Pursuant to Article 68 of the Trademark Act, conduct that constitutes trademark infringement includes the unauthorized use of identical or similar marks on identical or similar goods or services, which may cause confusion among relevant consumers. It is also an act of infringement of trademark rights to manufacture, sell, possess, display, import or export labels, tags, packaging, containers or service-related articles bearing a mark identical or similar to a registered trademark without the proprietor’s consent in the course of trade of identical or similar goods or services, since there is a likelihood of misleading consumers. When infringement is found, the trademark proprietor may seek civil remedies such as damages and injunctive relief, with the amount of damages awarded based on either the proprietor’s lost profits, the profits earned by the infringer or the total income from the sale of the infringing goods, or up to 1,500 times the unit retail price of the infringing goods or a lump sum of the market value if the number of infringing goods exceeds 1,500 pieces.[1]

  In a recent case involving Burberry Limited, the Intellectual Property and Commercial Court (IPC Court) found that Laicarfore Fashion Clothing Limited Company (“Laicarfore”) had infringed Burberry’s trademark (See Fig. 1 ) by selling apparel with highly similar check patterns.[2] Notably, the court upheld the validity of the penalty clause for breach of the undertaking previously executed by Laicarfore in a number of settlements, allowing Burberry to seek contractual penalties in addition to damages when the new infringement occurred.

  To determine whether infringement had occurred, the appellate court assessed the overall similarity between Burberry’s registered check pattern and the designs used on Laicarfore’s clothing.[3] The disputed product 1 (See Fig. 2) featured a dominant plaid design that closely resembled Burberry’s registered mark, sharing the same color scheme, structure and stripe arrangement. Although the decorative elements such as leopard print, rose flowers or English letters were applied inconsistently, they failed to alter the overall impression to consumers of a product associated with Burberry. Minor differences, including the red and black color of dividing lines, were deemed negligible. Given the similar nature and function of the goods, the materials used, and the shared marketing channels and markets, the court found there to be a high likelihood of confusion among consumers.

  The court further noted that the disputed product 2 (See Fig. 3) exhibited an even higher degree of similarity, nearly replicating the layout and color scheme of Burberry’s check pattern. Although the image submitted as evidence was smaller in size, it was nevertheless clear enough. The court rejected Laicarfore’s defense argument that the image had been uploaded in error, citing that both products had been displayed on the company’s official website as part of promotional activities. These actions were found to constitute trademark use infringement under Article 68 of the Trademark Act.

  The court emphasized that the check pattern of product 1 was printed directly on the clothing and was presented on the official website for sales purposes, thus constituting evidence of intentional marketing conduct. Similarly, product 2 was also used in a promotional context. Taking both products together, the court found that they had both been used in commerce in a manner likely to mislead consumers, falling within the scope of acts of infringement.

  The court also attached great importance to Burberry’s long-standing commercial use of the mark and its widespread recognition in Taiwan and overseas. Despite having given several undertakings to Burberry, Laicarfore continued to outsource and sell goods featuring similar designs. As a fashion wholesaler, Laicarfore was expected to recognize and respect the distinctiveness of the Burberry trademark. The combination of visual similarity, a shared product category and repeated bad faith led the court to conclude that the circumstances supported a clear finding of trademark infringement under Article 68(3) of the Trademark Act.

  Regarding compensation, the court upheld Burberry’s claim for contractual penalties based on the prior undertakings. Laicarfore had previously signed undertakings three times, promising to cease all infringing activities and to refrain from directly or indirectly engaging in acts such as manufacturing, displaying, selling, transporting, importing and exporting, advertising, giving away or otherwise distributing any products bearing designs identical or similar to Burberry’s registered trademarks, or engaging in any other conduct deemed an infringement of Burberry’s trademark rights. The undertaking further stipulated that in the event of any false statements, dishonest performance or breach of the above commitments, Laicarfore would be required to immediately and unconditionally pay punitive damages of TWD 3 million. The court found the clause enforceable and allowed Burberry to claim this amount based on Laicarfore’s subsequent infringement.

  On appeal, however, Laicarfore argued that the penalty was too high and requested the court to reduce the amount to TWD 300,000, one-tenth of the original amount. According to Article 252 of the Civil Code, the court has the discretion to adjust the amount of the penalty as appropriate based on given circumstances such as social and economic conditions, actual damages suffered by the creditor (the IP holder), or the debtor’s (the infringed party) performance ability. The appellate court found that the penalty of TWD 3 million was excessive, considering that Burberry had received partial compensation from other co-defendants and that the profits from the infringement had been confiscated by the criminal court[4]. The appellate court therefore used its discretion to reduce it to TWD 2 million.

  With regard to compensatory damages arising from the infringement, the court found that Laicarfore, its affiliated company Anida International Co., Ltd. (“Anida”), the responsible individual Su Hui-Chuan (who supervised the company operation), and employee Yang Mei-Hua (the procurement manager), were all involved in the event. They were jointly liable for trademark infringement and for damages totaling TWD 987,000. This amount was calculated under Article 71(1)(3) of the Trademark Act, which allows for statutory damages based on up to 1,500 times the retail price of infringing goods. The court found that 70 units of infringing apparel had been sold or offered for sale at a unit price of TWD 3,290 and deemed Burberry’s requested multiplier of 300 reasonable, especially in light of Laicarfore’s repeated infringement despite several prior undertakings.

  Moreover, the court rejected the defendant’s argument for a lower amount of damages based on its allegedly limited revenue and reaffirmed that statutory damages serve both compensatory and deterrent functions. The court also dismissed the excuses that the affiliated company Anida merely handled logistics and had no knowledge of infringement. Evidence showed that Anida processed sales, issued invoices and collaborated with Laicarfore in promoting the infringing products. The court further held that Su Hui-Chuan, as legal representative of both companies, was jointly responsible under the Company Act for infringing acts committed in the course of business.[5]

  By imposing joint liability on companies, officers and employees, the court signaled its firm stance against repeated infringement and malicious conduct. Importantly, the ruling provides meaningful legal protection for globally recognized trademarks by ensuring that rights are respected. For trademark owners, it demonstrates that persistent enforcement remains a vital tool for deterring infringement and upholding brand integrity in Taiwan.

Fig. 1 Burberry’s trademark; Taiwan Trademark Registration No. 00906192

Fig. 2 Disputed Product 1

Fig. 3 Disputed Product 2

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