Under the Article 97 of the Trademark Act of Taiwan, malicious selling and importing counterfeits will be subject to criminal liabilities. A defendant will be found guilty of such a crime only if he/she acts with the malicious intent to sell and import counterfeits. If the defendant does not act with malicious intent or just acts recklessly, he/she will not be culpable for criminal liabilities. In other words, the fact that the defendant might be aware that the products are counterfeit cannot serve as a proof for his/her malicious intent. The public prosecutor will have to submit concrete evidence to prove that the defendant has malicious intent when he/she is selling the counterfeit products.
As compared to traditional trademarks, such as word or design trademarks, most people might not really have the knowledge that non-traditional trademarks, such as patterns, 3D figures or colors, may have been protected as registered trademarks. In a recent trademark infringement case, the Intellectual Property Court of Taiwan held that, in determining the criminal liability for counterfeiting of non-traditional trademarks, the evidentiary rules should be stricter than in the cases of traditional trademarks counterfeiting.
In this case, the trademarks at issue were handbag locks. Each of the trademarked locks has a triangular clasp. Underneath the clasp is a rectangular plate with two or three rounded decorative design and four studs on each corner.
The public prosecutor in charge of this case asserted that the locks of the handbags sold by the defendant were confusingly similar to the registered trademarks. Therefore, the defendant should have malicious knowledge that the products sold were counterfeits. In response, the defendant argued that he did not know that functional objects, like handbag locks of this case, have been granted trademark registration.
The IP Court pointed out that the locks in this case were functional in nature and thus should not be inherently distinctive enough as trademarks. Through the extensive use and marketing of these locks, the locks later became distinctive enough and then were granted registration under the Trademark Act in Taiwan. It is quite possible that the defendant did not know the locks had been granted registration when he was selling the products. Since the public prosecutor could not submit concrete evidence to prove the defendant's malicious intent, the IP Court held the defendant not guilty.