The Korean Trademark Act (“KTA”) and Korean Design Protection Act (“KDPA”) have recently been amended to allow treble damages in infringement cases involving trademarks and designs. The two laws brought into effect by the latest revisions are, in effect, mutatis mutandis expansions of the 2019 revisions to the Patent Act, which introduced treble damages for willful patent infringement.

There have been growing demands to strengthen the protection of intellectual property rights in Korea by adopting stronger punitive damages for infringement. With the recent revisions to the KTA and KDPA, which took effect on October 20, 2020, courts can now order (not only patent infringers, but also) design or trademark infringers to pay up to three times the assessed damages if the infringement is found to be willful or intentional. In particular, the revised KTA specifically enumerates the following eight (8) factors for the court’s consideration in assessing the amount of damages against a trademark infringer.

(1) degree of harm to the distinctiveness or fame of the infringed mark

(2) infringer’s willfulness or awareness of the damages to be caused

(3) magnitude of damages inflicted upon the trademark owner or its exclusive licensee

(4) economic benefits gained by the infringer as a result of the infringement

(5) duration and frequency of the infringing acts

(6) amount of criminal penalty paid by the infringer, if applicable

(7) financial status of the infringer

(8) extent of efforts made by the infringer to mitigate damages

Further, in calculating the amount of damages, the standard used to calculate royalties has also been revised from “ordinarily expected royalties” to “reasonable royalties.” This revision is significant in that plaintiffs have often had to resort to royalties to determine damages, as they generally had difficulties in proving the infringers’ actual profit from their infringing activities. Further, damages calculated on the basis of a plaintiff’s lost profit were often inadequate, when the plaintiff’s own scale of business or production capacity is relatively small. The recent amendment changing the royalty standard to “reasonable royalties” from the past standard of “ordinarily expected royalties” is further intended to remove the ambiguity where there is no existing royalty that can be referenced to ascertain what can be ordinarily expected. 

The revision has also increased the amount of statutory damages for negligent trademark infringement, from a maximum of KRW 50 million under the previous KTA, to a maximum of KRW 100 million. If the infringing act is found to be willful or intentional, the damages can now be trebled, up to KRW 300 million. With the substantial increase of the potential damages against varied nfringers, the new KTA and KDPA are expected to help strengthen trademark and design protection Korea.