Civil Litigation

Employee Invention Compensation Lawyer

Employee Invention Compensation Lawyer | What you are owed, and how to prove it

Summary

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.

Civil · IP Applicable law: Invention Promotion Act (발명진흥법) Employee perspective Patent / R&D disputes

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.

Requirement 1

It must qualify as an 'employee invention'
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.

Requirement 2

The right must have been transferred to the employer
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.

Requirement 3

Compensation must be 'reasonable' — not whatever the company decides
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.

Requirement 4

Compensation is due even without a patent grant
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

Initial review of invention regulations and employment contract
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.

Estimating employer profit and a reasonable compensation range
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.

Internal claim or negotiation with the employer
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.

Filing suit and pursuing document production
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.

Resolution through settlement or judgment
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

Retainer fee
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.

Contingency / success fee
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.

Expert and valuation costs
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.

Litigation costs and document production expenses
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?

Frequently Asked Questions

Q. I already left the company. Can I still claim compensation?

A. Yes. The right to reasonable compensation belongs to the inventor personally and does not disappear simply because employment has ended. However, the claim is subject to the general statute of limitations for monetary claims, so the timing since the invention was used or commercialized should be reviewed carefully.

Q. My company says there's no invention compensation policy, so I get nothing. Is that true?

A. No. The obligation to pay reasonable compensation arises directly from the Invention Promotion Act once an employee invention's rights are transferred to the employer, regardless of whether the company adopted a formal internal regulation (발명진흥법 제15조 제1항). The absence of a policy mainly complicates how the amount is calculated, not whether compensation is owed.

Q. I was only one of several people listed on the patent. Can I still claim my share?

A. Yes. Compensation for a jointly created invention is divided among co-inventors according to their respective contribution to the invention, not simply divided equally by headcount. Disputes over who should even be listed as a co-inventor, or in what ratio, are common and can be examined during a claim.

Q. The company paid me a small fixed amount when I filed the patent. Does that mean I've already been fully compensated?

A. Not necessarily. Courts can review whether an amount set unilaterally by an internal regulation is actually 'reasonable' in light of the profit the employer gained from the invention (발명진흥법 제15조 제3항, 제6항). If the payment was a flat token amount unrelated to actual commercial performance, an additional claim may still be possible.

Q. My employer never got a patent for my invention — they just kept it secret and used it internally. Am I still owed anything?

A. Potentially yes. Compensation does not strictly require that a patent be granted; if the employer benefited from exclusive use of the technology — including by keeping it as a trade secret instead of publishing it through a patent filing — that benefit can still form a basis for a reasonable compensation claim.

Q. How is 'the company's profit from my invention' even proven when I don't have access to sales data?

A. This is one of the central practical challenges in these cases. Internal documents referencing the invention's commercial use, patent prosecution records, and industry-standard royalty rates can support an initial estimate, and a lawsuit allows for a court order compelling the employer to disclose relevant financial records that are not otherwise accessible to the employee.

Q. Is it worth pursuing a claim if the amount might be small?

A. It depends on the scale of commercialization and how central the invention was to the resulting product or service. A brief case assessment reviewing the patent scope, the product it relates to, and any available sales information is usually the fastest way to judge whether pursuing a claim is worthwhile before committing to litigation.

Q. Can I negotiate with my current employer without damaging my job?

A. Many cases begin with a written request supported by documentation rather than immediate litigation, and are resolved through negotiation. Whether to raise the issue while still employed or after leaving is a strategic decision that depends on your relationship with the employer and the strength of your documentation, and is worth discussing before taking any action.

Q. What documents should I gather before consulting a lawyer?

A. Your employment contract, any invention disclosure forms you submitted, the patent application and any granted patent documents, the company's internal invention compensation regulation if one exists, and any records showing how the invention has been used commercially are the most useful starting point.

Official References

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