The Journal of Intellectual Property (J Intellect Property; JIP)

KCI Indexed
OPEN ACCESS, PEER REVIEWED

pISSN 1975-5945
eISSN 2733-8487

Searching for Ways to Improve for Calculation Method of Employer’s Profit as a Factor for Calculating Employee Invention Remuneration: Focused on Hypothetical Royalty Rate, Exclusivity Contribution Rate, Employee Invention’s Contribution Rate

CONTENTS

Research article

Lee J. 2024. Searching for Ways to Improve for Calculation Method of Employer’s Profit as a Factor for Calculating Employee Invention Remuneration: Focused on Hypothetical Royalty Rate, Exclusivity Contribution Rate, Employee Invention’s Contribution Rate. The Journal of Intellectual Property 19(1), 49-78.

DOI: https://doi.org/10.34122/jip.2024.19.1.3

The Journal of Intellectual Property, 2024 March, 19(1): 49-78. 

Received on 31 December 2023, Revised on 23 January 2024, Accepted on 29 February 2024, Published on 30 March 2024.

Searching for Ways to Improve for Calculation Method of Employer’s Profit as a Factor for Calculating Employee Invention Remuneration: Focused on Hypothetical Royalty Rate, Exclusivity Contribution Rate, Employee Invention’s Contribution Rate

Joohwan Lee

Expert Adviser, Korea Invention Promotion Association, Expert Adviser, Republic of Korea; Ph.D. in Law.

*Corresponding Author: Joohwan Lee (kirt75@hanmail.net)

Abstract

Until recently, two major criticisms have been raised about the court’s practice of calculating employee invention remuneration. The first criticism is that in calculating the employer’s profit, it is not necessary to apply only the method of multiplying the hypothetical royalty rate, and it is necessary to apply the method of multiplying the employer’s profit rate together. The second criticism is that when calculating the employer’s profit, the calculation process of the hypothetical royalty rate, exclusivity contribution rate, and employee invention’s contribution rate, same circumstances are applied redundantly. Accordingly, this study proposes two improvement methods to address these criticisms. The first method is to calculate the employer’s profit by multiplying the employer’s sales by the employer’s profit rate, exclusivity contribution rate, and employee invention’s contribution rate. The key to this method lies in calculating the employer’s profit by multiplying the employer’s sales by the employer’s profit rate. The second method is to calculate the employer’s profit by multiplying the employer’s sales by the hypothetical royalty rate and exclusivity contribution rate. The key to this method is not to calculate the employee invention’s contribution rate to avoid duplicate application of the same circumstances as much as possible. Improvements in the principles for calculating for employee inventions remuneration can strengthen employee’s creative motivation for inventions by creating a legal environment in which employee inventions remuneration is calculated at a higher than it is currently.

Keywords

Employee Invention, Employee Invention Remuneration, Employer’s Profit, Employer’s Sales, Employer’s Profit Margin, Hypothetical Royalty Rate, Exclusivity Contribution Rate, Employee Invention’s Contribution Rate

Funding

The author received financial support for this article from Korea Institute of Intellectual Property.

Conflicts of interest

No potential conflict of interest relevant to this article was reported.