The Korean Patent Act was revised as of May 20, 2020 with respect to the provisions for calculating damages for patent infringement.
Under the pre-revised Act, no damages could be claimed for infringing products in a quantity exceeding a patentee’s capacity to produce its patented products. However, according to the revision, it is now possible for a patentee to claim damages even for the infringer’s sale of infringing products exceeding the patentee’s production capacity.
• Pre-revised Act: Patentee’s Production Capacity x Profit per Unit Product
• Revised Act: (Patentee’s Production Capacity × Profit per Unit Product) + (Quantity Exceeding the Capacity × Reasonable Royalty Rate)
For example, under the pre-revised Act, a patentee having a capacity of producing 100 products could only be awarded damages equivalent to 100 products. That is, even if an infringer sells 10,000 products infringing on the patentee’s right, the patentee could not be awarded damages for 9,900 products exceeding his/her production capacity. Based on the revision, however, the patentee may claim damages and request a reasonable amount of royalties to the infringer even for the 9,900 products exceeding the patentee’s production capacity (100 products).
The revised Act will take effect in December 2020. If the revised provisions for calculating damages are implemented, the protection of patent rights in Korea will be further enhanced along with the punitive damages (treble damages), which is effective as of July 9, 2019.