By Timothy S. Donahue
Top Takeaways:
- Criminal Complaint: EMTEK accuses current and former KT&G executives of coercion, attempted extortion and unfair trade practices.
- Patent Ruling: South Korea’s Supreme Court upheld EMTEK’s ownership of five patents disputed by KT&G.
- Compensation Demand: EMTEK is seeking Won300 billion in mediation, while KT&G denies wrongdoing.
KT&G’s patent fight with a former vaping partner has moved from the courtroom to criminal allegations.
South Korean electronics manufacturer EMTEK filed a criminal complaint on November 4 against current and former KT&G executives, accusing the tobacco company of using its commercial leverage to obtain e-cigarette technology and of severing business ties when additional patent transfers were refused.
According to the report, the complaint names former KT&G CEO Baek Bok-in and Lim Wang-seop, a former head of the company’s next-generation products business who now leads Korea Ginseng Corporation.
EMTEK alleges violations of South Korea’s fair trade and subcontracting laws, as well as coercion and attempted extortion. KT&G denies wrongdoing and asserts that its dealings with EMTEK complied with contractual requirements.
The dispute stems from a partnership formed in 2016 to develop heated-tobacco devices. EMTEK began supplying KT&G with products after the November 2017 launch of the lil FT Solo 1.0.
Over the course of the relationship, EMTEK reportedly supplied approximately 9.06 million devices and 410 million cartridges. EMTEK claims KT&G improperly obtained rights to 41 patents between December 2017 and October 2018, and then demanded the transfer of another 64 patents and applications in 2021.
When EMTEK refused, KT&G allegedly reduced orders, canceled development contracts, and eventually ended the relationship.
“KT&G unilaterally canceled four development service cases with remaining terms and deliberately reduced annual transaction volumes worth around 100 billion Korean won, eventually halting all transactions in May 2024,” an EMTEK source said.
EMTEK’s sales to KT&G reportedly fell from Won167 billion in 2021, which accounted for 42% of its total revenue, to Won19 billion in 2023. Sales dropped to zero in 2025.
The companies previously fought over patent ownership in a civil lawsuit KT&G filed in March 2022. KT&G sought the transfer of six patents, arguing that intellectual property developed under the companies’ service agreement belonged to the tobacco manufacturer.
A court determined that five patents belonged to EMTEK and one to KT&G. South Korea’s Supreme Court upheld that decision in August. “Five of the six patents claimed by KT&G are EMTEK’s exclusive patents, even according to the contract’s wording,” the court said, according to the report.
EMTEK argues that the ruling supports its allegations that KT&G improperly pressured the company into surrendering intellectual property.
“KT&G entered the market using its partner’s technology when it lacked the capability to develop e-cigarette devices independently and then exploited its transactional position to demand the partner’s technology without compensation, eventually severing ties,” an EMTEK source said.
The company has also sought mediation through the Korea Fair Trade Mediation Agency, seeking Won300 billion ($210 million) in compensation.
KT&G rejects the allegations, stating that it fulfilled its contractual obligations and paid all development fees. “KT&G conducted normal transactions until the product supplied under the contract with EMTEK was discontinued in May 2024 and paid all service fees,” a KT&G source said.
The company attributed the breakdown in the relationship to EMTEK’s patent filings and to its own need to diversify suppliers.
“Trust was damaged due to EMTEK’s unauthorized patent filings and indirect filings through subsidiaries, and the need for diversifying suppliers led to the termination of transactions,” the source said.
KT&G also disputed EMTEK’s interpretation of the earlier patent ruling, emphasizing that the court’s rejection of five transfer claims did not constitute abuse of commercial bargaining power.
“Although five of the six claims were dismissed, the dismissal was not based on KT&G abusing its transactional position to seize EMTEK’s patents,” the KT&G source said.
The company also maintains that EMTEK is not subject to the Subcontracting Act. “KT&G will respond faithfully based on objective evidence regarding EMTEK’s complaint,” the source said.
