Legal Intellectual

Tired of unprofessional or promotional legal answers?
Daeryun specialist lawyers will answer your questions.

Q

How do we use the employee invention system?

Legal IntellectualViews5,793

Our company has a relatively large R&D workforce, so employees make various technical ideas and inventions during the development process. Recently, I have heard a lot about the need to overhaul the compensation system for employee inventions, so I am trying to review our internal regulations. However, matters such as how to receive reports of employee inventions, by what procedure the company decides whether to acquire them, and by what standards compensation should be paid are not well organized, so I have many concerns. It must be fair to employees, and from the company's standpoint, we must stably secure patent rights, trade secrets, and the like. Could you explain how the employee invention system should actually be used and operated in a company?

Employee invention

Compensation for employee invention

A

Answer to Related Inquiry

Hello. This is an attorney specializing in intellectual property rights at Daeryun Law LLC.

In a company, in order to properly utilize the employee invention system, the entire process, from invention reporting to compensation calculation and dispute prevention, must be systematically operated without stopping at merely satisfying the minimum requirements demanded by law.

An employee invention is completed through the combination of the individual employee's creative effort and the company's research and development support, so the company can lawfully acquire the rights only if it clearly establishes regulations concerning the succession of employee inventions and compensation standards and announces them within the company.

First, the company must set out, in the employment contract, rules of employment, work regulations, or separate employee invention compensation regulations, the criteria for distinguishing employee inventions from personal inventions, the invention reporting procedure, the method for determining whether to acquire the invention, and the compensation system (application, registration, working compensation, and the like).

In this case, if the regulations are changed to the disadvantage of employees, the consent of a majority of employees is required, so the legality of introducing the system is secured only after prior explanation and sufficient consultation.

Once an invention is completed, the employee must promptly submit documents such as an invention report, an invention description, and a co-inventor share report, and the company must evaluate whether the invention constitutes an employee invention and whether it has commercial value, and notify its decision to acquire or not acquire the invention in writing within the deadline.

An evaluation table for technical merit, commercial viability, and rights, along with the operation of an employee invention deliberation committee, is an essential factor in preventing disputes.

Compensation must be calculated by comprehensively reflecting the company's contribution, the inventor's contribution, and the economic benefit generated by the invention.

Not only fixed compensation such as application compensation and registration compensation, but also working compensation paid when an increase in product sales or a cost reduction occurs, and disposition compensation corresponding to the distribution of technology transfer and license revenue, must be included.

This compensation system must be disclosed in advance through internal regulations to prevent compensation disputes from arising later.

Daeryun Law LLC provides one-stop support reflecting the R&D structure and technical field characteristics of each industry, covering the design of employee invention regulations, the establishment of invention reporting and evaluation processes, compensation calculation systems, and dispute prevention and response measures, so we recommend that you consult with Daeryun, the 9th-largest law firm in Korea (based on 2025 value-added tax filings with the National Tax Service), whenever you need assistance.

Daeryun's Key Strengths

Daeryun's key strengths background
Litigation strategy using
Daeryun's own AI & IT technology

Litigation strategy using Daeryun's own AI & IT technology

More than 240
key members

More than 240 key members

*experience_cnt*+ cases handled
per month

1,200+ cases handled per month

* 2025년 월평균 기준
Complies with Korean Bar Association Advertising Regulations Article 4 (1)

Explore
more strengths
Explore more strengths arrow

Book a legal
consultation with an attorney

All consultations are reviewed by a specialized attorney first,
so they are conducted by appointment only.

Phone consultation

1800-7905

Available 24 hours a day, 365 days a year

Phone consultation
Online consultation

Online consultation

We provide tailored
legal services for our clients.

Chat consultation

Chat consultation

KakaoTalk channel
Daeryun Law LLC Attorneys

Request a consultation

Related Members

View more
Attorney Nakhyeong Kim

Nakhyeong Kim

T. 070-7510-1820

Experience as Chief Judge of Daegu District Court and Judge of Busan High Court

Attorney InTae BANG

InTae BANG

T. 070-7510-1822

Intellectual property lawyer

Attorney DongHoon KANG

DongHoon KANG

T. 070-5214-2362

Intellectual property lawyer

Mia KIM

Mia KIM

T. 070-7510-1044

Qualified as a general/foreign language translation administrator and licensed as a lawyer in Washington D.C.

Patent Attorney HaeSeong KANG

HaeSeong KANG

T. 070-7510-1755

Korean Intellectual Property Office Examiner·Head of Examination Division and Trial Examiner experience · Handled numerous intellectual property cases

Related Practice Areas

View more

Consult in other languages

Popular Columns

View more
Quick Menu

Chat