KT&G Former Developer Claims 2.1 Billion USD in Patent Rights in World's 1st Vape Technology Appeal

According to a report by the Korean news agency Yonhap on April 24th, Kwak Daeguen, a former research and development employee at KT&G, has filed a lawsuit against the company seeking up to 28 trillion Korean won (approximately 2.1 billion USD) in compensation for his invention of the world's first e-cigarette technology. This lawsuit sets a record for the highest amount claimed in a personal lawsuit in South Korea.

In the report, Guo Dagen's legal team stated that their compensation claim is based on KT&G's profits gained from Guo Dagen's invention, along with losses incurred by not filing a patent for the invention overseas, totaling 84.9 trillion Korean won. Of this amount, 2.8 trillion Korean won is designated as compensation for the work invention.

Mr. Guo Dagen joined the predecessor company of KT&G in 1991, which was then called the Korean Ginseng Tobacco Research Institute. He started developing e-cigarette products in 2005 and created an e-cigarette that could automatically control the heat source. In July 2005, Guo Dagen applied for his first patent, followed by a patent application in December of the following year for a device with automatic heating control. He also developed a pod that was compatible with this device and applied for a patent in June 2007, completing the development of a full set of e-cigarette products including the heat source, device, and pod.

Former researcher Guo Dagen claimed that despite inventing the world's first internal-heating e-cigarette from 2005 to 2007 and bringing in huge sales to domestic and international markets, he did not receive fair compensation.

Although KT&G took over this invention from Guo Dageun and patented some of the technology in South Korea, the majority of the invention remains unpatented by the KT&G company. Especially overseas, KT&G did not apply for a patent for this technology. Guo Dageun pointed out that despite developing this groundbreaking technology, a globally renowned tobacco company A began selling their internally heated e-cigarette in South Korea in 2017 due to the lack of overseas patents. Guo Dageun stated that he did not receive compensation for this invention, and after leaving his job, he only received an advance payment of 20 million won for a one-year technology consulting fee and a monthly salary of 6.25 million won, which was based solely on the technology consulting agreement.

A spokesperson from the law firm Jaeyoo stated, "It is reported that KT&G signed an overseas sales supply contract with a global e-cigarette manufacturer because former researcher Kwak Da-geun holds the world's first patented original technology."

On the other hand, Mr. Guo's calculation of compensation is based not only on the company's sales revenue, but also on the detrimental effects caused by the company's failure to apply for overseas patents. Therefore, in addition to the estimated sales revenue of 88 trillion Korean won that Mr. Guo expects to achieve during the 20-year duration of the patent registered in 2007.

In response, KT&G stated: "We have already paid appropriate compensation related to employee inventions through a technical consultation contract, which Mr. Guo has accepted and agreed not to raise any further issues." They added, "The situation of the involved patent being applicable has not occurred. If retired individuals who have already received compensation continue to make unfair claims, we plan to take active legal action."

Meanwhile, Guo Dagen also requested KT&G to calculate the sales profit of 70.7 trillion Korean won earned by competing companies. He also believes that the 6.7 trillion Korean won profit generated from the transaction with Company A should be included in the compensation for employees.

Facing KT&G's statement, Guo Dagen disagrees and states, "The claim that Company A cannot develop a cigarette-shaped e-cigarette if they register the patent overseas is not true." He goes on to say, "At that time, it was difficult to ensure commercial viability, so we did not apply for overseas patents, but the product currently being sold by Company A uses that patent. This is a completely innovative product, with the original cigarette-shaped e-cigarette model being released in 1998," he argued.