The Latest Amendment of Taiwan’s Trademark Act

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Based on economic needs and trade developments, and considering the interests of the country, Taiwan is actively seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) so that Taiwan can share in the benefits of free trade with all trading counterparties or regions. As Taiwan’s current Trademark Act (hereinafter the Act) is not consistent with the Intellectual Property Chapters of the CPTPP, Taiwan’s Legislative Yuan passed the Amendment draft of the Act on April 15, 2022 and President also published the same on May 4 2022. However, the date of implementation will be determined by the Executive Yuan.

There are four key points for this Amendment of the Act.

(1) Amend the subjective condition that must be met for counterfeiting labels to give rise to civil liability

Counterfeit labels, because they are not used with goods or services, do not constitute typical trademark use, and thus do not constitute traditional trademark infringement. According to the current Act, this situation is referred to as legal fiction trademark infringement, and only gives rise to civil liability and not to criminal liability. The subjective condition that must be met for counterfeiting labels to give rise to civil liability is that the counterfeiting act was carried out “knowingly”, per item 3 of Article 70 of the current Act.

However, the subjective condition for civil liability stipulated at Article 18.74 of the CPTPP is that the violator “knowingly or with reasonable grounds to know” engaged in the infringing activity. To comply with the CPTPP requirement, this subjective condition of “knowing” stipulated at item 3 of Article 70 of the Act has been deleted and the new condition for civil liability will be “intentional” or “negligent” acts, which condition is the same as the subjective conditions for general civil damages (amendments to Article 68). Additionally, this Amendment applies to identical or similar trademark devices used on or with identical or similar goods or services.

(2) Adds criminal provisions and criminal liability for counterfeiting labels using trademarks or collective trademarks

Per Article 18.77 of the CPTPP, each party shall provide for criminal penalties to be applied in cases of willful importation and domestic use, in the course of trade and on a commercial scale, of counterfeit labels or packaging. This Article of the CPTPP only applies when a trademark device is identical to or cannot be distinguished from a registered trademark, and when the relevant goods and services are identical. As above said, according to the current Act, counterfeit labels are legal fiction infringement, but, there are no criminal penalties provided by the current Act, which lacking is not consistent with article 18.77 of the CPTPP. As such, criminal sanctions for counterfeiting labels has been added at Article 95Ⅱ of the Amendment.

Article 18.77 of the CPTPP provides that counterfeiting labels on or with identical goods or services gives rise to criminal liability. Thus, the criminal penalties stipulated at Article 95 of the amended Act apply only to counterfeiting labels on or with identical goods or services. Thus, per the amended Act, if the labels are attached to or used with similar (not identical) goods or services, only civil liability arises and there is no criminal liability.

(3) Amends the subjective condition under which counterfeiting labels of a registered certification mark give rise to criminal liability

In contrast with trademarks and collective trademarks, Article 96 of the current Act stipulates criminal liability for counterfeiting labels of registered certification marks.

However, as the current Article 96 does not include “importing”, it does not comply with article 18.77 of the CPTPP, which clearly stipulates that importing counterfeit label goods is prohibited, “exporting” and “importing” are added to the list of prohibited actions under the amended Article 96.

As the subjective condition in the current article is “knowing”, which condition does not comply with the subjective condition of “willful” as stipulated in article 18.77 of the CPTPP, the condition of “knowing” is deleted from the Amended Act.

(4) Amend the subjective condition for selling or intending to sell infringing articles

Regarding the sale or intent to sell infringing articles, only an offender who knows that the article he sells is counterfeit will be punished per Article 97 of the current Act. This is different from the subjective condition stipulated at article 18.77 of the CPTPP. Thus, this subjective condition of “knowing” has been deleted and “intentionally” engaging in infringing acts will give rise to criminal penalties, which acts include indirect intentional acts that could be foreseen to infringe.