Determination of Subjective Intent in Crime of Trademark Infringement – Judicial Opinion from Taiwan’s Intellectual Property and Commercial Court

On January 2, 2025, the Intellectual Property and Commercial Court rendered Intellectual Property and Commercial Court Criminal Judgement 113 Shang-Yi-Tzu 1 (hereinafter referred to as "the Judgment"). The court used the fact that the time of design and production of the defendant’s products preceded the registration date of the registered trademark as one of the bases for determining that the defendant did not have the intent to infringe the trademark rights. Below is a detailed account of the case facts and factors considered by the court in assessing whether the defendant had the intent to infringe the trademark rights.

1. Case Summary

In this case, the prosecutor has charged the defendant with the crime of trademark infringement under Article 95, Paragraph 1, Subparagraph 3 of the Trademark Act. While being aware that the registered trademark was registered and approved on October 1, 2020, and was still within its validity period, the defendant allegedly sold products bearing counterfeit versions of the registered trademark on an online shopping website in June 2021.

2. Main Issue of this Case

The crime of trademark infringement under Article 95, Paragraph 1, Subparagraph 3 of the Trademark Act is constituted by using a mark similar to a registered trademark or collective trademark in relation to identical or similar products or services without the consent of the proprietor of a registered trademark or collective trademark, leading to a likelihood of confusion among relevant consumers. There is no specific provision for penalizing negligent acts; therefore, it requires that the defendant has the intent to infringe the trademark rights to constitute this offense. The main issue of this case is whether the defendant has the intent to infringe the trademark rights.

3. Factors Considered by the Court

(1) Chronological Sequence
Based on the design photos submitted by the defendant, the date of publication for the design version of the product packaging marked on the packaging of the defendant’s product was "May 2019." Additionally, according to the photos of the packaging of the defendant’s product, the manufacturing date marked on the packaging was “February 2020.” The court recognized the defendant's assertion that the mark on the defendant’s product was designed in May 2019 and that the defendant’s product was produced in February 2020, which predates both the application and registration dates of the registered trademark. Therefore, at the time of designing the defendant’s mark, there was no existing application or registration for the registered trademark for reference or use by the defendant. Even if there is a similarity between the text or graphics of the defendant’s mark and that of the registered trademark, the defendant should not be considered to have the intent to infringe the registered trademark.

(2) Market Sales Performance
Compared to the complainant’s product, the defendant’s product was introduced earlier and had higher sales volumes. Even before the defendant used its mark on its product, it had already become bestsellers within similar categories on online shopping websites and was even specially recommended by such websites. Based on this information, the court recognized the defendant’s assertion that it had developed and sold its product earlier than the complainant, with greater sales volume and being the market leader, and that there was no necessity for the defendant to use the registered trademark.

(3) Trademark Recognition
The complainant argued that its product had been reported in media outlets and engaged in charitable donation activities, which should have granted it considerable recognition within the industry. Furthermore, the complainant’s product had been introduced for nearly one year, and it can be inferred that the defendant had the intent to infringe the complainant's trademark rights when the defendant launched its product during the period of June and July 2021. However, the court held that based on the period, scope, and territory of use of the registered trademark after its registration on October 1, 2020, and the fact that the registered trademark was not extensively advertised or promoted through media such as advertisements, promotional materials, or electronic media (including the internet) widely and extensively published or broadcasted nationwide, it can be inferred that the period of use of the registered trademark is short, and the scope and territory of use of the registered trademark are also limited. Furthermore, the case file did not contain any sales data related to the complainant’s product which could support the complainant’s assertion that its product is well known within the industry. Therefore, based on the complainant's use of the registered trademark in commercial activities, it cannot be concluded that the registered trademark has achieved substantial recognition within the relevant industry, and it should not be considered that the defendant subjectively knew that its product infringed another party's trademark rights.

Based on the judgment in this case, to mitigate the risk of trademark infringement, businesses can take the following approaches:

I. Properly retain evidence related to the design and the period of use of the trademarks.

II. Preserve the evidence of market performance.

III. Conduct a trademark search for any marks intended for use on products to avoid infringing other parties’ trademark rights.