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Statutory Damages and Treble Damages in Korean IP Laws

Gyooho Lee, Professor of Law, Chung-Ang University School of Law, Seoul, Republic of Korea.

To prove the causation between the defendant’s infringement of an intellectual property (right) of the plaintiff and actual damages and the amount of actual damages has been very challenging in cases related to intellectual property. Hence, the intellectual property laws in the Republic of Korea have provided several provisions computing damages based on lost sale, defendant’s profits or reasonable loyalty, etc. In addition to those provisions, statutory damages are available in copyright or trademark infringements where proof of actual damages is insufficient or actual damages are difficult to be calculated. In addition, treble damages are available where such damages are not enough to compensate the plaintiff in intentional patent infringement cases and trade secret misappropriation cases.

This Article explores statutory damages and treble damages in the Korean intellectual property law. Statutory damages and treble damages are modeled after American intellectual property laws, thus somehow foreign to civil law tradition. In this sense, the overview of statutory damages and treble damages in Korea will contribute to better understanding of how to harmonize civil law tradition with the legal elements transplanted from America.

In this Article, I argue that treble damages are categorized as increased damages, not punitive ones. In addition, it puts emphasis on my argument that eight factors to be considered in computing treble damages constitute material facts. In this regard, this Article proposes how to allocate burden of proof between parties, while critically analyzing each factor.

1. Introduction

To prove the causation between the defendant’s infringement of an intellectual property (right) of the plaintiff and actual damages and the amount of actual damages has been very challenging in cases related to intellectual property. [1] Hence, the intellectual property laws in the Republic of Korea (hereinafter “Korea”) have provided several provisions computing damages based on lost sale, defendant’s profits or reasonable loyalty, etc. In addition to those provisions, statutory damages are available in copyright or trademark infringements where proof of actual damages is insufficient [2] or actual damages are difficult to be calculated. [3] In addition, treble damages are available where such damages are not enough to compensate the plaintiff [4] in intentional patent infringement cases and trade secret misappropriation cases.

Especially, this Article explores statutory damages and treble damages in the Korean intellectual property law. Statutory damages and treble damages are modeled after American intellectual property laws, thus somehow foreign to civil law tradition. In this sense, the overview of statutory damages and treble damages in Korea will contribute to better understanding of how to harmonize civil law tradition with the legal elements transplanted from America.

At the outset, this Article illustrates statutory damages in copyright and trademark laws. In this regard, a trademark case related to statutory damages will be explained. Next, the Article examines treble damages in patent infringement and trade secret misappropriation cases. To discuss the history of the factors to be considered in computing treble damages, the Article explores other laws proscribing treble damages at this stage. In concluding, the Article identifies treble damages as increased damages, not punitive ones. The Article critically analyzes the factors to be considered in computing statutory damages and treble damages.

 

2. Recent development in statutory damages in the Korean intellectual property laws

2.1. General overview of statutory damages

The Free Trade Agreement between Korea and the United States of America (hereinafter “KORUS FTA”) was concluded on April 1, 2007 and was first signed on June 30, 2007. Following the first signature of the KORUS FTA, its renegotiated version was signed in early December 2010. The KORUS FTA was ratified by the United States on October 12, 2011 and by Korea on November 22, 2011. The KORUS FTA took into effect on March 15, 2012. [5]

Article 18.10 paragraph 6 of the Free Trade Agreement between the Republic of Korea and the United States of America (hereinafter “KORUS FTA”) states that “In civil judicial proceedings, each Party shall, at least with respect to works, phonograms, and performances protected by copyright or related rights, and in cases of trademark counterfeiting, establish or maintain pre-established damages, which shall be available on the election of the right holder. Pre-established damages shall be in an amount sufficient to constitute a deterrent to future infringements and to compensate fully the right holder for the harm caused by the infringement.” [6] Furthermore, Article 18.10 paragraph 10 (b) of KORUS FTA prescribes that, in civil judicial proceedings concerning the acts described in Article 18.10 paragraph 8 of KORUS FTA, each contracting country shall provide that its judicial authorities shall, at least have authority to provide an opportunity for the right holder to elect award of either actual damages it suffered or pre-established damages. [7] By implementing the KORUS FTA, Korea adopted statutory damages in cases concerning infringement of copyright and related rights, and trademark counterfeiting cases for the first time. In other words, transplant of statutory damages into Korea was the product of the KORUS FTA. The statutory damages were adopted pursuant to copyright law [8] and trademark law, [9] which were revised on December 2, 2011 and effective since March 15, 2012.

A holder of author’s economic right, etc. may claim considerable damages within the scope of up to ten million won (50 million won in cases of intentionally infringing rights for profit) for ..


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