David Parsons v Convatec Limited [2026] EWCA Civ 1357
Introduction
Dr Parsons brought two appeals which raised important matters concerning claims for employee inventor compensation under the Patents Act 1977. Arnold LJ (with whom Baker LJ and Asplin LJ agreed) held that both appeals should be allowed.
The First Appeal
The first appeal concerned a question of construction of section 40(1) of the Patents Act 1977, namely whether it permitted the court to consider the benefit from more than one invention or patent together when determining whether the employer had obtained an outstanding benefit.
Arnold LJ found in favour of Dr Parsons and held that under section 40(1)(b) of the 1977 Act, the Court was not confined to considering the benefit of each invention or patent individually. Arnold LJ recognised that a patent and/or inventions could be interdependent and that commercial benefits could arise across patents and/or inventions collectively. However, the further apart in time the inventions and patent are, the less justifiable it may be for the employee to attempt to rely upon their aggregate benefit; but that is a question for the court’s evaluation at trial.
Accordingly, the appeal was allowed and the bright-line rule in Convatec’s defence struck out.
The Second Appeal
On the second appeal, the issue was whether, and if so how, on the proper interpretation of section 106(1) of the Patents Act 1977, the court should take the employee’s financial position into consideration when determining costs budgets.
Arnold LJ held that on the proper construction of section 106, the approval of costs budgets was one step on the critical path to “determining … what costs … to award” and as such, section 106 was applicable at this stage. Having regard to Dr Parsons’ financial position in this case, the Court of Appeal applied s.106 to limit Convatec’s budgeted costs to £4 million, which was approximately two thirds of the costs which the lower court had determined to be Convatec’s reasonable future costs.
Arnold LJ also identified a new exception to the rules of precedent, namely that decisions of a single Lord Justice sitting in the Court of Appeal in proceedings incidental to an appeal (such as an application for costs protection) are not binding on subsequent constitutions of the Court of Appeal.
Brian Nicholson KC represented Convatec on the First Appeal and Chris Aikens represented Convatec as junior counsel on both appeals.