PME et propriété intellectuelle: Cas de Taiwan

3 ANALYSIS OF THE NATIONAL CONTEXT FOR IPR

In this section, our goal will be given a detailed description of Taiwan. this country has remained an ancient Chinese province, it is very well known globally for intellectual property rights. It is known only for its reputation of violation of these rights. No formal studies on such rights in Taiwan has never been made. This is why we have contact with expatriates and representatives of chambers of commerce.

3.1 Macro-level (Environment)

For the past thirty years, political difficulties have left Taiwan almost completely out of the

international arena^5(*). This also reflected on Taiwan's inability to seek IP protection under any

international convention.

3.1.1 Government Attitude & Commitment

As a result, Taiwan has no choice but to rely exclusively on bilateral arrangements to gain international benefits. In this regard, the United States is no doubt the single most influential player in shaping Taiwan's IP policy and reform. The U.S. concerns over IP protection in China date back to the turn of this century, when the Ch'ing Dynasty was in power^6(*). After World War II, the United States and China entered into a Friendship, Commerce and Navigation (FCN) Treaty when the Nationalist government (Republic of China) still controlled both the Mainland and Taiwan^7(*). When the United States government switched its diplomatic recognition from Taiwan to the government of the People's Republic of China (PRC) in 1979, Congress enacted the Taiwan Relations Act to ensure that all previous treaties and agreements between the United States and Taiwan remained effective unless and until legally terminated^8(*). Both sides subsequently and eventually entered into five administrative agreements on IP issues, and each of those agreements impacted directly on Taiwan's domestic legislation and resulted in significant reform on Taiwan's IP protection^9(*). Export growth is the key generator of Taiwan's economic growth^10(*). That the United States can be influential in Taiwan's IP reform is because Taiwan has been enjoying a significant trade surplus with the United States for years^11(*). In fact, until recently, the United States has consistently been Taiwan's largest export market^12(*). Although this situation changed when Taiwan shifted its export market focus to Mainland China and elsewhere, its economy still depends heavily on the health of the American economy. This gives the USTR much needed ammunition and strong leverage in its bilateral trade negotiations with Taiwan.

The United States is not alone, however. Experience shows that Japan, the European Union

(formerly the European Common Market) and other countries will normally first wait until results have been reached in Sino-American negotiations, then they will quickly jump in and demand the same, making Taiwan's full-scale, global concession almost inevitable, at least as far as trade and IP protection are concerned^13(*). For most people in Taiwan, the psychological fear of unilateral trade retaliation is very real. That a serious, direct blow to its domestic economy may be forthcoming and yet virtually no defense or counter-measure is available, particularly in light of the «Special 301» sanctions from the United States, exposes Taiwan's vulnerable economic infrastructure and frustrates the local public. The positive side is that hundreds of well-publicized reports and comments by the local media eventually brought enough pressure to bend the government's knee, forcing it to take drastic measures to reform the IP laws under a rigid timeframe set by the American trade negotiators^14(*). The negative side, though, is a growing frustration of the public toward their government and the anti-American sentiment that certainly will not help both sides in resolving their outstanding trade issues or disputes.

But today, On January 17, 2009, the insular authorities announced the withdrawal of Taiwan from the list of "Special 301" which includes the territories considered by Washington as failing to protect adequately the intellectual property rights (IPR). The U.S. government has noticed the progress made since 2001 (when the island appeared on the list for the first time), not only at the legislative level but also in legal protection of copyright.

Taiwan is committed to becoming a haven for innovation and creativity. In 2008, the island is developing a specialized judicial body empowered to try involving the cases of violations of intellectual property rights as well as awareness campaigns for students. U.S. officials welcomed the fact that amendments to the copyright protection on the Internet have been submitted to Members in October. The Taiwan authorities hope that these amendments will be adopted quickly. Meanwhile in Taipei, Minister of Planning and economic development, CHEN Tian-Yi, considered one of the last obstacles to negotiations on signing a bilateral free trade with the United States was now lifted.

Taiwan has become a post-industrial societies in which electronic and computer industry are essential. So long as the Taiwanese industry has been dominated by SMEs, it is clear that large international groups have emerged, such as Formosa Plastics, in plastics or Acer, fifth largest micro-computer.

As a newly industrialized country, it is not surprising to see that Taiwan was initially resistant to the idea of providing more IP protection, thinking this would only open the floodgates and result in foreign products saturating its domestic market. Many people even argued, pointing to the American and Japanese histories, that piracy and counterfeiting (which may not be clearly distinguishable from imitation) is an inevitable justification and is necessary to give a less developed country the time, tools and competitive edge to foster its own industry^15(*). However, the truth is that commercial piracy and counterfeiting have severely tarnished Taiwan's international reputation. Aside from vocalizing social and economic damage to their respective industries, affected manufacturers, both domestic and foreign, have expressed extreme dissatisfaction with the way in which the government on Taiwan has been handling the situation.

Most complaints focus on the inadequacies of the existing law in IP protection, the denial of juridical status to foreign corporations and the general lack of enforcement of the existing law^16(*). It did not take long before the political and business leadership in Taiwan realized that something must be done quickly to change this negative image and that reform would actually benefit Taiwan's indigenous industry more than simply granting favorable treatment to foreign goods and demands^17(*). This may be also due in part to Taiwan's need for foreign investment and a strengthened domestic industrial base, especially those in the high-technology area, which bolstered its self-confidence in competing fairly in the global market^18(*). Following along with the growth of Taiwan's domestic high-tech industry is a more institutionalized and cohesive effort on IP awareness, education, exchange and lobbying^19(*). On the lobbying front, the industry groups were able to forge a well-organized ad hoc alliance in 1993 and effectively persuaded the legislators to repeal a provision in Patent Law that imposes prison terms on unauthorized manufacturing of invention patents. This happened despite the Taiwan Executive Yuan's strong objections and the United States' hard push for an even more severe criminal penalty on wilful patent infringers^20(*). Similar scenarios played out in the major revisions of the Copyright Law and the passage of the Cable Television Law. Here the U.S. pressure (under the «Special 301» mandate) apparently backfired. With a growing distaste among members of the Legislative Yuan (the Parliament) toward the perceived «American arrogance,»

Taiwan's industry effectively lobbied for the passage of several provisions the USTR particularly disliked, such as an ambiguous disposition of parallel imports and a 20% ceiling on foreign shares or holdings in a cable television company^21(*). This shows that the United States may be able to push Taiwan (or any other country) for legislative reform, but it is local self-interest that eventually will prevail on details once the process of substantive statutory revision begins. «Special 301» pressure is effective only to the extent that parties are engaged in serious negotiations to resolve their IP disputes. When a nation's image and selfinterests are at stake, however, external pressure may only achieve a limited result, particularly when the targeted nation adopts a democratic system where many liberal-minded and nationalist legislators confront each other^22(*). Consequently, both sides would have to work together at the political and technical levels, to address each other's concerns and to explore a win-win solution.

Taiwan's lack of international political standing precludes its participation in all multilateral

international conventions for IP protection thus far. They include the Paris Convention for the Protection of Industrial Property (Paris Convention)^23(*) the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention)^24(*), and all other international treaties and conventions administered by the World Intellectual Property Organization (WIPO), an organ of the United Nations^25(*). This is because WIPO membership is open only to existing members of the Paris/Berne Conventions and the UN, and Taiwan belongs to none of the above categories^26(*).

Initially Taiwan did not seem to consider its lack of participation in the international IP community a loss or inconvenience. On the contrary, it has at one point tried to use this fact as a way to deflect the U.S. demand that its domestic law be revised to conform with certain international standards. However, as soon as its exporting goods hit the world market, the urgent sense of inadequate and insufficient international protection kicks in, and this has become a major concern to the Taiwan government. For example, no Taiwan citizen may take advantage of the Patent Cooperation Treaty (PCT) even if he/she may have residence in or tries to file his/her first patent in a PCT Contracting State^27(*). This means that the Taiwan patentee's only resort is to file separate patents in every country where he/she intends to receive protection. This, no doubt, will significantly increase the fees to pay, administrative proceedings to follow and the danger of missing filing deadlines, hence the loss of priority and/or even the patent itself. With a bilateral arrangement, Taiwan citizens may still not be able to enjoy full and universal national treatment in terms of seeking just remedies and judicial due process after all^28(*).

The successful conclusion of the Uruguay Round multilateral trade negotiations in 1993 and the subsequent creation of the World Trade Organization (WTO) may finally change Taiwan's awkward situation and isolation somewhat. That WTO membership is not contingent upon being a UN member and the possibility of access based not on an independent sovereignty but as a «separate customs territory» may provide flexibility and a much needed alternative for Taiwan to re-enter the global economic and financial community^29(*). In particular, the Agreement on Trade Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods (also known as the TRIPS Agreement, a component of the WTO rules that applies, mutatis mutandis, many provisions of the Paris/Berne Conventions)^30(*) could place Taiwan indirectly under the protection of various WIPO conventions. Therefore, Taiwan filed its request for formal accession to the former General Agreement on Tariffs and Trade (GATT) in 1989, by using the name «The Separate Customs Territory of Taiwan, Penghu (Pescadores), Kinmen and Matsu» (also to be known as «Chinese Taipei») while the Uruguay Round negotiations were under way and the outcome of GATT was not quite clear^31(*). An outcast of the international community for almost three decades, Taiwan is pursuing whatever it can to gain recognition again (not necessarily political) and has clearly put its accession to the WTO (along with the joining of other international organization) at the forefront of its national policy. It would seem that Taiwan is calculating that more international visibility means more leverage in dealing with the PRC. Whether this turns out to be true remains to be seen. Yet the irony is that, instead of being pushed by any foreign state, Taiwan is now actively and automatically amending its IP system as proof to its part of the bargain.

Meanwhile, on the regional front, Taiwan is also trying to gain more visibility in the Asia Pacific Economic Cooperation (APEC) forum and is taking a more aggressive stand, at least in the IP area. Established in 1989 as an informal forum for open dialogue, APEC has since developed into a major regional organization. Its 18 current «economies» (and soon to be 21) constitute more than half of the global trade volume^32(*). Politically and socio-economically heterogeneous, APEC has adopted the principles of consensus rule, «open regionalism» (as opposed to «closed regionalism» such as EU or North American Free Trade Agreement), international cooperation, free trade and investment, and pragmatism. Its chairmanship rotates among the members annually. In 1993, with the United States as the chair, the organization took a significant step forward to conduct its first Leaders Meeting in Seattle, Washington. This has since become a tradition for the APEC get-together at the highest level.

Within its loose structure, there is an IP Group that consists of, but is not limited to, all 18 commissioners and conducts an annual symposium for the exchange of ideas. The National Bureau of Standards (NBS, Taiwan's patent and trademark office and a sub-agency of the Ministry of Economic Affairs, MOEA)) hosted the second IP symposium in July 1997. One of the main topics for discussion was whether there should be an institutionalized region-wide patent and trademark or even copyright services. Although viewed by many within the region as merely a forum for dialogue, APEC has in recent history demonstrated its ability to weld incredible influence on global affairs. For instance, the Uruguay Round negotiations would not have been successfully concluded in late 1993 but for APEC leaders' commitment to push it forward just a few weeks before. APEC once again demonstrated its impact last year in the passage of the Agreement on the Implementation of the Ministerial Declaration on Trade in Information Technology Products (also known as the International Telecommunications Agreement, or ITA), whose negotiations were stalled for years and seemed to be going nowhere under the WTO platform. With the APEC's agreement to phase out all existing tariffs on telecommunication equipment by 2000, the WTO adopted the same measure in its first Minister's Meeting in Singapore within a month. In the IP area, however, it is yet to be seen how the APEC influence might translate into a framework for better cooperation among the member economies.

* ⁵ See U.N. General Assembly Res. 2758 (XXVI), U.N. GAOR, 26th Sess., at 358, U.N. Doc. A/L. 630 and Add. 1 and 2 (1971) , See U.N. General Assembly Res. 2758 (XXVI), U.N. GAOR, 26th Sess., at 358, U.N. Doc. A/L. 630 and Add. 1 and 2 (1971). The United States ceased its official recognition of Taiwan on January 1, 1979, while establishing formal diplomatic relations with PRC simultaneously. See Joint Communiqué on the Establishment of Diplomatic Relations between the United States of America and the People's Republic of China, 79 DEPARTMENT OF STATE BULLETIN, No. 2,022 (Jan. 1979), at 25; Maintaining Unofficial Relations with the People on Taiwan, Exec. Order No. 12,143, 44 Fed. Reg. 37,191 (1979), and Exec. Order No. 13,014, 61 Fed. Reg.

* ⁶ See Articles IX -- XXI, Commercial Treaty, Oct. 8, 1903, U.S.-China (Ch'ing or Manchu Dynasty), reprinted in 1 TREATIES, CONVENTIONS, ETC. BETWEEN CHINA AND FOREIGN STATES (2D ED.) 745, at 752-54 (1917)

* ⁷ See Article IX, Treaty of Friendship, Commerce and Navigation, Nov. 4, 1946, U.S.-Republic of China (Taiwan), T.I.A.S. No. 1871, 63 Stat. 1299 (1949). This article specifically calls for adequate and effective protection of patents, trademarks, trade names, and other literary, artistic and industrial property (such as copyrights).

* ⁸ See Section 4 of the Taiwan Relations Act, Pub.L. No. 96-8, apprv'd, April 10, 1979, 93 Stat. 14 (1979), 22

U.S.C. §3303 (1997).

* ⁹ See American Institute in Taiwan, List of Agreements Concluded between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States, 60 Fed. Reg. 42,159-02 (1995).

* ¹⁰ For detailed discussions on Taiwan's economy and trade as well as the problems confronting its growth, see

THOMAS R. HOWELL, ALAN W. WOLFF, et. al., ed., CONFLICT AMONG NATIONS: TRADE POLICIES IN THE 1990S, at 271-330 (1992).

* ¹¹ See THE CHINA TIMES EDITORIAL, Sept. 26, 1986, at 2 (Chinese edition).

* ¹² See USTR, NTE REPORT, 1992-96, supra note 2.

* ¹³ See Michell A. Silk, Legal Efforts of the United States and the Republic of China on Taiwan at Controlling the

Transnational Flow of Commercial Counterfeit Goods, contained in 5 CHINESE YEARBOOK OF INTERNATIONAL

LAW AND AFFAIRS, at 90-149 (1985)(hereinafter CHINESE YEARBOOK).

* ¹⁴ See, for example, LEGISLATIVE YUAN OF THE REPUBLIC OF CHINA, THE SINO-AMERICA TRADE, Chinese Legislative News Series, vol. 6 (Dec. 1986) and LEGISLATIVE YUAN OF THE REPUBLIC OF CHINA, INTELLECTUAL PROPERTY RIGHTS, Chinese Legislative News Series, vol. 2 (May 1986) for a comprehensive collection of media reports in Taiwan on those issues and their impact on the government.

* ¹⁵ See Board of Foreign Trade (BOFT), Ministry of Economic Affairs (MOEA), INTELLECTUAL PROPERTY RIGHTS PROTECTION: A REPUBLIC OF CHINA PROSPECTIVE (1983). See BOFT, MOEA, R.O.C. EFFORTS AND ACCOMPLISHMENTS IN THE PROTECTION OF INTELLECTUAL PROPERTIES (1985); see also EDWARD S.YAMBRUSIC, TRADE-BASED APPROACHES TO THE PROTECTION OF INTELLECTUAL PROPERTY, at 13-14 (1992); WILLIAM P. ALFORD, TO STEAL A BOOK IS AN ELEGANT OFFENSE: INTELLECTUAL PROPERTY LAW IN CHINESE CIVILIZATION, at 46 (1995)

* ¹⁶ See Silk, supra note 13, at 110; Michael M. Hickman, Comment, Protecting Intellectual Property in Taiwan --Non-recognized United States Corporations and Their Right of Access to Courts, 60 WASH. L. REV. 117-140 (1984).

* ¹⁷ See Vincent Siew, Counterfeiting and Piracy Are Our Public Enemies, CENTRAL DAILY,

March 13, 1984.

* ¹⁸ See Siew, id. In this article, Siew asserted that pirated products constituted only a very small portion of Taiwan's over-all exports, while admitting that they could have a devastating impact on Taiwan's economic interests.

* ¹⁹ Examples include the Asia-Pacific Intellectual Property Association (APIPA), National Federation of Industries (IP Division), National Computer Software Alliance, National Pharmaceutical Manufacturer's Association, National Publishers' Association, the semi-governmental Industrial Technology Research Institute (ITRI) and the Institute for Information Industry (3I).

* ²⁰ See Legislative Yuan, Related Documents to Legislative Proposals, Docket No. Yuan Chung 474, pertinent to

Bill Nos. 4517, 694, 719 and 720, July 14, 1993, at 156 (hereinafter Related Documents).

* ²¹ See, e.g., Legislative Yuan, 82 OFFICIAL GAZETTE, issue 48-1, at 104-200 (July 21, 1993).

* ²² See Robert E. Hudec, Thinking About the New Section 301: Beyond Good and Evil, in Chapter Four in JAGDISH BHAGWATI AND HUGH T. PATRICK, ed., AGGRESSIVE UNILATERALISM: AMERICA'S 301 TRADE POLICY AND THE WORLD TRADING SYSTEM, at 113-159 (1990).

* ²³ Of March 20, 1883, entered into force on July 7, 1884, as revised at Brussels on Dec. 14, 1900, at Washington,

D.C. on June 2, 1911, at The Hague on Nov. 6, 1925, at London on June 2, 1934, at Lisbon on Oct. 31, 1958, at

Stockholm on July 14, 1967, and amended on Oct. 2, 1979, WIPO Document AB/X/32 (1979).

* ²⁴ Of Sept. 9, 1886, entered into force on Dec. 5, 1887, as revised at Berlin on Nov. 13, 1908, at Rome on June 2,

1928, at Brussels on June 26, 1948, at Stockholm on July 14, 1967, at Paris on July 24, 1971, and amended on

Sept. 28, 1979, WIPO Document AB/X/32 (1979).

* ²⁵ See Agreement between the United Nations and World Intellectual Property Organization, adopted by the U.N. General Assembly on Dec. 17, 1974, approved by the WIPO General Assembly on Sept. 27, 1974, and entered into force on Dec. 17, 1974.

* ²⁶ See Article 5, Convention Establishing the World Intellectual Property Organization, signed at Stockholm on

July 14, 1967 and as amended on Sept. 28, 1979

* ²⁷ See Article 9, Patent Cooperation Treaty of June 19, 1970, as amended on Oct. 2, 1979 and modified on Feb. 3, 1984. PCT filing is still not possible even if a Taiwan citizen should join other applicant(s) whose nationality is under a member state of WIPO. See Rules 2.1, 4.5-4.7, Regulations under the Patent Cooperation Treaty, as in

force from January 1, 1996.

* ²⁸ See Apple Computer, Inc. v. Gen-Zhan Lee, et. al., (71) Tzu Tzu Ti No. 870 and 897, Criminal Judgment (Taipei District Court, 1983)

* ²⁹ See Article XII, Agreement Establishing the World Trade Organization, as a part of the Final Act Embodying

the Results of the Uruguay Round of Multilateral Trade Negotiations (Marrakesh, April 15, 1994)(hereinafter

Final Act), at 9, 16. This is an identical provision to its predecessor, Article XXXIII of the General Agreement on Tariffs and Trade (GATT) of January 1, 1948, as amended.

* ³⁰ Annex 1C, Final Act, Id., MTN/FA-A1C (1994).

* ³¹ See John Parry, WTO: Taiwan Praised for Efforts in Forwarding Bid to Join WTO, BNA INT'L TRADE DAILY, March 3, 1997, at D5.

* ³² See, KUANG-SHENG LIAO, ed., POLITICS OF ECONOMIC COOPERATION IN THE ASIA PACIFIC REGION, at 7-11 (1993).