Employee Invention Compensation Lawyer
Employee Invention Compensation Lawyer | What you are owed, and how to prove it
An "employee invention" is an invention that falls within an employee's current or past job duties and results from work related to the employer's business (Invention Promotion Act Article 2). When an employee transfers the right to obtain a patent, or the patent right itself, to the employer under an internal invention regulation or contract, the employer must pay "reasonable compensation" in return (Invention Promotion Act Article 15). Many employees never receive this compensation, or receive a token amount fixed unilaterally by the company — but the amount and the right to claim it are legally protected, not a matter of employer discretion.
Employee Invention Compensation | When does the right to compensation arise?
Not every idea an employee comes up with qualifies, and not every transfer of rights automatically triggers a compensation obligation. The following elements are usually checked first.
The invention must fall within the employee's present or past duties and must have resulted from an act that belongs to the employer's business (Invention Promotion Act Article 2, Item 2). An invention made entirely outside the scope of one's job — even if made using free time — is a 'free invention' and belongs to the employee, not the company.
The employer only owes compensation once the employee has transferred the right to obtain a patent, the patent right itself, or an exclusive license to the employer, typically under an employment contract or internal invention regulation (Invention Promotion Act Article 15, Paragraph 1). If the employee retains the right and the employer merely uses it under a non-exclusive license granted by statute (Article 10), a separate but related compensation logic applies.
Even where an internal regulation sets a fixed formula or amount, courts can review whether that amount is reasonable in light of the profit the employer actually gained and the employee's contribution (Invention Promotion Act Article 15, Paragraphs 3 and 6). A company cannot escape the obligation simply by writing a low number into its regulations.
Compensation does not depend on the invention actually being granted a patent or on the company making a profit from it immediately. Courts have recognized that anticipated profit and the value of exclusive use can itself form the basis of compensation, particularly where the company keeps the invention as a trade secret instead of filing a patent.
A common misconception: 'no invention regulation, no compensation'
Employees are sometimes told they have no claim because their company never adopted a formal invention compensation regulation. That is incorrect — the statutory obligation to pay reasonable compensation exists independently of whether internal rules were ever drafted (Invention Promotion Act Article 15, Paragraph 1). The absence of a regulation mainly affects how the amount is calculated, not whether it is owed.
Employee Invention Compensation | How is the compensation amount actually calculated?
Reasonable compensation is not a fixed percentage. Courts and practice generally work backward from the employer's profit, then adjust for how much of that profit is really attributable to the employee's individual contribution.
Step 1 — Identify the employer's profit from the invention
This can include increased sales, cost savings, licensing income received from third parties, or the value of having exclusive use of the technology (a competitive advantage the employer would not have had without the exclusive right). Where the invention is not separately commercialized but is embedded in a larger product, courts try to isolate the portion of profit reasonably attributable to that invention.
Step 2 — Apply the 'employer contribution' discount
Courts subtract a share representing the employer's own contribution — capital, equipment, existing know-how, and the risk the employer bore in commercializing the invention — because the employee did not create that value alone (Invention Promotion Act Article 15, Paragraph 6, considering circumstances such as the employer's contribution to the invention). This discount is often the single largest factor separating what an employee claims and what a court awards.
Step 3 — Adjust for the number of co-inventors
If the invention was created jointly, compensation is divided among the named co-inventors according to their respective contribution ratios. Disputes often arise here when a manager or team lead who did not substantively invent anything is listed as a co-inventor to dilute a junior researcher's share — this can itself become a point of contention in litigation.
Step 4 — Check the deadline to claim
A claim for reasonable compensation is a monetary claim subject to the general statute of limitations for civil claims, and delaying a claim for years can weaken both the legal position and the availability of evidence. Employees who suspect they were underpaid should not assume the issue can be revisited indefinitely after leaving the company.
Employee Invention Compensation | What evidence actually moves the needle
Because the employer usually controls most of the financial records, employees often feel they have no way to prove the value of their invention. In practice, several categories of evidence are consistently useful.
Internal documents showing the invention was used commercially
Product spec sheets, internal reports citing the patented technology, marketing materials referencing the feature, or internal emails discussing commercialization plans can establish that the invention was in fact used, even before exact profit figures are available.
The patent application and prosecution history
The patent specification itself, along with any office actions and amendments, helps establish the scope and technical significance of the invention — which matters when arguing how much of the product's success is attributable to it rather than to unrelated features.
Sales, licensing, or cost-saving data obtained through litigation
If negotiation fails, a lawsuit allows for a document production order or a request that the court order the employer to disclose relevant financial records, since these are usually not accessible to the employee directly. Courts have shown willingness to estimate profit reasonably where an employer withholds or fails to keep adequate records.
Comparable licensing or industry royalty rates
Where direct profit figures are hard to isolate, expert opinions or industry-standard royalty rates for similar technology can support an estimate of reasonable compensation, especially in cases where the invention was kept as an internal trade secret rather than commercialized through direct sales.
⚠ Compensation claims are subject to a time limit
A claim for reasonable compensation is a monetary claim and can become time-barred under the general statute of limitations for civil claims if left unaddressed for too long after the right to claim arises. Employees who left a company years ago and are only now reconsidering an old invention should have the timing checked before deciding whether to pursue a claim.
Employee Invention Compensation | From reviewing your situation to recovering compensation
We review the company's internal invention compensation regulation (if any), your employment contract, and the patent application to determine whether the invention qualifies as an employee invention and whether rights were properly transferred.
Based on available sales data, licensing records, or industry benchmarks, we work out a realistic range for reasonable compensation, factoring in the employer's contribution and any co-inventors.
In many cases, a formal written claim supported by documentation prompts a negotiated settlement without litigation, particularly where the employer is still using the invention commercially.
If negotiation fails, we file a civil claim for reasonable compensation and, where necessary, seek a court order compelling the employer to disclose sales and licensing records that are not otherwise accessible to the employee.
Cases resolve either through a court-mediated settlement or a judgment specifying the compensation amount, which may include statutory interest for the period the payment was delayed.
Employee Invention Compensation | How fees are structured for these cases
Set according to the complexity of reviewing the invention, patent scope, and available financial data, rather than a flat rate — cases requiring analysis of technical documents or multiple co-inventors typically involve more preparation work.
Many employee invention cases use a partial contingency structure tied to the amount actually recovered, since the final compensation figure is inherently uncertain until profit data is reviewed.
Where profit or royalty estimation requires a technical or financial expert opinion, that cost is billed separately and discussed in advance based on the scale of the dispute.
If the case proceeds to litigation, court filing fees and any costs associated with document production requests are calculated according to the claimed amount and case complexity.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Employee Invention Compensation | Self-Check for Employees
1️⃣ Did your invention qualify?
- Was the invention related to duties you were assigned at the time, or previously assigned?
- Did you create it using company resources, time, or facilities?
- Was it something you developed entirely on your own time with no connection to your job?
2️⃣ Was your right to the invention actually transferred?
- Did you sign an employment contract or invention disclosure form transferring patent rights to the company?
- Does the company have an internal invention compensation regulation?
- Did you file an invention disclosure report, and does the company have a record of it?
3️⃣ Have you already received any compensation?
- Did you receive a lump-sum payment described as 'invention compensation' at the time of filing?
- Was that amount calculated based on any actual sales or profit data, or was it a flat token amount?
- Has the company commercialized the invention since then in a way not reflected in what you were paid?
4️⃣ Is your claim still within time?
- How long has it been since you left the company or since the invention was commercialized?
- Do you still have access to your employment contract, invention disclosure, or patent documents?
- Have you raised this issue with the company before, even informally?
