Code of Criminal Procedure
Customs Anti-smuggling Act
Recently, a large number of goods have been imported from overseas because of the covid-19 pandemic. The number of cases involving infringement of trademark rights or copyrights at the border has also been increasing.
After customs refers a case to a district prosecutor's office, the prosecutor, in addition to considering the objective criminal act, shall also take into account whether the defendant had any criminal intent. If the prosecutor determines that there was no subjective criminal intent on the part of the defendant, they may decide not to prosecute the case on the ground that the suspicion of the offence is insufficient pursuant to article 252(10) of the Code of Criminal Procedure. If this happens, the question of whether such infringing counterfeits can be confiscated is complex.
Article 98 of the Trademark Act clearly stipulates that all articles or documents which infringe rights in trademarks, certification marks or collective trademarks shall be confiscated, regardless of whether such articles or documents belong to the offender. Therefore, even if the prosecutor does not prosecute the case because of insufficient suspicion of offence, they may thereafter apply to the court for confiscation in accordance with this provision to prevent the counterfeits from entering the market again.
Unlike the Trademark Act, the Copyright Act has no regulations regarding this absolute obligation to confiscate. Therefore, the courts have repeatedly rejected prosecutors' petitions regarding the confiscation of counterfeits of copyright products.
This article reviews the relevant confiscation regulations and discusses any remedial possibilities.
According to article 98 of the Copyright Act, an article used in the commission of an offence as set out in article 91-3 and article 91bis-3, or in preparation for the commission of such an offence, or an article derived from the commission of the offence, may be confiscated, regardless of whether it belongs to the offender.
This provision, however, only discusses offences against the Copyright Act with regard to CDs (referred to as "optical disks") – namely:
- "a person who commits the offense in Article 91-2 by means of reproducing onto an optical disk with the intent to sell or rent the same" (article 91-3 of the Copyright Act); and
- "a person who distributes or with intent to distribute publicly displays or possesses a copy knowing that it infringes on economic rights and the reproduced copy is an optical disk (article 91bis-3 of the Copyright Act).
Today, CDs are increasingly less in use. If the counterfeit product in question is not a CD, and the offence is specified under another provision of the Copyright Act – such as "offenses involving a violation of Article 91bis-2 of the Copyright Act and the reproduced copy is not an optical disk" – the confiscation shall be subject to the relevant provisions of the Criminal Code.
Articles 38-1 and 38-2 of the Criminal Code stipulate, respectively, that:
- "contraband shall be confiscated, whether it belongs to the offender or not"; and
- "a thing used in the commission of or preparation for the commission of an offense or a thing derived from or acquired through the commission of an offense may be confiscated only if it belongs to the offender; if there are special provisions, these special provisions shall govern".
However, a counterfeit of a copyright product is always not a contraband. Further, if the prosecutor rules that the suspicion of offence is insufficient and decides not to prosecute the case, the confiscation rule specified above is not applicable pursuant to article 252(10) of the Code of Criminal Procedure.
Article 259bis of the Code of Criminal Procedure provides that for cases that have been issued for a disposition of dismissal or deferred prosecution pursuant to article 253 or article 253bis, the prosecutor may make a separate petition to the court for confiscation of the articles specified in articles 38-2 and 38-3, as well as the criminal gains specified in article 38bis-1 and 38bis-2 of the same Code. Nevertheless, this provision is specifically for cases where the seized articles may constitute an offence but are allowed to be circulated because the prosecutor rules not to prosecute the case or to defer prosecution at their discretion, which would impair the social benefits as well as the rights and interests of the copyright owner.
However, this provision is not applicable where the suspicion of offence is insufficient, as specified in article 252(10) of the Code of Criminal Procedure. This results in a situation where "reproductions violating copyright other than optical disks [CDs]" cannot be confiscated through a criminal procedure. This creates a substantial loophole through which illegal reproduced articles are allowed to flow into the market.
Since counterfeits of copyright products are seized by customs at the border, once the criminal procedure has closed, customs may separately examine whether the importer's act violates the relevant administrative regulations. Customs can refer to the Administrative Penalty Act, which provides as follows:
if one and single act constitutes simultaneously a criminal offense or offenses as well as a breach of duty under administrative law, it shall be punishable under the criminal law; however, an administrative penalty may be additionally imposed in the case that the act is punishable by any other types of administrative penalty or that no confiscation is pronounced by the court over the things that may be confiscated because of the act. (Emphasis added.)
in the case of an act described in the preceding paragraph over which a final decision of non-prosecution or deferred prosecution is made, or over which a final judgment of acquittal, exemption from prosecution, lack of jurisdiction, not to be put on trial, not placed under protective measures, exemption from punishment or reprieve from punishment is pronounced, penalty may be imposed under the provisions with respect to breach of duty under administrative law. (Emphasis added.)
According to article 39bis of the Customs Anti-smuggling Act, in the case of the import or export of cargo that has been declared to infringe any patent right, trademark right or copyright, the importer or exporter in question shall be, except otherwise specified in other acts and regulations, imposed with a fine of no more than three times the value of the cargo, and the cargo shall be confiscated (other than in the case of parallel imports).
Therefore, where confiscation cannot be effected through criminal procedure, the rights owner should remind customs to impose penalties and confiscate the cargo, at its discretion. In particular, if the counterfeit has been transferred from customs to the court's storage warehouse, it is even more important to remind the prosecutor to write a letter requesting customs to proceed with any follow-up disposition by law when the criminal procedure for the decision of non-prosecution is closed. This thus implements customs' duty to protect IP rights at the border.
For further information on this topic please contact Audrey Liao at Lee and Li Attorneys at Law by telephone (+886 2 2715 3300) or email ([email protected]). The Lee and Li website can be accessed at www.leeandli.com.