Employee innovators win payout

Two employee innovators have been awarded compensation by the UK High Court for a corporation's use of their invention. The beneficiaries of the significant 11 February ruling, Dr Duncan Kelly and Dr Ray Chiu, are former employees of Amersham International, taken over in 2004 by General Electric and renamed GE Healthcare. While at Amersham, they developed the breakthrough heart disease diagnostic, Myoview sales of which have exceeded £1.3 billion. Kelly and Chiu's award of £1.5 million stands as the first successful claim of its kind under the 1977 Patents Act.

Since the Act came into force, any inventor who has launched such a claim has faced the challenge of proving that their patent has brought 'outstanding benefit' to their employer. However, court interpretations of the Patents Act have typically drawn a distinction between the patent, as in monopoly right, and the actual invention. A 2005 amendment removed this distinction, but problems remained: the Act still offered no guidance on how courts should gauge the 'outstanding benefit' that flowed from an invention or the 'fair share' from its sales that an employee innovator was entitled to.

Marks & Clerk lead partner Gregor Grant, who represented Kelly and Chiu, praised the High Court's decision. 'This is a landmark ruling,' he said. 'Previous claims [of this kind] had all failed, and many had thought that a successful case was virtually impossible. Yet the obvious success of Myoview as a diagnostic tool for the GE Healthcare business convinced the judge that the patents were of outstanding benefit to the company, and warranted compensation to those inventors whose creative effort made this product possible.'

A disclosing agent for diseased tissue, Myoview (EP-337654; US-5045302) consists of a radioactive element in a suspension. When injected into a patient, the agent clings to healthy areas of the heart, but not to defective tissue. A special gamma camera is used to image the agent's traces, revealing where the patient's heart is healthy and where it is not. Amersham ploughed £2.4 million into Myoview's R&D and saw a return on investment in the first year of production. Sales then multiplied year-on-year.

'[This] decision ought to encourage employers to reconsider the arrangements they have with their employees,' added Gregor Grant, 'so that we see much greater financial remuneration for the inventive contribution of staff in the UK. Arrangements like these are surprisingly rare in industries driven by research and development yet a strong framework of recognition and financial reward is of benefit to everyone in fostering the culture of innovation and discovery we need in UK industry.'

Employee innovation cases outside the UK have made far greater impact, with some rulings taking the technology industry by surprise. In 2004, the Tokyo District Court awarded Dr Shuji Nakamura 20 billion yen (US$189 million) against his former employer, Nichia, over revenue from blue LEDs that he developed at the firm although this was lowered considerably the following year after further court action. In another 2004 case, Olympus v Tanaka, the Japanese Supreme Court ruled that employees who had invented technologies with unusually high revenues were entitled to greater remuneration than their contracts stated. In Germany, however, inventor compensation is decided through a structured formula with a sliding scale, making lawsuits rare.

The Myoview case was heard by Mr Justice Floyd.