Newsletter
Determining the Subjective Elements of Criminal Liability under the Trademark Act for Importing Counterfeit Goods
I. Relevant provisions on trademark infringement involving the importation of counterfeit goods
Paragraphs 1 and 2, Article 97 of the Trademark Act provides the following: "A person who sells, or who possesses, displays, exports, or imports, with intent to sell, goods referred to in Paragraph 1 of either of the preceding two Articles shall be punished by imprisonment for a term not exceeding one year, detention, or a fine not exceeding NT$50,000, or both." "The same shall apply where the conduct referred to in the preceding Paragraph is committed through electronic media or the Internet."
The Article-by-Article Interpretation of the Trademark Act issued by Taiwan Intellectual Property Office further states that Article 97 is limited to circumstances where the offender subjectively has direct intent in the form of "actual knowledge." Neither indirect intent nor negligence is sufficient to establish an offense under this Article. Accordingly, affirmative evidence remains necessary to establish that the offender had the criminal intent to sell counterfeits.
The Intellectual Property and Commercial Court's Criminal Judgment 114-Xing-Zhi-Shang-Yi No. 56 (dated July 29, 2026) held that, although the defendant knew that the imported goods were counterfeit, there was no affirmative evidence sufficient to establish that the defendant intended to sell them. The Court therefore affirmed the first-instance judgment of acquittal.
II. Facts of the case
The defendant imported 15 counterfeit handbags and long wallets from China (the "Goods at Issue"), which were subsequently seized by customs. The defendant operated a business selling accessories and had previously been convicted for selling counterfeit goods.
III. The Court's judgment
1. The defendant "actually knew" that the goods at issue were counterfeit
The defendant did not purchase the goods through the brands’ official distribution channels or other reliable platforms; the purchase prices were also substantially lower than the market prices of genuine products, ranging only from NT$1,000 to NT$6,000 per item on average. The defendant had also stated that, given the substantial price difference, the goods "must have been fake." The Court therefore found that the defendant subjectively knew that the Goods at Issue were counterfeit.
2. There was no evidence establishing that the defendant had an "intent to sell"
There were only 15 items involved in the case; there was only one item each for some of the certain brands and styles. It is difficult to determine that the quantity of counterfeit goods had reached a scale normally associated with resale. Although the defendant operated a Facebook fan page, the page did not contain any information regarding the sale of the Goods at Issue. In addition, there was no evidence establishing that the defendant had previously sold counterfeit leather goods identical or similar to those involved in the case.
Despite the defendant's history of selling counterfeit accessories and the inconsistencies in the defendant's explanations regarding the intended use of the goods, the Court held that neither was sufficient to directly establish an intent to sell in this case.
IV. Conclusion
In summary, the Court distinguished between the two required elements under Article 97 of the Trademark Act: "actual knowledge that the goods are counterfeit" and "intent to sell." Even where an offender knows that imported goods are counterfeit, criminal liability does not automatically arise. Other objective evidence may still be required to establish that the offender imported the goods for the purpose of sale.
We recommend that consumers and businesses shall carefully verify the authenticity and source of the goods when purchasing goods from overseas. Where a person knows that goods are counterfeit and is further found to have imported, possessed, or displayed them with an intent to sell, the person may still face criminal liability under the Trademark Act. The source and intended use of the goods should therefore be carefully confirmed to avoid violating the law.