PME et propriété intellectuelle: Cas de Taiwan

3.1.2 IPR Instrument Structure & Scope

Copyright^33(*):

In Taiwan, ownership of the copyright to a work is granted to Taiwan nationals upon completion of the work. By virtue of the 1946 Friendship, Commerce, and Navigation Treaty between the R.O.C. and the U.S., the works of U.S. nationals are also granted copyright upon completion. Taiwan is not a member of the Berne Convention. Works created by nationals of the United Kingdom, Hong Kong, and Spain are also protected by treaty. After January 1, 2002 when Taiwan entered into the WTO, works created by nationals of the member states obtained protection. However, other works, unless first published in the ROC, or published in the ROC no more than 30 days after first publication in a nation that provides reciprocal protection to Taiwan nationals, will not be protected in Taiwan.

The Exclusive rights retained by copyright owners are: the right of reproduction; the right of public recitation; the right of public broadcasting; the right of public projection; the right of public performance; the right of public transmission; the right of public exhibition; the right of compilation; the right to distribute their works through transfer of ownership; the right of leasing; the right of adaptation.

Generally, the term of copyright ownership is the life of the author plus fifty years, starting at the date of completion. When the date of completion is unknown, the copyright term begins at the date of first publication. In the following instances, the term of copyright will endure for fifty years after the public release of the work:

Economic rights for works authored by a juristic person endure for fifty years after the public release of the work; provided, if the work is not publicly released within fifty years from the date of completing the creation, the economic rights shall subsist for fifty years after completion of the creation. Economic rights for photographic works, audiovisual works, sound recordings, and performances endure for fifty years after the public release of the work.

There are ten types of works protected in Taiwan: Literary works, including oral works, translations, translation's of oral works, compilations, and derivative works. Dramatics and choreographic works, including lectures, musical performances and stage presentations. Artistic works Pictorial works Musical works Motion pictures including videotapeSound recordings Photographic works Computer programs Architectural works

Copyright belongs to the author of the works. If the creator is employed to create a work, he is the author, but the employer may be the author pursuant to a written agreement with the employee. Copyrights may be jointly owned by two or more persons and may be assigned in whole or in part.

Civil remedies available to a copyright owner whose copyright is infringed upon include monetary damages, removal of infringement and prevention of future infringement, and publication of a court judgment. Monetary damages will be assessed based on the profits obtained by the infringer and losses suffered by the injured party. If the copyright owner fails to prove the actual amount of damages, then the damages will be determined by the court, from NT$10,000 to NT$1,000,000 (roughly US $30,000).

The Copyright Law provides for criminal penalties for various types of copyright infringements. For example, any person who reproduces the work of another without authorization is subject to imprisonment of no more than three years, and a fine of no more than NT $750,000 (roughly US $22,000). Any person who commits such an offense as a profession shall be imprisoned for between one year and seven years, and in addition, may be, fined up to NT $3,000,000 (roughly US $90,000). Generally, prosecution for copyright infringement shall be instituted only upon complaint by the injured party.

Patent^34(*):

Patent rights commence from the date of publication in the Patent Gazette. The term varies depending on the type of patent. For example:

- Invention Patent - 20 years from the filing date.

- New Utility Model Patent - 10 years from the filing date.

- New Design Patent-12 years from the filing date.

Invention Patent - inventions that show "novelty" and are not obvious, that have been developed to the point that they can be utilized in industry.

New Utility Model Patent - creations or improvements relating to the form, construction, or fitting of an object. Technical requirements are not as high as those for an invention patent.

New Design Patent - original visual designs relating to the shape, pattern, color or a combination thereof of an object.

Inventions and New Utility Models:

Before filing, an invention or a new utility model has been disclosed on a publication or put to public use anywhere in the world, or has been known by the public, except where such disclosure, use or status is arising out of one of the following circumstances, and the invention or new utility model patent application was made within six months after such circumstance occurs:

1. Due to research or experiment;

2. Due to display on an exhibition sponsored or approved by the government;

3. Due to the disclosure not made against the applicant's will.

4. A patent has already been granted to the same invention or new utility model, and that application was filed earlier than the current application, except that the applicant of the prior patent is the same applicant of the current application.

5. An invention or a new utility model simply utilizes conventional technology or knowledge known prior to applying for patent, and can be easily accomplished by persons skilled in the art.

New Designs

Before filing for patent registration, the same or similar design has been disclosed on a publication put to public use anywhere in the world, or has been known by the public, except where such disclosure, use or status is arising out of one of the following circumstances, and the new design patent has been applied within six months after such circumstance occurs:

1. Due to display on an exhibition sponsored or approved by the government;

2. Due to the disclosure not made against the applicant's will.

3. A patent has been previously granted for the same or a similar new design, which was filed earlier than the current application.

4. Any design obvious to people familiar with the relevant field.

The following items are unpatentable^35(*) in Taiwan:

- Animals, plants and biological methods that produce animals or plants, not including microbiological produce methods;

- Diagnostic, therapeutic or surgical methods for treating diseases of the human body or animal body;

- An article that is detrimental to public order, morality, or public health;

- An new utility model that does not belong to the form, construction, or fitting of an object;

- An article the shape or the design of which is identical or similar to the party, national or military flag, the national emblem, the government medal, a portrait of the Dr. Sun Yat-Sen or an official seal;

- An article the shape of which is purely functional (new design only);

- An article that is purely an artistic creation or artistic work;

- An article which is an integrated circuit layout or electronic circuit layout may not be the subject of a New Design Patent, although it can be protected by the IC Layout Law, and invention or Utility Model patents.

Cancellation^36(*) - Filed after a patent has been granted registration, usually on the grounds that the approved patent is not novel or is similar to a registered patent. Barred if an identical argument was previously the subject of an unsuccessful opposition action against the subject patent.

In the event that the TIPO^37(*) returns an unfavorable decision on an application or cancellation action, the following paths of appeal are open:

- Re-examination to the TIPO (for applications only);

- Appeal to the Ministry of Economic Affairs;

- Administrative suit filed with the Administrative High Court;

- Appeal to the Administrative Supreme Court.

Trademarks^38(*):

Exclusive rights to the use of a trademark in Taiwan requires registration of the mark.  The exception is that famous marks, even if unregistered, may be protected by Taiwan's Fair Trade Law, and may block the registration of similar marks in Taiwan, provided that the owner of the famous mark can prove that the mark was well-known in Taiwan before the application date of the similar mark.  Generally, U.S. trademark owners are eligible for trademark registration in Taiwan.

Trademark owners must apply separately for registration of a mark in each class in which it is to be used.

A trademark applicant must file an application with Taiwan's Intellectual Property Office (TIPO).  Normally, the IPO renders a decision within six months after it receives all supporting documents. If the application is approved, the mark will be published and registered after the applicant pays registration fees within two months upon receiving the approval notice.

The term of protection is ten years from the date of registration. The trademark may be renewed for additional ten year terms within six months of the expiration date of the mark's present term.  There is also a six-month grace period following expiration of a mark. 

Principal Mark (including word, drawing, symbol, color, sound, three-dimensional shape, or combination thereof)

Group Mark - A mark used by members of a cooperative or association, such as by union members.  These marks are generally used on goods not sold directly by members of the group.

Certification Mark - A mark used to identify the quality or characteristics of products. These marks identify goods as meeting the criteria of a certifying body, but not the particular source of goods. Certification marks will not be registered if they are descriptive.

Several types of trademarks are not granted registration in Taiwan.  Among these are marks that are identical or similar to national flags, marks that are identical with or similar to other registered marks for the same or similar merchandise, marks that are likely to lead the public into misidentification or misconception in respect of the characteristics, quality, or place of origin of the merchandise, marks that are descriptive of the merchandise to which they are applied, marks that are identical or similar to another person's famous mark thus causing the public to confuse or misidentify it or diluting the identification or reputation of the famous mark, and marks which are not distinctive. Suggestive marks are generally considered to be "descriptive" by TIPO examiners. For more specific information on marks barred from registration, please contact our office.

Use of a trademark by the registrant or his registered licensee is mandatory. Non-use for three years immediately following registration, or continuous suspension from use for three years may result in cancellation of the registration or deletion of goods listed on the registration but not actually used. To satisfy TIPO use requirements, the mark must be used "as a whole", as registered.

Failure to record a trademark license agreement with the TIPO may result in cancellation of the trademark registration.  However, the new trademark law states that TIPO will notify the trademark owner in writing and give the trademark owner an unspecified period in which to cure the defect.  It should be noted, however, that the licensee will have no right to enforce the trademark rights until the license is recorded.

Oppositions^39(*) - Filed within three months after a trademark has been registered and published, usually on the grounds that the mark is similar to either another registered mark for the same or similar merchandise, or to a mark well-known in Taiwan.

Invalidations - Filed after a mark has been granted registration, on substantially the same grounds as for oppositions.  Identical arguments may not be used if previously used in an unsuccessful opposition against the same trademark.

Cancellations - Filed after a mark has been granted registration, on the grounds that the trademark owner violated certain trademark regulations following registration.  Such violations might include any of the following: 1) lack of use of the mark, 2) alteration of, or addition to, the mark, 3) failure to attach appropriate distinctive symbols under Article 36, 4) a mark's becoming descriptive of the name or shape of the designated goods or services, 5) unrecorded licensing of the mark, or 6) a mark that is likely to lead the public into misidentification or misconception in respect of the characteristics, quality, or place of origin of the merchandise, 7) a court judgment finding infringement of another person's copyright, new design patent, etc., by the trademark.

In the event that the TIPO returns an unfavorable decision on an application, opposition, invalidation, or cancellation action, the following paths of appeal may be available:

- Appeal to Ministry of Economic Affairs (MOEA)

- Administrative Suit filed with Administrative High Court

- Appeal to Administrative Supreme Court

Integrated Circuit Layout Protection Law

Obviously in the passage of its ICLPL, Taiwan adopted the sui generis approach and modeled the law after the U.S. Semiconductor Chip Protection Act of 1984 (SCPA)^40(*). This law also takes into consideration Articles 35 to 38 of the TRIPS Agreement^41(*). Among other things, Article 15 requires registration as a pre-requisite for protection, and Article 19 stipulates a term of ten years from the date of first commercial exploitation or filing, whichever comes first^42(*). To qualify for protection, like a patent, a circuit layout design (1) must be the result of its creator's intellect and efforts, and, (2) at the time of its creation, must not be «ordinary, common, or known to the integrated circuit industry and designers of circuit layouts» (Article 16). Unlike a patent, however, the NBS will not conduct substantive examination before a registration is granted (Article 10).

Once registered, the owner shall have the exclusive right to preclude unauthorized reproduction, importation or commercial distribution of the layout (Article 17), but it is subject to the following fair use exceptions: (1) to analyze or evaluate for research, educational or reverse engineering purposes; (2) to use the result of such research, analyses, or reverse engineering in creating a second layout that conforms to the requirement of Article 16 or to incorporate the first layout as an embodiment; (3) to qualify under the first sale exhaustion; (4) to import or distribute illegally produced integrated circuits without knowledge; or, (5) to independently create, by a third party, an identical layout or circuit (Article 18). Therefore, parallel import of foreign circuit layout design may be permitted, as long as it falls within one of these rather broad-based fair use exceptions. It is not clear, however, whether the law adopts the doctrine of territoriality or international exhaustion; nor is it clear how these exceptions may encroach upon the over-all effectiveness of the law^43(*).

ICLPL apparently recognizes the fact that most creations of circuit layouts are the result of a team effort. Therefore, registration in the names of multiple creators are permitted (Article 9). In this situation, no single joint owner of the layout may assign, license or create a pledge in his/her own share without the consent of all joint owners, although other joint owner(s) may not reject such transfer without just cause (Article 21). If a joint owner abandons his/her share, the abandoned share shall be allocated to other joint owner(s) pro rata to their share in the original ownership. A juristic person such as a corporation may also be the creator in this regard (Article7). In the event an employee within the scope of employment creates the layout, unless the contract provided otherwise, the employer shall retain ownership, although the employee shall have the right of attribution (moral right) to the layout. The same rule applies to commissioned works where the property right belongs to the commissioner, unless the contract provides otherwise (Article 7). Despite the TRIPS Agreement's preclusion of paragraph 3, Article 6 in applying the IPIC Treaty, Article 24 of ICLPL nevertheless permits compulsory licensing under two circumstances: (1) when the purpose is for non-profit public interests; or, (2) when an owner of the layout is found to have engaged in unfair competition. It is not clear exactly what activities may fall under one of these two categories, and this may well be one of the points of dispute between Taiwan and other WTO member states in the future. Once a petition for compulsory license is filed, however, the owner(s) of the layout may issue a defense statement within three months. Also, the granting of one such license by the competent authority will not preclude others from obtaining another compulsory license for the same circuit layout rights.

In this regard, note that Article 24 explicitly prohibits the assignment or sub-licensing of a compulsory license right except in the case of business mergers or acquisitions where the right may be transferred together with the business in one package. Articles 29 through 32 provide for civil remedies for infringement of integrated circuit layout rights. Either the right owner or the exclusive licensee may institute a civil action, yet a licensee may not bring a case unless and until the owner has taken no action after being properly notified and the contract does not restrict his/her standing to sue. In a case where a third party knows or should have reason to know that the products, which were imported or distributed for commercial purpose, contain integrated circuits produced from illegal means, that third party will also be liable as an infringer (Article 29). This rule does not apply, however, if the third party has separated the infringing circuit from the products^44(*). An «infringement assessment report» (IAR) must be submitted when the layout owner or licensee exercises his/her rights^45(*). Neither the law nor its Implementing Regulation specifies how this report may be obtained.

Past practice suggests the competent authority (the NBS) is likely to designate a number of institutions (such as 3I or ITRI) to serve as official inspectors. Yet on many occasions, these institutions may themselves be involved in a dispute or have a conflict of interest problem, given the fact that they are semi-governmental and part of their function is for the research, development and manufacturing of semiconductor chips. The total remedies may be based on actual damages and lost profit, minus the infringer's production costs and «necessary expenses,» or, alternatively, the statutory damage of no more than NT$5 million (approximately US$166,667)(Article 30). If the infringer cannot prove production and other necessary expenses, then the entire proceeds from the sale of infringing layouts will be counted toward lost profit. In addition, the injured party may request the destruction of infringing layouts and the publication of the court judgment in a newspaper or journal with costs to be borne by the infringer(s)(Article 32). Note that in the case of an innocent infringer, the injured party may claim damages based on the usual royalties charged to the use of the layout if the infringer continues to import or distribute the product for commercial purposes, after receiving written notice of the infringing facts and an accompanied IAR from the owner (Article 31). Under regular administrative procedures for IP disputes, a party should first file a petition before the same administrative agency for adjudication (first petition), normally to a board within that agency, then a re-petition may be filed to the Executive Yuan and finally an appeal to the court. Here, the NBS may form an Assessment and Mediation Committee to resolve assessment, dispute resolution and compulsory licensing matters concerning circuit layout rights (Article 36). It is not clear, however, what the status is of this committee's rulings and whether they are subject to judicial review. It can be inferred, however, that once a committee is established, it certainly will not have the authority to impose any criminal penalty on the infringer, thus rendering the question of criminal liability for layout infringers moot.

Article 33 specifically grants for a foreign legal entity or organization standing to institute an

action even if the Government does not recognize that entity. This is apparently a major departure from reciprocity and is a significant move toward a true national treatment standard. Despite the potential deficiencies of ICLPL, Taiwan's industries seem to have reacted quite positively since its passage and certainly want to take advantage of its protection. In November 1996, the NBS issued the very first registration certificate to Winbond Electronics Corporation, a local Taiwan company. Toward the end of the year, i.e., in just one month, 245 circuit layout (mask work) registration applications were filed, most of them domestic and Japanese filings^46(*).

Enforcement of Intellectual Property Rights in Taiwan:

An investigation of a target can determine the scope and level of infringement, and can also provide evidence for filing a complaint or instigating a police raid. It generally takes 2-3 weeks to obtain such evidence. No meaningful discovery procedure exists in Taiwan, thus the amount and quality of evidence of infringement we can present during litigation has a direct bearing on our chances of success. Moreover, any additional evidence revealed during such investigations puts us in a stronger position to proceed with the issuance of a Cease and Desist letter and settlement negotiations in lieu of proceeding with a raid and civil or criminal litigation. Investigations help to determine the following:

- Whether the infringer exports the goods;

- Whether the infringer manufactures and/or sells the goods;

- The volume of infringing goods produced/sold;

- The dollar value of the infringing goods compared to the price of the legitimate goods;

- The location of the goods, such as in a warehouse, or distribution center;

- Depending on the results of the investigations, we can determine whether to proceed with raid actions, filing a lawsuit, or merely issuing Cease and Desist letters.

With evidence in hand, we can prepare a complaint and begin raid coordination with the police. The Public Prosecutor generally asks the court to issue a search warrant within ten days of our commencing preparation meetings with the police.

Although the Court may issue a preliminary injunction, if petitioned to do so, the Court has ample discretion to determine the provisional measures it deems appropriate to each case. In addition, the petitioner must file a civil suit within a period specified by the Court, which is usually about one week. In the case of a provisional seizure for a monetary claim, the defendants may request that the Court order the plaintiff to post a bond, usually somewhere between one third to one half of the plaintiff's claim, to cover defendant's potential damages. However, in the case of provisional measures for a non-monetary claim, such as a claim for ceasing infringement, the court may request the plaintiff to post a bond for the full damages that may be suffered by the defendant. If the plaintiff loses the civil suit, it is liable for the defendant's actual damages, not limited solely to the bond posted. Damages could include injury to the corporate reputation.

Following a raid, the Public Prosecutor's Office holds indictment hearings. These usually take 3-6 months, and consist of a series of 4-5 hearings. If an indictment is filed, there is another series of hearings for the criminal trial. This set of hearings usually lasts another 3-6 months. The trial process generally costs a similar amount, but varies with the complexity of the case and the defense. With an indictment secured, we generally file an ancillary civil suit. One advantage of a piggy-back civil suit is that a plaintiff avoids the requirement to post court costs. The costs the plaintiff must post are generally a percentage of the damages or the value of the injunction claimed. These costs may be assessed at up to 4% of the value of the damages or injunction claimed, depending on various factors. Some non-binding cases based on infringement that have set precedent, hold that the value of the injunction claim may be 20% of the paid-in capital of the infringing company. However, some judges tend to have the Trademark or Service mark and relevant factors evaluated by an appraiser to determine the value of such claim. The court costs operate as a strong incentive to not claim damages, and put the plaintiff in a civil suit at a financial risk.

For some infringers, the threat of criminal and civil liability is sufficient incentive to halt infringing activities and negotiate a settlement. The letter and negotiation approach can prove to be a cost-effective manner of stopping infringement, especially for retailers and small targets not meriting the effort of a law suit. A Cease and Desist letter demands that infringers immediately stop the production and sale of any and all infringing goods, and deliver or destroy all infringing goods already produced and/or distributed.

* ³³ See USTR, 1992 NTE REPORT, supra note 2, at 234-236. See Committee on Ways and Means, U.S. House of Representatives, OVERVIEW AND COMPILATION OF U.S. TRADE STATUTES (1995 ed.), 104th Cong., 1st Sess., at 87 (August 4, 1995); see also MOEA, Comprehensive Action Plan for the Protection of Intellectual Property Rights (July 1993)(hereinafter 1993 Action Plan).

See Article 5(2), Berne Convention, supra note 24 (no formality rule), and Article 9.1, TRIPS Agreement, supra

note 30 (Relation to Berne Convention).

The 1993 Copyright Agreement, supra note 9.

See also Article 6bis, Berne Convention, supra note 24

See Article 11, TRIPS Agreement, supra note 30. Note that prior to 1993, the rights to translation and public

broadcasting were excluded from copyright protection in Taiwan.

See Article 9.2, TRIPS Agreement, supra note 30; see also Article 5, Copyright Law for a detailed illustration of

what constitutes a protectable subject matter.

See Article 18, Berne Convention, supra note 24.

* ³⁴ See Patent Law Amendment of April 15, 1997.

* ³⁵ Article 21, Patent Law (1994).

* ³⁶ See Ministry of Justice (MOJ) Memorandum, Questions Concerning the Application of

Article 36 of the Fair Trade Law in the Situation of Trademark Parallel Import, 150 MINISTRY OF JUSTICE

GAZETTE, at 71-74 (Dec. 31, 1992).

* ³⁷ See Article 139, the 1997 Patent Law Amendment

* ³⁸ See Article 18, TRIPS Agreement, supra note 30. See Article 32, Trademark Law Implementing Regulation. See Article 16.2, TRIPS Agreement, supra note 30. See WIPO International Bureau, Memorandum and Draft Provisions on Well-Known Marks, WKM/CE/III/2 (Aug. 20, 1997); and, Article 20, Fair Trade Law. For more discussions, see III. C., infra.

* ³⁹ See Articles 23-24, Fair Trade Law Implementing Regulation. See Article 35, Fair Trade Law. See FTC Memorandum, Clarification No. 080: On Fair Trade Law Article 20, (83) Kung Fa Tzu Ti No. 63981 (August 17, 1994).

* ⁴⁰ see Terril G. Lewis, Comment, Semiconductor Chip Process Protection, 32 HOUS. L. R.

555-613 (1995)

* ⁴¹ Article 35 of the TRIPS Agreement mandates the application of Articles 2 through 7 (other than paragraph 3 of Article 6 on compulsory licensing), Article 12 and paragraph 3 of Article 16 of the Treaty on Intellectual Property in Respect of Integrated Circuits (hereinafter the IPIC Treaty).

* ⁴² Article 8, IPIC Treaty

* ⁴³ See Lewis, supra note 118, at 574-598. In addition, the rather broad-based permission of compulsory licensingmay also negatively impact the chip manufacturers' incentive to use this law for chip protection, forcing them tolook for other alternatives, such as process patent protection under the Patent Law.

* ⁴⁴ See 17 U.S.C. §907 (1997). But Article 29 is not clear whether the end user or purchaser

* ⁴⁵ See supra note 19.

* ⁴⁶ See NBS, MOEA, YEARBOOK OF PATENTS AND TRADEMARKS, THE REPUBLIC OF CHINA: 1997, at 79.