SOUTH KOREA Law and Practice Contributed by: Dongju Kwon, Changkwon Kim, Sejung Lee and Yoon Sun Kim, Yoon & Yang LLC
7.2 Measures of Damages Under the UCPA, a misappropriator that dam - ages the trade secret owner’s business inter - ests through wilfulness, intention or negligence is liable to compensate for such damages; if the misappropriation is found to be wilful, the court may award up to quintuple damages (Articles 11 and 14-2). Actual Damages From the Misappropriation As it is difficult for the claimant (owner) to prove a causal relationship between the misappropria - tion and actual damages, as well as the amount of actual damages, the UCPA provides damage calibration rules based on the following legal presumptions. Calculation of damages As a formula for damages, the amount of dam - ages may be calculated by the sum of the fol - lowing. • The amount calculated by multiplying the volume of the goods transferred by the mis - appropriator (the “Volume Transferred” ) with the claimant’s presumed profit per unit of the goods that the claimant could have sold had there been no misappropriation. The volume of the goods that the claimant could not have sold even in the absence of such misappro - priation (the “Unsaleable Volume” ) should be deducted from the Volume Transferred. The Volume Transferred should not exceed any volume resulting from deducting the volume of the goods actually sold by the claimant from the volume of the goods that the claim - ant had the capacity to produce (the excess volume shall be referred to as “Volume Exceeding Presumed Inventory” ). • The amount that the claimant could reason - ably have received had there been no such misappropriation from the Volume Exceed -
ing Presumed Inventory or the Unsaleable Volume. Misappropriator’s profits gained by the misappropriation The profits gained by the misappropriator may be presumed to be the amount of damages suf - The claimant may choose the amount of rea - sonable royalty as damages against misappro - priation, and the reasonable royalty denotes the objective amount that would have been paid for the trade secret if the misappropriator had gone into a licence contract with the claimant. The reasonable royalty is guaranteed as the base amount of damages for every misappropriation, and if the actual damages amount exceeds the royalty amount, such excess amount may also be claimed as compensation. fered by the claimant. Reasonable royalty Calculation of Damages at Court’s Discretion Further, under the UCPA, where the court rec - ognises the extreme challenge of proving the amount of damages incurred with respect to the misappropriation in litigation owing to the nature of the case, it may determine a reason - able amount on the basis of the entire purpose of oral proceedings and the outcome of examina - tion of evidence (Article 14-2). Punitive Damages As explained above, punitive damages (quintu - ple damages) are available and the UCPA pro - vides that the court should consider the follow - ing in determining damages (Article 14-2): • whether the misappropriator has a superior bargaining position;
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