IP Newsletter | Fall/Winter 2015
	PATENT
	Employee's Relative Contribution Rate to Employee Invention Lowered in View of Company's Efforts Making Invention the Technology Standard
	Korean law requires that employees be paid a reasonable compensation for employee inventions. In determining the reasonableness of the inventor compensation, the courts will look at (1) the employer's profits from the invention; (2) the contribution of the employee to the value of the invention (versus the inventor's contribution); (3) and the inventor's contribution relative to the other inventors. Based on the above factors, the Seoul High Court recently issued a decision on appeal awarding KRW 199 million (about USD 173,000) in employee invention compensation to a former employee at LG Electronics ("LG") who helped invent Long Term Evolution (LTE) technology (Case No. 2014Na2051082, rendered on October 1, 2015). The former employee originally sought KRW 600 million. However, the Court awarded a much smaller amount after finding that the employer's relative rate of contribution to the value of the invention was much higher relative to the former employee's contribution. As neither party appealed the decision to the Supreme Court, the award is now final. Notably, the District Court lowered the employee's contribution rate to the value of the invention to 5% based on LG's explanations of the substantial amount of work that was involved in getting the invention selected as the international standard for LTE (including conducting prior art searches in the beginning stages of development to work in negotiating with numerous communications related companies all over the world). This finding was upheld by the High Court. Ultimately, the High Court calculated the inventor compensation award based on the following factors:
	Defendant's profits from the invention: KRW 6.65 billion (based on the amount a third party paid to purchase the patent) Former employee's rate of contribution to value of invention (relative to employer's contribution): 5% Former employee's rate of contribution relative to other employees: 60% Total amount of compensation: (KRW 6.65 billion x 5%) x 60% = KRW 199 million
	The employee's rate of contribution to the value of an invention can range from 3-50%. Thus, employers are encouraged to keep detailed records showing the efforts made in developing the invention. The more work that can be attributed to the company, the lower the inventor compensation awards are likely to be.
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	Jongmin LEE jongmin.lee@kimchang.com Jack Eui-Hwan JUNG ehjung@ip.kimchang.com Inchan Andrew KWON ickwon@ip.kimchang.com
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