The Intellectual Property Court rendered the 103-Xing-Zhi-Shang-Yi-77 Criminal Decision of November 20, 2014 (hereinafter, the "Decision"), which held that article 97 of the Trademark Law is premised on whether the actor had personal knowledge. If an actor only foresees the facts of the crime while passively allowing or tolerating the occurrence of the criminal act, or if the actor is only negligent, the actor would not be subject to penalties.

In this case, the public indictment alleges that Defendant Pi-chu Chiu had knowledge that the logos in question are registered trademarks by Plaintiff Chrome Hearts Japan used on its jewelry products. After purchasing 208 counterfeit products affixed with the aforementioned trademark logos from unknown individuals, she then displayed those counterfeit products in her accessory store for sale to the general public, thereby allegedly selling goods which she knew to be counterfeit in violation of Article 82 of the Trademark Act.

The Decision explained that both the pre-amended Article 82 of the Trademark Act and Article 97 of the Trademark Law required personal knowledge of the actor as an element; there is only a crime if the actor subjectively had personal knowledge. In contrast, if an actor only foresees the alleged crime while passively allowing or tolerating the occurrence of the crime, such actor shall not be held penalized for the crime.

Here, the goods seized possess commonly seen styles such as crosses, flowers, hearts, round, daggers or swords. In light of general trading practices, if the sources of such goods are to be represented, an additional tag is usually placed next to each accessory to indicate the trademark, or the trademark may be affixed to the accessory with a sticker. Alternatively, the sources of goods may be shown through displaying the trademark on a separate box or bag, or even the user manual or warranty certificate. However, the goods at issue were displayed amidst other similar goods without any special display or labeling, thus it was not possible to prove that the Defendant had personal knowledge that they were counterfeit. Since the personal knowledge requirement of the pre-amended Article 82 of the Trademark Law was not met, no criminal liability may be imposed. Therefore, the Decision reversed the previous guilty verdict for the Defendant on this charge.