Easily Underestimating Intellectual Property Leads to Trouble... Patent Law Amendment Passed by National Assembly

[Asia Economy (Daejeon) Reporter Jeong Il-woong] A partial amendment to the Patent Act, aimed at realizing the amount of damages for infringed patent rights, has passed the plenary session of the National Assembly. The amendment is scheduled to take effect from December this year.

According to the Korean Intellectual Property Office (KIPO) on the 21st, under the current Patent Act, if a patent holder's production capacity is 100 units, even if an infringer produces 10,000 infringing products and sells them on the market, there is a limitation in that the patent holder cannot receive damages for the 9,900 products exceeding their production capacity (100 units).

Intellectual property rights have the characteristic that the rights holder can produce patented products themselves while also receiving royalties from third parties who use the patent. However, the current Patent Act does not reflect this characteristic of intellectual property rights, which has directly transferred the damage to small and venture companies.

However, once the amendment is implemented, securing intellectual property rights will be possible regardless of the patent holder's production capacity. The patent holder will be able to receive additional compensation (reflecting reasonable royalties for the patented invention) from the intellectual property infringer for the 9,900 units exceeding their production capacity.

Previously, the United States recognized this calculation method through case law since the 1940s, and Japan has also applied the same calculation method since last month.

However, Korea is the second country after the United States to operate triple damages (punitive damages) for patent infringement alongside calculating the amount of damages for intellectual property infringement by the patent holder.

In particular, KIPO emphasizes that Korea is the only country among the five advanced intellectual property countries (Korea, the United States, Europe, China, and Japan) to codify both the revised damage calculation method and triple damages in the Patent Act.

Above all, KIPO explains that with the combination of the improved damage calculation method and the triple damages system, the amount of compensation that intellectual property infringers must pay to patent holders in Korea will naturally increase (be realized), which is expected to promote the activation of patent technology transactions and intellectual property financing that had been interrupted due to the limitations of patent protection.

Park Won-joo, Commissioner of KIPO, stated, “With the amendment passing the last plenary session of the 20th National Assembly, the foundation of the damage compensation system has been completed,” and added, “Through this, Korea has established the strongest patent protection system in the world.”

He also said, “With the implementation of the amendment, it is expected that a fair trade culture where intellectual property is traded at its proper value will be established domestically,” and emphasized, “KIPO will make every effort to ensure that the institutional improvements contained in the amendment become a cornerstone supporting the growth of startups and small and venture companies.”

This content was produced with the assistance of AI translation services.