PME et propriété intellectuelle: Cas de Taiwan

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.

Transparency of the judicial system & consistency of laws:

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.

Prepare an action:

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.

Civil actions and penal actions:

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.

Seizure of counterfeit goods:

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.

Enforceability of commercial and collaboration contracts:

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(*).»

Jurisdiction and choice of law issues:

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.

Before commencing overseas litigation

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.

Labour law & Financial system:

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!

* ⁴⁷ Article 76 of Taiwan Patent Act

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

(Aug. 28, 1997). See 1998 Special 301 Recommendations, id., at 373.

* 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.

* ⁵¹ Article 3(5) of the Copyright Law

* ⁵² See § 2.5, 1996 Action Plan, supra note 129.

* ⁵³ See §§ 2.7 and 2.8, 1996 Action Plan, supra note 129.

* ⁵⁴ See §2.10, 1996 Action Plan, supra note 129.

* 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

the TRIPS Agreement.

* 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.