Memoire Online - PME et propriété intellectuelle: Cas de Taiwan

Taiwan market is a distant and difficult to access. Do not ignore it. The business world is complex and difficult to understand for foreign makers. The market information and the actual situation of Taiwanese companies is often difficult to find. The barrier of language (Mandarin) is a real obstacle. These difficulties are disadvantageous for many SMEs.

Throughout the 1980s and 1990s, The Republic of China (here inafter Taiwan) has been notoriously dubbed by many, particularly U.S. industry, as the «pirate kingdom» of the world^1(*). Based on one estimate, the U.S. copyright industry alone suffered US$669 million loss from Taiwan piracy and counterfeiting activities in 1992^2(*). Ever since the enactment of the «Special 301» provision under the U.S. trade law, Taiwan has been a regular on the law's hit list. This means Taiwan was identified as a «priority foreign country», a U.S. trade partner which «has committed the most onerous or egregious acts, policies or practices» in denying «adequate and effective protection of intellectual property rights» or «fair and equitable market access to U.S. persons that rely upon intellectual property protection» or being placed on the «Priority Watch» list pending further investigations and consultations^3(*). It was not until November 1996 that Taiwan was completely removed from the list^4(*).

A careful examination of Taiwan's experience in dealing with IP protection reveals a remarkable path for its peaceful transformation. In less than twenty years, Taiwan has changed from being the reigning king of global piracy and counterfeiting activities to one whose government officials and businessmen now travel the world advocating better IP protection, and do so completely without the coverage of any international convention. This path, however, is anything but a straight line; rather, it is filled with zigzags, often involving struggles among different interest groups and sometimes even violent protest, all in the name of preserving Chinese cultural values and Taiwan's national economic interests. But as the dust settles, the counterfeiters are now clearly on the run, and Taiwan's industry has been enjoying a tremendous boom. Taiwan now looks like a shining-knight waving the banner of international IP community. So how did Taiwan succeed in its IP reforms and what is their substance? What issues are still outstanding are unresolved and most pressing issues? What are the challenges ahead? This report attempts to address these questions, including a survey and an analysis of the latest amendment to Taiwan's IP laws.

2.1 Research objective

The study set up by the observatory undertaken jointly with the University of Neuchatel part of a broad vision of the economic structure of developing countries. The part that interests us in this report concerns the intellectual property rights in Taiwan. The objective of this research is to construct a map of institutional country in order to provide international SMEs with a tool to estimate the level of protection and violation of individual rights. In addition, this document will provide the most comprehensive list of the possibilities of protection in Thailand and the procedures to follow in case of violation of protection.

The second objective of this research is to compare the structures with other countries in development to realize the differences that might exist and then try to suppress them for some international cohesion.

2.2 Research structure

The structure of the research is divided into two main parts. The first part of the research focuses exclusively on academic standpoint. Indeed, it is an analysis of national context for intellectual property rights. This part includes three levels:

Ø The macro level: This section focuses on the government. This sets the level of action and attitude of the Thai government in relation to intangible assets. This includes the structure of the instruments of intellectual property, legal support and regulatory environment.

Ø The meso level institutional level: this level is between the macroeconomic environment is the microeconomic level. In this category are listed the different agencies available in a given territory. Institutions cover a wide range of services developed by the state, such as the Department of Intellectual Property or all state institutions that help companies to have a protection as effective as possible. We will focus on three different items, ranging from an analysis of the institutional framework to the level of proactivity of the institutions in the country and so their effectiveness

Ø The micro-economic level: Most laws and regulations of a country are creating the primary purpose of defending the interests of persons, whether physical or moral. Intellectual property is no exception to the rule. It must, however, that people are the currents of their rights and how to enforce them, which is not always so easy. Therefore we will try to determine the level of use of different protections available to businesses. It is also important to focus on the violation rate and whether the legal system is effective enough to be able to punish any misuse of an intangible asset. Finally, the question of how often companies use its tools will be asked

Ø The second part of our study should been a quantitative research. Having sent our questionnaire to nearly 500 companies and had received very few responses, we did not do statistical analysis. However, we fill this gap by more detailed qualitative analysis with some contacts in the foreign country. We have also done research in several libraries, including the Library François Mitterrand in Paris where we found most of our sources, the university library in Belfort, and the Library of Economics in Neuchatel. Taking a lot of contact in this country has been very rewarding to a theoretical perspective. We then explain why companies do not want to answer our questionnaire on intellectual property rights in 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

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.

3.1.2 IPR Instrument Structure & Scope

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

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.

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:

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.

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:

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

- 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 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 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:

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:

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(*).

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:

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

- 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.

3.1.3 Supporting legal and regulatory environment

The authorities have taken measures to fight against counterfeiting, which helped control it, especially in the field of optical discs and consumer goods. The Taiwan Intellectual Property Office (TIPO), and Customs, supported by a special police force (the IP Police Force), demonstrate effectiveness. However, justice could be further improved: handling of files is slow and judgments, especially in the first instance, may be surprising, convictions are not sufficiently dissuasive.

The establishment of a specialized court in July 2008, strengthen the protection of intellectual property. The protection is less certain that the patent in an economy where basic research remains small, and where the electronics industry has attempted to use patents without paying royalties. It is therefore not surprising that the first procedure that Taiwan is threatened at the WTO involves a matter of intellectual property related to the misuse of patents (registration required a license from Philips to produce discs optical, contrary to Article 31 of TRIPs); this case has led to the initiation of a thorough investigation by the European Commission and led to the withdrawal of the license by the Taiwanese authorities. This example shows the interest, in the absence of amicable settlement, to take action litigation, particularly at international level.

To prepare an action a lawsuit against an infringer, the company or individual must first submit the documents to the authorities outlining their rights and evidence of infringement. The Taiwanese police, prosecutors and judges are particularly attentive to detail to allow or disallow searches. Above all, the individual or corporation must ensure the fair produce copies of certificates of deposit Taiwanese identify (both sides) and any other evidence of protection under copyright.

Regarding trademarks, it is necessary to produce an evaluation report in which a person attests the authenticity of manufactured products. Generally, employees or distributors. It is sometimes made to send digital photographs to customers abroad. Some independent institutions approved by the Judicial Yuan and the Ministry of Justice, also produce the necessary reports to the initiation of legal action in violation of intellectual property rights.

The Taiwan authorities, however, play an important role in the establishment of evidence by the organization reports, commercial samples and plans. These elements are necessary to authorize a search. It is generally appreciated gather evidence as quickly as possible to decide which element will be significant (real estate, bank accounts) for the referral of justice.

Patent infringement involving both Taiwan and mainland China have certain difficulties relating to evidence. In intellectual property, courts do recognize, however, the Taiwanese civil and criminal liability of "legal officer" of a corporation only if that company is directly linked to the counterfeiting activity. Many Taiwanese companies have relocated their business abroad have always kept an office in Taiwan to representation, whose staff often brilliant characters of business (real estate, bank accounts, cars). It is crucial to ensure coordination of searches carried out abroad and the various investigations to collect evidence before a court in Taiwan.

Counterfeit Trademark and infringement of copyright is governed by penal provisions, while patent infringements have been decriminalized. Thus, the latest criminal provisions, relating to counterfeiting of designs, have been in early 2003. All counterfeit trademarks and some works that violate copyrights are crimes public. Consequently, they do not require a complaint to be pursued. However, the Taiwanese authorities appreciate the production of a complaint by a local agent.

After the seizure by police of infringing goods, a survey will be conducted. A report will be sent to the Crown, who will conduct some interviews before deciding to refer the case before a judge. The case is then brought before a district court. The judge will conduct several interviews to ensure a better understanding of the case and decide the criminalization of facts. If the court decides that the defendant is not guilty of counterfeiting and was sentenced to a very small penalty, the defendant has ten days to submit an appeal to the High Court to the Crown. Prosecutors generally hold that call.

Incidental civil action is particularly interesting. It allows access to all the investigations by the police and judicial authorities. A direct involvement in the criminal investigation also allows the owner to influence the amount of criminal fines and can also provide a basis for civil liability of the accused. The incident civil action can also avoid the 1% tax levied on the shares purely civilian. Access to records is an important factor to obtain interesting results in criminal cases. Indeed, the advice of the holders of intellectual property rights enjoy an experience in this area which often exceeds that of judges or prosecutors.

Access to the file is often appreciated because it provides accurate information on the accused. Specific information concerning the identity of the accused (sometimes the owner has no rights at the outset that the following information about the identity of the accused: nickname "Ah-Bao", working as an employee of a company road transport). Regarding the civil action as such (eg patent infringement), the procedure is usually longer than criminal. Given the current difficulties faced by the Taiwanese Civil Procedure, it is especially appreciated having the use of investigators to gather evidence. It is advisable to make counterfeit goods or records under seal, to secure them and make them available to the hearing.

While police seizures usually concern only the only counterfeit goods, the courts are increasingly willing to enter production facilities, the books and promotional materials. Insofar as the Taiwan authorities are not always amenable to such an extension of the seizure, it is advisable to mention in order to seize the products identified in this survey (computers, software, records, marketing and advertising , sale price or any other document to establish the purpose and duration of counterfeiting).

The security cameras can not provide such evidence, it is interesting to use in cases involving organized criminal groups (Local use being made by the investigators or the police). Taiwanese law of evidence is relatively weak. Accordingly, the court looks only at the trial as the only evidence seized during the investigation. An inventory of counterfeit goods can possibly be done before the actual recording. This applies to front companies legally registered and covering the actions of people known by their nickname. Having established the origin of funds and assets of the business, inventory can be compiled. The Taiwanese courts generally require an inventory with a third to half of the assets.

This practice can be used to establish the books of the company (in a purely civil matters such as patent infringement), or to meet the undisclosed material seized by police in the investigation criminal (trademarks and copyright). The judge, after examination, retains only the assets or products within the scope of the case.

A foreign company may invest in Taiwan through purchasing shares of a Taiwan company or establishing a joint venture, wholly owned subsidiary, branch office or representative office in Taiwan. There are different corporate forms. The Limited Company and the Company Limited By Shares are the forms most often employed by foreign companies, as they provide the greatest protection from liability. Unlike a domestic company, a foreign invested company must comply with the Foreign Investment Statute, and must obtain approval from the Foreign Investment Commission prior to investing. The general procedures for investment in Taiwan include approval for foreign investment, corporate registration, business registration and other procedures as required by law.

The enterprise must handles general corporate matters, including incorporation (amendments, change of directors, capital increase) and registration, corporate restructure, merger & acquisition, sale of major assets or businesses, stock listings, stock option plans and employment issues. She must handle general business transactions, including sales, services, asset transfer, intellectual property and technology licensing, leasing, banking and e-commerce-related transactions.

The foreign enterprise often need the help of an firm of service specializes in intellectual property and technology licensing matters, including licensing of patent, know-how, trademark, copyright, software and other intellectual properties.

The rules that are relevant in the petitioning for, granting and enforcement of patent compulsory licenses are set forth in Article 8, 76, 78, 80 of Taiwan's Patent Act; and the key legal basis for patent compulsory licensing is set in Article 76, which stipulates the following:

«In order to cope with the national emergencies, or to make non-profit-seeking use of the patent for enhancement of public welfare, or in the case of an applicant's failure to reach a licensing agreement with the patentee concerned under reasonable commercial terms and conditions within a considerable period of time, the Patent Authority may, upon an application, grant a right of compulsory licensing to the applicant to put the patented invention into practice; provided that such practicing shall be restricted mainly to the purpose of satisfying the requirements of the domestic market. However, if the application may be allowed only if the proposed practicing is purposed for a non-profit-seeking use contemplated to enhance the public welfare. In the absence of the conditions set forth in the preceding Paragraph, the Patent Authority still may, upon an application, grant to the applicant a compulsory license to practice the patented invention in the event that the patentee has imposed restrictions on competition or has committed unfair competition, as confirmed by a judgment given by court or disposition made by the Fair Trade commission of the Executive Yuan^47(*).»

But with an increasing number of cases being brought against Taiwan companies, it's important to consider how to make that future judgment in a home state worth something in Taiwan. With Taiwan's relatively unique diplomatic isolation, it can be often helpful to get advice at a couple of key junctures: before getting into a contract with a Taiwan party and before commencing litigation against a Taiwan party.

The usual textbook approach is to specify one's own courts and laws to handle any disputes that may later arise under a contract, the reasoning being that overseas courts may give an unfair «home court» advantage to the «home» company. While it may make sense to stay out of relatively undeveloped court systems that have a history of prejudice, the Taiwan system has generally not had these sorts of problems and, in fact, offers many advantages with regards to speed. In any contractual matter in which a dispute might need injunctive-type relief (particularly where significant trade secrets or other intellectual properties are involved), it will often be important to specify Taiwan's domestic courts to ensure that swift action can be taken within Taiwan.

Draft amendments to Taiwan's Code of Civil Procedure (CCP) may eventually allow enforcement in Taiwan of foreign court rulings (e.g., for injunctive-type relief) that have not yet progressed to being final, irrevocable judgments, but this method would likely still interfere with swift action because of the need to translate documents and to go through separate enforcement filings in Taiwan. In our view, it is best to keep open the option of local action directly through the Taiwan courts, even drafting such an option to only exist at the election of the foreign party or allowing for the use of Taiwan's courts to seek injunctive-type relief.

The current version of the CCP allows for the enforcement of «irrevocable» foreign judgments (i.e., final judgments) and states that a judgment will not be valid if: 1) the foreign court has no jurisdiction under Taiwan law; 2) the Taiwan party has not «responded» to the action - except where service of process is accomplished in that foreign country or served via judicial assistance in Taiwan; 3) the judgment is incompatible with public order or good morals; and 4) there is no reciprocal recognition from the foreign court for Taiwan judgments. Practically speaking, the Taiwan courts do not find many jurisdictional or public order/good morals problems - the lion's share of problems arise in evaluating service of process and reciprocity.

Service of process matters, particularly, if it is likely that a Taiwan party will not «respond» in the foreign court - once a Taiwan defendant has «responded» the foreign plaintiff is in good shape and can proceed without worrying about following the usual Taiwanese service method via the court system. However, «response» seems not to have yet been clarified by any Taiwan court opinions and only a couple of professors have ventured thoughts on paper briefly suggesting that this should be interpreted to include appearances even for the purpose of arguing jurisdictional issues.

As foreign parties cannot always count on a Taiwan company's representatives being available to accept service of process in the country where the litigation will be brought, we often recommend using a two-pronged method in which documents are served upon the company in Taiwan first, followed by service using the judicial assistance procedure if the party does not make an appearance in court. Some coordination and explanation of this may be necessary, as some foreign judges may be hesitant to stop proceedings already underway just to move forward with a judicial assistance request for service of process.

Reciprocity then becomes the next major hurdle. Before launching into overseas litigation against a Taiwan party, it may be a good idea to run some checks into whether that jurisdiction has a particularly favorable or unfavorable history. Some countries, such as the United States, have a long track record. However, even countries without history on their side can put together alternative documentation and/or expert opinions showing that their courts would have no problems with accepting and enforcing a valid Taiwan decision.

Before getting into a contract with a Taiwan-based company or commencing overseas litigation against a Taiwan-based party, it can be very helpful to consult with counsel experienced in handling and advising on these issues. If injunctive relief in Taiwan is important, it may be a good idea to be ready to take action locally. If legal action against a Taiwan party in an overseas jurisdiction is necessary, there are still many things that can be done to speed up service of process and to lay the groundwork for an enforceable foreign decision. Once overseas litigation is underway, there are also many ways by which counsel can help provide litigation support, including locating defendant assets, providing legal opinions, working with investigators, and even monitoring relevant Chinese-language media.

So, on a general point of view, in 1996, the Action Plan seeks to streamline and simplify the document verification process and prosecution; to initiate a series of continuing educational seminars for judges and prosecutors; and, to instruct prosecutors to place IPR cases on the highest priority and request the maximum penalty against alleged infringer(s)^48(*). On substantive law matters, the 1996 Action Plan promises to study and find a way for U.S. copyright holders to enjoy a rebuttable presumption (prima facie evidence) of valid copyright in civil and criminal proceedings in Taiwan, much as what they now enjoy under the U.S. law^49(*). The Plan also confirms that the current Copyright Law already protects performers against bootleg recording^50(*). However, neither the Copyright Law nor the Fair Trade Law directly addresses bootleg recordings or merchandise in their current versions, and it is indeed a strained reading to interpret the law administratively as such so as to by-pass the Legislature^51(*). In other words, to render proper protection to performers against bootlegging, it would probably and inevitably require an amendment to the current Copyright Law, and major efforts need to be made to gain a favorable response from the independent minded Legislative Yuan.

Other areas the 1996 Action Plan seeks to address include, inter alia, a confirmation that under Article 84 of the Copyright Law, both domestic and foreign copyright holders may request that articles, implements, or materials solely used for the illegal reproduction of computer software, decompilation, or audio-video works be subject to necessary and appropriate disposition, such as confiscation, and when the evidence is sufficient, total destruction^52(*). The Action Plan commits continuous efforts for public education and enforcement against parallel imports of patented or copyrighted products^53(*).

In response to U.S. industry's latest demand that Taiwan must take proper measures in coping with issues derived from hi-tech development, the Copyright Commission promises to engage in studies and report their results to the public and the United States for comments^54(*). These emerging issues include, inter alia, satellite, multimedia, the so-called «information superhighway» or Internet, and anti-circumvention measures (decrypting equipment)^55(*). These promises, however, may not satisfy the demands of the U.S. industry, which wants to see legally binding commitments and concrete actions.

The regime that governs the protection of trade secrets in Taiwan may be found in the Civil Code, the Criminal Code, the Fair Trade Law and the 1996 Trade Secrets Law. Under Article 2.10 of the 1992 IPR Understanding, Taiwan is committed to the passage of, among other acts, a trade secrets law.^56(*) This was finally realized on January 17, 1996. Rather than compiling an exhaustive list of what constitute «trade secrets,» Article 2 lays out the basic criteria: (1) that it is not generally known by those in the field; (2) that it possesses certain realistic or potential economic value; and, (3) that the owner of the information has taken reasonable measures to safeguard its secrecy. It may be in the form of a method, technique, manufacturing process, formula, program, design or any information that can be used to manufacture, sell, distribute, or manage. This is in line with the TRIPS Agreement language and requirements^57(*). The Trade Secrets Law clarifies the ownership issue in work-made-for-hire situations. Unless the contract provides otherwise, the employer owns the secret (Article 3); in case of commissioned works, the secret belongs to the commissioned, although the commissioner may retain the right to use the secret in related works (Article 4). In the event of joint development, all developers jointly and severally own the secret (Article 5). Thus to transfer ownership, it must be agreed to by all co-owners. The law specifically provides that an individual co-owner may not reject the transfer of ownership or licensing agreement without just cause (Article 6), but does not specify the remedy if it so happens. Note that although the law permits free alienation of trade secrets ownership, it does prohibit sublicensing of the ownership without the owner's prior consent (Article 7).

The law expressly exempts trade secrets from being the subject matter of foreclosure or injunctive relief (Article 8). The Trade Secrets Law also imposes upon government officials, arbitrators, agents, counsels, witnesses or any other related individuals who come across the trade secrets because of their work the duty to maintain its confidentiality (Article 9). Violators of trade secrets may be subject to two-year imprisonment and a fine of no more than NT$500,000 (approximately US$16,667) in addition to civil damages (Articles 19(5) and 36 of the Fair Trade Law, Article 216 of the Civil Code)^58(*). If the violator is convicted of fraud, the maximum imprisonment may be as high as seven years (Articles 339 and 340 of the Criminal Law). As in other IP legislation, foreign trade secrets protection in Taiwan is under the semi-reciprocal rule. Therefore, foreign trade secrets will be protected if, and only if, (1) the country where the secret belongs affords protection to Taiwan's trade secrets or (2) it is stipulated in a bilateral agreement or treaty (Article 15). This may pose some difficult issues in a complex, multilateral cross-licensing scheme where only part of the know-how may be protected under Taiwan's domestic law^59(*). It is, therefore, all the more important to have a well thought-out licensing agreement and security measures instead of only relying on domestic law for protection.

Having contacted several Swiss and French expatriates settled in Taiwan and has visited some sites of banks that were translated into English, we know that the Taiwanese financial system offers no support for IP. No special loan is put in place to allow Taiwanese enterprises to protect their work. This is not surprising because, as we have explained, intellectual property is governed by TIPO, customs and local police. But some expats have told me that the laws against counterfeiting are poorly implemented. Some have even admitted seeing police and customs officers making their major purchases in stores specializing in counterfeiting. We now understand better why the U.S. had entered this country on a blacklist!

3.2 The meso-level (Institutional)

In this category are listed the different agencies available in a given territory. Institutions cover a wide range of services developed by the state, such as the Department of Intellectual Property or all state institutions that help companies to have a protection as effective as possible

3.2.1 Sector Review & Analysis

In Taiwan, the sector of semiconductor devices and the electric solid state devices are the sectors who filed the most patents during 2008^60(*). In fact, Semiconductors are one of key sectors of Taiwan's economic success. Characterized by a strong specialization, the Taiwanese production has succeeded in positioning themselves in areas totally innovative. The Taiwanese have been the first to provide their services under contract in the foundry and are thus distinguished themselves from their competitors. Two groups dominate the Taiwanese foundry, these giants TSMC and UMC, which alone is home to more than 50% of the global market. Manufacturers integrated, vertically focused companies, by definition, tend to favor a sub-contracting the manufacture of integrated circuits, to increase flexibility and reduce costs. Also, this sector has patented more than 1,789 invention certificates in 2008.

Concerning the utility model certificats, there are the electrically-conductive connections that are the most patented with 1,660 Utilities Models. Then there are the electric digital data processing with a number of utility model of 856 in 2008 See Table I: Invention Certificates Issued by International Patent Classification (IPC) in 2008 (TOP 20).

Design is very important for the communication equipment, the wireless remote controls and the radio amplifiers. Since its liberalization in the 1990s, the telecommunications industry in Taiwan has experienced a steady growth rate. The evolution strategy of Taiwanese production network equipment is similar to the one chosen by the computer equipment a few years ago. Taiwan first began to produce equipment with low value added products such as modems conventional mature technologies whose production was gradually relocated to Asian countries with low labor cost. Its industry then evolved into more complex productions. As in most developed markets, the mobile telephony sector is reaching saturation, with a penetration rate approaching 100%. Service providers are experiencing similar problems. They then shifted their activities to the Internet services and mobile phones with integrated PDAs. It's why this sector has patented 480 designs in 2008 See Table II and IIII: Utility Model Certificats Issued by International Patent Classification (IPC) in 2008 (TOP 20) and Design Certificates Issued by International Classification for Industrial Design System (LOC) in 2008 (TOP 20).

Some industries have a tendency to turn to intellectual property rights. This is the case of Hon Hai Precision Industry CO., LTD and of the Industrial Technology Research Institute (ITRI).

Hon Hai Precision Industry may be the biggest electronics company you never heard of. The company, more commonly known by its trade name, Foxconn, is one of the world's largest contract electronics manufacturers. It manufactures computer, consumer electronics, and communications products, including connectors, cable assemblies, enclosures, flat-panel displays, game consoles, motherboards, servers, and TVs. Hon Hai, doing business as Foxconn Technology Group, also provides design engineering and mechanical tooling services. The global company's customers include Apple, Cisco, Dell, Nokia, and Sony. CEO Terry Gou founded Hon Hai in 1974 to make plastic switches for TVs.

ITRI has three mission statements: first, to expedite the development of new industrial technology; two, to aid in the process of upgrading industrial technology techniques; and three, to establish future industrial technology. However, in order to face a new economic era and serving as a nation's premiere technology research institute, ITRI must transform Taiwan's research capability from a «follower» to a «pioneer» in order to provide major advantage and opportunities for domestic industries. As of today more than 60% of the ITRI's 6,000 employees hold either a Master's degree or PhD in their respective field of studies: Communication and Optoelectronics, Precision Machinery and MEMS, Materials and Chemical Engineering, Biomedical Technology, Sustainable Development, and Nanotechnology. To more information, see Table IV and V: Residents Patent Applications in 2008 (Top 20) and Residents Certificate Issued in 2008 (Top 20)

3.2.2 The institutional map

Taiwan still has work to do on its IP structure. In international comparison, the United States, European Union and Japan are considered to have a structure more developed for IP protection than Taiwan^61(*).

Concerning its organizational integration and coordination, the first goal of Intellectual property Bureau (IPB) is to consolidate the patent and trademark operations in the present NBS and the Copyright Commission. This bureau placed it under the MOEA, whereas the other parts of the NBS are strictly deal with issues related to national standards^62(*). Currently, six ministries and one commission have IP-related duties under the Executive Yuan, yet there have been «glitches» among their works.

The goal of MOE is to deliver an innovative, high-quality, and rapid response to the needs of business and the public, and the MOEA will serve a guiding role for business sector, develop an even more active partnership with private businesses, optimize the utilization and effectiveness of the nation's overall resources, enhance administrative efficiency, improve the domestic investment environment, and lead the economy through fair competition towards liberalization and internationalization, nourishing a vigorous private sector. The ministry will devote its efforts not only to guiding Taiwan's economy through the short-term obstacles it faces, but also to laying a solid foundation for long-term industrial growth.

To ensure speedy and more effective resolution of IP disputes, Taiwan amends a number of provisions contained in the Administrative Litigation Law, Civil Procedure Law and Criminal Procedure Law.

The Administrative Court or a common court suspend an on-going litigation if the finding of another legal relationship or status is a condition precedent or determinative to the outcome of the pending case^64(*). Therefore, in a patent or trademark infringement dispute or petition, as soon as the issue of patent or trademark validity is raised (and often it is the case), the entire case is then put on hold while the issue is referred back to the NBS for determination^65(*). The court simply does has not the authority to resolve this matter de novo. It follows that delay becomes a common practice for the accused infringer, hich, if exercised skillfully, can distract and drastically prolong the litigation, causing enormous extra damages to the patent holder.

TIPO is a main organization involved in the registration and the enforcement of Intellectual Property Rights. Its goal is formulation of IPR enforcement policy and legislation on patent, trademark, copyright, integrated circuit layout, trade secret and other IP related affairs. This organization is specialized on examination, cancellation, administration, to resolve of IP disputes.

The Chambers of Trade play a relevant role. They help the foreign business enterprise to relocate to Taiwan in developing a variety of services such as market research, partnerships, administrative information and economic.

Again, he vote of the IP Court Organic Act of the Assembly, March 5, 2007, making after a long preparation which continued throughout 2006, endorsed the creation of a court specialized in property intellectual. This law offers hope for progress in implementing the rules of intellectual property protection in Taiwan, which remained a weak point, while the law had been brought into conformity with the TRIPS Agreement following the accession of Taiwan to the WTO in 2001. The IP Court is an appellate court, ruling in the second proceedings in civil, criminal and administrative. It will consist of 15 judges: 1 chief prosecutor, and 2 Head Prosecutors and 12 Prosecutors. In Moreover, unlike an ordinary room, it can appeal to technical experts to advise the judges.

3.2.3 Degree of institutional proactivity

We detailed the public or private institutions that assist SMEs in Taiwan. We can distinguish three kinds: the institutions whose purpose is to inform, to create intellectual property, institutions whose goal is development aid and technological assistance to SMEs and export development.

3.3 The Micro (Enterprise) Level

We will try to determine the level of use of different protections available to businesses. It is also important to focus on the violation rate and whether the legal system is effective enough to be able to punish any misuse of an intangible asset

3.3.1 Level of use of IPR protection instruments

According to recent statistics published by IFI CLAIMS Patent Services^68(*) and TIPO, Taiwan has become the country who files the most patents per year with a total of 76,55% of certificates in 2008. It surpasses Japan (11,13%), the United States (4,96%) and Germany (1,27%). This is thanks to companies like Hon Hai Precision Industry Co., LDT, specialized in the semiconductor sector. The country is both the first level of patenting as utility models, inventions and design. (See Table of certificates issued by nationality in 2008)

In this international context, Taiwan is too the first country which uses Intellectual Property Rights: we can see that the patents applications represent 61,40%. It`s the first country behind Japan (15,16%) and United-States (11,20%). However, this time, inventions (23'868) is more important than utility models (23'195) and design (4'276). (See Table Patent Applications by nationality in 2008).

Concerning the Integrated Circuits Layout, we can see the important evolution between 1996 and 2008 (on the table «Statistics for IC Layout Applications and certificates issued»). IN 1996, the number of certificates was 40 and this number has fall to 37 in 2008. The applications was 243 in 1996 and today this number was fall to 37. In fact, the law has become harder over the years. See Table VI, VII and VIII: certificates issued by nationality in 2008, Patents Applications by nationality in 2008, and Statistics for IC Layout Applications and Certificates Issued.

The orientation towards applied research-oriented industrial ITRI is reflected by a large number of patents obtained and Taiwan (373, 0.88%), but the United States where the institute has achieved strong increased number of granted patents (229 in 2007, 286 in 2008 and 397 in 2009). We also note that the numbers of patents filed and obtained in Taiwan and the United States are very close. The new information technologies and telecommunications (ICT) dominate the portfolio of research center in Taiwan with 58% of patents granted in the United States. Followed by precision machinery and microsystems systems (MEMS) (19%) and materials and chemistry (8%). The sectors that Taiwan now wants to develop the technologies for sustainable development, biomedical and nanotechnology, now account for respectively 7.5 and 2% of the overall portfolio^69(*). Finally, the ITRI has set up a platform^70(*) to relate to players wishing to acquire or dispose of patent rights, enabling the local industry to more easily observe intellectual property rights. These facts thus show that Taiwan and industry have now fully integrated mechanisms of innovation in their IP strategies.

3.3.2 Level of Transgressions

The five largest suppliers of counterfeit goods in the direction of the United States, have been in 1997, China, Korea, Hong Kong (China), the Philippines and Chinese Taipei. The products were the most common audio-visual items (CDs, video cassettes, computer games, etc...) of ready to wear and electrical accessories. In total, the U.S. Customs seized 54 million worth of counterfeit goods in fiscal year 1997. The main sources of export of counterfeit goods in the direction of the European Union were Poland, Thailand, Turkey and the United States. Sections of ready-to-wear accounted for over half of seizures.

Please note however, Taiwan has made much progress in the field of counterfeiting. Since then, the awareness of authorities to the problem of intellectual property, the country has set up special institutions for the treatment and the control of ligation and disputes. Thus in 2008, Taiwan is a specialized tribunal established. Indeed, the judiciary is the weakest system of repression of violations of intellectual property rights, especially for courts of first instance: the slow processing of cases and judgments surprising and somewhat persuasive sentences (as explained behind).

The number of litigation, for example for the trademarks, has increased year by year. This means that laws have hardened because there are more cases of disagreement. This is also a good thing for the country. See Table XIX, Statistics of Trademark Administrative remedy Filed and Cancelled.

We therefore believe that despite the great enthusiasm and despite huge investments in Intellectual Properties, the level of infringement of intellectual property is still important and taiwan should continue its efforts in this direction.

According to the U.S. Customs, the share of Chinese counterfeits seized at their borders in 2009 represents 81% of the total value of goods seized. European customs, meanwhile, confirmed that China remains the primary source of false, 54% of the total quantities of copies seized in 2008 from this country. Taiwan following soon after with 10%.

The finding of L'Oréal is unequivocal: "The manufacture of various items of counterfeit goods are mostly made in China, blending those elements may however be made in another country." Mr. Michel Danet, Secretary General of WCO, analyzed in January 2008, the situation the same way: "The more we progress in understanding the phenomenon, most unhappily discovers new developments against which we must sustain new responses. A globalization of the legal economy and the inevitable transfer of knowledge it brings to the Asia Pacific represents the globalization of counterfeiting. Many Other Asian countries are also stigmatized, which include Thailand (automotive, cosmetics, luxury goods, textiles), Malaysia (consumer goods, watches, wines and spirits), Taiwan (Automotive and pharmacy), South Korea (watches and luxury), Hong Kong (watches and cigarettes), Vietnam (sports and wines and spirits), Dubai and the UAE (cosmetics and luxury), the Middle East (cigarettes and pharmaceuticals) and India (industrial goods and pharmaceuticals).

In the area of watchmaking, the Federation of Swiss Watch confirms that it "conducts its anti-counterfeiting in Asia through its center in Hong Kong mainly in the following countries: China (including Hong Kong), Taiwan, Vietnam."

In the auto sector, Renault believes that "the origin of counterfeit parts is increasingly extra. The countries of Southeast Asia are becoming major producers, whereas in the past it was mainly the work of countries in southern Europe". Valeo, for his part says weight now occupied by the Taiwanese in counterfeit auto parts worldwide. Valeo group notes that the first counterfeit (20 years ago) were fake products, rather coarse, marketed under its brand, mostly made in Taiwan before being exported to Africa, while today the French company faces faithful copies, sold under other brands (particularly in the area of lighting), always produced in Taiwan and exported to France, the Germany, Spain or Italy.

In Taiwan, active networks of traffickers have developed over 20 years. The level of transgression is very important, even if authorities fight effectively again.

3.3.3 From Awareness to Action

In 2006 in Taiwan, the detention of the consumers of counterfeit products was not punishable. Only the production, importation or sales were sanctioned. It was not envisaged at this time, to modify this approach by criminalizing counterfeiting. This would have resulted in a strong social and political opposition. However, TIPO has conducted awareness campaigns for consumers: in 2006, and during the World Day of Intellectual Property (April 26), TIPO was disseminated to the public information publications, DVDs and posters, and had also organized seminars. The organization was also formed clubs and tournaments IP in universities.

Today, In Taiwan, these are the customs, the Intellectual Property Police (Brigade charge search the markets or manufacturing centers and seize counterfeit), and Justice which is responsible for setting implementation of IP rights. The Taiwan Intellectual Property Office (TIPO) regularly organizes Training for the Intellectual Property Policy and established the Taiwan IP Training Academy (TIPA) to provide education on the Harmonized issues of intellectual property. The TIPO also organizes training courses, with support from the private sector to Customs that are appreciated by Participants and organizers, and appear to increase the efficiency of Customs, as evidenced by the number and quality of seizures that follow them. The companies most vulnerable to counterfeiting organize training in partnership with legal experts. There is, however, not Association which organizes sessions of group among several shareholders foreigners. The Taipei Economic Mission can organize contacts with these partners or directly with the TIPO.

3.4 Summary

Element	Strength	Weakness
Environment
Govt attitude & commitment	Enabling environnement, trade to GDP ratio, export growth, reform IP, retirement of the Special list 301, multilateral opening, global market, risk of political instability are very low,	Vulnerable economics infrastructures, lack of participation in international IP, lack of enforcement of IP laws, corruption in the government and problems with Chinese Mafia
IPR instruments & structure	Good laws concerning copyright, trademarks, patents and utility model, integrated circuit law, design,	Lack of judicial instance for the treatment and the control,
Legal & Reg. Environment	Simple system, effective system, labour law, commercial contrats for R&D,	Usually slow treatment and surprising conclusions, finance and banking regulation is sufficiently effective, shareholders'right are sufficiently implemented.
Institutional
Sector analysis & Review	Innovation and creativity, technologic island, semiconductors sectors and electronic , telecommunications,	Made in Taiwan =negative image
Institutional Map	Companies specializing in consulting, IP laws, assistance to export of goods, initiated the establishment of foreign	Lack of companies specializing in arbitration of disputes (if we want not going to judicial instance)
Institutional Proactivity	Many institutions	Not many aids for development in Taiwan
Enterprise
Use of IPR instruments	First country in applications and certificates IP in world comparison, patent productivity, Number of patent in force,	Counterfeiting mainly in the automobile parts area
Infringements of rights	Know-how, entrepreneurship of manager is widespread in business, adaptability of companies to market changes is high, working hours is highly per years,	lack of Human resources, financial institutions' transparency is sufficiently implemented in business, labor market flexibility
Awareness to Action	Actions in university and schools	Lack of IP formation

Also we can describe the macro environment of enabling, the institutional framework of General Support because there is a gap at banking system, loans and payment system. Finally, we can describe the level of micro enterprise of Limited use because these rights are not respected. (To more information, see the table above).

4 THE SURVEY

This study is only qualitative because we have a gap of data. We have explained the reasons of this gap: a lot of corruption and violation of intellectual property rights, Taiwan is in conflict on the management of these rights and their application. Many people has afraid to respond and be denounced to the customs of the country.

4.1 Quantitative Methodology

Given that Taiwan is a country specializes in the violation of intellectual property rights that three-quarters of major global brands have their copies in Taiwan, and that country is the hub of non-enforcement of intellectual property, was very difficult to complete the study questionnaire to Taiwanese firms as well as China. Taiwan has long been part of the Republic of China.

Many local contacts have tried to help me. They helped me understand the mentality of this particular country, but without the time to help me look for addresses of companies. We learned that leaders do not respond to the questionnaire for fear of being reported, that many companies that practice this violation did not complete this questionnaire because neither patent or design, trademark or official. Some expatriates, told me that I had to send the questionnaire only to businesses that do not make copies. But it is impossible to verify from abroad

Organizations like the Taiwanese Chambers of Commerce, MOEA asked me if I had an official letter of WTO to do this study. They apparently heard by other bodies to whom I sent the questionnaire, and were angry. After sending the link of the Observatory of the company that demonstrates the partnership of the study with WTO, I have not had a single reply from those state agencies! A company made me realize that we should not dream and that I would not get anything.

I was also told that most small SMEs do not speak English but Mandarin. So I wanted someone who could translate for me the questionnaire by placing an advertisement on the website of the University of Neuchatel and Lausanne. I found none. Also most companies in my database are large multinational companies. They are quoted on the stock exchange Taiwan because I got their address through this medium. So is this really a language barrier. I think not!

Another expatriate was amused to send me copies of photos of famous brand and made me understand that the Taiwanese government was playing a game abroad. It is believed that the international community is making efforts in intellectual property in creating some official bodies, but inside the country, these bodies are controlled by the state and not private organizations. The state seeks to hide the real observation. The policy applies at all by the laws on intellectual property.

Indeed, if these laws were applied, it would pose enormous problems for 40% of GDP comes from Taiwan fakes and it enriched the country. The government did not ban! The Mafia has also senior officials in Taiwan and there is much corruption within the state.

The special court that the government introduced a year ago, which deals only with cases of intellectual property makes judgments that are not quite disuasif. Indeed it is the subject of much criticism abroad. The United States, who removed Taiwan from its Special 301 list a year ago, are also conducted surveys over two years by brokers in Taiwan and to ensure the good faith of this country.

In this overview, I was advised not to study because I have SPSS successful in getting two answers instead of 15. Obviously the results will not be very representative. But I think anyone who repeated the study will notice.

Having informed of the problem since the beginning of the semester, I was not informed that I could change the country. Instead, I was told to go well until the end of the study. So the report is essentially qualitative.

4.1.1 The sample

For reasons that we explained above, our response rate to this study is 3/500. What is insignificant. We obviously know how to calculate an average, but the result is not representative and completely incoherent. But this is not the goal we want to give to this study.

4.1.2 Survey information

The aim of the analysis is to identify six latent variables: the company profile, the perception of the company, the perception of the visibility of the country's intellectual property, the motivations to own intellectual property rights, reasons not to own and finally a roadmap IP & operational issues.

4.1.3 Data analysis method

Statistical analysis was performed by the SPSS program. The goal is to represent the mean and standard deviations by an analsye descriptive data. Then if we want to analyze the responses of different questionnaires are correlated and are valid and reliable (Cronbach alpha). Finally, the goal is to represent the results graphically and analyze the statistical significance.

4.2 Results

4.2.1 Descriptive analysis

4.2.2 Reliability and validity measures

4.2.3 IP survey results + analysis

5 CONCLUSION

With a GDP of U.S. $ 296 billion, Taiwan ranks 17th in world rankings. GDP per capita above U.S. $ 13,000. Foreign trade in Taiwan is very specialized. The island generates more than half of its trade with three countries: China and the United States are its two top export markets, Japan's biggest supplier. Taiwan is the 17th largest investor worldwide. China is the main focus of these investments. An estimated U.S. $ 100 billion would be invested in China Taiwan, making Taiwan the 1st investor in China. Taiwan has an industrial economy, and nearly half of its trade in electronics (32% of exports in 2003) and electrical machinery (11.4%). The island is the 3rd global manufacturer of semiconductors and the 4th largest producer of computer equipment. This specialization in new technologies is one of the main strengths of the Taiwan's economy.

In the 80s, Taiwan has managed to develop a real Hsinshu cluster dedicated to information technology around the Industrial Technology Research Institute (ITRI). In total, the semiconductor industry in Taiwan weighs approximately U.S. $ 35 billion U.S. $ and should reach 60 billion U.S. $ in 2010. Taiwan today has one of the telecommunications systems of the more developed world in terms of penetration of mobile telephony, Internet access to broadband, fixed line penetration. The industrial structure of Taiwan is built on a network of small and medium-sized family firms with high flexibility and high adaptability. Taiwan also has the large groups which may have a dominant position in the global market. ( www.yolin.net/Mission-Chine-public_05_02_15jmy.doc)

After many painful struggles for a decade and a half, the word «remarkable progress» is now

bestowed on Taiwan's IP reform^71(*). Yet this is anything but another «economic miracle»; rather this is the collective effort of many people and serious commitment from the entire society. By and large Taiwan has met or even surpassed in some regard the international standards on IP protection, yet there are still areas that require further reform, which include, inter alia, transparency, market access and national treatment. The most recent round of Taiwan's IP reforms can be viewed as very politically smart, yet somewhat risky. By delaying the effective date of the amendments, Taiwan intends to now use these half-ready domestic laws as political leverage in exchange for more favorable terms in its WTO accession negotiations, not just with the United States but all other nations. In other words, now the pressure is reverted back to the very same business lobbying forces that have traditionally pressed hard on the USTR and EU negotiators to gain headway with Taiwan. Apparently Taiwan's calculation is, now that it has done what can be done, those foreign industrial lobbies will start pressuring the USTR to give the go ahead on Taiwan's WTO accession.

An island of the size of the states of Maryland and Delaware combined, Taiwan has been the 7^th leading export market of the United States^72(*), the 15th largest economic power in the world, and has indeed become a major global economic player^73(*). Thus it really should be included in future international IP discussions. Yet the political situation between the two sides across the Taiwan Strait casts a constant spell over this proposition. As a result, Taiwan is very much treated by the world community as an outcast, pushed to follow what others have done after-the-fact and without any say. This situation has taken a toll on the morale and self-esteem of the island's population and has resulted in bursts of anti-American sentiment from time to time. This political reality is unlikely to change in the foreseeable future, however. Yet Taiwan's efforts and experiences should be told and learned. The world can be a better place and significant improvement can be made in a relatively short time. Even for countries plagued with IP problems, as long as their leaders make the same commitment, and employ the same concrete efforts to carry IP reforms through, as Taiwan continues to do.

5.1 Discussion of key findings of the survey in the context of the national background

IP has moved to center stage and become a key component of the international trade agenda and negotiations. Taiwan intends to turn itself into a «Asia-Pacific Regional Operation Center», with an ambition to transform the country into an high-tech island. To accomplish this goal, it must establish a clear track record of adequate and effective IP protection as well as full market access from within. Simultaneously, both government and citizens of Taiwan should pay close attention to global development, abide by international IP harmonization efforts.

5.1.1 Macro-level (Environment)

Taiwan is an economic miracle; the island has made a remarkable progress and reform of intellectual property is a success. It must be said that this progress has been very rapid. In less than 10 years, Taiwan has managed to restructure its institutions, creating new specialists in this area, companies specialized in providing consulting and laws to help foreign companies to more easily implanted and do business.

Taiwan has met or even surpassed in some regard the international standards on IP protection. Yet there are still areas which require further reforms can be viewed as very politically smart, yet somewhat risky.

Statistics show that Taiwan is more to the repression than to economic freedom to the corruption. The index of economic freedom related in corruption has increased from 90 in 1995 to 59 in 2008 (100 means economic freedom and 0 means repression. The Index of economic freedom dropped because the state has become more repressive, which is a good thing in the case of Taiwan Despite the country is still among the kings of the copy but is a clear improvement. Taiwan is especially involved but attitudes are changing and that is what takes time!

Index^74(*) of economic freedom related with corruption : statistics of Taiwan

What may be strange for the enforcement of intellectual property. We note that the island became the first country to implement them. Why is he still part of the kings of the copy? We believe that this is due to changing attitudes and government structures that are still young. Several authors speaking countries of Asia, explains that corruption is often at the highest level of government. We know that the indice of the corruption is of 5,9/10 at international level.

Some police officers are corrupt and especially the Mafia is very important and indeed most of its profit in this way. The country has also increased the number of actual policies for improving the lives and customs crossings.

5.2 Implications

5.2.1 For Government and policy makers

Business losses due to international piracy of intellectual property (IP) in Taiwan were valued at $ 2.23 billion CDN per year. The magnitude of the problem is difficult to measure, but many trademark owners say that Taiwan is the capital of global piracy of P after China. To meet the requirements of the WTO in recent years has taiwain taken many steps to improve its regulatory framework, revised and introduced many laws and regulations related to IP. . The companies hardest hit are those that produce branded apparel, software, entertainment products (especially the DVD and pop), cosmetics, pharmaceuticals, hygiene products, specialty chemicals and components of information technology. The good news is that Taiwanese companies depend more and more IP (particularly trademarks) and begin to demand better protection under it.

The problem of IP is often embedded with other illegal activities, such as overproduction by licensed factories, fraud distribution and sales of gray markets. In scenarios surplus, manufacturers licensed to produce the owner of the mark, reached the quota, and they then produce more of the same goods for them. By the back door, they ship the surplus to lower prices on the market, thus disrupting the market that the owner of the mark had seen, and they received payment of profits illegally. The fraud involves distribution of local managers of multinational companies setting up their own companies to defraud the foreign entity. The gray market problems include licensed factories that ship goods in areas designated as the preserve of another licensed manufacturer. These problems may be complicated by the involvement of corrupt local officials.

5.2.2 For SMEs

IP owners should adopt a comprehensive approach to protect their IP in China. There are three main aspects to the strategy (the first being by far the most important):

Prevention and Protection - attenuate the risk in advance, making sure that your IP is properly registered, clearly protected by contract and as difficult to hack as possible (for ex. Does not share more software source code that is absolutely essential) Recognize that the business strategies depend on the long-term protection of IP in Taiwan can be risky and require additional efforts.

Recovery and retaliation - save the brand or product, whether she / he is a victim of
IP pirates. This includes investigations, raids, seizures and destruction, as well as civil litigation and criminal prosecution. These measures can be costly and time-consuming.

Lobbying - this includes all the actions a company can deploy to address the official and public opinion in favor of the owners of IP and cons criminals, and influencing the evolution of the system of legal protection of IP in Taiwan.

5.3 Limitations and future research

Taiwan has introduced the right of property in its constitution. The regulations on industrial property exists and is at international standards, but its application is uncertain. Came into force on 1st March 2004, a Customs regulations provide new tools to fight against counterfeiting. According DGTPE, counterfeiting in Taiwan and China accounts for 8% of GDP and employs between 3 and 5 million people. Taiwan acceded to the Agreement relating to the respect of intellectual property rights affecting commerce by joining the WTO. According to testimonies, the copy is exactly the same pay and no longer practiced, but the copy smart tailored to the Chinese market, to production in very large quantities at low cost is commonly practiced. A company that sets up in Taiwan to introduce a new product or service to market Taiwanese or Chinese is expected to be copied. This is part of manners and therefore a study on intellectual property is not appropriate in this context.

6 REFERENCES

* ¹ See United States Trade Representative (hereinafter USTR), Fact Sheet on AIT-CCNAA Understanding

* ² This is an estimate by the International Intellectual Property Alliance (IIPA) in its 1993 annual submission to the Office of the United States Trade Representative (USTR) and was adopted by the latter without change (hereinafter SPECIAL 301 RECOMMENDATIONS). See USTR, 1993 NATIONAL TRADE ESTIMATE REPORT ON FOREIGN TRADE BARRIER (hereinafter NTE REPORT), at 251 (1993).

* ³ See Section 182 of the Trade Act of 1974, an addition to the 1974 Act by Section 1303 of the Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, apprv'd, Oct. 3, 1988, 102 Stat. 1107, 19 U.S.C. §2242 (1997).

* ⁴ See Andy Y. Sun, The Prospect for a Dispute Settlement Mechanism under the World Trade Organization -- International Intellectual Property and Trade Disputes, reprinted in PAUL C. B. LIU AND ANDY Y. SUN, ed., INTELLECTUAL PROPERTY PROTECTION IN THE ASIAN-PACIFIC REGION: A COMPARATIVE STUDY, Occasional Papers/Reprint Series in Contemporary Asian Studies, University of Maryland School of Law, No. 4 -- 1996 (135), at 153-183

* 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

* 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).

* 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

* 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,

* 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

* 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

* 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

* 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.

* 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).

* 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

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

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

* 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

* 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.

* 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).

* 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

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

* ⁴⁸ See MOJ Memoranda, (85) Fa Chien Tzu Ti No. 19,922 (Aug. 8, 1996), (86) Fa Chien Tzu Ti No. 3,322

* ⁴⁹ See MOI Memorandum, Tai (85) Nei Chu Fa Hui Tzu Ti No. 8512559 (July 27, 1996)

* ⁵⁰ Article 14(1), TRIPS Agreement, supra note 30. See MCCARTHY'S ENCYCLOPEDIA, supra note 42, at 43.

* ⁵⁵ See NII Steering Committee of the Executive Yuan, The National Information Infrastructure (NII) of R.O.C.: Abstract, printed on the Web at URL: http://www.nii.gov.tw/niieng/nii.htm (August 1997).

* ⁵⁶ See INSTITUTE FOR INFORMATION INDUSTRY, COMPILATION OF INTELLECTUAL PROPERTY DECISIONS (PART II): CASES ON TRADE SECRETS, at 1-424, Apr. 1995.

* ⁵⁷ See Article 39, TRIPS Agreement, supra note 30. Trade secrets are referred to as «undisclosed information» in

* ⁵⁸ See Article 216 of the Civil Code. See Article 13 of the Trade Secrets Law

* ⁵⁹ See Laura Tyson, Matra Hachette Offshoot May Quit Taiwan: Row Escalates with Taipei Authorities over Payments for Work on Commuter Rail System, THE FINANCIAL TIMES, June 3, 1996, at 6.

* ⁶¹ Bruce E. O'Connor and David A. Lowe, Comparative Analysis of Intellectual Property Dispute Resolution Processes in Mainland China, Taiwan and the United States, supra note 4, at 57-132.

* ⁶² See Article 8, Amendment to the Organizational Law of the Ministry of Economic Affairs (Oct. 16, 1996).

* ⁶⁴ See Article 25, Administrative Litigation Law; Article 182, Civil Procedure Law.

* ⁶⁶ See 1993 Action Plan, supra note 84. Note that although Taiwan pledged to establish a specialized IP chamber or division, it had not been realized by the end of 1997. The following factors played a part: (a) the Legislative Yuan was unable to pass the statute granting authority to create such courts; (b) unlike some of the countries where IP cases tend to be filed or focused on a certain jurisdiction, cases are widely scattered across Taiwan, making consolidation efforts more difficult; (c) there are not enough judges trained specifically in the IP field; and, (d) many judges fear being pigeonholed and «stuck» in the IP area, thus affecting promotions.

* ⁷¹ This compliment, ironically, comes from one organization that has been one of the harshest critics on Taiwan's past IPR protection. See IIPA, supra note 4.

* ⁷³ See BUREAU OF COMPTROLLER, EXECUTIVE YUAN, KUO CH'IN T'UNG CHI T'UNG PAO (GENERAL REPORT ON THE STATE OF NATIONS AND ECONOMIC ANALYSIS) (1996). This is based on WTO's total trade volume (import and export) statistics of 1995. In addition, the Geneva-based World Economic Tribune ranked Taiwan's overall

international economic competitiveness at No. 8 out of 53 nations in its latest survey, up one notch from the 1996. survey. See Taiwan's Eco. Competitiveness Ranked 8th Highest In World, TRADEWINDS, Monday, September 1, 1997.

* ⁷⁴http://perspective.usherbrooke.ca/bilan/servlet/BMTendanceStatPays?langue=fr&codePays=TWN&codeTheme=9&codeStat=PF.CORRUP.HF.ECN.IN

6 APPENDIX

6.1 Appendix: The survey
6.2 Appendix: Statistical Data

Table I: Invention Certificates Issued by International Patent Classification (IPC) in 2008 (TOP 20)

Table II: Utility Model Certificats Issued by International Patent Classification (IPC) in 2008 (TOP 20)

Table III: Design Certificates Issued by International Classification for Industrial Design System (LOC.) in 2008 (TOP 20)

Table XIX: Statistics of Trademark Administrative Remedy Filed and Cancelled

PME et propriété intellectuelle: Cas de Taiwan

1 TABLE OF CONTENTS

2 INTRODUCTION

2.1 Research objective

2.2 Research structure

3 ANALYSIS OF THE NATIONAL CONTEXT FOR IPR

3.1 Macro-level (Environment)

3.1.1 Government Attitude & Commitment

3.1.2 IPR Instrument Structure & Scope

3.1.3 Supporting legal and regulatory environment

3.2 The meso-level (Institutional)

3.2.1 Sector Review & Analysis

3.2.2 The institutional map

3.2.3 Degree of institutional proactivity

3.3 The Micro (Enterprise) Level

3.3.1 Level of use of IPR protection instruments

3.3.2 Level of Transgressions

3.3.3 From Awareness to Action

3.4 Summary

4 THE SURVEY

4.1 Quantitative Methodology

4.1.1 The sample

4.1.2 Survey information

4.1.3 Data analysis method

4.2 Results

4.2.1 Descriptive analysis

4.2.2 Reliability and validity measures

4.2.3 IP survey results + analysis

5 CONCLUSION

5.1 Discussion of key findings of the survey in the context of the national background

5.1.1 Macro-level (Environment)

5.2 Implications

5.2.1 For Government and policy makers

5.2.2 For SMEs

5.3 Limitations and future research

6 REFERENCES

6 APPENDIX

6.1 Appendix: The survey
6.2 Appendix: Statistical Data

PME et propriété intellectuelle: Cas de Taiwan

1 TABLE OF CONTENTS

2 INTRODUCTION

2.1 Research objective

2.2 Research structure

3 ANALYSIS OF THE NATIONAL CONTEXT FOR IPR

3.1 Macro-level (Environment)

3.1.1 Government Attitude & Commitment

3.1.2 IPR Instrument Structure & Scope

3.1.3 Supporting legal and regulatory environment

3.2 The meso-level (Institutional)

3.2.1 Sector Review & Analysis

3.2.2 The institutional map

3.2.3 Degree of institutional proactivity

3.3 The Micro (Enterprise) Level

3.3.1 Level of use of IPR protection instruments

3.3.2 Level of Transgressions

3.3.3 From Awareness to Action

3.4 Summary

4 THE SURVEY

4.1 Quantitative Methodology

4.1.1 The sample

4.1.2 Survey information

4.1.3 Data analysis method

4.2 Results

4.2.1 Descriptive analysis

4.2.2 Reliability and validity measures

4.2.3 IP survey results + analysis

5 CONCLUSION

5.1 Discussion of key findings of the survey in the context of the national background

5.1.1 Macro-level (Environment)

5.2 Implications

5.2.1 For Government and policy makers

5.2.2 For SMEs

5.3 Limitations and future research

6 REFERENCES

6 APPENDIX

6.1 Appendix: The survey 6.2 Appendix: Statistical Data

6.1 Appendix: The survey
6.2 Appendix: Statistical Data