On November 20, 2025, in a counterfeiting dispute involving the POLI trademark, the Intellectual Property and Commercial Court of Taiwan (“IP Court”) held that the offense under Article 97 of the Trademark Act, namely, selling product infringing other's trademark right, requires that the defendant act with criminal intent. The IP Court emphasized that subjective intent shall not be inferred solely from the mere fact of selling counterfeit goods. Accordingly, the IP Court upheld the lower court's judgment clearing the defendant's liability of infringement (Case No. 114-Shin-Zhi-Shang-Yi No. 18).
According to the indictment, the defendant operated claw machine (crane game) businesses, and ROI VISUAL CO., LTD. (“ROI”), a Korean company, is the owner of “POLI” trademark (Reg. No. 01767333, hereafter the “POLI Trademark”), which is registered for goods including toy figurines and toy vehicles. The defendant was prosecuted for, without ROI's prior consent, displaying and selling products bearing marks that were similar to the POLI Trademark since June 2022. The defendant profited by allowing the public to play the claw machines at NTD 10 per attempt, thereby constituting an offense under Article 97 of the Trademark Act.
The defendant argued that he was unaware of the existence of the POLI Trademark, noting that the trademark was not well known. He further claimed that he had no knowledge that the toy cars involved were protected by trademark rights, nor had he verified whether they were counterfeit products.
The District Court found that the defendant did not act with the requisite criminal intent and therefore lacked the subjective element required under Article 97, and accordingly found the defendant not guilty. The prosecutor appealed to the IP Court.
On appeal, the prosecutor argued primarily that the POLI Trademark was a well-known trademark within the toy industry. Given that the defendant operated claw machine businesses and displayed toys as the primary prizes, the defendant could not plausibly claim that he did not know the trademark. The prosecutor further pointed out that the defendant acquired the counterfeits at approximately NTD 20 each, whereas the price of legitimately licensed products from ROI was about NTD 299, which was huge price disparity. Additionally, the packaging of the counterfeit lacked any indication of authorization by ROI or any anti-counterfeiting label, so the defendant should have easily identified the goods as counterfeit.
Nevertheless, the IP Court affirmed the lower court's judgment, holding that in cases involving the offense of Article 97 of the Trademark Act, the key issue is whether the defendant knowingly sold counterfeit goods infringing the trademark. Based on the evidence presented, although the goods displayed and sold in the claw machines were objectively counterfeit, there was insufficient evidence to establish that the defendant subjectively knew the products infringed the POLI Trademark and intentionally displayed and sold them.
The IP Court further noted that while the prosecutor asserted that the POLI Trademark was well known in the toy industry, no concrete evidence was presented to demonstrate that the trademark had achieved wide recognition in Taiwan through long-term and extensive marketing. Moreover, although the price of the counterfeit was significantly lower than that of genuine products and the packaging lacked anti-counterfeiting labels, the IP Court opined that on online shopping platforms and in private sales, different pricing strategies are common. Online sellers or individual vendors, due to lower overhead costs and the absence of physical store, often sell goods at prices far below those at physical stores. As such, the defendant could not reasonably be expected to determine that the goods were counterfeit based solely on price disparity. The defendant's mere failure to verify the details of authorized products was insufficient to establish the requisite intent. Accordingly, the IP Court upheld the lower court's decision.
This decision highlights that when trademark owners choose between civil and criminal enforcement, they must be aware of the different legal standards and evidentiary burdens required in each approach. In civil proceedings, when seeking injunctive relief, strict liability applies. When persuing civil damages, it is sufficient to prove negligence, without the need to establish intent. In contrast, in criminal proceedings, trademark owners must prove not only the objective existence of trademark infringement, but also the defendant's direct intent, making the threshold significantly higher than in civil cases. While initiating criminal proceedings to pressure settlement is common for trademark owners, careful preparation and assessment of the required evidence are essential to avoid difficulties in proof after prosecution has commenced.