterisation and other personal needs during the flight. No assistance was forthcoming from the cabin crew. At trial, the judge granted a declaration that the Respondent had breached the Appellant’s rights under the EC Disability Regulation, but dismissed the claim for damages by reference to the limits imposed by the Montreal Convention, to which the European Union recognised and was a party. The Court of Appeal dismissed the Appellant’s appeal in relation to damages; see below the final paragraph of Lord Justice Maurice Kay below.

The Montreal Convention of 1999 (‘MC’) provides a uniform code in relation to the carrier’s liability under the contract of carriage by air. The provisions have been interpreted and found to be the exclusive code in regard to this specific liability: passengers being effective barred from seeking reliance on applicable law in their member states. Article 29 states that

‘In the carriage of passengers, baggage and cargo, any action for damages, however founded, whether under this Convention or in contract or in tort or otherwise, can only be brought subject to the conditions and such limits of liability as are set out in this Convention […]’

Without delving into the case law and the exclusive regime, it appears to be the general position that injury to feelings is not included within the exclusive regime of the Convention, albeit such categories of loss and injury are recognised and compensated under EC law.

EC provisions that do recognise the heads of loss in this appeal

The breaches under EC law brought by the Claimants include the Disability Regulation EC 1107/2006, incorporated into UK law by the Civil Aviation (Access to Air Travel for Disabled Persons and Persons with Reduced Mobility) Regulations 2007 (SI 2007/1895), notably as regards appropriate seating arrangements. In their defence, British Airways and Thomas Cook seek to rely upon the exclusivity of the Montreal Convention as a comprehensive code, as incorporated into EU law by Regulation (EC) 889/2002.

In the hearing before the Supreme Court, constituted of Baroness Hale and Lords Neuberger, Reed, Hughes and Toulson, they considered whether the Montreal Convention can operate to exclude a claim for damages arising from a breach of EU law. This raises several important issues:

– to what extent can the well-established line of exclusivity cases (such as Sidhu) be relied upon in the case of ‘novel’ heads of claim?

– on what basis, if any, can claims under the EU’s Disability Regulation be distinguished from claims under the Passenger Rights Regulation, which have been held to fall outside the scope of the Montreal Convention?

– should the exclusivity of the Montreal Convention be determined by reference to a ‘timeline’ of events (as the Court of Appeal’s judgment seems to suggest), or by the type of damage sustained by passengers (the approach favoured by the CJEU)?

It does not appear that the case will go on a reference to the European Court of Justice in light of the core issue of effectiveness of EC law and on the facts, the fact that persons who are intended to benefit from EU laws are left without an effective remedy. Lady Hale’s shorter judgment looks like a good start for anyone wishing to explore the great lacuna that remains in existence in terms of disabled persons rights – which lacuna is in existence apparently right above our heads.

Click to access UKSC_2012_0109_PressSummary.pdf

Click to access UKSC_2012_0109_Judgment.pdf