Hermes, the French luxury goods maker named after the messenger of the Gods in Greek mythology, has won record damages in Taiwan for an infringement of one of its trade marks. The compensation award of 7.77 million US dollars represents the highest compensation pay out in Taiwan in a trade mark infringement case.
The company launched the civil action through the newly established IP court in Taiwan against a former employee, following upon her criminal conviction for trade mark infringement and fraud. The former employee sold four fake Hermes bags for a total of around US$60,000, taking advantage of the wish of some customers to by-pass the waiting list for such goods (which can be between 8 – 10 years) and pay over the odds for goods that look similar but are of unknown origin.
Clearly, the award against the former employee is substantially greater than the value or price of the goods in question. Trade mark legislation in Taiwan permits the owner of the mark to claim damages for 500 to 1,500 times greater than the price for which the infringing articles were sold. This decision sends out a clear warning to those who are involved in the trade of counterfeit goods. It also shows how serious Taiwan is in tackling the fake goods market and cleaning up its image as a haven for counterfeit producers.
The specialist IP court was established on 1 July 2008, following similar set ups in Thailand, Japan and Malaysia. In simple terms, it is designed to make intellectual property litigation quicker and more consistent. The court has jurisdiction to hear civil, criminal and administrative actions. In infringement cases prior to 1 July 2008, a dual civil and administrative system was in operation. This meant that if the validity of an IP right were challenged during civil proceedings, the civil action would be suspended until the administrative court heard the validity issue. Such matters are now heard in the one court and this accordingly reduces the likelihood of delays.
Delays can be unavoidable however, particularly as anyone in Taiwan can bring a case to the IP court. This can lead to delays where a lay person has not prepared properly or is unsure of the process, and therefore the court uses up valuable time by explaining or clarifying certain legal issues. There has been a call for only IP attorneys to take up cases.
Training is also an issue. It is unlikely that judges will have experience of all three types of IP case that the IP Court will hear, and therefore it is necessary that they undergo several months of training prior to taking office. The court also employs technical examiners from Taiwan's intellectual property office to help judges reach decisions swiftly.
Despite any shortcomings the IP court may have, it is a step in the right direction as far as IP owners, domestic and foreign, are concerned, although one would expect an IP owner to have exhausted various alternatives to expensive court action, such as mediation or arbitration, before resorting to the IP court.