A scientist has been awarded £2 million compensation by The Supreme Court after a 13-year legal battle. The claim was brought under section 40 of the Patents Act 1977. The Supreme Court overturned the previous decisions in the case and held that Professor Ian Shanks, a former employee of Unilever UK Central Resources Ltd (“CRL”) had made a patented invention which had provided his former employer with an “outstanding benefit”.

What is a patent?

A patent is an intellectual property right granted by the government which gives the owner the legal right to exclude others from using, making, selling and importing an invention for a limited period. A UK patent has a 20 year life-span. The law relating to employees’ inventions is governed by sections 39 to 43 of the Patents Act 1977 (“the Act”).

Background to the case

 In 1982, whilst employed by CRL, Professor Shanks created a new system for measuring the concentration of glucose in blood and other liquids by using glass slides and plastic film from his daughter’s toy microscope kit and bulldog clips to hold it together. This technology was then used in most glucose testing products.

Professor Shanks accepted that the intellectual property rights to his invention belonged to CRL under section 39(1) of the Act as it had been created during the course of his normal duties. However, after witnessing the success that his invention had brought to Unilever, Professor Shanks decided to apply for compensation at the Intellectual Property Office (UKIPO) in 2006 on the basis that his patents provided a ‘outstanding benefit’ to his employer and he should be entitled to a fair share of the benefit. The UKIPO found that, having regard to the size and nature of Unilever’s business, the benefit provided by the Shanks patents fell short of being outstanding. The UKIPO went on to consider what a fair share of the benefit would have been had the benefit been considered to be outstanding. It was concluded that in the context of section 41 of the Act that 5% would have been appropriate. The UKIPO declined to increase this figure to take into account the time value of money.

Professor Shanks appealed to the High Court and the appeal was dismissed by Arnold J. He held that the UKIPO had made no error in finding that the patents were not of outstanding benefit to Unilever and that a fair share of the benefit would have been only 3%. He also concluded that it was not appropriate to take into account the time value of money. Furthermore, an appeal to the Court of Appeal was also dismissed.

The appeal to the Supreme Court gave rise to the following questions:

1. What are the governing principles that need to be taken into consideration to correctly assess outstanding benefit to an employer?
2. How should a fair share of an outstanding benefit be assessed?

In relation to outstanding benefit, Lord Kitchen held that the meaning of outstanding is an ordinary English word meaning “exceptional or such as to stand out”. Section 40(1) of the Act seeks to put this in context by requiring the assessment to take into consideration “the size and nature of the employer’s undertaking”. This can be difficult to assess, as with the case at hand, where the invention was made within a small subdivision (CRL) of a large company, Unilever, and it was the large multinational company that took the benefit, not the subdivision. Lord Kitchen held that the notion of comparing the profit generated from the patents to the overall revenue of Unilever should be disregarded. Instead, it was concluded that the Shanks patents were of outstanding benefit because in comparison to other inventions protected by patents of Unilever, the Shanks patents had made significant contributions to Unilever’s profits and thus stood out. Additionally, the benefit received from the Shanks patents correlated to the licensing of the invention itself and not from Unilever’s effort to commercialise the invention.

In assessing fair share of compensation, section 41 of the Act needs to be taken into account. Lord Kitchen agreed with the UKIPO that an appropriate fair share of the outstanding benefit was 5%. He rejected Professor Shanks’s argument that 10-20% of the benefit would amount to a fair share on the grounds that, whilst the patent generated a new stream of income for Unilever, this was “brought to fruition by Unilever’s negotiation of the licences” and Professor Shanks played no role in this. On that basis, Lord Kitchen awarded Professor Shanks £2 million compensation taking into account the impact of time on the value of money.

The Supreme Court’s judgement provides a wider scope for what constitutes an outstanding benefit and thus improves the prospects of employee inventors being able to claim compensation for the outstanding benefit resulting from their inventions.

If you need legal assistance visit our patents page here.

Patents provide important protection for your inventions. If you require legal assistance regarding patents, then please do not hesitate to contact Christopher Buck, Associate Partner in our Business Services Department on 01908 660966 or at christopher.buck@franklins-sols.co.uk who will be happy to assist.

The famous graffiti and street artist Banksy, has launched a pop-up shop called ‘Gross Domestic Product’ in London following a legal dispute over the trade mark to his art. A trade mark is a sign, word or a symbol which enables customers to identify goods or services as coming from one particular source, even though they may not know the identity of the source. Banksy has stated that a greetings card company is contesting his trade mark rights to his art, name and imagery. He further commented that the unnamed company are “banking on the idea” that he will not show up in court to defend himself.

The opening of the shop highlights the repercussions faced by trade mark holders not using their mark as the mark can potentially be transferred to someone who will use it. In the UK, trade mark law is predominantly governed by the Trade Marks Act 1994 and EU law. It is important that trade marks are used in order to uphold their validity and their ability to be enforced against third parties. The use of a trade mark must be for genuine commercial use, therefore the mark must be used on goods or services. Accordingly, this is why Banksy’s lawyer suggested that he start his own merchandise range and open a shop as a solution.

The owner of a mark can obtain some rights without registering their mark. An individual who uses a mark acquires ‘goodwill’ in relation to that mark. Goodwill is the quality or reputation which causes a customer to use one particular good or service rather than any other. The owner of a trade mark can take legal action against another trader who uses that mark in a way which confuses the customer or the public into believing that his goods or services are those of the owner of the mark. This action is defined as ‘passing-off’. In contrast, a third party can apply to revoke a registered trade mark if:

• the trade mark has not been used for five years,
• the mark was registered in bad faith,
• the mark has been used in a misleading manner
• or the use of the mark has become generic.

Trade marks provide important protection for your brand and your business. If you require legal assistance regarding trade marks, then please do not hesitate to contact Christopher Buck, Associate Partner in our Business Services Department who will be happy to assist. 01908 660966 or Christopher.buck@franklins-sols.co.uk.

The European Court of Justice (ECJ) ruled that Google does not have to apply the ‘right to be forgotten’ worldwide, only in Europe. This means that Google must remove outdated information or irrelevant links from the European version of its search results, but not globally, after receiving an appropriate request for the removal.

The case arose back in 2015, when French data regulator, CNIL, ordered Google to remove search results and de-list links worldwide because they contained damaging or false information about a person and broke EU law. Subsequently, in 2016, Google implemented a geo-blocking feature which prevented users in Europe from being able to see delisted links. However, Google refused to the censoring of search results outside of Europe. As a result, CNIL fined Google €100,000 and the ECJ’s hearing represented Google’s appeal against the fine that CNIL tried to impose.

The ‘right to be forgotten’ also known as the ‘right to erasure’ derives from the 2014 Google Spain v AEPD and Mario Costeja González case, where it was ruled that individuals had the right to request from search engines, the removal of out-of-date or embarrassing information and search engines had an obligation to remove such information. The ECJ’s ruling in the Google v CNIL case has been described as a “landmark” as it establishes that search engines have no obligation to remove such information outside of Europe. The right to be forgotten has been codified under Article 17 of the General Data Protection Regulation (EU) 2016/679 (GDPR). Individuals have the right to have their personal data erased if the personal data is no longer required for the original processing purpose, the individual withdraws their consent and there is no other legal basis for the processing of the data, the individual has objected to the processing of their data and there is no overriding legitimate grounds to continue processing or erasure is necessary to fulfil a statutory obligation under EU law.

The ‘right to be forgotten’ seeks to protect your personal data. It can prevent search engines from using information that is damaging or false. If you require legal assistance regarding the ‘right to be forgotten’ or have any other GDPR concern, then please do not hesitate to contact our Business Services Department who will be happy to assist. 01908 660966 or businessservices@franklins-sols.co.uk.

Ariana Grande claims that Forever 21 is benefiting from her popularity and fame by using a “lookalike” model for its advertisements to promote its products. The singer alleges that the retailer hired a model who barred “uncanny” resemblance to her after she declined to enter into partnership and endorse the brand when they approached her last November. Furthermore, the lawsuit states that Forever 21 used Ariana Grande’s lyrics in their campaign.

The lawsuit highlights important issues in relation to ‘Passing Off’ and intellectual property rights. Passing Off can occur when a company deliberately or unintentionally misleads its customers into believing that their products or services are those of another company or individual so as to deceive the customer and benefit from the reputation of the other company or individual. The law in relation to Passing Off in the UK is governed by case law. The case of Reckitt & Colman Products Limited v Borden Inc. [1990] 1 All E.R. 873 (also known as the Jif Lemon case) states that there are three elements that need to be satisfied in order to succeed in a claim:

1. One party must have an established goodwill or reputation in its name, goods, services, mark or logo which distinguishes them to the public and they claim the other party is passing off as their own; and
2. There is misrepresentation. The public has been misled; and
3. Damage has been or is likely to be caused.

It is important to protect your business and to prevent others from benefiting from your reputation and image. If you require legal assistance in relation to Passing Off, or have reason to believe that someone is Passing Off your goods or services as their own, then please do not hesitate to contact our Business Services Department who will be happy to assist.

A GDPR breach can be a costly error for employers! To ensure compliance with these stringent regulations as an employer it is essential to be able to determine where your responsibility lies.

It is important to establish your status prior to the processing of any data so to ensure that there are no gaps in demonstrating your compliance. The regulations utilise a variation of different definitions that seek to define those who are either a data subject, data controller or data processor. An employer will primarily be considered to be a data controller by virtue of exercising direct control over their employees’ data and determining the purpose for which their data can be processed. In contrast, a data processor processes the data for and on behalf of the data controller; for example, a third party pension provider used in the workplace. Therefore, as a data controller, employers may find themselves liable under GDPR.

How will the ICO react to a GDPR breach?

GDPR affords supervisory authorities, such as the Information Commissioner’s Office (ICO), with an array of powers to enable it to obtain compensation for those data subjects who have been the victim of a breach of data protection. The ICO may serve a variety of written notices, whether this be an information notice requiring an employer to provide evidence that it has complied with GDPR, an assessment notice requiring the ICO to investigate the employer’s actions, or an enforcement notice requiring the employer to take, or refrain from taking, the steps outlined in the notice itself. Failure to comply with these notices could result in the ICO issuing a penalty notice, which is why if you are issued with such a notice you should take action imminently.

Penalties for a GDPR breach

Penalties issued by the ICO can see the collapse of a business due to the hefty fees that may be payable. Where the GDPR breach relates to the processing of data or a data subjects’ rights, the maximum amount of the penalty that the ICO may impose can be up to 4% of the undertaking’s total annual worldwide turnover in the proceeding financial year, or up to 20 million euros or the equivalent in sterling, whichever is greater. As an employer, if you are found to be in breach of your obligations as a data controller, the fine can be up to 10 million euros or the equivalent in sterling, or 2% of the undertaking’s total annual worldwide turnover, again whichever is the highest.

When considering whether to impose a penalty fine, the ICO will take account of an array of different factors including the actions taken by the employer, as a controller, to mitigate any damage suffered by data subjects. If you are an employer it is therefore crucial to ensure that you are compliant with data protection principles and must implement all appropriate technical and organisational measures, including data policies and procedures. If you are the receiver of a fine issued by the ICO and require advice on the next steps involved, or if you require legal assistance with demonstrating your compliance with these stringent regulations, including putting in place appropriate policies and procedures, then please do not hesitate to contact our Commercial Services Department who will be happy to assist.

Find out why updating your terms and conditions is an important way to stay the right side of GDPR in our recent article.

What is indemnity?

In simple terms an indemnity is a form of contractual promise that seeks to provide for payment in the instance that a certain event or set of circumstances occur, which usually arises on a breach of contract. The purpose of an indemnity is to shift the risk of a potential breach on to the party providing the indemnity. These contractual promises will be outlined within the contract so it is clear as to when a breach will have occurred.

How does an indemnity work?

Indemnities work on a pound for pound basis and seek to provide the party subject to the breach with compensation in respect of the loss they have suffered. A key advantage of an indemnity is that it seeks to ensure repayment for the injured party in respect of those losses that may not ordinarily give rise to a claim in damages under a breach of warranty claim. Indemnities therefore provide an extra layer of protection. When considering indemnities in comparison to warranties, there is also no obligation imposed upon the injured party to mitigate their losses or to demonstrate that they have done so.

Another key advantage of an indemnity is that the limitation period for claiming for the loss incurred starts from the date on which the loss was actually suffered. Therefore, theoretically speaking, the limitation period is longer in comparison to the limitation period under a warranty claim which begins to run from the date of the breach itself. Although an indemnity appears to cover unlimited losses by its very nature, it is not the case that 100% of the total loss incurred will, in every circumstance, be recoverable.  This is why the contractual wording is key to ensuring that as much as possible of the total loss incurred is recoverable. For example, ensuring that all legal costs incurred in bringing a breach of contract claim are recoverable under the indemnity clause. The clause itself will of course be interpreted in conjunction with the entire contract.

What should you do if you need more information about how an indemnity works?

Whether you are the party giving the indemnity or the receiver of this contractual promise it is key to ensure that you understand the mechanics of how an indemnity works. If you require legal assistance with regards to reviewing and understanding an indemnity clause that may be incorporated into a contract that you are a party to, or if you require us to draft an appropriate clause, then please do not hesitate to contact Christopher Buck, Associate Partner in our Commercial Services Department.

Follow the link to read our article about indemnity clauses in contracts and agreements.

 Katy Perry, her co-stars, label producers and songwriter face a hefty $2.78 million fine following a jury’s ruling that all parties were found to be liable for copyright infringement in the making of her infamous hit ‘Dark Horse’. Judgment was granted in favour of Flame, a Christian rapper, following the jury’s verdict that elements of Flame’s song, “Joyful Noise”, had been copied by Katy Perry and her co-stars, including the electric beat of “Joyful Noise”, therefore constituting a form of primary infringement. The damages awarded to Flame have been apportioned between the parties with Katy Perry being ordered to pay just over $550,000, and her record label, Capitol Records, having to pay $1.3 million!

The fine issued to Katy Perry and her co-stars highlights the repercussions faced by those seeking to use the work of others and claim it as their own. In the UK, the primary piece of legislation that seeks to provide a creator of work with protection in relation to their original work produced is the Copyright, Designs and Patents Act 1998. This Act outlines two different classes of infringing acts, namely primary infringement and secondary infringement. Primary infringement involves a direct form of infringement, including a person copying the work of the copyright owner, and either issuing, performing or playing the copyright work to the public. Interestingly, ignorance to this type of infringement is no defence. In contrast, secondary infringement involves the infringing party having some specified knowledge, or reasonable grounds for having such knowledge, when committing the act.

Copyright seeks to protect a work, its key aim being to prevent others from using it without the owner’s permission. If you require any legal assistance regarding copyright, or have reason to believe that someone may be committing copyright infringement in respect of your own work, then please do not hesitate to contact Christopher Buck, Associate Partner in our Commercial Services Department who will be happy to assist.

The ICO has revealed that it intends to fine British Airways a hefty £138 million pounds in relation to severe breaches of data protection that has resulted in customers’ personal information falling into the wrong hands! The day after the ICO announced its intentions to fine BA, Marriott International have been informed they too will be fined £99 million pounds for similar breaches.

Understanding when, and if, you are processing an individual’s personal data is crucial to understanding whether the General Data Protection Regulations apply. Not only must individuals have the right to access their personal data, as and when requested, they must be provided with the reasons behind why you are processing their data, your retention periods for holding their personal data and who it will be shared with. If not adequately managed, you may find yourself subject to the wrath of the ICO resulting in irreparable consequences!

The recent fines issued to both British Airways and Marriott demonstrate that a year on from the implementation of the new GDPR regulations, individuals and business alike are still struggling to get to grips with the regulations and how these are monitored in practice.

So what should you do to ensure you are complying with the regulations?

Firstly, and most importantly, you should ensure that you have adequate procedures in place, including a suitable data protection policy, which is essential to evidencing your commitment to GDPR compliance. You should also ensure that any policies and terms and conditions that you currently have in place are up to date and compliant with the GDPR.

If you require legal advice on the GDPR and what this means for your business, or if you require a legal health check and review of any of your current policies or terms and conditions of business that you may have in place, then please do not hesitate to contact Christopher Buck, Associate Partner in the Commercial Services Department here at Franklins.