Korean Invention Promotion Act: Employee Inventions in Korea

The Korean Investment Promotion Act (“IPA”) was amended in June of 2013. The amendments will come into force at the end of January 2014. For an article on filing a Korean Patent please see: Filing a Patent in Korea.

Major Amendments to Korean Investment Promotion Act

1.  Employers will no longer obtain, automatically, a non-exclusive royalty-free license to all inventions by employees. Employers will, now, have to implement company policies and/or include in employment contracts provisions to grant rights to inventions to employers. The amendment will not apply to employers deemed by the Act on Small to Medium Enterprises to be SMEs.

2.  Employers will have an easier time establishing that “reasonable” compensation was paid in exchange for an assignment of inventions under the invention compensation policies of the employer. The amendment, however, maintains the present, uncertainty by still maintaining abstract guidelines, partially, based on future unknown profits that are, only, realized often years after the assignment of the invention.

3.  Employers are required to establish an Employee-Invention Review Committee. The Committee is intended to review the employer invention compensation policies. Also, employers must notify the employee in writing before implementation or amendment to employee invention compensation policies. The employer, then, must consult with the employee on the implementation or amendment of the policies. In most cases, consent by a majority of the employees is required.

We will be updating the reader when cases are handed down interpreting the Korean Invention Promotion Act.

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients in their contentious, non-contentious, and business development needs in Korea and China.

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