18 February 2009

Employees' Compnsation: Kelly and Another v GE Healthcare Ltd [2009] EWHC 181 (Pat) (11 February 2009)

This is the first reported case of a successful contested award under s.40 and s. 41 of the Patents Act 1977. In Kelly and another v GE Healthcare Ltd [2009] EWHC 181 (Pat) (11 February 2009). The claimants, Duncan Kelly and Kwok Wai ("Ray") Chiu, were research scientists at Amersham International Plc. They were involved with the first synthesis of a compound called P53, which later formed the basis of a patented radioactive imaging agent which was a highly successful product for their employers. It was sold under the trade mark Myoview. By this action they sought an award of compensation from their employer under s. 40 and s.41 of the Patents Act 1977. They were claiming a share of the benefit which, they say, had been derived by their employer from the patents.

The above sections have now been amended by s.10 of the Patents Act 2004 with respect to patents applied for after 1 Jan 2005. As the applications for the patents in this case had been filed long before that date the old law applied.   S.40 of the Act used to provide:
    "40 (1)    Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that the employee has made an invention belonging to the employer for which a patent has been granted, that the patent is (having regard among other things to the size and nature of the employer's undertaking) of outstanding benefit to the employer and that by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer, the court or the comptroller may award him such compensation of an amount determined under section 41 below.
    (2) Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that -
    (a) a patent has been granted for an invention made by and belonging to the employee;
    (b) his rights in the invention, or in any patent or application for a patent for the invention, have since the appointed day been assigned to the employer or an exclusive licence under the patent or application has since the appointed day been granted to the employer;
    (c) the benefit derived by the employee from the contract of assignment, assignation or grant or any ancillary contract ("the relevant contract") is inadequate in relation to the benefit derived by the employer from the patent; and
    (d) by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer in addition to the benefit derived from the relevant contract;
    the court or the comptroller may award him such compensation of an amount determined under section 41 below. "
Mr. Justice Floyd summarized the law as follows:

    "i) Section 40 is available to an inventor in the sense of the "actual deviser" of the invention, but not to those who merely contribute to the invention without being joint inventors;

    ii) Section 40 is available to an employee who makes an invention (which is subsequently patented by the employer) in the ordinary course of his employment or in the course of duties specifically assigned to him;

    iii) Under the section prior to its amendment, it is the patent (as opposed to the invention) which must be of outstanding benefit to the employer, having regard to the size and nature of the employer's undertaking;

    iv) "Outstanding" means "something special" or "out of the ordinary" and more than "substantial", "significant" or "good". The benefit must be something more than one would normally expect to arise from the duties for which the employee is paid;

    v) On the other hand it is not necessary to show that the benefit from the patent could not have been exceeded;

    vi) Section 40 is not concerned with whether the invention is outstanding, although the nature of the employee's contribution may fall to be considered at the section 41 stage, if it is reached;

    vii) It will normally be useful to consider what would have been the position of the company if a patent had not been granted, and compare this with the company's position with the benefit of the patent;

    viii) The patent must have been a cause of the benefit, although it does not have to be the only cause. The existence of multiple causes for a benefit does not exclude the benefit from consideration, although the benefit may have to be apportioned to isolate the benefit derived from the patent;

    ix) "Patent" in section 40 does not include regulatory data exclusivity ("RDE"). Thus the scenario without patent protection is one where RDE nevertheless exists;

    x) It must be "just" to make an award: the consideration of what is just is not limited to the facts set out in section 40;

    xi) It is not a requirement of obtaining compensation that the employee can prove a loss (for example by reference to inadequate remuneration for his employment) or by the expenditure of effort and skill beyond the call of duty. These are nevertheless factors to take into account under section 41;

    xii) The valuation of any benefit is to be performed ex-post and in the light of all the available evidence as to benefit derived from the patent: not "ex-ante";

    xiii) Where the employee shows that the invention has been of outstanding benefit, the amount of compensation is to be determined in the light of all the available evidence in accordance with section 41 so as to secure a just and fair reward to the employee, neither limiting him to compensation for loss or damage, nor placing him in as strong a position as an external patentee or licensor."

Applying those rules the judge found that 

    i) The patents had been of outstanding benefit to Amersham;

    ii) It was just that the employees should receive an award of compensation;

    iii) the benefit of the patents was of the order of £50 million;

    iv) A fair share for the employees was £1 million for Dr Kelly and £500,000 for Dr Chiu.

17 February 2009

Telecommunications: Draft Data Retention Regulations Published

Regulations to implement the Data Retention Directive (Directive 2006/24/EC) which will come into effect on 6 April 2009 have been published in draft on the OPSI website.   

The legislation - to be known as The Data Retention (EC Directive) Regulations 2009 - require public communications providers (“providers”), to retain specified categories of communications data for up to 12 months from the date of the communication in question and to store them in accordance with the requirements of the regulation.

Data protection and data security measures are provided for in the regulation which are to be monitored by the Information Commissioner.

05 February 2009

LawCamp Leeds: 7 April 2009

Embarrassingly, I am not the first to blog this event. That honour (if such it be) goes to Nick Holmes of Binary Law (see "Brainstorm on Web Law at LawCampLeeds"). And while you are there look at some of the other things on Nick's blog like the Free Legal Web which I commend and to which I hope shortly to contribute.  
Nick also has the honour of organizing what appears to have been the first legal BarCamp anywhere and certainly the first in the UK. And that event was to float, develop and promote the Free Legal Web.

"Now what is BarCamp" I hear some of you say. Nothing to do with barristers except that this barrister is helping to organize one.   Probably the best introduction to the BarCamp concept is provided by Wikipedia:
"BarCamp is an international network of user generated conferences — open, participatory workshop-events, whose content is provided by participants."
If you have never actually been to a BarCamp you can get an idea from the videos of previous BarCamps listed under "Need an Example" on the BarCamp front page.   Here's what to expect:

"When you arrive, go to the pre-registration table, where you can claim your nametag (and sometimes T-shirt). Make your way into the eatery, where you may find breakfast (if organizers or other participants have brought some to share) and lots of people to socialize with.

We start by gathering together in one space and going around the room to introduce ourselves with three tags to describe what we're passionate about (or want to talk about). There will also be some announcements. After this, people who intend to lead a session will add their session info to an empty schedule grid (may be moved around early on). If you see a session you're interested in, go to it.

After a couple of sessions, you will have a significant amount of downtime for lunch. Feel free to wander around and socialize while or after you eat. More announcements will be made, and any newly proposed sessions will be announced.

After the sessions are finished, please stick around to clean up. It's generally as simple as throwing trash away and taking down signs, but all the help is appreciated.

If you brought wireless equipment or power strips, find a coordinator and ask where they're most needed. Please set your wireless router to a unique SSID (e.g.- barcamp_xxx), to avoid networking conflicts (nasty with a dozen routers in the same room named the same thing). Always choose one of channels 1, 6, or 11 to avoid interference between nearby channels (the coordinators may have a preferred choice to avoid interfering with neighbours too). Also, if you can, please lower the radio output of your router. There'll be plenty of WiFi cloud to go around without everyone blasting out at full power."

Now the man who invented BarCamps (well FOOCamps really - "FOO" standing for standing for "Friends of O'Reilly") also coined the expression Web 2.0.  In his article "What is Web 2.0" Tim O'Reilly he explored the new generation of websites in which the website becomes in effect the visitor's computer. Familiar examples include Google Docs which liberated word processing, spreadsheets and presentations from the standalone computer or local area network or the calendar program "Upcoming".   The facility to use a website as a computer have given rise to hundreds of new businesses - social networks like facebook and twitter, self-publishing sites like Lulu, information sites like Wikipedia. Not all these new businesses are American. Liquid Accounts, for instance, an online bookkeeping service comes from Huddersfield and GB Offices a virtual office application from Bradford.

One of the curious things about Web 2.0 is that it has taken so long for most lawyers to catch up with it.   It is obvious that there will be legal issues such as, who is entitled to user generated content, who is liable for any loss or damage arising from user generated content, what price privacy and data protecting, and loads more, but lawyers just aren't thinking about them.   One of the reasons for that is that the issuers are rather inchoate, rather like the technology.  Law is reactive rather than proactive.  But lawyers can't ignore these issues indefinitely because one day the techies and business people will be seeking their advice. To understand the issues we lawyers will have to understand the technologies and the web 2.0 business models. And the best way to do that is to use BarCamp, one of the tools that the industry uses.   

When planning BarCamp I gave some thought to the venue.   The NTI was the obvious choice because it already hosts Open Coffee, Ignite UK and other BarCamps.  Anyway you can find more details and sign up at http://www.barcamp.org/LawCampLeeds