'Who is that person?' was the question before the court in Shanks v Unilever plc and others  EWHC 3164 (Ch), a decision of Mr Justice Mann in the Patents Court, England and Wales, yesterday. This dispute involved compensation for employee inventors whose patents are particularly beneficial to their employers, a topic which is again under scrutiny (earlier this year the quantum of compensation was the subject of Kelly and Chiu v GE Healthcare, noted by the IPKat here). Yesterday's decision however hinged on the interpretation of the Patents Act 1977, s.41 which provides, in relevant part:
"An award of compensation to an employee ... in relation to a patent or an invention shall be such as will secure for the employee a fair share (having regard to all the circumstances) of the benefit which the employer has derived, or may reasonably be expected to derive, from the patent or from the assignment, assignation or grant to a person connected with the employer of the property or any right in the invention or the property in, or any right in or under, an application for that patent ...
(2) ... the amount of any benefit derived or expected to be derived by an employer from the assignment, assignation or grant of–(a) the property in, or any right in or under, a patent for the invention or an application for such a patent; or
(b) the property or any right in the invention; to a person connected with him
shall be taken to be the amount which could reasonably be expected to be so derived by the employer if that person had not been connected with him".
"If a hypothetical person had been intended, the legislator could have said "a person" instead of "that person". As a matter of English, the use of the word "that" would seem to clearly indicate that the specific person previously identified is the one referred to".He then refused the application either on the basis of treating the application as an application for an amendment which ought not to be allowed because it was unsustainable, or by the striking out of a claim that could not be maintained in law. The appellant appealed.
Mann J allowed the appeal. In his view Parliament, in using the formulation in question, had intended to refer to a notional non-connected counterparty operating in the appropriate market at the appropriate time. That understanding was not inconsistent with the assumption, in the case of other actual transactions leading to benefits, that an employer was likely to want to exploit the patent properly and not give away its benefits, even though the words used did not impose a positive obligation on the employer to do so. He added that the words 'that person' could not sensibly be taken as being the actual purchaser: to do so would risk introducing absurdity into the hypothesis, leading to absurdity in the result.