The Taiwan Supreme Court has issued a powerful judgment (Burberry v. ETMall, 2025) that offers significant new direction for the calculation of trademark infringement damages. This decision clarifies several long-standing ambiguities in the application of the Trademark Act and sets a higher standard of accountability for e-commerce platforms and joint sellers.

This ruling provides essential guidance for every brand owner, legal counsel, and platform operator in the region.

Judgment Summary: Three New Directives

The 2025 ruling introduces three crucial shifts in how trademark infringement damages are calculated under Article 71 of the Trademark Act:

1. The Total Profit Rule for Joint Infringers

The Court clearly stated that when multiple parties jointly infringe, they are fully and jointly liable. Damages based on infringer profits must now be calculated using the total combined profit acquired by all parties involved, not just the individual platform's net share. This rule aims to ensure that the full economic benefit derived from the infringement is recovered.

2. Precise Retail Unit Price Calculation

When using the retail price multiple method (500x to 1,500x), courts must use the separate retail unit price for each distinct type of infringing good rather than an averaged price. This directive ensures a more accurate damage assessment that aligns the penalty with the actual value of the infringed item.

3. Comprehensive Review for Damage Reduction

The Court clarified that its power to reduce damage amounts must be exercised through a comprehensive and holistic review of all relevant factors, including the trademark's fame, the product's market circulation, and the scale of both parties' operations. Arbitrary reductions based on isolated factors are deemed insufficient.

Industry Impact: Understanding the New Direction

This judgment provides clarity on legal liability and necessitates a strategic adjustment of compliance and risk models across the industry.

For E-commerce Platforms & Retailers (The Defendants)

This ruling provides a new direction for assessing platform liability, establishing a more rigorous framework:

• Elevated Liability Threshold: Platforms must now model their risk based on the total sales revenue of the infringement chain, not just their commission slice. This significant clarification requires a reassessment of financial exposure.
• Mandate for Proactive Vetting: The Court emphasized that simply having an anti-counterfeiting policy is not enough; it must be diligently executed. Negligence resulting from staff failure to properly vet supplier documents (like import declarations) will lead to liability, underscoring the need for robust compliance procedures.

For Brand Owners & Luxury Goods (The Plaintiffs)

The ruling strengthens the position of brand owners, offering more precise and favorable avenues for calculating compensation:

Maximized and Accurate Recovery: The combined effect of the Total Profit Rule and the Separate Unit Price rule provides a clearer framework for calculating damages, preventing the high value of luxury items from being diluted. This secures a more comprehensive financial recovery.

Stronger Legal Deterrence: By setting a higher, clearer standard for calculating the penalty, the ruling makes large-scale online counterfeiting a less attractive financial risk, enhancing the overall deterrence against IP infringement.

Strategic Support for a Complex Legal Landscape

As the legal environment receives this new guidance, the need for experienced counsel in trademark protection, risk auditing, and litigation becomes paramount.

Our firm is fully equipped to guide you through this evolving landscape. From implementing proactive anti-counterfeiting strategies to handling intricate trademark litigation, our expert team provides comprehensive assistance. We specialize in managing the unique legal and logistical challenges of IP infringement, particularly those involving cross-border issues within the Greater China region (Taiwan, Mainland China, and Hong Kong).

If your brand is facing a threat or your platform needs a strategic liability audit, contact us. Let our team empower your legal position and safeguard your brand assets.