Criminal trademark enforcement applies to preparatory acts for infringement

On June 23 2016 the Executive Yuan gave its stamp of approval to a draft revision of the Trademark Law in order to meet the standards required to join the Trans-Pacific Partnership (TPP). The amendment will allow trademark owners to enforce their rights through criminal procedures against unauthorised uses of their registered trademarks on labels, tags, packaging or containers, even where these articles have not yet been applied to goods or services.

According to the existing Trademark Law, a party which manufactures, possesses, displays, sells, exports or imports labels, tags, packaging or containers bearing a mark that is the same or similar to another party’s registered trademark in the knowledge that such articles will likely infringe trademark rights will be deemed to have infringed the trademark rights, and thus will be liable for civil damages only. In one case the police seized labels bearing another party’s registered trademark and empty beverage bottles but as the labels had not been affixed to the beverage bottles, the defendant was deemed not criminally liable, as the Trademark Law punishes only the use of a trademark on or with goods or services.

However, the new draft revision of the Trademark Law adds criminal liability for fake labels, tags, packaging or containers that bear a mark that is the same as or similar to another party’s registered trademark. This means that the criminal enforcement of trademark rights will now cover acts committed in preparation of trademark infringement. In addition, the draft revision of the Trademark Law removes the element of knowledge that was previously required for liability, and thus the subjective requirement is lowered.

The main points of the draft revision are as follows.

Trademarks
A party which manufactures, possesses, displays, sells, exports or imports labels, tags, packaging or containers bearing a similar or the same mark as another party’s registered trademark, even where such labels, tags, packaging or containers have not yet been affixed to or used with the goods or services, will be punishable by imprisonment of up to one year, a fine of up to NT$50,000 or both.

Certification trademarks
Certification trademarks are related to the public welfare as they certify the nature or origin of the goods or services on or in connection with which they are used. The existing Trademark Law already imposes criminal liability on a party which sells or, with the intent to sell, manufactures, possesses or displays labels, packaging, containers or other articles in the knowledge that the mark is the same as or similar to another party’s registered certification trademark. The draft revision removes the element of knowledge from the offence.

Comment
The Taiwanese government understands that joining the TPP requires the formulation of new regulations and thus has been making preparations in every area, including amending the Trademark Law. The Trademark Law's provisions allowing a rights holder to enjoy protection against trademark infringement will be more comprehensive once the Legislative Yuan pass the amendments, which are expected to take effect in 2017.