[1] The meaning of "amount of profit per unit" under the main sentence of Article 64 (1) of the former Design Act concerning the presumption of the amount of loss caused by infringement of a design right, etc.

[2] The case holding that where the amount of damages caused by the infringement of a design right related to the tent smoking machine is estimated pursuant to Article 64 (1) of the former Design Act, the amount of damages can not be calculated by including the labor profit from the installation of a tent smoking machine in the "amount of profit per unit" under the main sentence of the same paragraph

[3] The case where the amount of damages can be reduced pursuant to the proviso of Article 64(1) of the former Design Act concerning the presumption of damages caused by the infringement of the design right, etc., and the infringer who invoked the above proviso shall assert and prove

[1] The "amount of profit per unit" in the main text of Article 64 (1) of the former Design Act (amended by Act No. 7289 of Dec. 31, 2004) concerning the presumption of the amount of damages caused by the infringement of a design right, etc. refers to the amount calculated by deducting the cost per unit of the product that would have been expected to have been additionally disbursed for the sale of the product increased by the owner of the design right if there is no infringement.

[2] The case holding that since an owner of a design right has received a supply of and demand for the installation of a astronomical smoking plate from a purchaser while manufacturing and selling a astronomical smoking plate, which is the product of a registered design, even though it seems that if the infringer had not infringed the design right, he could sell the astronomical smoking plate more and would have received more payment for the installation of a astronomical smoking plate, it cannot be deemed that the price for the installation of a astronomical smoking board is the sale price of a astronomical smoking board, and therefore, the amount of damages caused by the infringement of the design right of a astronomical smoking board cannot be calculated pursuant to Article 64 (1) of the former Design Act (amended by Act No. 7289 of Dec. 31, 2004) in presumption of the infringement of the design right of a astronomical smoking board, the amount of damages shall not be included in the "amount of profit per unit" under the main sentence of Article 64 (1) of the same Act

[3] The reason under the proviso of Article 64(1) of the former Design Act (amended by the Design Protection Act, Act No. 7289 of Dec. 31, 2004) concerning the presumption of the amount of damages caused by the infringement of the design right, etc. refers to the case where there is a sales quantity unrelated to the infringement of the design right due to the infringer’s efforts to develop and sell the market, the infringing person’s trademark, the advertisement, publicity, the quality of the infringed product, etc.

[1] Article 64 (1) of the former Design Act (amended by Act No. 7289 of Dec. 31, 2004) (see current Article 64 (1) of the Design Protection Act) / [2] Article 64 (1) of the former Design Act (amended by Act No. 7289 of Dec. 31, 2004) (see current Article 64 (1) of the Design Protection Act) / [3] Article 64 (1) of the former Design Act (amended by Act No. 7289 of Dec. 31, 2004) (see current Article 64 (1) of the Design Protection Act) (see current Article 64 (1) of the Design Protection Act)

Korea AHS Co., Ltd. (Attorney Kim Jong-ju, Counsel for the plaintiff-appellant)

Han River rink Co., Ltd. (Law Firm Dr., Attorney Park Jong-mun et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2004Na65345 delivered on May 25, 2005

All appeals and supplementary appeals are dismissed. The costs of appeal and supplementary appeal are assessed against each party.

1. Judgment on the Plaintiff’s grounds of appeal

The main text of Article 64(1) of the former Design Act (amended by Act No. 7289, Dec. 31, 2004; hereinafter the same) provides that where an owner of a design right claims damages from a person who has infringed the design right against the person who has infringed the design right, the amount calculated by multiplying the number of transferred articles by the profit per unit of the articles that the owner of the design right could have sold in the absence of the infringement may be the amount of damages of the owner of the design right. The amount of profit per unit quantity referred to in this provision refers to the amount calculated by deducting the cost per unit of the product that the owner of the design right could have sold in the absence of the infringement.

In light of the above legal principles and the records, even if the plaintiff was to receive a supply of and demand from the purchaser for the installation of the tent smoking machine, which is the product of the registered design of this case (registration No. 1 omitted), it cannot be deemed the sale price of the astronomical smoking machine. Thus, even if the plaintiff, the owner of the registered design of this case, could sell the astronomical smoking machine more if he did not infringe the defendant's design right, and accordingly, he could not be deemed the profit amount per unit of Article 64 (1) of the former Design Act, including labor profit from the increased work, even if the plaintiff, the owner of the registered design of this case, could not be deemed to have received a supply of the astronomical smoking machine from the purchaser. Meanwhile, the court below found the plaintiff's profit amount per unit and the quantity of the defendant's sale of infringed goods based on the evidence duly employed, and found the amount of damages in accordance with the above provisions after recognizing the plaintiff's profit amount per unit and the defendant's sale price increases more than 1,000.

2. Judgment on the Defendant’s grounds of appeal

A. Regarding ground of appeal No. 1

The court below held that when comparing the registered design of this case with the defendant's infringement 1, the defendant's design of this case is infringed on the defendant's registered design of this case, the court below held that the defendant's design of this case is in violation of the registered design of this case because the defendant's dominant characteristics such as the protruding part in the form of 2 column consecutively, protruding part in the central level, and the protruding part, from the central level to the protruding part, etc. are similar to the dominant characteristics such as the main part, and 1, etc. In light of the records, the decision of the court below is proper, and there is no violation of law such as misunderstanding of legal principles as to the similarity of the design of this case, as otherwise alleged in the ground for appeal.

B. As to the grounds of appeal Nos. 2 and 3

The proviso of Article 64(1) of the former Design Act provides that when an owner of a design right is unable to sell an article for reasons other than infringement, an amount calculated by the volume of goods which he could not sell due to such reasons shall be deducted from the amount of damages under the main sentence of the same paragraph. Such reasons refer to the case where there is a sales quantity irrelevant to the infringement of the design right due to the market development network of the infringer, the trademark of the infringer, the advertisement, publicity, the quality of the infringed product, etc. In addition, the circumstance where there is competition between the owner of the design right and the infringing product without the infringement of the design right, or the situation where the utility model right is being executed in the infringing product, shall be included in such reasons. However, in order to claim a reduction in the amount of damages by applying the above proviso, the infringer must prove and prove the amount calculated by the number of goods which the owner of the design right

In light of the above legal principles and records, even if there was an enterprise that produces and sells the astronomical smoking board in Korea other than the plaintiff and the defendant at the time when the registered design of this case was infringed, or the defendant's utility model right (registration number 2 omitted) was being implemented in the production and installation of infringed products, the court below's rejection of the defendant's claim that damages should be reduced under the proviso of Article 64 (1) of the former Design Act is justified, and there is no proof as to whether the products produced and sold by the above astronomical smoking companies were written on the Smoking-ray board, which is the registered design of this case, or how the market share was contributed to the increase in the sale of infringed products, and there is no proof as to whether the market share was left or how the defendant's utility model right contributed to the increase in the sale of infringed products.

3. Judgment on the Plaintiff’s grounds of incidental appeal

Examining the reasoning of the judgment below in light of the records, the decision of the court below that when comparing the registered design of this case and the defendant 2 and 3, protruding part of the registered design of this case constitutes a slope which is lower than the point of the center to the outside, and the end part of the protruding part is good in a vertical angle, and the defendant's chief 2 and 3 are the most protruding part among protruding part, and the defendant's chief 2 and 3 are in the form of a heading to the outside of the two parts, and the defendant's chief 2 and 3 do not infringe the registered design of this case, and there are no errors in the misapprehension of legal principles as to the similarity of the design of this case, as otherwise alleged in the ground of appeal.

4. Therefore, each appeal and incidental appeal are dismissed, and the costs of appeal and incidental appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Hwang-sik (Presiding Justice)