Punitive Damages for Trademark and Design Infringement Increased Fivefold... Implemented in the First Half of This Year

The cap on punitive damages applied when trademark rights and design rights are infringed will increase from three times to five times.

The Korean Intellectual Property Office (KIPO) announced on the 19th that the amendments to the Trademark Act and Design Protection Act, which include this change, will be enforced from July 22 this year (promulgated on the 21st of this month).

The core of the amendment is to allow compensation up to five times the amount of damages (recognized amount) caused by intentional infringement of trademark rights or design rights.

Previously, in August last year, the punitive damages cap was raised to five times through amendments to the Patent Act and the Unfair Competition Prevention Act, covering patent and trade secret infringement and idea theft. This amendment expands the scope of increased punitive damages from patents and the like to trademarks and designs.

The increase in the punitive damages cap is a measure to prevent malicious infringement of trademark and design rights and to ensure the effectiveness of victim relief.

One of the reasons intellectual property infringement has persisted is the complacent perception that “the profit gained from infringement is greater than paying the rightful price for intellectual property.” Reflecting this, KIPO’s domestic online counterfeit goods monitoring and enforcement results show that the number of detected counterfeit goods distribution cases nearly doubled from 137,382 cases in 2020 to 272,948 cases last year.

To prevent damage caused by mass production and distribution of counterfeit goods, strengthening rights protection measures such as raising the punitive damages cap was necessary.

China and South Korea are the only countries with a punitive damages cap of five times. The United States recognizes punitive damages up to three times for design right infringement, but there is no punitive damages system for trademark infringement. Japan does not apply punitive damages for either trademark or design right infringement. Compared to major countries, the fivefold punitive damages is the highest level worldwide.

KIPO evaluated that the amendments to the Trademark Act and Design Protection Act are the result of a social consensus formed due to the increasing severity of intellectual property infringement, including patents and trade secrets.

Furthermore, with the punitive damages system of up to five times being expanded from patent, trade secret infringement, and idea theft to trademark and design infringement, the overall protection level of domestic intellectual property rights is expected to be further strengthened.

Kim Wanki, Commissioner of KIPO, said, “Once the amendment is enforced, more effective relief for rights violations due to trademark and design infringement will be possible. However, for punitive damages to be properly applied, proving the intentionality of the infringement is necessary, and for that, evidence collection must precede. Therefore, we will actively work on improving systems such as Korean-style evidence collection.”

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