[KOR-US NOW] A Strengthening of IP Protection In Korea: A Broadening of Punitive Damages

2020. 10. 15. THU

On or after July 9, 2019, under the “Patent Act” and “Unfair Competition Prevention and Trade Secret Protection Act”, Korean courts may award damages up to three times the amount of damages in case of willfully infringing the patent rights and trade secrets as punitive damages.

And, recently, the amendments to the “Trademark Act”, “Design Protection Act” and “Unfair Competition Prevention and Trade Secret Protection Act” were passed at the National Assembly and the amendments will be effective on or after April 2021 (no retroactive effect). The major amendments are the introduction of punitive damages for (a) willful infringement of the trademark rights and design rights, (b) willful act of unfairly using information. These amendments authorize Korean courts to award up to treble damages as punitive damages.

Specifically, Korean courts consider the following eight factors to award the punitive damages.

(1) whether the infringer has a dominant position;

(2) whether the infringer knew the act of infringement would cause harm to the owner;

(3) the significance of any such damages;

(4) the economic benefits to the infringer from the infringement;

(5) how frequently and how long the infringing activity was committed;

(6) the criminal penalty for the infringing activity;

(7) the infringer's financial status; and

(8) what efforts the infringer has made to reduce the harm to the owner.

These eight factors are similar to the following nine factors (“Read Factors”) the US courts consider when they determine willfulness of infringer and enhancement of damages. Read Corp. v. Portec, Inc., 970 F.2d 816, 826-27 (Fed. Cir. 1992).

1) whether the infringer deliberately copied the claimed invention;

2) whether the infringer had a good-faith belief of invalidity or non-infringement;

3) the infringer's litigation behavior;

4) the infringer's size and financial condition;

5) closeness of the case;

6) duration of the misconduct;

7) whether the infringer took any remedial action;

8) the infringer's motivation for harm; and

9) whether the infringer attempted to conceal the misconduct.

To be continued.