Former Employee Sues KT&G for $2 Billion in Heated Tobacco Patent Dispute

Key Points

1.Former researcher Kwak Daegeun from South Korean tobacco company KT&G has filed a lawsuit against the company over compensation issues related to his inventions during his tenure. The two parties were unable to reach a settlement after mediation.

2.Kwak Daegeun previously worked at KT&G, leading the development of key technologies for heated tobacco devices. He claims that the company did not provide fair compensation, particularly failing to apply for international patents, resulting in the technology being used by foreign companies.

3.He estimated that he should receive compensation of 28 trillion Korean won (approximately $20 billion), with an initial claim amount of 100 billion Korean won (approximately $72.14 million). However, KT&G stated that they have already paid reasonable fees.

4.The case will enter the formal trial stage, with the expectation of initiating a technical evaluation process.

According to a report from the Seoul Economic Daily on May 20, a civil lawsuit between a former researcher at the South Korean tobacco company KT&G and the company regarding heated tobacco technology was unable to reach a settlement in mediation. This case is expected to be resolved in a formal trial.

On April 22, the mediation meeting at the Daegu District Court in South Korea failed to resolve the dispute over compensation for job inventions between former KT&G researcher Kwak Daegeun（곽대근） and KT&G. Kwak Daegeun worked at KT&G from 1991 to 2010, during which time he completed a full range of product design and development, including heating elements and devices for heating tobacco products. He filed a lawsuit in April 2024, alleging that he did not receive fair compensation for this job invention.

He claimed that the company inherited some technology and applied for patents domestically, but most of the inventions were not patented, especially internationally. Kwak Daegeun alleges that this has led to a globally renowned company A launching and selling HNB devices in China since 2017. Guo estimates that he should receive a total compensation of 28 trillion Korean won (approximately 2 billion US dollars), with the initial claim amounting to 100 billion Korean won (about $72.14 million ).

KT&G stated that they had engaged in thorough negotiations with Guo Dagen and had paid appropriate compensation through a technical consultant contract. The company also stated that Guo Dagen's accusations regarding international patents were unfounded, citing that they had not applied for foreign patents due to unclear commercial prospects.

Mediation was unsuccessful, and the court will proceed with formal trial, with an evaluation of e-cigarette technology expected. The evaluation date has not been determined. Kwak Daegeun's legal representative stated that the core of the case is about job invention, and expert evaluation will begin soon. However, both parties may still be able to resume mediation during the litigation process.

KT&G stated that they have provided Guo Dagen with appropriate compensation for his job invention through legal procedures and have signed an agreement to cease further litigation. They believe that the claim is in violation of the agreement and have expressed that the company will actively respond to this lawsuit.