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GRAY IMPORTS DO NOT BREACH TRADEMARK ACT
The question of whether parallel importation of genuine goods violates the Trademark Act is an important issue in practice. In a criminal appeal judgment issued on 8 April 2008, the Taiwan High Court held that such imports do not breach the Trademark Act.
The court stated that the subject of the criminal liabilities imposed under the Act is goods bearing a counterfeit trademark. If goods offered for sale are parallel imports of genuine branded goods that have been lawfully manufactured in another country, and their quality is similar to that of the same goods as marketed by the holder of the right to use the trademark in Taiwan, and they are not likely to lead to confusion among, misidentification by, or deception of consumers, then they do no harm to the business reputation of the Taiwanese trademark rights holder or to the interests of consumers. Furthermore, their sale can prevent the Taiwanese trademark rights holder from monopolizing the domestic market and controlling the price of goods. Thus such imports can, in fact, promote price competition, giving consumers an opportunity for choice when purchasing the same goods, so that they may enjoy the advantages of free competition. This is not contrary to the legislative intent of the Trademark Act, and within this scope, parallel imports should not be regarded as infringing on the right to use a trademark, and criminal penalties cannot be applied.