[Asia Economy (Daejeon) Reporter Jeong Il-woong] A punitive damages system requiring compensation up to three times the amount of damages for infringing on others' trademark rights and design rights will be introduced and implemented.
On the 27th, the Korean Intellectual Property Office (KIPO) announced that the Intellectual Property Protection Act (amendment) containing this provision recently passed the National Assembly plenary session and is scheduled to take effect from April next year.
According to KIPO, first, the Trademark Act and Design Protection Act will be partially amended to introduce a punitive damages system that requires compensation up to three times the amount recognized as damages in cases of intentional infringement of trademark rights or design rights.
The core of the amendment is to expand the scope of the punitive damages system, which was introduced in 2018 for patent and trade secret infringement under the Patent Act and Unfair Competition Prevention Act, to include the trademark and design fields.
The scope of the punitive damages system will include trademarks and designs, and at the same time, the calculation of damages will be made more realistic.
For example, KIPO will revise the standard for calculating damages by royalties in cases of trademark infringement from ‘ordinary’ to ‘reasonable’ amounts, allowing damages to be calculated based solely on the value of the infringed trademark rights without being confined to royalty standards generally accepted in the trading industry.
Additionally, the maximum limit of statutory damages introduced in the Trademark Act in 2011 will be raised from 50 million KRW to 100 million KRW, and grounds will be established to allow compensation up to 300 million KRW as punitive damages when intentional infringement is recognized.
This was done considering the expansion of the product trading market and inflation factors since the system's introduction in 2011, aiming to enhance the effectiveness of trademark rights protection along with the triple damages system.
In particular, the recent amendment also establishes grounds to punish patent infringement offenders even without a victim’s complaint. The ‘complaint-based offense’ system, which allowed patent infringement investigations only when the patent holder filed a complaint, has been revised to a ‘non-prosecution offense’ system that permits ex officio investigations without the patent holder’s complaint, thereby further strengthening patent protection.
KIPO Commissioner Kim Yong-rae said, “The reason intellectual property infringement has not been eradicated so far is that it was possible to judge that the benefits gained from infringement were greater than paying the rightful value for intellectual property.” He added, “By including and applying acts such as trademark and design infringement and idea theft to the previously introduced punitive damages system, we expect the level of domestic intellectual property protection to be further enhanced.”
He also stated, “KIPO plans to expedite the introduction of systems such as ‘improvement of damage calculation methods’ and ‘evidence collection system for patent protection of small and medium-sized enterprises’ to support this amendment.”
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