[1] The meaning of “profit to be obtained by an employer” under Article 40(2) of the former Patent Act and the standard for determining whether an employee is a joint inventor

[2] The meaning of "profit to be obtained by an employer" under Article 40 (2) of the former Patent Act that shall be considered when determining the amount of compensation for an employee invention

[1] Articles 39(1) and 40(1) (see current Article 10(1) and (2) (see current Article 15(3) of the Invention Promotion Act) of the former Patent Act (amended by Act No. 6411 of Feb. 3, 2001) / [2] Article 40(2) (see current Article 15(3) of the former Patent Act) of the former Patent Act (amended by Act No. 6411 of Feb. 3, 2001)

[1] [2] Supreme Court Decision 2009Da75178 decided July 28, 2011 (Gong2011Ha, 1732)

Plaintiff (Law Firm Sejong, Attorneys Cho Yong-ho et al., Counsel for the plaintiff-appellant)

Korea Titty Co., Ltd. (Law Firm KCEL, Attorneys Dog-dam et al., Counsel for the defendant-appellant)

Supreme Court Decision 2010Da26769 Decided November 11, 2010

Seoul High Court Decision 2010Na109963 decided May 25, 2011

All appeals are dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. Judgment on the Plaintiff’s grounds of appeal

Article 40(2) of the former Patent Act (amended by Act No. 6411, Feb. 3, 2001; hereinafter the same) provides that when an employer succeeds to an employee invention from an employee, due compensation for the employee shall be determined by considering the benefits that the employer would obtain by the invention and the degree of contribution of the employer to the completion of the invention. According to Article 39(1) of the same Act, even if the employer does not succeed to the employee invention, the employer has a non-exclusive license on the patent right without compensation. Thus, the term “profit that the employer would obtain” refers to the benefit that the employer gains by acquiring the status to exclusively and independently implement the employee invention beyond the non-exclusive license. In addition, in order to become a joint inventor, it means the person who newly presented, supplemented, or improved specific points to solve the technical problem of the invention from the perspective of the purpose and effect of the invention, and if it is substantially difficult to determine the invention through the experiments or guidance of specific means and methods to achieve the purpose and effect thereof, it should be determined as a new invention through 17.

According to the reasoning of the judgment below, in light of the circumstances acknowledged by the adopted evidence, the court below held that there was an implied agreement on the transfer price (hereinafter “the transfer price of this case”) for the Plaintiff to transfer the right to obtain a patent for the invention of this case (hereinafter “the right of this case”) to the new Titty Co., Ltd. (hereinafter “New Titty”) around June 2, 1995, at least “the amount equivalent to the employee’s invention compensation amount computed by assuming the invention as an employee’s invention” at least as the transfer price of this case (hereinafter “the transfer price of this case”). As long as the transfer price of this case was agreed to be calculated as the amount equivalent to the employee’s invention compensation, the new Titty and the new Tittyty Co., Ltd. (hereinafter “New Tittyty, etc.”) to which the Plaintiff acquired the right of this case was transferred and the Plaintiff should be considered as the Plaintiff’s contribution to the new invention of this case’s 40% of the total profits acquired from the invention of this case, and the Plaintiff’s contribution to the sale price of this case’s 1.

In light of the above legal principles and records, the court below's fact-finding and judgment are just, and there is no error in the misapprehension of legal principles as to the calculation of the transfer price of this case and the recognition of a joint inventor.

2. Judgment on the Defendant’s grounds of appeal

A. As to the grounds of appeal Nos. 1 and 2

According to the reasoning of the judgment below, the court below held that the transfer price of patent for the invention of this case transferred to the defendant under the contract for the transfer of the business of this case includes the amount of profits acquired from the computation of the transfer price corresponding to the employee invention compensation. The above transfer price of business was determined as KRW 106,626,68,000 in total of the net asset price of the new compatibility and the business right price of KRW 20,438,474,000 in total; the transfer price of patent for the patent of this case was determined as KRW 106,626,68,00 in the production process of the polyethyl Emphene (hereinafter referred to as "TPPMG"); while the company possessing the production technology of this case transferred to the plaintiff under the contract for the transfer of the business of this case, it seems that it is difficult for the new production technology of this case to calculate the transfer price of the patent of this case to 200,000,000 won in Germany, which is the only 200,0,00,00,00,00.

In light of the records, the above fact-finding and judgment of the court below are just, and there is no violation of law by exceeding the bounds of the principle of free evaluation of evidence against the logical and empirical rules.

B. Regarding ground of appeal No. 3

Article 40(2) of the former Patent Act provides that when an employer succeeds to an employee’s invention from an employee, the term “profit that an employer gains” refers to the profit that an employee gains by the employee’s invention itself, and does not mean the profit that remains after the settlement of profits and expenses, and thus, if an employee’s invention is in profit regardless of the outcome of settlement of profits and expenses, the employer is entitled to gain profit (see Supreme Court Decision 2009Da75178, Jul. 28, 201).

In light of the above legal principles and the records, it is just that the court below calculated profits from the transfer of patent right to the invention of this case without deducting the investment amount, expenses, etc. of 5 billion won from the 5 billion won investment amount, etc. of the transfer price of this case, and it did not err in the misapprehension of legal principles or the binding force of the judgment remanded, as otherwise alleged in the ground of appeal.

C. As to the grounds of appeal Nos. 4 and 5

Examining the reasoning of the judgment below in light of the records, it is just that the court below calculated the amount of the transfer price of this case to be paid to the plaintiff by the defendant on the ground that the plaintiff's contribution to completion of the invention of this case was 50%, and there is no violation of law such as violation of the principle of free evaluation of evidence against logical and empirical rules.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-bok (Presiding Justice)