In Korea, the right to a patent belongs to the inventor or their successor in title. The right to a patent may be transferred by assignment, in whole or in part. An inventor has the right to be identified in a patent application. Conversely, the applicant for a patent application need not be the inventor, as the right to a patent may be transferred before the filing of the application, for example, by contract or inheritance.
The Invention Promotion Act (IPA) defines a "work for hire" invention as an invention that results from:
- Present or past duties of the employee
- Being within the scope of the employer's business
Unless otherwise stipulated, the ownership of a "work for hire" invention belongs to the inventor-employee. In the meantime, the employer is given a royalty-free and non-exclusive license (often called "shop right") to use the invention if the employee is a small or medium sized entity defined under the Small or Medium Sized Entity Framework Act (SME). In order for an employer that is not an SME to receive a non-exclusive license, the employer must have a contract or employment regulation where the employee agrees to assign the "work for hire" inventions to the employer in advance and which has to be executed or adopted after consultation with the employee.
In this regard, the employee must report the completion of the works made for hire to their employer (when 2 or more employee-inventors contributed to the invention, all of the employee-inventors must report together). The employer must notify in writing whether it plans to succeed the works made for hire or not within 4 months from the above invention completion report by the employee. The right to the invention is deemed to be transferred to the employer as soon as the timely written notice is provided to the inventor-employee. However, if the employer fails to make such notification in writing, the works made for hire are deemed as free inventions to the employer. The National Assembly of Korea passed a bill to revise the IPA on January 9, 2024, which will come into effect 6 months after the date of promulgation. Under the revised IPA, if the employer has a contract or employment regulation where the employee agrees to assign the "work for hire" invention to the employer in advance adopted after consultation with the employee, the ownership rights to the employee invention are automatically assigned to the employer at the time when the invention is completed. As an exception, the employer is required to notify the employee within 4 months from the receipt of the invention disclosure only when the employer decides not to acquire ownership to the "work for hire" invention.
The employee is entitled to "reasonable compensation" for any "work for hire" invention acquired by the employer. Further, the IPA provides several factors for determining "reasonableness" of the compensation:
- The employer is required to adopt an internal compensation rule and provide the employees with adequate details about the program in writing, including the type of compensation, criteria for determining the amount of compensation and the payment method.
- The employer is required to provide the inventor employee with adequate details in writing, regarding the compensation amount, including how the amount was derived based upon the above rules.
- The employer is required to consult with the employees regarding adoption or amendment of the above compensation rule; if an amendment is pursued that is less favorable to the employees, the employer is required to obtain consent from at least 50 percent of the relevant employees.
- In addition to the above requirements, the compensation must be determined in consideration of the profits that the employer gained or expects to gain from the in-service invention and the degree of contribution by the employer and the employee to the creation of the particular invention; and the IPA also stipulates that even if a patent application is not filed for a "work for hire" invention acquired by an employer, the employee is still entitled to reasonable compensation.