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2023/05/05  copyright©️  GOLD KEEN INTELLECTUAL PROPERTY OFFICE
 

Is parallel importation considered infringement?
 

Parallel importation refers to the purchase of genuine products from overseas for resale in the domestic market, commonly known as "grey market" goods. To determine if parallel importation is considered infringement, the legality of the source of the goods must first be established. Under the current provisions of Article 36(2) of the Trademark Act, the sale and purchase of grey market goods is not illegal if the source of the goods is legal.
 

The Trademark Act in Taiwan follows the principle of "exhaustion of rights." When a product enters the market for trade, the "trademark right" of the product is already exhausted (also known as the first-sale doctrine), and the trademark owner cannot claim infringement by a secondary seller.

 

★ Legally reselling "grey market" parallel imported goods does not infringe on trademark rights. However, when buying or selling secondhand or new branded products online, it is still necessary to confirm the source of the goods to avoid falling victim to counterfeits.

 

※ Under Article 36(2) of the Trademark Act, "Where the goods bearing a registered trademark are traded in the domestic or foreign markets by the trademark owner or with the consent of the trademark owner, the trademark owner may not claim trademark rights over such goods. However, this does not apply where the goods have deteriorated, been damaged, or where there are other legitimate reasons."

According to the Trademark Law, selling counterfeit goods will result in civil and criminal liability.

Civil liability
 

The owner of a trademark that has been infringed may request the removal of the infringement, or seek measures to prevent further infringement. The owner may also request the destruction of infringing goods and the raw materials or tools used in the infringement. However, the court may make other necessary dispositions after taking into account the degree of infringement and the interests of third parties.

 

The right to claim damages (for intentional or negligent infringement of a trademark) expires if not exercised within two years from the time the claimant knew of the damage and the person responsible for compensation. If the infringement occurred more than ten years ago, the same applies. (Article 69 of the Trademark Law)

 

Calculation of damages:

 

1. The usual profits that could have been obtained from the registered trademark, minus any profits obtained through the infringement.
2. The profits obtained through the infringement.
3. The retail price of the goods that infringe the trademark, up to 1500 times the price. (Article 71 of the Trademark Law)

 

• Criminal Liability (with intentional infringement)

1. Production of counterfeit goods (Article 95 of the Trademark Act)Imprisonment for up to 3 years, detention, or a fine of up to NT$200,000.

 

※Direction of amendment passed in 2022:

Add Article 95, Paragraph 2 of the Trademark Act to include the production of counterfeit labels within the scope of punishment. The act of manufacturing, selling, possessing, displaying, exporting, or importing counterfeit trademarks or collective trademarks labels will result in imprisonment for up to 1 year, detention, or a fine of up to NT$50,000 or both.

Add Article 95, Paragraph 3 of the Trademark Act to address the increasing prevalence of online sales transactions in modern technology. It stipulates that the production or use of counterfeit labels through electronic media or the internet will also be included in the scope of punishment.

 

2. Sale, intent to sell, possession, display, export, or import of counterfeit goods (Article 97 of the Trademark Act)
3. Imprisonment for up to 1 year, detention, or a fine of up to NT$50,000.
4. Seizure of goods or documents that infringe upon trademark rights, certification trademark rights, or collective trademark rights, or provide items for use in a crime or for preparing to commit a crime (Article 98 of the Trademark Act, Article 38 of the Criminal Code).

 

When consumers discover problems with the goods they have purchased, they can apply for a return or exchange within the "7-day appreciation period". For online purchases (including live broadcasts and shopping malls), it is recommended that consumers remember to keep evidence, such as unboxing videos, checking whether the items are complete and correct, whether they are original products, and screenshots of the conversation records between the buyer and seller.

In addition, counterfeiting not only harms consumers but also constitutes an illegal act against the trademark owner. When consumers discover that they have purchased counterfeit products, they can not only apply for a return or exchange within the "7-day appreciation period", but also report the incident to the Intellectual Property Police.

Report email: 0800016597@iprp.spsh.gov.tw

Report hotline: 0800016597

 

1. Apply for Trademark Registration
    
2. In the fast-paced world of e-commerce, it's difficult to distinguish between real and fake products, as many online images look similar. How can you quickly protect your brand? Goldkeen believes that the most reliable and affordable way is to apply for a "trademark registration"! Even if you're not a well-known corporation, as a general electronic product brand operator, you should apply to the Intellectual Property Office to protect your brand name. The trademark in the application process can be marked with a ™️ on the upper right corner of the brand name, and a registered trademark can be marked with ®️ on the upper right corner of the brand name. When facing infringement, you can exercise your trademark rights to demand the infringing party to remove the infringing items or compensate you. → What should you do if your trademark is infringed? Goldkeen teaches you the three steps to safeguard your rights 👉 https://bit.ly/goldkeen55
    
3. Sign a Registration Agreement for Agency Authorization
    
4. If you're franchising someone else's brand, both the authorizer and the authorized party should register the authorization with the trademark authority to protect both parties' rights. Trademark authorization can be divided into exclusive authorization, non-exclusive authorization, and exclusive authorization. 👉 https://bit.ly/goldkeen56 Regardless of which authorization method you choose, if both parties do not register the authorization, once the trademark owner transfers the authorized trademark to others, the authorized party will no longer be bound by the original authorization contract, resulting in significant losses for the authorized party who has already started marketing the trademark.