Law Articles
2026-06-12
MLM
Remedies for Trademark Infringement" and Intellectual Property Strategies for Direct Selling Companies
【Partner Lawyer Charlotte Wu, Zhong Yin Law Firm】
charlotte.wu@zhongyinlawyer.com.tw
charlotte.wu@zhongyinlawyer.com.tw
With the rapid growth of the wellness industry and new retail models, direct-selling companies have established a pivotal position in the Taiwanese market thanks to their unique “word-of-mouth marketing” and “high-quality products.” However, success often attracts scrutiny, and in recent years, well-known direct-selling brands have become prime targets for online infringement and counterfeit goods.
The proliferation of "low-priced genuine products" and "overseas purchasing services" on major online shopping platforms and auction sites has not only severely eroded the market share of legitimate brands but has also dealt a devastating blow to the core assets of direct-selling companies—their brand reputation and distributor networks.
Based on practical legal experience in the fields of intellectual property and direct selling compliance, direct selling companies must establish a comprehensive trademark enforcement and risk management system to safeguard their brand value in the face of intense market competition.
I. The Three Major "Pain Points" in Trademark Protection for Direct Selling Companies
Due to the unique nature of the direct selling model, intellectual property rights protection cannot simply follow the same approach as in traditional retail. When facing market infringement, direct selling companies often encounter the following three major challenges:
Online and private traffic channels are opaque, making it difficult to gather evidence: Sellers of counterfeit direct-selling products often use closed social groups and messaging app groups to conduct sales, and transaction records can easily be erased. This makes it extremely difficult for companies to gather and preserve evidence in the early stages, making it hard to trace the products back to their original sources.
The Intertwined Phenomenon of "Mixing Genuine and Counterfeit Products": Some online sellers employ strategies that mix genuine and counterfeit products, and some even remove labels and barcodes from genuine products sourced from direct-selling systems before dumping them at low prices. This not only infringes upon the brand rights of trademark holders but also severely undermines the sound pricing structure and channel order established by direct-selling companies.
A Blow to Distributor and Consumer Confidence: The essence of direct selling lies in "trust between people." Once counterfeit products flood the market and consumers experience adverse reactions after taking or using them, all the negative publicity will backfire on the brand itself, leading to a mass exodus of compliant distributors and undermining the very foundation of the company.
II. Legal Classification of Common Infringement Practices in Online Shopping
In legal practice, direct-selling companies should adopt different legal strategies to effectively address various forms of online infringement:
1. Unauthorized manufacture or sale of counterfeit goods bearing a brand’s trademark
Such conduct directly infringes upon a company’s trademark rights and constitutes a clear act of infringement. Under Taiwan’s legal framework, infringers are not only liable for civil damages, but those who intentionally counterfeit and sell another party’s trademarks may also face criminal charges. Companies should take decisive legal action through both civil and criminal channels to hold the perpetrators legally accountable.
2. Online sellers using the brand’s official trademarks and promotional images on their websites without authorization
Promotional photos and copy produced by direct-selling companies using significant resources are protected under copyright law. Online sellers who reproduce, redistribute, or publicly transmit such materials without permission are committing copyright infringement. Additionally, using another party’s brand reputation to mislead consumers may also violate the provisions on unfair competition under the Fair Trade Act.
3. Selling products with the anti-counterfeiting barcode torn off or the lot number cut out
Some unscrupulous merchants circumvent corporate traceability by altering batch numbers or damaging packaging. From a legal perspective, the core value of a trademark lies in “identification of origin” and “assurance of quality.” Arbitrarily damaging a product’s original packaging and selling it can easily mislead consumers and cast doubt on the product’s quality. Such actions may constitute trademark infringement or violate the Fair Trade Act, and rights holders are entitled by law to seek damages and seek an injunction to prevent further sales.
III. Zhong Yin Law Firm: Legal Services for Direct Selling Companies in the Area of Intellectual Property Rights Protection
Faced with rampant market infringement and counterfeiting, direct-selling companies should not allow themselves to become bogged down in a cycle of reactive, exhausting responses. Drawing on its extensive practical experience, Zhongyin Law Firm is able to provide companies with comprehensive, end-to-end legal services ranging from “strategic planning” to “litigation enforcement”:
1. Develop a comprehensive intellectual property defense strategy
A solid foundation of rights is essential for effective rights protection. A professional legal team can help businesses implement the principle of “securing trademarks before launching products.” In addition to registering core product names and trademarks across multiple classes, companies should consider incorporating anti-counterfeiting marks, distinctive packaging (such as unique graphic designs or color combinations), and even sub-brands and social media handles into their overall intellectual property protection strategy to build a robust legal moat.
2. Initiate professional evidence preservation and collection
Practical Tips for Lawyers: The integrity of the evidence determines the success or failure of a rights protection case. To address infringement cases involving the high level of anonymity on the internet, our firm has established a dedicated rights protection team to assist companies in conducting systematic evidence collection. From purchasing online notarization services and capturing real-time screenshots of web pages to thoroughly tracing the logistics and financial flows of counterfeit goods, we ensure that every piece of evidence obtained possesses unassailable probative value in court.
3. Professional Negotiation and Calculation of Damages for Infringement
Before proceeding with complex litigation, our legal team will calculate a reasonable amount of damages for the company by comprehensively evaluating factors such as the retail price of the seized goods and the infringer’s profits, in accordance with the provisions of the Trademark Act and the Fair Trade Act. Professional attorneys will represent the company in negotiations with the infringing party, leveraging both legal and commercial leverage to negotiate a settlement amount and sign a settlement agreement, with the aim of resolving the issue for our clients in the most efficient manner possible.
4. Legal Litigation Services and Follow-up Enforcement
If a negotiated resolution cannot be reached, we can promptly initiate civil preservation proceedings (such as provisional attachment or provisional measures) and formally file civil and criminal lawsuits. Our legal services not only aim to secure a favorable judgment in court but also emphasize the actual enforcement of the judgment to ensure that the company’s losses are effectively compensated. At the same time, a favorable judgment serves as the company’s most powerful public relations tool, demonstrating to all distributors and consumers the company’s determination to defend its brand.
Conclusion: Let the law be the strongest pillar of support for direct-selling brands
A brand is a direct-selling company’s most valuable asset. At a time when awareness of intellectual property rights is on the rise, proactively and efficiently enforcing trademark rights and combating counterfeiting is not only a necessary means of protecting a company’s revenue, but also a vital way for direct-selling companies to fulfill their social responsibilities and safeguard consumer rights.
Zhong Yin Law Firm boasts a team of experienced intellectual property attorneys and direct-selling legal experts who have long been dedicated to providing comprehensive legal services to renowned domestic and international companies in the direct-selling, healthcare, and new retail sectors. By developing tailored legal strategies that align with the current landscape of the Taiwanese market, we help businesses shift from reactive enforcement to proactive defense, enabling brands to navigate the legal landscape with confidence and achieve long-term success.
If you have any related requests or questions, please feel free to contact us at any time.
If you require legal advice regarding trust structures, or need to review the legal terms of trust contracts provided by financial institutions or trust companies, please feel free to contact:
Attorney Wu Jiehua
charlotte.wu@zhongyinlawyer.com.tw
tel +886 2 2377 1858 ext 8888