Newsletter
DEPARTMENT STORE SHARES LIABILITY FOR COUNTERFEIT GOODS SOLD BY CONCESSION OPERATOR
A highly controversial issue in practice has been that of whether a department store bears joint and several liability for civil damages when the operator of an in-store concession infringes a trademark by selling goods bearing a counterfeit mark. In a 2008 judgment, the Taipei District Court held that the department store does bear such liability.
In its judgment, the court stated that if a department store rents out a concession to an operator that has not obtained lawful licensing, and the concession operator sells counterfeit goods, the department store's action in renting out the concession is a causative factor contributing to the harm suffered by the trademark rights owner. A department store has the power to decide whether or not to rent out a concession to an operator that may sell counterfeit goods, and has a duty of care to verify whether such an operator is licensed to sell the goods that it offers for sale. If a store fails to exercise its duty of care by making such verification, it should be held liable for gross negligence.