“I could not receive compensation for inventing electronic cigarette technology”… Former KT&G researcher sues company for KRW 2.8 trillion

A former KT&G researcher filed a large civil suit against the company, claiming, “I invented the world’s first electronic cigarette technology, but I was not compensated.”

On the 24th, Mr. Kwak, a former KT&G researcher, filed a lawsuit against KT&G at the Daejeon District Court, requesting 2.8 trillion won in compensation for employee inventions. This is known to be the highest amount for an individual in the country, excluding group and class action lawsuits.

Law Firm Jaeyoo, Mr. Kwak’s litigation representative, said on this day, “The total amount, including the profits that KT&G has already earned or could obtain from former researcher Kwak’s invention and the losses incurred by not applying or registering the invention overseas, is estimated at KRW 84.9 trillion. “Of this amount, we request 2.8 trillion won in compensation for employee inventions.”

According to the complaint, Mr. Kwak, who joined the Korea Ginseng and Tobacco Research Institute, the predecessor of KT&G, in 1991, began developing an electrically heated cigarette-type electronic cigarette in 2005. Mr. Kwak developed a prototype electronic cigarette device equipped with a heating element that directly heats cigarettes, and applied for his first patent in July 2005. Then, in December of the following year, a patent was applied for a device that applied a method to automatically control the heating state of the heating element.

Next, they manufactured a stick suitable for the developed electronic cigarette device and applied for a patent in June 2007, completing the development of a complete electronic cigarette set including the electronic cigarette heating element, device, and stick. Mr. Kwak explained that he later proposed a follow-up study, but the company did not accept it, and he left the company in 2010 due to restructuring.

The company that inherited Mr. Kwak’s employee inventions applied for some of the technology domestically, but did not grant rights to most of the employee inventions, and in particular did not apply for patents overseas. Kwak’s claim is that even after developing the world’s first technology, there was no overseas patent, so a globally famous tobacco company began selling internally heated electronic cigarettes in Korea in 2017.

He claimed that he was not compensated for his work-related inventions, and that all he received as a technical advisor contract fee of 20 million won and a monthly salary of 6.25 million won for one year after leaving the company was only salary according to the technical advisor contract.

The basis for the compensation calculated by Mr. Kwak included not only the company’s sales, but also the disadvantages arising from the company’s failure to apply for overseas patents. Accordingly, in addition to the estimated sales of KRW 8.8 trillion that Mr. Kwak is expected to reap during the rights holding period (20 years) through the patent registered in 2007, KT&G’s share of the KRW 70.7 trillion in sales profits of Company A, a foreign competitor, is estimated to be KRW 2 trillion. It is explained that the loss of 800 billion won and the profits earned by KT&G by neglecting Company A’s patent infringement by selling its products domestically were also reflected in the calculation of compensation for employee inventions.

In response to this, KT&G said, “We have already paid appropriate compensation for employee inventions through an internal review through the technical advisory contract, and there is also a contract in which Mr. Kwak agrees to accept this and not raise further issues.” He continued, “The relevant patents are not applied to currently produced products, and if a retiree who has already received compensation continues to make unfair claims, we plan to take legal action.”

“The claim that Company A would not have been able to develop a cigarette-type electronic cigarette if the patent had been registered overseas is also untrue,” he said. “At the time, it was difficult to guarantee commercialization, so no overseas application was made, but Company A’s products currently sold are based on the patent.” “It is an unused product, and Company A has already released an early model of a cigarette-type electronic cigarette in 1998,” he refuted Kwak’s claim.