Statutory Damage to TM Infringement in Korea



Under the Trademark Act, the TM owner may recover damages for trademark infringement, which generally are limited to one of 1) the registrant's profit but-for the infringement (calculated by multiplying the registrant's profit margin by the number of additional articles the registrant would have sold in the absence of infringement), 2) the infringer's profits from the infringement, 3) a reasonable royalty, or 4) an amount of actual damages the court determines is reasonable in light of the available evidence, if the other methods are not feasible.

In litigation practice, it is difficult to prove damage amount with specific number because infringers refuse to submit critical evidence regarding the accused infringer's sales and profits.

In 2012, the Trademark Act adopted statutory damage clause up to KRW 50,000,000 (approximately USD 44,000). This statutory damage provision may reduce the burden of proving trademark infringement damages.

However, the statutory damage provision, Article 111 requires that both the registered mark and the infringing mark and their associated goods, services be "identical or substantially indistinguishable," and additionally, that there be actual use of the registered mark at the time of infringement (as opposed to the actual damages provisions, which do not require use (though use has been required by courts regardless)).

Recently the Korean Supreme Court upheld the lower appellate ruling denying the plaintiff's statutory damages claim, both for lack of use and lack of exact similarity between the registered and accused marks. The lack of use ruling in particular may have depended in part on the complicated ownership and use history of the registered mark – the party that registered the mark sold the mark to another party, and the successor's subsidiary actually used the mark, but the Supreme Court essentially determined that that use did not accrue to the mark owner for purposes of qualifying for statutory damages.

In summary, the statutory damage is only applied to TM infringement case that strictly meet the requirements of the provision.
 

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