Korea Introduces Treble Damages in Infringement Cases and Reverses the Burden of Proof

Bilingual Version

Korea has officially adopted punitive damages for willful infringements of a patent right or a trade secret. Effective July 9, 2019, any intentional infringement of a patent right or its exclusive license in Korea shall be imposed punitive damages. The amount is up to three times the damages recognized by the court. The adoption of punitive measures is to ensure that the infringed right holders can be fully compensated and to curb unethical business practices in which competing market players prefer to infringing and paying damages, rather than negotiating and paying the appropriate licensing fees as provided by law. 

This new provision was included in an amendment bill of the Korean Patent Act and was passed by the National Assembly of Korea on December 7, 2018. The amendment bill also shifts the burden of proof, in patent infringement litigation, to the party denying a specific act of the alleged infringement. If the accused party fails to justify the specific act with sufficient evidence, the court may assume the allegedly infringing act to be true. 

Under the current Patent Act, the burden of proving a specific act of infringement in patent litigation lies with the accuser. The right holder has the obligation to identify an infringing product or service; but, in most cases, such evidence is not publicly or easily available. The defendant may win the lawsuit by simply denying the allegation. The Act and  the Korean Civil Procedure Code were amended in 2016 so that the court may order the alleged infringer to produce materials necessary to verify the alleged infringement. It however doesn’t bring a substantial change in the situation.

Eight Factors in Damage Calculations 

According to the newly added provisions, Articles 128 (8) and 128 (9) of the Korean Patent Act, the court will consider the following eight factors in determining whether the act of infringement is willful or intentional, as well as the amount of damages to be awarded.  

  • whether an infringer is in a dominant position (superior status); 
  • the degree to which an infringer recognized the willfulness of his misconduct or potential damages that a Plaintiff may sustain; 
  • the scope of damages suffered by a Patentees; 
  • economic benefits that an infringer obtained as a result of the infringing act; 
  • the period and frequency of the infringing act; 
  • penalties arising from the infringing act;
  • the scope of an infringer’s assets; and 
  • the degree of remedial efforts by an infringer. 

The adoption of treble damages for willful infringement is expected to redress certain distortions in the technology market and to encourage licensing between companies, as well as aid the infringed right holders to sufficiently recover their damages through litigation. The provisions regarding the punitive damages will be applicable to infringements occurring after the effective date of the revised Acts. 

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