[Patent Talk] Surging Employee Invention Compensation Suits: Compensation for Working Is the Key

Employee invention compensation suits have recently been surging. Current and former employees are suing on the grounds that they have not received fair compensation for patents on their inventions. In most of these suits, however, while the amounts claimed are very high, ranging from hundreds of millions to tens of billions of won, the amounts actually awarded are very low, at the level of several million to several tens of millions of won.

For employees, given the attorney fees incurred over years of litigation, these suits are a losing proposition. Companies, for their part, are dissatisfied with the growing uncertainty caused by a continuing stream of compensation suits from current and former employees. In response, KIPO set up a "Committee for Improving the Employee Invention System" in February last year and began discussing how to improve the employee invention system.

Employees file suits expecting large awards, looking to cases such as Professor Shuji Nakamura's blue LED case or Samsung's "Cheonjiin" keyboard case, while companies take the position that they have no obligation to pay compensation because the value of the patent or the inventor's contribution is low. The two sides are, in effect, worlds apart.

In Korea, employee inventions are governed by the Patent Act and the Invention Promotion Act. In particular, Article 15(6) of the Invention Promotion Act provides that fair compensation is basically deemed to have been paid when the compensation procedure is reasonable, but makes an exception where the profits the employer will gain and the respective contributions of the employer and employee were not properly taken into account.

Most employee invention compensation suits are brought on the grounds that the employer's profits and the employee's contribution were not properly taken into account. Companies operate various types of compensation rules for employee inventions, such as compensation for filing, compensation for registration, compensation for working, compensation for disposal and compensation for deferred filing, but in practice it is not easy to properly provide compensation for working and compensation for disposal.

Some employee inventions are not worked immediately but only in the future, and even when they are worked immediately, the contribution of the employee invention to the product and the inventor's contribution to the employee invention ...