IP Newsletter | Winter 2016/17
	PATENT
	Proposed Amendment to the Korean Invention Promotion Act to Delete Employer's 4-month Notification of Succession Requirement
	The Ministry of Trade, Industry and Energy ("MOTIE") announced a proposed amendment to the Korean Invention Promotion Act ("KIPA") on August 18, 2016 for public consultation. One of the major changes includes revisions to employee invention rules (Articles 2, 10 and 13). We prepared summaries regarding the current KIPA rules relating to employee inventions (also referred to as "in-service inventions") and the proposed amendments thereof.
	Proposed amendment: A pre-invention assignment provision alone automatically grants the employer ownership in in-service inventions upon completion of the invention. The employer's notification of succession within 4 months from invention disclosure will no longer be required.
	Under the current KIPA rules, upon completion of an invention, an employee must promptly report the invention to the employer in writing. Subsequently, the employer is required to notify the employee in writing within four (4) months of receipt of the in-service invention disclosure whether the employer intends to acquire ownership or exclusive rights to the invention. If there is a pre-invention contract or employment rule that requires the employee to transfer in-service inventions to the employer, the rights to the in-service invention is deemed to have been transferred to the employer as soon as written notice is provided to the employee.
	According to the proposed amendment, if there is a pre-invention contract or employment rule that requires an employee to transfer in-service inventions to the employer, the rights to the in-service invention is deemed to have been transferred to the employer upon completion of the invention.
	Proposed amendment: If an employer notifies an employee that it will not acquire ownership in an in-service invention, the employer still remains entitled to a non-exclusive license to the invention.
	Under the current KIPA (effective as of January 31, 2014), for small or medium sized entity employers ("SME"), as defined under the Small or Medium Sized Entity Framework Act ("SMEFA"), a non-exclusive license is automatically granted to an employer if the employer notifies the employee, in writing, within four-months of being notified that an invention has been made, that it does not intend to obtain ownership to the invention. For an employer who is not a SME, the employer must have a pre-invention contract or employment rule that requires the employee to transfer all his/her in-service inventions to the employer, to be entitled to the automatic non-exclusive license. [NOTE: Under the SMEFA, if a foreign parent company has 30% or more shares of its Korean subsidiary and the gross amount of assets of the parent company is KRW 500 Billion (about US$460 Million) or more, the Korean subsidiary is not classified as an SME.]
	According to the proposed amendment, the granting of an automatic non-exclusive license to the employer based on the size of the employer will no longer be available. Specifically, under the proposed amendment, if there is a pre-invention contract or employment rule that requires an employee to transfer in-service inventions to the employer, the employer does not need to provide written notification to the employee within four months of receiving the in-service invention disclosure regarding whether the employer intends to acquire ownership or exclusive rights to the invention. This is because the right to the in-service invention is deemed to have been transferred to the employer upon completion of the invention. However, if the employer provides written notice that it does not wish to acquire ownership in the invention within the period designated by the Presidential Decree of KIPA (which has yet to be decided), ownership of the invention will remain with the employee and the employer will be entitled to a royalty-free, non-exclusive license to the invention – irrespective of whether or not the employer is a SME.
	Proposed amendment: The scope of IP subject to KIPA rules is expanded to include registration of new varieties of plants.
	The intellectual property rights that are governed by the current KIPA rules include patents, utility models and designs. According to the proposed amendment, intellectual property rights will be expanded to further include registration of new varieties of plants. That is, the KIPA rules governing in-service inventions (including the procedural requirements for an employer to acquire ownership to an in-service invention, reasonable compensation, etc.) will apply to new varieties of plants.
	Information on Next Steps
	The Korean Intellectual Property Office held a public consultation session on October 18, 2016 and is preparing a final proposal for the amendment. The proposed amendment needs to sequentially pass Government Legislation Agency review, Vice-ministerial meeting review, Cabinet meeting review and Presidential approval before the review of National Assembly.
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	If you have any questions regarding this article, please contact:
	Mikyung (MK) CHOE mkchoe@kimchang.com Ki Beom PARK kibeom.park@kimchang.com Ho-Yeon LEE hylee2@kimchang.com
	For more information, please visit our website: www.ip.kimchang.com