KT&G is facing the largest compensation demand by an individual in a legal proceeding in a new lawsuit. Photo credit: Kwangmo, CC.
KT&G is being sued for US$2 billion by a former employee who asserted that the company did not adequately compensate him for inventing what he claims is the world’s first heated tobacco product.
Kwak Dae-geun, a former researcher at KT&G, filed a civil lawsuit at a district court in Daejeon, where the company's headquarters is located, seeking KRW2.8 trillion (US$2 billion) in compensation for his invention. This is the largest compensation demand by an individual in a legal proceeding, not including collective suits.
Kwak, who joined the company in 1991, created a prototype of a non-combustible tobacco device in 2005. He submitted his initial patent for the device in July of that year and a second patent for an upgraded product featuring an automatically-controlled heater in December 2006. Then, in June 2007, he filed a patent for a tobacco stick, completing a heated tobacco product set comprising a heating unit, another device, and a stick. The researcher reportedly left KT&G in 2010 as part of the company’s restructuring after his proposal for further developments was turned down.
KT&G inherited Kwak's inventions and patented some of his technologies. However, Kwak alleged he did not receive recognition as an employee inventor for those technologies, and KT&G did not pursue overseas patents for the technologies he created.
Kwak's requested compensation was based on projections of KT&G's potential sales from his patented technology over a 20-year period, the missed earnings from overseas patents, and the revenue lost to foreign competitors due to KT&G's failure to address patent infringements.
KT&G says it properly compensated Kwak through a technology advisory deal, which Kwak accepted without raising legal concerns. Furthermore, the company stated that the technologies developed by Kwak are not utilized in its current product lineup and that it had introduced early-model heated tobacco-type products as far back as 1998.