Under Korean patent law, a patentee generally may claim damages according to its lost profits from the infringement, the infringer's profits from the infringement, or a reasonable royalty, subject to the court's discretion. The "lost profits" calculation method, however, is subject to the limitation that damages will not be awarded beyond the patentee's own production capacity. As a result, the damages available to the patentee under this calculation method have tended to be quite low, even where the infringer is a much larger company with greater ability to produce and market the relevant products or services. This situation has been criticized as insufficient to deter patent infringement, particularly infringement by large companies. However, in practice, some lower courts have used their discretion to award additional damages in the form of reasonably expected royalties for such excess sales by an infringer.

On May 20, 2020, an amendment to the Korean Patent Act was passed to formalize this practice into law, by adding a provision that if the "sales amount of an infringer" exceeds the patentee's own production capacity, the patentee will now be entitled to receive reasonably expected royalties for such excess sales (Article 128, Paragraph 2). By increasing the potential liability for damages through explicit provisions in the Patent Act, the amendment is expected to strengthen patent rights in Korea and to help curb abuses by large infringers.

The new amendment applies to patent actions filed on or after its effective date of December 10, 2020. The amendment also applies to utility model rights, though not trademarks or designs.