Enforcement

Trademark enforcement proceedings

What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

A trademark owner may use border enforcement mechanisms and file civil or criminal action against an alleged infringer. The Taiwan Intellectual Property Court (IP Court) has subject matter jurisdiction over civil and criminal trademark infringement cases. However, a trademark owner may also file the civil or criminal action in a district court. There is criminal liability for a trademark infringer knowingly using an identical or similar trademark for marketing purposes without the consent of the rights holder under the Trademark Act. Therefore, trademark infringement is an offence that is criminally prosecuted.

Procedural format and timing

What is the format of the infringement proceeding?

There is no discovery in any trial, so the plaintiff or prosecutor must collect sufficient evidence before filing the litigation. Live testimony is allowed in certain circumstances and expert witnesses are allowed in most situations. Generally, there will be three judges in an infringement proceeding. It takes about 200 days for a civil case and 100 days for a criminal case in the IP Court.

Generally, the criminal procedure starts from the plaintiff’s filing a complaint with the police or the court or the police’s or prosecutor’s discovery of trademark infringement. After that, the police will investigate evidence, take the suspect’s statements and transfer the case to the prosecutor. Then the prosecutor will determine whether to prosecute the suspect. If so, the case will go into a normal criminal proceeding.

Burden of proof

What is the burden of proof to establish infringement or dilution?

In a civil action, the plaintiff has to prove that it is more likely than not that the defendant wilfully or negligently infringed the trademark.

In a criminal action, the prosecutor has to prove that it is beyond reasonable doubt that the defendant wilfully infringed the trademark.

Standing

Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?

A trademark owner may seek any remedy and bring a criminal complaint pursuant to the law. An exclusive licensee may seek the remedies and bring a criminal complaint within the scope of the licence.

Border enforcement and foreign activities

What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?

Regarding the imported infringing goods, the customs authority will actively monitor the imported goods and will inform the trademark owner if they find any suspicious goods. Meanwhile, a trademark owner may apply for monitoring imported goods with the customs authority and submit relevant documents (eg, comparison charts between the genuine goods and counterfeit goods). After the application is granted by the customs authority, the customs authority will pay more attention to the imported goods bearing with the trademark. After receiving the notice from the customs authority regarding the suspicious imported goods, the trademark owner must go to the customs authority to take photos of the suspicious goods and provide an identification report within 24 hours after receiving the goods if said goods are counterfeit. After receiving the identification report, the customs authority will transfer the case to the court and the court will determine whether the imported goods are infringing goods or not.

Regarding the exported goods, the trademark owner may apply for attachment of the exported goods after explaining the infringement and providing a bond to the customs authority. However, the exporter may provide twice the bond to release the attachment. After the customs authority attaches the exported goods, the trademark owner must file a lawsuit within 12 days after the attachment (the deadline can be extended to additional 12 days by filing an application with the customs authority).

There is criminal and civil liability for an infringer who imports goods infringing the domestic trademark, regardless of whether the imported infringing goods were made or sold in foreign countries.

Discovery

What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?

There are no discovery proceedings in Taiwan. Therefore, generally a trademark owner will file a criminal complaint with the police because it is much easier for the police to collect evidence. The trademark owner may also save litigation costs, since the plaintiff in a criminal proceeding is the prosecutor and not the trademark owner.

If a trademark owner chooses to file a civil action for some reason, such as that it is difficult to prove the infringer’s wilfulness or the trademark owner aims to acquire damages, it must collect evidence by itself. Effective methods for collecting evidence include hiring a private investigator, conducting due diligence, notarisation of evidence and sample purchase.

Timing

What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?

It takes about six months for the first instance of the IP Court to make a decision on whether to grant a preliminary injunction order (the average grant rate between 2014 and 2016 was about 50 per cent). The appeal with the second instance court takes about another six months.

Limitation period

What is the limitation period for filing an infringement action?

For the damages claims, the statute of limitation will apply in either of the following circumstance:

  • within two years after the trademark owner learns about the infringement and the infringer; or
  • within 10 years after the infringement.

For the permanent injunction claim, the statute of limitation is within 15 years after the infringement.

Litigation costs

What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?

For a civil action, it may cost:

  • US$5,000 to US$7,000 for trial preparation;
  • US$25,000 to US$35,000 for the first-instance trial; and
  • US$20,000 to US$30,000 for the second-instance trial.

Under current case law, the losing party bears the court fees, but does not bear the winning party’s attorney fees.

Appeals

What avenues of appeal are available?

There are three trial instances: first instance, second instance and the Supreme Court.

Defences

What defences are available to a charge of infringement or dilution, or any related action?

The following defences are available to a charge of infringement or dilution.

Bona fide prior use defence

This is available if the infringer uses the trademark in good faith prior to the application date of the registered trademark.

Fair use defence

This is available if the asserted infringer’s use of the trademark is a descriptive use: for example, indicating the quality and nature of the goods, is in good faith or such use is necessary for the goods or service to be functional.

International trademark exhaustion defence

If the goods have been put on the domestic or foreign market under a registered trademark by the trademark owner or its licensee, the trademark owner is not entitled to claim trademark infringement against such goods, unless such claim is to prevent the condition of the goods been changed or impaired after they have been put on the market or there exist other legitimate reasons.

However, if the domestic trademark owner is different from the foreign trademark owner, the aforementioned trademark exhaustion defence cannot be sustained, according to current case law.

Remedies

What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?

The remedies for a trademark owner in a civil action are as follows.

Monetary damages

The trademark owner may choose to calculate the damages based on one of the following methods:

  • damage incurred and lost profit;
  • profits earned by the infringer; if the infringer cannot prove the cost or necessary expense, the sales amount would be deemed as the infringer’s profits;
  • up to 1,500 times the retail price of the infringing goods; if over 1,500 items of infringing goods were found, the amount of damages shall be a lump sum of the market value of the infringing goods; and
  • the equivalent amount of royalty that may be collected from using the trademark under licensing.

A trademark owner may file a criminal complaint with the judicial authority. However, the trademark owner cannot claim damages unless it files an incidental civil action during criminal proceedings.

Injunctive relief

Injunctive relief, including a permanent injunction, will be granted to the successful trademark owner by the court in the judgment. A permanent injunction order can include a request to destroy infringing goods.

ADR

Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?

Arbitration

Arbitration is available and enforceable, but not commonly used for trademark matters for the following reasons:

  • it is difficult for the trademark owner to acquire evidence proving the infringement and damages without the assistance of judicial power; and
  • the cost of arbitration is higher than the cost of a criminal action.
Mediation

If both parties agree, the court may arrange a mediation proceeding, in which both parties may negotiate the terms and conditions of settlement. Mediation is occasionally used by the court but is not effective since it is difficult to expect the trademark owner and infringer to have consensus on ceasing trademark use and damages.