The Court of Appeal has answered an important question on employee inventor compensation: can several inventions or patents be considered together when deciding whether an employer has received an “outstanding benefit”?
In David Parsons v ConvaTec Limited [2026] EWCA Civ 1357, the Court held that they can. An employee does not need to show that each individual invention or patent provides an outstanding benefit in its own right.
The decision could be significant for employees who develop a portfolio of related technology over the course of their employment, particularly where the commercial value lies in the combined effect of several inventions or layers of patent protection rather than any single patent in isolation.
The Court of Appeal also considered the potentially significant costs of bringing an employee inventor compensation claim and held that an employee’s financial position should be taken into account during costs budgeting.
The Background
Dr David Parsons, an analytical chemist, worked for ConvaTec between 1991 and 2023. During his employment, he claims to have devised a number of inventions protected by seven patent families.
Dr Parsons claims that the inventions and patents have been of outstanding benefit to ConvaTec, pointing to estimated global sales of around $3.2 billion for products embodying the inventions. His compensation claim is valued, at its highest, at approximately £366 million. ConvaTec disputes the claim.
Under section 40 of the UK Patents Act 1977, an employee may be entitled to compensation where an invention belonging to their employer, or the patent protecting it, is of “outstanding benefit” to the employer and it is just for compensation to be awarded.
The issue before the Court of Appeal was whether Dr Parsons could rely on the combined benefit of several inventions and patents, even if none was individually of outstanding benefit.
The substantive trial is scheduled for February 2028 and is expected to last 37 days.
Can Several Inventions Add Up To Something Outstanding?
ConvaTec argued that each invention and patent had to be assessed individually. The Court of Appeal rejected that approach.
In the Court’s reasoning, Arnold LJ considered that a strict one-invention, one-patent approach did not reflect either the statutory scheme or the commercial reality of patent protection.
For example, a pharmaceutical product might simultaneously be protected by a basic compound patent, a formulation patent and a dosage patent. Where those rights work together to protect the same commercial product, attempting to disentangle the benefit attributable to each patent may be artificial.
Similarly, an employee might develop a breakthrough invention followed by an improvement which enables the original invention to achieve commercial success. In those circumstances, the benefit may realistically arise from the inventions acting together.
The Court also recognised that requiring every invention or patent individually to produce an outstanding benefit could create a risk of employers “atomising” inventions and patent portfolios so that no individual right crossed the statutory threshold.
Accordingly, the Court held that the benefit of multiple inventions and/or patents can be considered together for the purposes of section 40.
However, that does not mean that unrelated inventions can automatically be bundled together. Whether aggregation is appropriate remains an evaluative question for the trial judge. Dr Parsons will therefore need to identify which combinations of inventions and patents he relies upon and explain why their benefits should be considered together.
The Cost of Bringing A Claim
The Court of Appeal also considered a separate but related issue: the potentially prohibitive expense of bringing proceedings for employee inventor compensation.
Dr Parsons had already incurred just under £2.7 million in costs, while ConvaTec had incurred £4.2 million. Future costs of approximately £4.7 million for Dr Parsons and £6.5 million for ConvaTec had been provisionally approved.
This presented a significant problem for Dr Parsons. Although he had after-the-event insurance, the level of cover and the cost of obtaining additional protection against an adverse costs order meant that litigation costs could substantially reduce, or potentially consume, any compensation ultimately awarded.
Section 106 of the UK Patents Act 1977 requires the Court to consider the parties’ financial positions when determining costs. The Court of Appeal held that this extends to costs budgeting, rather than applying only when a final costs order is made.
The Court ultimately limited ConvaTec’s future budgeted costs to £4 million.
What Does This Mean In Practice?
- Consider the portfolio as a whole. When assessing potential employee inventor compensation, it may be appropriate to consider several inventions or patents together where they collectively generate the commercial benefit.
- There must still be a reason to aggregate. The decision does not allow an employee simply to combine unrelated inventions accumulated during their employment. The relationship between the inventions, patents and resulting commercial benefit will be important.
- Patent filing strategy will not necessarily determine the outcome. Dividing protection between several patents does not mean that each right must be considered separately when assessing outstanding benefit.
- Consider costs protection early. The financial disparity between an employee and employer can be relevant at the costs-budgeting stage, potentially providing employees with greater certainty over their exposure.
Perhaps most significantly, Arnold LJ noted that there have been only two successful employee compensation claims in almost 50 years, Kelly v GE Healthcare and Shanks v Unilever. Describing the current legislation as “not fit for purpose”, he suggested that the employee inventor compensation regime itself needs rethinking.
For now, Parsons v ConvaTec provides an important clarification. Outstanding benefit remains a high threshold, but the assessment should reflect the commercial reality of how inventions and patents deliver value, rather than assuming that each invention and patent operates in isolation.
Ailis Shuttleworth
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Withers & Rogers LLP November 2026
