Local chain wholesale store Kuang Nan found not guilty for selling pirated UNO cards

　After several years of sale of the worldwide famous card game, UNO, by Taiwan-based Kuang Nan Fashion Shop (hereinafter “Kuang Nan”) since 2012, the business director of Mattel Taiwan Corporation, the affiliate company of Mattel, Inc., which releases the UNO game cards (hereinafter referred to as “Mattel Taiwan” and “Mattel”, respectively), unexpectedly sighted pirated UNO game cards displayed for sale at a branch store of Kuang Nan in 2017, for which the business director filed a police report to assert violation of Taiwan Trademark Act and thus had the pirated products and purchase details seized.  Kuang Nan’s purchasing manager, Chen claimed that he had no idea about the UNO products sold in the store being counterfeit and that their supplier indeed signed an undertaking to prove the legality of these UNO products.  This case was brought to the IP Court, which found Chen not guilty.  

　Mattel has registered its UNO mark with Taiwan IPO since June 1, 2009 with its trademark term expiring on May 31, 2019.  As revealed by the purchase and sale details, Kuang Nan had purchased from Sun Up Stationery Co., Ltd. (hereinafter “Sun Up”) 78,405 packs of counterfeit UNO cards and 883 packs of counterfeit UNG cards at the unit prices of TWD24 and TWD72 per pack, respectively, and paid a total amount of TWD1,945,296 therefor, and then sold these cards at their nationwide branch stores at the prices of TWD40 and TWD90, respectively, throughout the period from September 2012 to November 2017, for which Chen was prosecuted for violating the Trademark Act of Taiwan.  

　According to the court’s investigation, Kuang Nan has been working with Sun Up for more than ten years.  In their cooperation, Kuang Nan would always inquire about the legality of the said UNO cards before purchase and Sun Up confirmed the legality thereof and also presented an undertaking issued by its upstream supplier, Won-B Co., Ltd. to ensure the copyright of the said UNO cards.  The foregoing makes Chen’s argument tenable that he did not know about the said UNO cards being counterfeit.  Moreover, Chen’s ignorance of the said UNO cards being counterfeit is further sustained by the other fact that in addition to the purchase from Sun Up at the unit price of TWD24, Chen had also purchased UNO cards from another upstream supplier, Sheng Yang Stationery Gift Co., Ltd. (hereinafter “Sheng Yang”) at the price of TWD23 each pack during the period from year 2015 through year 2017.  The slight unit price difference between TWD23 and TWD24 does not make it reasonable to establish a fact that Chen purchased the counterfeit UNO cards from Sun Up due to price difference.  

  According to the IP Court’s holding, the prosecutor shall bear the burden of proof to produce convincing and substantive evidence as to the facts of the crime charged against the defendant and the defendant bears no obligation to substantiate his/her innocence.  Therefore, it is groundless to sustain Chen’s knowledge of the occurrence of trademark infringement and his continued sale of such infringing products under that knowledge.  The IP Court affirms Chen’s innocence in accordance with presumption of innocence.  (April 2020) 

/CCS