On May 20, 2020, the Korean National Assembly passed a bill amending the Patent Act to allow a claim for damages against patent infringers' product sales that exceed the patentee's production capacity.  This amendment takes effect on December 10, 2020.

Under the current Patent Act, when the patent owner's product production capacity is 100 units, whereas the infringer sells 10,000 infringing units to the market, it was difficult for the patent owner to claim damages for the 9,900 infringing products exceeding his production capacity of 100.  This issue has continuously been raised by small and medium-sized companies as well as startup companies.

When the revised law is enforced, the patent owner will be able to obtain damage compensation from the infringer for the remaining 9,900 units as follows:

•         - Current amount of compensation = patent owner's production capacity (100 units) × profit per unit

•         - New compensation amount = (patentee's production capacity (100 units) × profit per unit) + (excess (9,900 units) × reasonable license fee)

It should be noted that this new standard for damage calculation may be applied in combination with the treble damage compensation for willful patent infringement, which has been in effect since July 9, 2019.  As such, under the new standard, the number of treble damages will also increase.