Burberry Limited (“Burberry”) found that several counterfeit products bearing the Burberry marks—including handbags, briefcases, scarves, backpacks and watches—were being sold on the Eastern Home Shopping & Leisure Co., Ltd (“ETMall”) platform. Taiwan’s first TV‑shopping company, it now operates as one of the largest e-commerce outlets to offer a variety of consumer goods, and partially owns the SenSen Home Shopping Co., Ltd. (“SenSen”) which also runs shopping channels. After making a test purchase, Burberry discovered that these counterfeit products were being supplied by Cosmerchant Co. Ltd., an importation trader controlled by Mr. Huang and Mr. Liu.

  In 2021, Burberry collectively sued ETMall, SenSen, Cosmerchant, Mr. Huang and Mr. Liu for trademark infringement, claiming permanent injunction for not selling the accused products, restoration of reputation, and joint and several damage compensations. In October 2025, the Supreme Court rendered a civil judgment reversing and remanding the IPC Court’s (“lower court”) second-instance decision.

  Lower Court’s Decision[1]

  After a series of courts’ review, it was determined that the defendants jointly and severally infringed Burberry’s trademark rights. It was affirmed that Cosmerchant did not obtain any IP licenses traceable to Burberry. The accused products in seizure were indeed counterfeits. In selling the disputed products, ETMall and SenSen failed to fulfill their duty of care as prudent managers by recklessly believing in Cosmerchant having received the latter’s affidavit and product sample declaration forms. They were found to be jointly liable for Burberry’s loss of revenue.

  As for the calculation of statutory damages, the law stipulates that the amount may not exceed 1,500 times the retail unit price of the infringing goods. Furthermore, if over 1,500 units of infringing goods are found, the damages amount shall be a lump sum of the market value of the infringing goods.[2] The lower court also emphasized that when there are multiple infringing products with different retail prices, the “mean price” should be used as the unit basis for calculating the retail price. Since Burberry was only able to present evidence of two identifiable models of fake watches, the court held that it was not possible to calculate a reasonable mean price for all models to determine the full amount of damages.

  Additionally, Burberry is a legal entity and thus cannot be subject to emotional distress. Moreover, it has not proven the extent of the reputational damage incurred. Hence, it was not entitled to claim non-pecuniary damages.

  The Supreme Court Judgment[3]

  The Supreme Court disagreed with the opinion of the lower court. Although the finding of infringement was not overruled, the Supreme Court pointed out that the lower court had made errors in the determination of damages, particularly in the calculation basis of monetary damages and the legal entity’s eligibility for non-pecuniary damages.

  The Supreme Court reversed the lower court’s decision to dismiss Burberry's claim for non-pecuniary damages. In the past, as several precedent cases have revealed, non-pecuniary damages have been treated equally to solatiums, compensations due to mental distress.[4] Non-pecuniary damages primarily refer to compensation for the mental anguish suffered by a natural person due to injury to their reputation, freedom, physical integrity or health. On this basis, a legal person—lacking the capacity for mental anguish—is therefore not eligible to claim this kind of compensation. In 2025, however, the Civil Grand Chamber of the Supreme Court rendered a uniform ruling that non-pecuniary damages are not limited to solatiums.[5] While legal persons do not suffer emotional distress in the same way as individuals—whether caused by damage to their physical or mental health, or other interests at law —they can still experience significant injury to their “reputation or credibility” that could affect their business operations and long-term success.

  In the present case, the Supreme Court recognized that a company’s reputation is a crucial asset, especially for a famous brand like Burberry. The inferior-quality counterfeit products seriously tarnished Burberry’s reputation for fashion, elegance and superior quality, a reputation it has built up over many years in the high-end luxury market. The Supreme Court backed Burberry’s claim for compensation for injury caused to its business goodwill.[6]

  Furthermore, the Supreme Court also clarified the theory of joint liability. The statute provides that when multiple persons have together wrongfully injured the rights of another, they are jointly liable for the injury.[7] More specifically, when multiple parties jointly commit trademark infringement, the total benefit derived by all parties should be considered when calculating damages. The lower court had mistakenly calculated the damages based solely on the actual profits obtained from the total sum of the retail price of counterfeit products sold by ETMall and SenSen minus the cost price paid to Cosmerchant. In other words, the sum of damages awarded by the lower court only amounted to the profits generated by ETMall and SenSen, ignoring the profits made by Cosmerchant, Mr. Huang and Mr. Liu.

  As for the mechanism for calculation of damages, the Supreme Court emphasized that when various models of counterfeit products are sold, the “separate and individual” retail price of each product should be used as the basis for establishing the resulting subtotal for that model, with a maximum multiplier of 1500 units.[8] The subtotals of the different models are then added together, with a discretionary reduction modified by the court as necessary, in order to yield the statutory damages amount. The Supreme Court criticized the lower court for using an average price across different models of counterfeit products, which could have undermined the accuracy of calculation of compensation.

  The case was therefore reversed and remanded.

  Conclusion and Implications

  The judgment marks the first time the Supreme Court in an IP case has affirmed a corporation’s entitlement for non-pecuniary damages due to reputational injury; this was followed by the ruling of the Grand Chamber in June 2025. On the plaintiff’s side, in order to support a valid claim, sufficient evidence must be prepared to demonstrate the negative impact that the counterfeit products have had on the trademark owner’s image in commerce, such as negative media comments or termination of business partnerships. On an optimistic note, if compensation for harm caused to reputation is taken into account, the total amount of damages award effectively increases, thereby creating a greater financial incentive for pursuing infringement enforcement in Taiwan.