The compensation is determined based on the total price calculated per legal fiction

The Decision

The Supreme Court (111 tashang 2081) held in 2022 that the "total price" stipulated in Article 71-1-3 of the Trademark Act refers to the total price counted by the price and number of counterfeits, not the total price of the defendant's actual sales. Therefore, there is no need to distinguish between sold and unsold. The compensation amount should be calculated by " The retail price of counterfeits” multiplied by the “total quantity seized”.

In addition, in response to the defendant's defense that the number of counterfeits presented as a promotional gift should be deducted. The Supreme Court obviously agreed with the IP Court’s opinion: this part of the quantity is still "seized counterfeits" and does not need to be deducted.

The comment of Ching-I Lu

The Article 71-1-3 of the Taiwan Trademark Act stipulated that”

Damages demanded by the trademark owner may be calculated according to any of the following:….

(3) the amount not more than 1,500 times the unit retail price of the counterfeits; if over 1,500 pieces of counterfeits were found, the number of damages shall be a lump sum of the market value of the counterfeits;…”

Thus, if the amount of counterfeits is less than 1500 pieces, the compensation will be certain times (less than 1500) the unit retail price. If it exceeds 1500 pieces, the compensation will be the lump sum of the market value of counterfeits. However, “the market value” should be calculated by " The retail price of counterfeits” multiplied by the “total quantity seized” rather than the defendant's actual sales, according to the opinion of the Supreme Court in this case. Thus, the compensation is determined based on the total price calculated per legal fiction rather than the actual sales.