Daejeon District Court 2012Guhap5390 ( October 15, 2014)

compensation paid to the inventor shall be non-taxable other income.

The instant compensation is the other income subject to non-taxation under Article 15 of the Invention Promotion Act, which is paid to the inventor with due compensation for the employee’s invention, and which is the other income subject to non-taxation prescribed in Article 12 subparag. 5 (d) (i)

Article 12 of the Income Tax Act

2014Nu43. Revocation of disposition of collection of income tax, etc.

AAA Research Institute

BB Head of the Tax Office (CCC Head of the Tax Office before correction)

Daejeon District Court Decision 2012Guhap5390 Decided January 15, 2014

August 21, 2014

November 20, 2014

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

Claim: The defendant shall revoke all the dispositions listed in the attached Table 1 that the defendant made against the plaintiff.

The purport of appeal: Revocation of the judgment of the first instance. The plaintiff's claim is dismissed.

1. Details of the disposition;

A. The Plaintiff is a government-funded research institute established with the main purpose of research and development in the field of chemical technology, such as chemical materials, new medicine, and convergence chemistry, and dissemination of outcomes thereof, in accordance with the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutes

B. From 2006 to 2010, the Plaintiff succeeded to the invention of the research and development outcomes of patent rights, etc. in the course of performing duties under each of the above projects, and entered into a license agreement with the companies that intend to perform the research and development outcomes by using, producing, etc. them, and paid part of the royalties paid as compensation to the researcher or the retired worker registered as the inventor on the relevant application, Patent Gazette, etc. under Articles 4 and 17(1) of the Guidelines for the Management of Employee’s Inventions, which are the Plaintiff’s internal regulations (hereinafter “instant compensation”), and did not withhold income tax on the instant compensation by deeming that the instant compensation constitutes an employee’s invention compensation under the Invention Promotion Act, which is non-taxable income under Article 12 subparag.

C. However, around August 2011, the Board of Audit and Inspection notified the Commissioner of the National Tax Service of the collection of royalties from non-profit organizations, such as the Plaintiff, in return for the performance of the research and development task to enterprises, etc., and of the royalty rates, etc. paid to participating researchers, etc., on the grounds that the employee invention compensation and nature of the invention invention compensation

D. On February 29, 2012, the Defendant corrected and notified the Plaintiff on February 29, 2012, the sum of the wage and salary income taxes for employees and the total amount of OOO and corporate tax (additional tax due to failure to submit a statement of payment) on the retired employee (hereinafter “instant disposition”).

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on April 17, 2012, but the Tax Tribunal dismissed the Plaintiff’s appeal on September 14, 2012.

[Basis] Facts without dispute, Gap evidence 1-1 to 13, Gap evidence 2, Eul evidence 1-5, Eul evidence 2-1 to 3, Eul evidence 2-1 to 3, Eul evidence 3-1 to 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

The instant compensation constitutes an employee’s invention compensation under Article 15 of the Invention Promotion Act, which is other income subject to non-taxation provided for in subparagraph 5 (d) (i) of Article 12 of the Income Tax Act, since the Plaintiff’s researchers transferred the patent right, etc. for the employee’s invention originally acquired to the Plaintiff as the employer according to the Plaintiff’s internal regulations.

Therefore, the instant disposition taken on the premise that the instant compensation is subject to income subject to taxation shall be revoked as it is unlawful.

2) The defendant's assertion

The instant compensation constitutes an employee’s invention compensation under Article 15 of the Invention Promotion Act, not an employee’s invention compensation under Article 15 of the same Act, and thus, the instant disposition is lawful.

A) An employee’s invention compensation under Article 15 of the Invention Promotion Act is recognized in cases where an employee acquires an employee’s right to obtain a patent, etc. on the employee’s invention in the event of an employee’s invention, and an employee succeeds to and acquires the employee’s right to the employee’s invention or related patent rights from the employee, etc. on the premise that the employee acquired the right to obtain a patent, etc. on the employee’s invention, and the ownership of the national research and development outcomes obtained from a non-profit research institute as a result of the performance of the government’s contributions from the Plaintiff is attributed to the Plaintiff as the research institute under Article 20(2) of the Regulations on the Management, etc. of National Research and Development Projects (hereinafter “National Research and Development Project Management Regulations”). Therefore, even if the employee’s employee invention was made by the Plaintiff, the Plaintiff’s right to the employee’s invention or intellectual property right to the employee’s invention shall be deemed to have been acquired at his own

B) Since the Plaintiff entered into a license agreement with an enterprise, etc. and paid part of the royalties to a participating researcher not described as an inventor in the application or the Patent Gazette, it constitutes a research incentive not only for the transfer of patent rights, etc., but also for the Plaintiff’s employees under the research incentive. The Plaintiff withheld income tax on the amount paid to the creator by paying the amount to his/her employees under the same ground provision with the financial resources of royalties income, and treats the amount paid to the creator as non-taxation is logical contradictory. Other income listed in Article 12 subparag. 5 of the Income Tax Act refers to temporary and contingent income due to its nature, even if the formal title of income is consistent with those listed in the above subparagraph 5, if it occurred in the process of carrying out continuous and repeated work with the aim of earning profits, it shall be deemed as non-taxable business income regardless of its title, and the non-taxable other income shall be deemed as non-taxable business income from the Plaintiff’s exclusive licensee under Article 15 of the Income Tax Act, and the non-taxable income shall be included in the non-exclusive license under Article 15 subparag.

(b) Relevant statutes;

Attached Table 2 shall be as stated in the relevant statutes.

(c) Fact of recognition;

1) Plaintiff’s internal provisions relating to the instant compensation

The inside provisions of the plaintiff related to the compensation of this case are "the employee invention management guidelines" and "the rules on the use of technical fees", and the detailed provisions of each of the above provisions are as shown in attached Table 3.

2) Grounds for the payment of the instant compensation

A) Article 2 Subparag. 2 of the Employee’s Invention Management Guidelines defines that “an employee’s invention falls within the scope of the Institute’s work in its nature and the act of making the invention falls within the scope of the Institute’s work,” and defines “an employee’s present or past work (limited to an application filed within two years after retirement or transfer)” (Article 2 Subparag. 2), and defines the inventor as “a person who has made, or has made, an inventive attachment” (Article 3 Subparag. 3).

B) In addition, the employee invention management guidelines provide that when the Plaintiff succeeds to the right to obtain an inventor’s intellectual property right or the intellectual property right, the inventor shall be paid compensation (Articles 3 and 4), and the aforementioned compensation is divided into registration compensation and working compensation. Of these, compensation for implementation is paid if income accrues from the transfer of a patent, etc., and payment scope is determined according to contractual royalties such as transfer of a patent (Article 17(1)). Meanwhile, compensation for registration is paid where the Plaintiff is registered for an employee invention filed for the purpose of acquiring an industrial property right. In addition, the employee invention management guidelines are paid by the OOO or the OOO for the patent right other than the patent (Articles 17(2) and 6). Meanwhile, the right to receive compensation for implementation remains even after the inventor is transferred or retired (Article 18(1)).

3) Method of calculating the instant compensation

The compensation in this case shall be paid in accordance with the provisions concerning the method of calculating incentives for researchers under the technology fee use provision.

B) The technology fee use rule defines “the amount of royalties” as “the amount of royalties paid in cash, such as lump-sum royalties and ordinary technology royalties, which are paid to the Plaintiff, regardless of the receipt and recovery of royalties for one task (Article 2 Subparag. 2); and “the amount of net revenues from technology fees” as “the amount of net revenues from technology fees, excluding taxes, fees, and expenses for marketing success,” under Article 2 Subparag. 2. (Article 2 Subparag. 3).

C) Article 3 of the Technology Fee Use Regulation provides that 65% of the net amount of royalties shall be allocated as incentives for research personnel, but in fact, 50% of the amount of royalties collected with respect to one research task is allocated as incentives for research personnel related to the research task. Based on the above financial resources, each individual research personnel incentive amount is determined pursuant to Articles 16 through 18 of the Technology Fee Use Regulation. Article 16 of the Technology Fee Use Regulation provides for the method of allocation by research team, such as the core research team, joint research team, cooperation research team, etc., in which the research task in which the technology fee occurred is performed, and Articles 17 and 18 of the Technology Fee Use Regulation provide for the method of allocation of incentives for individual research personnel within each research participating team. Comprehensively considering the above provisions, the method of calculation for each employee is as follows.

The compensation in this case = The ratio of individual allotment under Articles 16 through 18 of the Regulations on the Use of x Royalties by 50% x royalties.

4) Based on Articles 4, 15, and 21 of the Technology Fee Use Regulation, the Plaintiff paid research staff incentives to research employees and persons who contributed to the transfer of technology, who do not fall under the inventor, but participated in the research task that is subject to royalties, but are subject to withholding income tax.

[Reasons for Recognition] Unsatisfy, Gap evidence 3, 4, Eul evidence 4, the purport of the whole pleadings

D. Determination

1) The original acquisitor of the right to the employee invention

A) According to Article 2 subparags. 1 and 2 of the Invention Promotion Act and Article 10(1) of the Patent Act, the right to obtain a patent, etc. for an employee invention constitutes a right to obtain a patent, utility model, or design registration under the Patent Act, the Utility Model Act, Article 11 of the Utility Model Act, Article 3 of the Design Protection Act, and Articles 10 and 15 of the Invention Promotion Act, in cases where an employee, an officer, or an employee of a corporation, or a public official (hereinafter referred to as an "employee, etc.") performed an employee invention that falls within the scope of duties of the employer, corporation, State, local government, or organization (hereinafter referred to as "employer, etc.") by performing his/her creative activities such as an invention, design, or design, etc., the right to obtain a patent, etc. for the employee invention is determined as the employee's original acquisition by the employee, etc., while the employee, etc. transferred the right to the employee invention or the patent right related to the employee invention or acquired it by the employee, etc. in the exclusive license.

Therefore, even if an employee's employee invention was made by the Plaintiff, the right to obtain a patent, etc. for the employee's invention should be regarded as the original acquisition of the employee's invention, unless there are special circumstances.

B) Meanwhile, Article 20(2) of the Regulations on the Management of National Research and Development Projects provides that “the intangible outcomes, such as intellectual property rights obtained as the result of performing the national research and development projects, shall be owned by the main research institute as prescribed by an agreement.” However, the above regulations are as follows: ① for the purpose of stipulating matters necessary for the planning, management, evaluation, utilization, etc. of national research and development projects under Articles 11 and 11-2 through 11-5 of the Framework Act on Science and Technology (see Article 1 of the Regulations on the Management) by delegation of the Framework Act on Science and Technology; in the context of the provisions on the Framework Act on Science and Technology, which are the mother laws of the above regulations on the management of the Framework Act on Science and Technology, there is no explicit provision allowing the Plaintiff to separately regulate the rights to employee invention entitled to patents, etc. with respect to the employee invention; ② It is difficult to view that there are reasonable grounds to view the aforementioned regulations on the research and development projects, such as the establishment purpose of the government-invested research institute or the government-funded research institute’s research institute’s.

2) Whether the instant compensation constitutes an employee’s invention compensation

A) Relevant provisions

An employee shall have a right to receive an employee's invention compensation pursuant to Article 15 (1) of the Invention Promotion Act, where the employee has succeeded to the right to obtain a patent, patent, etc. for an employee's invention or has established an exclusive license in accordance with a contract or employment regulations

On the other hand, Article 15(2) of the Invention Promotion Act provides that "where a contract or employment regulation provides for the compensation for an employee invention, the compensation therefor shall be determined by considering the situation between the employer and the employee when determining the type of compensation and the amount of compensation, the situation in which the standards for compensation were presented to the employee, such as the publication and posting of the standards for compensation set, the situation in which the employee’s opinion is considered reasonable when determining the form of compensation and the amount of compensation from the employee when determining the amount of compensation." Paragraph (3) of the same Article provides that "if the compensation for an employee invention is not prescribed by a contract or employment regulation or if it is not deemed that the amount of compensation is a just compensation under paragraph (2), the benefits that the employer would obtain from the invention and the degree of contribution of the employee and the employee shall be considered in the completion of the invention." In addition, Article 17(1) of the Regulations on the Disposal, Management, Compensation, etc. of the employee’s invention of a public official shall be paid to the inventor equivalent to 50/100 of the proceeds from disposal."

B) In light of the above relevant provisions, it is reasonable to deem that the compensation in this case was paid to the Plaintiff by the Plaintiff’s employees pursuant to Article 3 of the Work-for-the-job invention management guidelines and pursuant to Articles 4 and 17 of the Work-for-the-job invention management guidelines. The compensation in this case’s nature is also the same as above. The compensation in this case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’s case’

그리고 이 사건 보상금은 "기술료 수입금 x 50% x 기술료사용규정 제16 내지 18조가 정하는 개인별 배분비율"로 산정된 것인바, ① 공무원 직무발명의 처분・관리 및 보상 등에 관한 규정 제17조 제1항은 발명에 대하여 특허를 받을 수 있는 권리에 관한 처분보상금 중 100분의 50 부분을 발명자에게 지급하도록 규정하고 있는 점, ② 기술료 수입금 중 50%는 발명자에 대한 이 사건 보상금뿐만 아니라 발명자 이외 해당 연구에 참여한 연구자에 대한 연구직원 인센티브의 재원도 되므로 기술료 수입금 중 직무발명보상금으로서 이 사건 보상금이 차지하는 비율이 실제로는 100분의 50 이하로 인정될 여지도 있는 점, ③ 원고는 출원서나 특허공보에 발명자로 등록된 연구자인 직원 또는 퇴직자에게 지급한 보상금에 대하여만 비과세 처리하고, 나머지 사람들에 대하여는 소득세를 원천징수해서 처리한 점, ④ 원고가 이 사건 보상금 외에 직무발명관리 요령 제17조 제2항 및 별표6의 규정에 따라 등록보상금을 지급하기는 하였으나 등록보상금의 성격 및 규모에 비추어 볼 때 위 등록보상금만으로 정당한 직무발명보상이 이루어졌다고 보기는 어렵고, 달리 원고가 소속 종업원에게 이 사건 보상금 외에 실시보상금으로서 다른 금원을 지급하였다고 볼 만한 자료도 없는 점, ⑤ 원고가 종업원의 직무 발명에 대하여 그 발명관련자들에게 개인별로 배분비율을 인정하는 과정에 특별히 어떤 중대한 오류가 있다고 볼만한 별다른 사정도 발견되지 않는 점, ⑥ 발명진흥법 제15조 제2항에 의하면 직무발명보상에 대하여 계약이나 근무규정에서 정하고 있는 경우 그에 따른 보상이 보상형태와 보상액을 결정하기 위한 기준을 정할 때 사용자등과 종업원등 사이에 행하여진 협의의 상황, 책정된 보상기준의 공표・게시 등 종업원등에 대한 보상 기준의 제시 상황, 보상형태와 보상액을 결정할 때 종업원등으로부터의 의견 청취 상황 등을 고려하여 합리적인 것으로 인정되면 정당한 보상으로 본다는 것인데, 원고는 원고의 내부규정인 직무발명관리요령, 기술료사용규정 등에 따라 합리적으로 보상금을 산정한 것으로 보이는 점 등에 비추어 보면, 이 사건 보상금이 직무발명보상금으로서 정당한 보상의 범위를 넘는 것이라고 보기도 어렵다.

C) Judgment on the defendant's argument

(1) The defendant asserts that the compensation in this case is not an employee's invention compensation since it is the amount of continuous and repeated nature, not an employee's right, but an employee's invention compensation. However, when the plaintiff succeeded to the employee's right and allowed a third party to use and produce the employee's invention, the plaintiff's claim in this part shall be paid in a lump sum according to the terms and conditions of the contract, or shall be paid in a certain amount as regular or irregular divided, or in a pro rata to the sales of the product, etc., according to the terms and conditions of the contract. The defendant's claim in this part shall not be justified, on the ground that the compensation in this case, which is paid from the royalties or the royalty in this case, does not necessarily constitute an employee's invention compensation in accordance with Article 15 of the Invention Promotion Act, solely on the ground that the amount

The Defendant asserts that the Plaintiff’s license agreement is concluded with enterprises, etc. and some of the royalties paid to the participating researchers that are not written as the inventor in the application or the Patent Gazette and the support personnel who did not participate in the relevant research, and thus, the instant compensation is merely research grants and does not constitute an employee invention compensation. However, regardless of whether the Plaintiff is an inventor, the instant compensation paid based on Articles 4 and 17 of the Technology Fee Use Regulation is subject to the researcher related to the implementation contract regardless of whether the Plaintiff is the inventor, while the instant compensation paid based on Articles 4 and 17 of the Work Invention Management Guidelines is subject to the Plaintiff’s succession to the right to the employee invention, and the Plaintiff’s compensation is subject to the Plaintiff’s succession to the right to the employee invention. Although the method of calculating the income tax is partially shared, the Plaintiff’s payment basis, payment object, and the purpose of the payment are entirely different from the two. In light of the fact that the Plaintiff withheld the income tax for the research personnel, this part of the Defendant’s assertion is without merit.

(2) The Defendant asserts to the effect that other income subject to non-taxation includes an exclusive license among the license granted pursuant to Article 15(1) of the Invention Promotion Act, but does not constitute a non-exclusive license established and a compensation paid to the employer by the employee, etc. However, since the employee, etc. of the Plaintiff succeeds to the Plaintiff’s right to work invention or set the exclusive license pursuant to Article 15(1) of the Invention Promotion Act, as long as the employee, etc. of the Plaintiff succeeds to the Plaintiff’s right to work invention or set the exclusive license, the Plaintiff, who is the employer, is entitled to receive the royalties by establishing the non-exclusive license for the invention, and whether to receive the royalties

D) Sub-committee

Therefore, even though the compensation of this case is an employee invention compensation under the Invention Promotion Act, which is one of the non-taxation objects, income tax, etc. should not be imposed, it shall be deemed as income subject to taxation, and the disposition of this case imposing tax on wage and salary income, etc. shall be revoked as unlawful. The plaintiff's assertion pointing

3. Conclusion

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.