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Patent License Agreement in Korea – What Happens to Royalty Payment When the Patent Later Becomes Invalidated

Korean Law OfficeThere is no doubt that intellectual property is a valuable asset and parties all around the world are dealing with an arrange of utilizing 3rd party’s intellectual properties.  Sometimes it could be a license or sometimes a transfer.  In any case it is very important to verify the validity of the underlying intellectual property before entering into a contract.  As for a patent, first it looks relatively simple compared to other intellectual property such as a copyright to clear this issue because a patent is being registered with the Korean Intellectual Property Office.  The registration, however, does not guaranty the validity of the patent at issue.  It can be challenged later by 3rd party and could be nullified by the court’s decision.  Then what happens if the patent becomes void after the license agreement is entered into?  The Korean Patent Act provides that if a court’s decision invalidating a patent becomes final and conclusive, the patent shall be deemed never to have existed.  Then what happens to the royalty previously paid by the licensee?  Does the licensee can refuse to pay the royalty after the patent gets invalidated and even ask for the refund of the royalties previously paid pursuant to the patent license agreement?  The Supreme Court of Korea said No.
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Prenuptial Agreement under Korean Law

Unlike situations in some states in the U.S., a prenuptial agreement is somewhat in a grey area in Korean legal system.  When the case later goes into a divorce by agreement, the prenup would be fully honored by the court, too.  When the case, however, goes into a judicial divorce or a contested divorce, the Korean court applies more strict standard in honoring the validity and application scope of the prenuptial agreement.

I would not say signing a prenuptial agreement is meaningless.  To the contrary having a prenuptial agreement is better than having no such agreement.  Even in case of a contested divorce, the existence of a prenuptial agreement could work for your advantage when the court decides which property shall be distributed and which property shall be opted out.

If you have any question regarding this article or you are in a similar case/situation , please visit our Legal Consultation center or send your inquiry email by clicking here.  Our Korean qualified lawyer will answer your inquiry.

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[Q&A] Leaking Employer’s Confidential Information and Employment Termination : What Is Confidential Information under Korean Law?

“Hello, I am a U.S. citizen working for a Korean listed company.  Recently my company sent me a dismissal notice saying I had breached the employment contract by leaking their confidential information.  Informations at issue are a set of sale/purchase statements of the company.  I downloaded those informations from the company’s server to my personal email account.  But, there has been no warning mark of confidentiality.  My other colleagues have a free access too, and the information sometimes was provided to our suppliers.  Did I really breach the confidentiality of my Korean employer?”  

Leaking employer’s confidential information could result in a termination of the employment contract.  The legal issue, however, still remain whether or not the information can be regarded as a confidential information.

Most employers in Korea have their own rules of employment which state what is a confidential information.  And even an employment contract could list a set of confidential informations which the employee should not disclose to 3rd parties.  But, defining what is a confidential information is a matter of law and, therefore, the Korean court does not always follow the definition which an employer had been set in their internal documents.

The Korean court has well-established precedent that the confidential information should be Continue reading


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Introduction to the Korean Inheritance Law

When a person is deceased in Korea, the inheritance comes to fruition immediately.  The Korean inheritance law provides who shall become the inheritor and beneficiary of the property of a deceased person, i.e. estate.  This, however, does not always mean the inheritor shall be given all the property of the decedent.  There are separate rules and restrictions of the distribution of the estate in Korea.

The basic rule of the Korean inheritance law is that the property of a deceased person is distributed according to his or her will.  So, a person who is not categorised as a person who can be an inheritor by law can be a beneficiary of the property by the decedent’s will.  What if there is no valid will?  The Korean inheritance law sets forth the rule of intestate succession.  This rule of intestate succession names the beneficiary and the shares of each beneficiary for a distribution.  The intestate succession rule provides that persons become beneficiaries in the following order:

  1. Direct descendants (children or grandchildren)
  2. Direct ascendants (parents or grandparents)
  3. Siblings
  4. Relative within the 4th degree of collateral consanguinity

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What to Expect When Dismissed by Employer in Korea

It is well known that the Korean labor law provides the employees with generous protections when it comes to the matter of disciplinary measures taken by the employer. Unlike many other foreign legal regimes, Labor Standard Act of Korea (LSA) requires the employer of five or more employees to establish a just cause for a dismissal and any other disciplinary actions.  In other words, the employment is not “at-will” in Korea.  (Note:  There is a legal concept of no fault dismissal based on the managerial hardship under the LSA, which requires very strict requirements to execute.  This will be the subject of our upcoming article) 

This rule of law shall equally apply to the employment contract between Korean employer and Foreign employee in Korea, and vice versa.  More importantly, this is the case even when the employee working in Korea agrees in his employment contract that the Korean labor law does not apply.  That is because the Private International Act of Korea which provides the general principles for the choice of law in Korea enables every Korean and foreign employee working in Korea to enjoy the very protections under the mandatory rules of the Korean labor law. Therefore, it is highly advisable that any foreign employee working in Korea and a multinational which has employees in Korea must understand how the Korean labor law regulates the dismissal and under what situation the dismissal becomes a wrongful termination.

Then What is the Just Cause for Dismissal in Korea?

The LSA does not provide what the just cause exactly means.  It is up to the court’s review and the decision thereafter.  That said, it is firmly established in the Supreme Court’s precedent that Continue reading


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[Q&A: Labor Law] I Work for Korean Branch of U.S. Company. My Employment Contract Provides U.S Law Shall Apply and Severance Pay Is Not Granted. Can I Still Get a Severance Pay Pursuant to Korean Labor Laws?

Question) I am an American citizen working in South Korea.  Originally I was working for a U.S. company incorporated in the state of New York, but 3 year ago I was seconded to the Korean branch of my U.S. company, and have been working for the branch until now.  When I was seconded, my new employment contract provided that the New York state law shall apply to my employment relation in Korea.  Now, my employment contract is expiring and I would like to know whether I am entitled to the severance pay under the Korean labor law.  I know my employment contract and my company’s policy do not provide the right to severance pay.  But, as I have been working in Korea for 3 years, I am wondering if the statutory rights of severance pay under the Korean labor law could be given to me.

Answer) The answer is Yes.  You are entitled to the severance pay under the Korean labor laws.  (check here as to how the the severance pay under Korean law is recognized and operates)  This answer could be accepted quite surprising considering the fact that the parties had previously agreed (i) the Korean labor should not apply and (ii) the severance pay should not be awarded.  How come the Korean labor law intervenes in the parties’ employment relation which is seemingly irrelevant to the Korean law implications other than the fact that work place of the employee is in Korea?  The answer lies in the provisions of Private International Act of Korea which provide the general principles for the choice of law in Korea.

When a legal relation has certain foreign elements, the court must decide which jurisdiction’s law shall apply to interpret that legal relation.  In Korea, the Private International Act provides the general rules and principles for the governing laws of the various types of legal relations.  Specifically, the Act provides that if the employer and employee agree to their own choice of law, the employment contract is governed by the law chosen by the parties.  But, this does not mean the parties can freely determine which law and regulations apply to their employment relation.  It is true in Korea that the party autonomy is a general principle of governing laws, but party autonomy is subject to limits imposed by the overriding public policy and mandatory rules.  Accordingly, Continue reading


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Attorney Wonil Chung Successfully Obtained a Supreme Court’s Ruling in a High-Profile Overture Sponsored Links Case Reinforcing Unrestricted Access to Internet Network

그림 2In April 2013, attorney Mr. Wonil Chung successfully obtained a Supreme Court’s ruling which overturned lower court’s decision in connection with the sponsored links, Internet keyword advertising services, operated by Overture Services Inc., a wholly-owned U.S. subsidiary of Yahoo! Inc.  Before this ruling from the Supreme Court of South Korea, there had been an increased controversy over whether Overture system user’s deployment of an automated program to access to the sponsored links could fall into a crime causing a harm to the Internet network system.  In this case, attorney Mr. Chung argued before the Supreme Court of South Korea that it cannot constitute a statutory crime, otherwise the result would be an over-reaching of Korean criminal statute and cause an excessive chilling effect on the free access to the Internet.  Responding to Mr. Chung’s arguments, the Supreme Court of South Korea held that it does not constitute a statutory crime of interference with stable operation of the Internet network.  With its ruling, the Court struck down the prosecutor’s attempt of excessive criminalization and reinforced online service user’s right of free and unrestricted access to the Continue reading