Minimum statutory compensation for trademark infringement is abolished

Taiwan

The new Taiwan Trademark Act, which came into effect on July 1 2012, has abolished the minimum statutory compensation for trademark infringement (ie, 500 times the unit retail price of the infringing goods) so that the courts may exercise their discretion on a case-by-case basis. 

The revision came as a result of the Hermès case, in which the judge granted a claim for damages in the amount of approximately $7 million based on the plaintiff's request for minimum statutory compensation (ie, 500 times the unit retail price of the infringing products). The case led to a debate as to whether the minimum statutory compensation was appropriate and how to determine the difficult question of damages.

Following the abolition of the minimum statutory compensation, the amount of damages shall now be calculated based on any of the following methods according to Article 71 of the new Trademark Act:

  • the method provided in Article 216 of the Civil Code - if no method of proof can be provided to evidence the damage suffered, the proprietor is entitled to request damages based on the amount derived by subtracting the profit earned through use of the trademark after infringement from the profit that would normally have been expected through use of the trademark;
  • the profit earned by the infringer as a result of the infringement - if no proof of costs or necessary expenses can be provided by the infringer, the total amount of the income derived from the sale of the infringing goods will be presumed to constitute the amount of profit;
  • an amount of not more than 1,500 times the unit retail price of the infringing goods - if over 1,500 pieces of infringing goods were found, the amount of damages shall be a lump sum corresponding to the market value of the infringing goods; or
  • the amount of royalty that could have been collected had the trademark owner licensed the use of the trademark.

A court may, however, at its own discretion, reduce the amount of damages derived from the calculations above if such amount is deemed to be inappropriate.

Joseph S Yang, Lee and Li, Taipei

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