Amendments to the Trademark Act, Design Protection Act, and Unfair Competition Prevention and Trade Secret Protection Act, which provide compensation for damages for infringing goods sold over the rights holder's production capacity, passed the National Assembly on December 1, 2020.  It is expected to be enacted in June 2021.

Currently, if the scale of infringement exceeds the right holder’s production capacity, the amount of damages is determined within the range of the production capacity.  Under the amended laws, the scope of damages compensation will also include the sale of products that exceed the right holder’s production capacity, the amount being equivalent to the reasonable license fee. In other words,

Current compensation amount = (right holder's production capacity ­– actual sales quantity) × right holder’s profit per unit

Compensation for damages under the new rule = [(right holder’s production capacity – actual sales quantity) × right holder’s profit per unit] + [(total sales quantity of infringer – quantity not sold by right holder due to infringement) × reasonable royalty rate per unit]

Amendments to the Patent Act with such content passed the National Assembly on May 20, 2020, and went into effect on December 10, 2020 (see IP News on the homepage of Myung-Shin & Partners dated June 25, 2020).