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October 2020
October 2020Provisions for Intellectual Property Protection Introducing Treble Damages for Trademark/Design Infringement and Idea Theft Pass in the Korea National Assembly
(Amendments and Revisions to Trademark Act, Design Protection Act, Unfair Competition Prevention Act, and Patent Act to go into effect in April, 2021)
The bill for amendments and revisions to Trademark Act, Design Protection Act, Unfair Competition Prevention Act, and Patent Act passed in the Korea National Assembly and will go into effect from April, 2021. The key points are as follows.
1. Introduction of Treble Damages Provision for Infringement of Trademark and Design Rights
Trademark Act and Design Protection Act have been amended to introduce a punitive damages provision allowing up to three times the recognized amount of damages in case of willful infringement of trademark rights or design rights. This expands the punitive damages provision for infringement of patent rights and trade secret, which was introduced in 2018 to Patent Act and Unfair Competition Prevention Act, to trademark and design fields.
2. Revision of the Basis for Royalty Computation regarding Infringement of Trademark Rights and Design Rights (“Conventional” à “Reasonable”)
The basis for computation of damages by royalty in case of infringement of trademark and design rights has been revised from “a conventionally obtainable amount” to “a reasonably obtainable amount.” From this, increase in the recognized royalty rate is expected in the future.
3. Increase in Statutory Damages for Infringement of Trademark Rights (￦50 Million à ￦100 Million)
The maximum award for statutory damages, which was introduced to Trademark Act in 2011, has been increased from 50 million Korean won to 100 million Korean won (in case of willful infringement 300 million Korean won). The change is to reflect the expansion of the market for sale of goods, inflationary factors, etc. and to enhance the effectiveness of trademark protection along with treble damages provision.
When demanding compensation for damages, the trademark right holder must prove the amount of damages, but statutory damages provision allows the court to compute the amount of damages within the amount not exceeding the statutory amount with proof of infringement only, easing the burden of proof borne by the trademark right holder.
4. Introduction of Punitive Damages Provision Allowing Compensation of up to Three Times the Damages from Idea Theft
Unfair Competition Prevention Act has been amended to allow compensation of up to three time the damages from an act of idea theft. In addition, in case the recommendation for correction for an act of unfair competition is not followed through, the facts regarding violation can be publicly announced so as to enhance the effectiveness of administrative investigation and recommendation for correction.
5. Change from an Offense Subject to Complaint to No Punishment against the Will of the Victim
The bill for a revision of Patent Act to allow for punishment against an act of patent infringement without a complaint from the victim has passed the Korean National Assembly. Under the current Patent Act provisions, an offense of patent infringement is “an offense subject to complaint” where an investigation into the patent infringement may only be launched when there is a complaint from the patent right holder, and the complaint must be filed within six month from the date of act of infringement.
In the revised Patent Act, an offense of patent infringement has been revised to allow for ex officio investigation. However, under the revision, the offense cannot be punished against the will of the victim.
Over the years, it has been pointed out that the reason that infringement of intellectual property has not ceased is due to the fact that there is more to be gained through infringement than the price to pay. If the “punitive damages” provision introduced against patent infringement is expanded in all directions to acts of infringement of trademark and design rights and idea theft in order to strengthen the effectiveness of intellectual property protection, the level of protection for intellectual property overall will be greatly elevated.
Commissioner of the Korea IP Office, Young-Rae Kim, stated, “With the current amendments and revisions, strict and fair enforcement against infringement of intellectual property has been made possible, and the foundation for fair trade for fair value of intellectual property in the market going forward has been set. In order to facilitate the current amendments and revisions, we will quickly proceed with improvement of basis for computation of damages, which was first introduced into Patent Act, as well as introduction of system for collection of evidence for patent protection for small-to-medium-sized business.”
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