The Patents Act 1977 (as amended)

Section 41: Amount of compensation

Employees’ inventions.

  1. (1) An award of compensation to an employee under section 40(1) or (2) above 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 reasonably be expected to derive, from any of the following -

(a) the invention in question;

(b) the patent for the invention;

(c) the assignment, assignation or grant of;

(i) the property or any right in the invention, or

(ii) the property in, or any right in or under, an application for the patent, to a person connected with the employer.

(2) For the purposes of subsection (1) above the amount of any benefit derived or expected to be derived by an employer from the assignment, assignation or grant of;

(a) the property in, or any right in or under, a patent for the invention or an application for such a patent; or

(b) the property or any right in the invention; to a person connected with him shall be taken to be the amount which could reasonably be expected to be so derived by the employer if that person had not been connected with him.

(3) Where the Crown or a Research Council in its capacity as employer assigns or grants the property in, or any right in or under, an invention, patent or application for a patent to a body having among its functions that of developing or exploiting inventions resulting from public research and does so for no consideration or only a nominal consideration, any benefit derived from the invention, patent or application by that body shall be treated for the purposes of the foregoing provisions of this section as so derived by the Crown or, as the case may be, Research Council. In this subsection “Research Council” means a body which is a Research Council for the purposes of the Science and Technology Act 1965.

(4) In determining the fair share of the benefit to be secured for an employee in respect of an invention which has always belonged to an employer, the court or the comptroller shall, among other things, take the following matters into account, that is to say -

(a) the nature of the employee’s duties, his remuneration and the other advantages he derives or has derived from his employment or has derived in relation to the invention under this Act;

(b) the effort and skill which the employee has devoted to making the invention;

(c) the effort and skill which any other person has devoted to making the invention jointly with the employee concerned, and the advice and other assistance contributed by any other employee who is not a joint inventor of the invention; and

(d) the contribution made by the employer to the making, developing and working of the invention by the provision of advice, facilities and other assistance, by the provision of opportunities and by his managerial and commercial skill and activities.

(5) In determining the fair share of the benefit to be secured for an employee in respect of an invention which originally belonged to him, the court or the comptroller shall, among other things, take the following matters into account, that is to say;

(a) any conditions in a licence or licences granted under this Act or otherwise in respect of the invention or the patent for it;

(b) the extent to which the invention was made jointly by the employee with any other person; and

(c) the contribution made by the employer to the making, developing and working of the invention as mentioned in subsection (4)(d) above.

(6) Any order for the payment of compensation under section 40 above may be an order for the payment of a lump sum or for periodical payment, or both.

(7) Without prejudice to section 32 of the Interpretation Act 18893 (which provides that a statutory power may in general be exercised from time to time), the refusal of the court or the comptroller to make any such order on an application made by an employee under section 40 above shall not prevent a further application being made under that section by him or any successor in title of his.

(8) Where the court or the comptroller has made any such order, the court or he may on the application of either the employer or the employee vary or discharge it or suspend any provision of the order and revive any provision so suspended, and section 40(5) above shall apply to the application as it applies to an application under that section.

(9) In England and Wales any sums awarded by the comptroller under section 40 above shall, if the county court so orders, be recoverable by execution issued from the county court or otherwise as if they were payable under an order of that court.

(10) In Scotland an order made under section 40 above by the comptroller for the payment of any sums may be enforced in like manner as an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.

(11) In Northern Ireland an order made under section 40 above by the comptroller for the payment of any sums may be enforced as if it were a money judgment.

(12) In the Isle of Man an order made under section 40 above by the comptroller for the payment of any sums may be enforced in like manner as an execution issued out of the court.