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It is apparent from the summary in the immediately foregoing section that a central and essential part of the hearing officers reasoning was that Unilever generated a vast income and commensurate profits from the manufacture and sale of products such as ice cream, spreads and deodorants which had the benefit of patent ... |
The hearing officer clearly thought that this was highly relevant because he said in terms that it gave an indication of the sorts of benefits generated by highly successful products and so the sorts of sums which could be considered of great benefit to Unilever. Ratio |
This is also apparent from his conclusion, for in referring to profits an order of magnitude greater on other inventions, the hearing officer was referring to the overall profits made by Unilever from the manufacture and sale of these products. Ratio |
There are in my view a number of problems with these aspects of the hearing officers analysis. Ratio |
First, he adopted the wrong starting point. Ratio |
Professor Shanks was employed by CRL, and CRL operated a research facility for the Unilever group. Ratio |
CRLs undertaking for the purposes of section 40 of the 1977 Act was the business of generating inventions and providing those inventions and the patents which protected them to Unilever for use in connection with its business. Ratio |
It was to the size and nature of this undertaking, among other things, that the hearing officer was required by section 40 to have regard in assessing the nature of the benefit to CRL and Unilever of any such patent. Ratio |
Instead the hearing officer took CRLs undertaking to be the whole of the Unilever group and this pervaded the whole of his evaluation. Ratio |
In my judgement that was wrong in principle. Ratio |
Secondly and irrespective of his starting point and the extent of CRLs undertaking, the hearing officers particular focus upon the overall turnover and profits generated by Unilever, as illustrated by the size of its business in making and selling ice cream, spreads and deodorants, was in my view misdirected. Ratio |
The success of these products could no doubt be attributed to a range of factors including quality, branding and pricing. Ratio |
It is also true that they were protected at least to some degree by patent families which related to the processes by which they were made or aspects of the technology which they contained. Ratio |
But, as the hearing officer himself acknowledged, only a proportion of the sale price of any product could be attributed to any patent protection, and Unilevers attempts to assess the value of these other patents failed. Ratio |
Indeed, the hearing officer recognised that, in terms of the benefit which Unilevers patents had generated, the Shanks patents stood out. Ratio |
Thirdly, it cannot be said that the size and success of Unilevers business as a whole played any material part in securing the benefit it has enjoyed from the Shanks patents. Ratio |
That benefit was generated by licensing or selling its patent rights, not by harnessing its manufacturing capacity, its sales and distribution facilities or its goodwill. Ratio |
The licence fees, which constituted the main part of the benefit, were paid by licensees who, with one exception, approached Unilever. Ratio |
It is true that Unilevers licensing personnel negotiated those licences with skill and serious effort but its costs of doing so were modest and taken into account, and the hearing officer made no finding to the effect that the royalty rates were boosted by the application of Unilevers financial muscle or the threat of ... |
These were matters he failed properly to take into account. Ratio |
Fourthly, the hearing officer appeared rightly to disavow an approach which involved assessing the extent and nature of the benefit derived from a patent simply by comparing it to the patent owners overall turnover or profits. Ratio |
But he also indicated these matters might be relevant if, for example, an undertakings size enabled it to exert greater leverage. Ratio |
Yet, having apparently rejected such an approach, he then adopted it. Ratio |
There was no justification here for simply weighing the sums Unilever generated from the Shanks patents against the size of its turnover and overall profitability in products such as Viennetta ice cream, spreads and deodorants and yet this formed an important part of his assessment. Ratio |
I am conscious that the decision of the hearing officer on this issue necessarily involved an evaluation and it is of course well established that an appellate court should be very cautious in differing from such an evaluation unless it involves an error of principle: see, for example, Biogen Inc v Medeva plc [1997] RP... |
That is particularly so where the decision is that of a specialist tribunal. Ratio |
What constitutes an error of principle was considered most recently by Lord Hodge in Actavis Group PTC EHF v ICOS Corpn [2019] UKSC 15; [2019] Bus LR 1318, paras 80-81. Ratio |
As he there explained, such an error is not confined to an error as to the law but extends to certain types of error in the application of a legal standard to the facts in an evaluation of those facts. Ratio |
A legal error might involve asking the wrong question, failing to take into account relevant matters or taking into account irrelevant matters. Ratio |
In the absence of such an error, the appeal court would be justified in differing from a tribunals assessment if it were to reach the view that the tribunals conclusion was outside the bounds within which reasonable disagreement was possible. Ratio |
I am satisfied that, for the reasons given in paras 79-82 above, the hearing officer was wrong in principle and that Arnold J on appeal and the Court of Appeal on further appeal wrongly failed so to hold. Ratio |
Further, having regard to the fundamental nature of these errors, the decision of the hearing officer must be set aside. Ratio |
I have considered whether it is necessary to remit this appeal for a rehearing but I have concluded it is not, for it seems to me to be clear how the hearing officer would or ought to have decided this issue had he directed himself correctly. Ratio |
I would add that this is a conclusion at which I am relieved to arrive in the light of the time these proceedings have taken and the costs that must have been incurred. Ratio |
In summary and as I have foreshadowed, Professor Shanks made his invention using his own initiative for his brief was to work in the area of biosensors for process control and process engineering and he was made to understand that he should not stray too far from it. Ratio |
He built the first prototype of his invention in October 1982, some five months after he had joined CRL. Ratio |
This would have been a new product area for Unilever but it was a development which the group did not, in the hearing officers terminology, get behind and push. Ratio |
It was regarded as far from a key technology and it was one into which Unilever made only a modest investment. Ratio |
It is true that Unilever patented and maintained a patent portfolio which protected it and in due course expended significant effort and skill in the licensing negotiations. Ratio |
But 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. Ratio |
What was more, they could not be attributed to the deployment or application of Unilevers wider business assets or infrastructure; nor were they found to be the consequence of any leverage Unilever could exert because of its size. Ratio |
In short, the benefit Unilever enjoyed from the Shanks patents was outstanding within the meaning of section 40 of the 1977 Act. Ratio |
Fair share Ratio |
Section 41 of the 1977 Act says that an award of compensation to an employee under section 40(1) or (2) 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 be reasonably expected to derive from the patent. STA |
Section 41(4) then specifies that various matters must be taken into account. STA |
In assessing what would have been a fair share of the benefit Unilever had derived from the Shanks patents, the hearing officer duly addressed each of the matters set out in section 41(4). Ratio |
In so doing he had regard to the nature of Professor Shanks duties and that he was employed to invent; Professor Shanks remuneration, which was commensurate with his level of responsibility; the effort and skill Professor Shanks expended in making the invention; the contribution made by Unilever to the making, developi... |
The hearing officer also had regard to the evidence before him about the percentage award rates in company and university employee compensation schemes. Ratio |
Having regard to all of these matters, the results of a literature review and the parties submissions, he held that 5% would have been the appropriate fair share of the benefit, had it been outstanding. Ratio |
On appeal, Arnold J came to the conclusion that an important factor in Unilevers ability to extract licence fees was the fact that it could afford to bring proceedings for patent infringement and pursue them to a conclusion, and that the hearing officer had wrongly failed to take this into account. Ratio |
In these circumstances he thought that it would not be right to award to Professor Shanks a percentage of the benefit which was higher than the 3% awarded to the inventors in the Kelly case, and that this would have been the fair share of the benefit to award to Professor Shanks, had that benefit been outstanding. Rati... |
On further appeal, the Court of Appeal did not need to address this issue and did not do so. Ratio |
Professor Shanks now contends that Arnold J had no proper basis for reducing the share of the benefit to 3% and that even 5% is too low, for it fails properly to take into account that he conceived the invention outside and in addition to his assigned role; that the licence fees generated by the patent represented an e... |
He argues that between 10% and 20% of the benefit would represent a fair share. ARG |
In my judgement Arnold J was wrong to find that 3% represented a fair share of the benefit Unilever enjoyed from the Shanks patents. Ratio |
The hearing officer had well in mind the size of Unilevers business and the nature of the licensing negotiations yet he did not make a finding that it secured the licence rates it did because it could afford to bring and pursue infringement proceedings against the prospective licensees. Ratio |
The absence of such a finding is not at all surprising. Ratio |
Unilever had no manufacturing business it needed to protect and, with one exception, the discussions were initiated by the prospective licensees. Ratio |
In substance, these were negotiations between willing licensors and willing licensees. Ratio |
Arnold J therefore had no basis for reducing the percentage from 5% to 3%. Ratio |
I am not persuaded by Professor Shanks other arguments, however. Ratio |
The hearing officer found that the invention was made in the course of his contractual duties, although its subject matter was not the main focus of his work. Ratio |
Moreover, as the hearing officer also found, Professor Shanks was employed to invent and, in making the invention, did what he was employed to do. Ratio |
I accept that the patent generated a new stream of income for Unilever, but it did not do so without its input. Ratio |
To the contrary, it was brought to fruition by Unilevers negotiation of the licences, and that is something in which Professor Shanks played no part. Ratio |
Finally, it is true that Unilever made only a relatively small effort to commercialise the invention and exploited the Shanks patents at no real risk to itself, but these were matters which the hearing officer took into account in arriving at his figure of 5%. Ratio |
I am satisfied that the hearing officer made no error in the way he approached this issue and it would not be appropriate to interfere with the conclusion to which he came. Ratio |
It only remains to apply to the 5% share of the 24m an uplift to reflect the impact of time on the value of money. Ratio |
Professor Shanks invites us to take 1999 as the median year in which Unilever received the benefit and then to take into account the effect of inflation using the Bank of England calculator. Ratio |
I did not detect any substantive objection from Unilever to this methodology and I think it is a reasonable and fair way to proceed. Ratio |
This produces a figure of about 2m at an average inflation rate of 2.8%. Ratio |
In my judgement the fair share of that benefit to which Professor Shanks is entitled is therefore 2m. Ratio |
Conclusion RPC |
For these reasons I would allow Professor Shanks appeal. RPC |
In my judgement the Shanks patents were of outstanding benefit to Unilever and CRL and Professor Shanks is entitled to a fair share of that benefit amounting to 2m. RPC |
Widowed parents allowance is a contributory social security benefit payable to men and women who are widowed with dependent children. FAC |
It is non-means- tested, so it is particularly valuable to parents who are in work, although it is taxable. FAC |
The widowed parents entitlement depends upon the contribution record of the deceased partner. FAC |
Currently, the widowed parent can only claim the allowance if he or she was married to, or the civil partner of, the deceased. FAC |
The issue in this case is whether this requirement unjustifiably discriminates against the survivor and/or the children on the basis of their marital or birth status, contrary to article 14 of the European Convention on Human Rights (ECHR) when read with either article 8 of the Convention or Article 1 of the First Prot... |
The facts FAC |
Ms McLaughlin and her partner, John Adams, lived together (apart from two short periods of separation) for 23 years until he died on 28 January 2014. FAC |
They did not marry because Mr Adams had promised his first wife that he would never remarry. FAC |
They had four children, aged 19 years, 17 years, 13 years and 11 years when their father died. FAC |
He had made sufficient National Insurance contributions for Ms McLaughlin to be able to claim a bereavement payment and widowed parents allowance had she been married to him. FAC |
Ms McLaughlins claims for both bereavement payment and widowed parents allowance were refused by the Northern Ireland Department for Communities. FAC |
She applied for judicial review of that decision on the ground that the relevant legislation was incompatible with the ECHR. FAC |
That claim succeeded in part before Treacy J in the High Court: In the matter of an application by Siobhan McLaughlin for Judicial Review: [2016] NIQB 11. FAC |
He made a declaration of incompatibility under section 4(2) of the Human Rights Act 1998, that section 39A(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 is incompatible with article 8 of the ECHR in conjunction with article 14 insofar as it restricts eligibility for Widowed Parents Al... |
He rejected the claim in relation to the bereavement payment. FAC |
The Court of Appeal unanimously held that the legislation was not incompatible with article 14, read either with article 8 or with A1P1: [2016] NICA 53. RLC |
Ms McLaughlin now appeals to this Court. RLC |
The Evolution of Bereavement Benefits FAC |
National Insurance pensions for widows were first introduced under the Widows, Orphans and Old Age Contributory Pensions Act 1925. FAC |
They provided a pension for all widows whose husbands fulfilled the contribution conditions, at a very modest flat rate with extra allowances for children. FAC |
It was part of the piece- meal development of a National Insurance scheme, whereby people in work would pay into a National Insurance fund which would provide benefits if they were deprived of earnings through the ordinary vicissitudes of life: old age, invalidity, unemployment and, in the social conditions of the time... |
The assumption - and at least among the middle classes the reality - was that women would not work after marriage, so that for them the loss of a breadwinning husband was the equivalent of the loss of a job through old age, invalidity or unemployment for people in work. FAC |
The National Insurance scheme was quite separate from the relief of the destitute under the old Poor Law and its later replacements, beginning with the National Assistance Act 1948. FAC |
Those were strictly means-tested benefits, whereas National Insurance benefits, having been paid for by contributions, were not. FAC |
The National Insurance scheme was systematised and rationalised as a result of the Beveridge Report on Social Insurance and Allied Services (Cmd 6404, 1942). FAC |
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