The Supreme Court has ruled that if a retired researcher at LG Electronics earned revenue by selling to other corporations a patent developed while employed, the company must pay a service-invention compensation under its internal rules.
The Supreme Court's Second Division (presiding Justice Oh Kyung-mi) said on July 11 that on June 25 it overturned the appellate ruling that had ruled against a person surnamed Kwon in a lawsuit seeking service-invention compensation against LG Electronics and sent the case back to the Intellectual Property High Court.
Kwon worked as a researcher at LG Electronics from September 2000 to July 2018, handling tasks such as mobile handset software (SW) development. While employed, Kwon and two other employees developed a technology titled "mobile terminal having proximity touch sensing function."
After succeeding to this service invention from Kwon and others, LG Electronics filed a total of three patent applications listing Kwon as an inventor. It also filed three patents on this service invention in the United States and Europe.
In September 2015, LG Electronics signed a contract to assign a total of 12 patents, including this one, to Microsoft Technology Licensing (MTL), Microsoft's patent and intellectual property subsidiary.
In 2006, LG Electronics implemented revised service-invention compensation rules. The rules provide that if the company earns a benefit by assigning a service invention succeeded from an employee, it must pay the inventor-employee.
However, LG Electronics did not pay compensation to Kwon and others. LG Electronics argued that the statute of limitations for the claim to service-invention compensation under the Invention Promotion Act is 10 years, and because 10 years had passed since LG Electronics succeeded to the technology when the patent was assigned to MTL, Kwon and others could not claim compensation.
Kwon filed suit, saying the decision was unreasonable. In the first trial, Kwon and others partially won. But on appeal, the court accepted LG Electronics' argument and ruled against Kwon and others.
The Supreme Court, however, said, "Under LG Electronics' compensation rules, when payment requirements arise—such as when a service invention is 'assigned for value or a tangible benefit is obtained by exercising rights'—the compensation is paid to the inventor-employee after going through procedures," and judged, "Absent special circumstances, Kwon may exercise the claim for compensation when the time for payment arrives."
A Supreme Court official explained, "The company's internal compensation rules mean that even if profits arise long after the patent is succeeded, the statute of limitations runs from when the profits occur." In this case, the benchmark is 2015, when LG Electronics assigned the patent to MTL.