The Limited Legal Weight of Brand Protection Labels

A recent decision of the Intellectual Property and Commercial Court in Taiwan demonstrates that the absence of an anticounterfeiting label on a product may not, on its own, prove that the seller of the product ‘knew’ it was fake.

Under Taiwan’s Trademark Act, criminal liability requires direct intent – actual awareness that a product bears counterfeit trademarks. It is not enough that the goods are counterfeit. It is not enough that they were sold cheaply. It is not even enough that obvious security features were missing. The prosecution must prove subjective ‘knowledge’.

In the case in question, an amusement arcade operator had purchased toy cars bearing counterfeit trademarks from an unidentified supplier and displayed them as prizes in a claw machine. The goods lacked an anticounterfeiting label and were sold at prices significantly lower than genuine products.

Yet the operator was acquitted of charges relating to criminal intent. He was not a toy retailer, there was no evidence that the trademark was widely recognised, and there was no proof that he was aware of the brand’s authentication features. Low prices and missing labels were treated as suspicious circumstances – but not as proof of criminal intent.