Taiwan Law

Outline of Taiwanese law covering structure and workings of Taiwan’s legal system and review of major laws and regulations

Issuing Gaming Points in Taiwan

The key legal requirement to issuing online gaming points in Taiwan is that the gaming point issuer must adopt one of several regulator-approved measures to ensure that users can receive refunds for unused points. For example, the regulator has approved a bank guarantee that user points will be refunded.

Failure to obtain a bank guarantee or to adopt another approved method may result in an order from the regulator to take down the online game.

Until recently, this requirement applied only to online gaming software. The Taiwan Industrial Development Bureau defined online gaming software in a nonbinding 2006 guidance as “software that allows a player to play a game concurrently with multiple other persons over the internet through a server maintained by the gaming operator.” A typical example of online gaming software is World of Warcraft.

However, the Development Industrial Bureau is now inclined to consider all gaming software published via application (app) platforms as online gaming software even if the software does not allow players to play concurrently.  Consequently, foreign game publishers whose payment structure requires the issue of gaming points need to ensure that an approved method for securing refunds is in place regardless of whether they publish traditional multiplayer online games or the newer single-player games popular on mobile app platforms.

Technical Examination Officers at Taiwan’s IP Court

Technical Examination Officers ( “TEO“) are officers of the court who assist judges at the Taiwan Intellectual Property Court (“IP Court“) in litigation involving complex technology.

There are currently 13 TEOs at the IP Court with expertise in fields such as electrical engineering, chemistry, and biotechnology. Most are patent examiners on secondment from the Taiwan Intellectual Property Office.

Taiwan’s Legislature authorized the appointment of TEOs when it established the IP Court in 2007. Intellectual Property Court Organization Act §15(1).  Taiwan’s TEOs are modeled on the judicial researchers at the Japan’s Intellectual Property High Court and the technical examiners at the Korean Patent Court.

Acting under instructions from a judge, a TEO “makes judgments about technology, collects technical information, and analyzes and gives opinions about technology.” Organization Act §15(3). In particular, a TEO can analyze and organize the issues in party briefs to clarify the issues in dispute and refer the Court to learned treatises in the field. Intellectual Property Case Adjudication Rules §13(1)(a).

A TEO may also “participate in the litigation.” Organization Act §15. This means that on instructions from a judge, a TEO can appear in court and question parties, their counsel, and witnesses or give opinions for the court’s reference on technical issues. Intellectual Property Case Adjudication Act §4;  Adjudication Rules §13(1)(c).

In more complex cases, a TEO may be ordered  by the IP Court to produce intermediate and final reports on technical issues. Adjudication Rules §16. While the parties do not have access to these reports, the IP Court will disclose opinions it has received on “specialized technical information” to the parties and give an opportunity to respond before using such opinions as the basis for its judgment. Adjudication Rules §16

As fact finders, the IP Court judges are not bound to adopt the views of the TEO and in complex cases, the IP Court will usually also appoint an neutral expert witness to evaluate the technology in dispute. Furthermore, the statements of TEOs may not be offered by the parties as evidence of facts in dispute. Adjudication Rules §18.

Between 2008 and 2012, TEOs were assigned to a total of 1,636 cases. 1,070 of those cases were civil matters, 550 were administrative and sixteen cases were criminal. TEOs provided assistance with mechanical technologies in 48% of these cases, IT in 26%, and chemistry in 8%.

Although the role of TEOs has been controversial in patent litigation and the subject of a number of Supreme Court cases, our experience has been that TEOs serve as able assistants to the judges on the IP Court.

Taiwan’s Labor Ministry relaxes rules for foreign professionals working at startups

On 7 January 2015, the Ministry of Labor (MOL) amended rules for foreign professionals working in Taiwan. Among the latest amendments, foreign professionals that have a bachelor’s degree or higher are no longer required to have work experience to work at qualifying startups. Qualifying startups are those that meet one of the following criteria outlined as part of the National Development Council’s HeadStart Taiwan project:

  • Have received NT$2 million or more in venture capital,
  • Have registered on the Go Incubation Board for Startup and Acceleration Firms (GISA) with the GreTai Securities Market,
  • Have been granted an invention patent in Taiwan, or have had a patent assigned or licensed to exploit by a Taiwanese invention patent holder, the assignment or license of which is registered with the Taiwan Intellectual Property Office (TIPO),
  • Incubators already part of the international startup cluster in Taipei approved by the Executive Yuan or directly operated by or cooperating with the Ministry of Economic Affairs and which have been rated as Quality Incubators by the Ministry in the last three years or,
  • Have won awards in recognized entrepreneurial or design competitions.

HeadStart Taiwan’s main objectives are to create an environment that supports the growth of Taiwan’s startup ecosystem through deregulation, attracting capital, and cluster building. For more information, please refer to the NDC’s website here.

Food Safety: A Legal Perspective

WP partners Peter Dernbach, Gary Kuo and paralegal Michael Fahey recently contributed an article to the American Chamber of Commerce in Taipei (AmCham)’s monthly TOPICS magazine. The article takes a look at the recent set of food scandals that have shaken the public’s faith in Taiwan’s food industry, examining it from a legal perspective.

The article summarizes previous food scandals that have occurred in Taiwan, dating back to the bran oil tragedy in 1979, which claimed the lives of over fifty people and caused significant physical harm to many others.

The article goes on to analyze the key litigation following the 2011 plasticizer scandal and the 2013 olive oil scandal. Peter and Gary explain the successful criminal prosecutions in both cases, the failure of a class action in the olive oil case, and the constitutional issues that led the Ministry of Health and Welfare to roll back massive fines imposed by local governments.

The article concludes that while Taiwan has made significant and admirable strides in its legal system since the 1979 bran oil tragedy, it will need to do much more to ensure that the country’s vibrant culinary culture and consumer health are adequately protected.

The entire article is available on AmCham’s website.

WP’s Michael Fahey speaks on recent immigration liberalization in Taiwan

As part of our pro bono support for Forward Taiwan, a grass roots movement for immigration reform in Taiwan, Winkler Partners’ Michael Fahey spoke at the National Immigration Agency’s 2014 International Conference on Immigration Policy. The purpose of the presentation was to describe recent government liberalization and to evaluate them quantitatively and qualitatively. Forward Taiwan’s proposals for immigration reform were also introduced.

Michael summarized the main issues that have led to immigration reform in the past, from the creation of permanent residence in 1999, to the recent relaxation of rules including those for financial health and criminal records. These relaxations have in part led to a steady increase in the number of permanent residents in Taiwan, from 1649 in 2005, to 10,811 as of September 2014.

One of Forward Taiwan’s main policies is to encourage the Taiwanese government to make it easier for foreign students and professionals already studying or working in Taiwan to stay and contribute to society. Foreign students are now given a six month extension to look for work after graduation for example, whilst the same is given to professionals to change employment. This has resulted in an increase of 343 professional and 525 student ARC (alien resident certificate) extensions since April of this year. While these figures are modest, they are a step in the right direction if Taiwan is to attract and keep foreign talent.

An even more recent development has been the new points system set out in regulations implementing the Employment Service Act. The points system allows foreign graduates of Taiwanese universities to obtain work authorization if they can score 70 points for various criteria. Points are given for university degrees, reputable universities, Chinese and foreign language, following government policy and even residence abroad. The significance of the new points system is that it is now possible for foreign graduates of Taiwanese universities to work and reside in Taiwan without having to meet minimum salary requirements.

Nearly 260 foreign graduates have been granted work authorization under the points system since it was announced in July of this year.

The presentation that accompanies Michael’s talk can be viewed here.

Commutation of Sentences to Fines in Taiwan

As the owners of intellectual property are well aware, convictions for lesser crimes in Taiwan rarely result in the offender actually serving jail time. If a court sentences an offender to a custodial sentence of up to six months for an offense that carries a maximum of five years, the sentence can be commuted to to a fine (yike fajin ) at a daily rate of NT$1,000 (c. US$33) to $3,000 (c. US$100). Criminal Code § 41.

IP conviction commuted to fine

For example, criminal trademark infringement carries a maximum sentence of three years. Trademark Act § 95.  Consequently, sentences for criminal trademark infringement are almost always commuted fines. This is illustrated by a 2011 case in which the Shilin District Court sentenced an offender surnamed Liu to a custodial sentence of 40 days for selling counterfeit computer accessories bearing the Hello Kitty and Audio-Technica marks. The sentence was suspended for two years and commutable to a fine of NT$1,000 per day. Shilin District Court, ShenZhijian 18 (2011).

Commutation is discretionary

While most such sentences are in fact commuted, commutation is not automatic but at the discretion of the prosecutor. Taiwan’s Code of Criminal Procedure provides that the sentences are carried out by the prosecutor at the court that handed down the sentence. § 457. This is construed to mean that the power to commute a sentence is at the discretion of the prosecutor.

Keelung City policy against commutation

The Keelung District Prosecutor’s Office has issued a new policy against drunk driving that illustrates this discretion well. Since June of this year,  Keelung prosecutors have been declining to commute sentences of less than six months for drunk driving to fines where the offender has been convicted of driving under the influence twice in the past five years . The Chinese language media Liberty Times reports that 33 drivers in Keelung have not had their sentences commuted to fine as almost certainly would have been the case in other cities or counties and instead have had to serve time for drunk driving. This had led some members of Taiwan’s legal community to argue that drivers in Keelung are being singled out unfairly because this is a purely local policy with no basis in the national policies of the Ministry of Justice (which administers the procurate) or the law. According to this view, the policy of not commuting sentences for these repeat offenders would justified only if the procurate adopts a uniform national policy against commutation of sentences for repeated drunk driving offenses.

Judicial review

Nonetheless, prosecutorial discretion in carrying out sentences is subject to judicial review. The Code of Criminal Procedure provides that a person who has received a sentence may petition the court to review the prosecutor’s carrying out of the sentence for abuse of discretion (budang).  § 484.  Three offenders have petitioned the Keelung District Court since June for reviews of decisions by the Keelung District Prosecutor’s Office not to commute sentences for drunk driving into fines.  One of the petitioners had his petition granted by the court on grounds that his imprisonment would cause undue hardship since he was the sole source of support for his extended family which included his 80 year old mother, young children, and his disabled younger brother. He also promised to reform and not to offend again.

Draft Amendments to Collective Bargaining Agreement Act Penalize Refusal to Negotiate

New amendments to the Collective Bargaining Agreement Act would place new obligations on both labor and management in the collective bargaining process. These amendments were approved by the government in early 2008, and could be enacted and promulgated as early as May 1, 2011.

In addition to the Collective Bargaining Agreement Act, the Council of Labor Affairs has also revised the Labor Union and Settlement of Labor Disputes Acts.

Under the draft revisions to Article 6 of the Collective Bargaining Agreement Act, employers and labor representatives must collectively bargain in good faith. Neither side may refuse to negotiate without a legitimate reason. The new amendments expressly list the following reasons as prohibited refusals:

  • refusing to proceed with negotiations if the proposed agreements have been presented in a reasonable manner and/or time frame;
  • not answering any written notices within 60 days of receipt; and
  • rejecting to offer any information that would otherwise facilitate negotiations;

Any of these acts of non-cooperation can be the basis for the Council of Labor Affairs to determine that either labor or management is refusing to negotiate. The amendments now allow the CLA to fine a party NTD 100,000-500,000 (US$3,195-15,975) if it refuses to negotiate, according to article 32 of the Act. These fines can be imposed repeatedly when labor or management refuses to negotiate on multiple occasions.

Article 6 of the act also clarifies as to who can represent labor in negotiations. Under the new law, a party must have contractual privity in the employment relation to represent. The practical effect is that only management and government-recognized unions will be able to sit at the bargaining table.

For legal guidance on employment law in Taiwan, please contact Christine Chen.

Online Sources of English Translations of Taiwanese Law

The first two databases listed are public and bilingual. Both have English pages with links to translations of many of Taiwan’s statutes, regulations, and judgments. The third, Lawbank, is a commercial service but deserves special mention because it also includes a searchable collection of administrative letters of interpretation (Chinese only) and English translations of varying quality unavailable elsewhere.

  1. Ministry of Justice law database
  2. Judicial Yuan law database
  3. Lawbank law database

Some other web pages providing translations of Taiwanese laws in specific areas are listed below. It should be noted the home pages of most Taiwan’s government agencies provide English translations of selected key laws and regulations in the agency’s jurisdiction. The new National Immigration Agency and the Council of Labor Affairs are important examples.

  1. Capital markets law
  2. Intellectual property law
  3. Competition law
  4. Environmental law
  5. Business and industrial law
  6. Banking law
  7. Tax law
  8. Insurance law

The primary and centralized source for new laws, regulations, and administrative acts and decrees is the Executive Yuan Gazette Online. While the full announcements are only available in Chinese, their abstracts are expertly translated and updated every weekday.
Paul Cox leads the Winkler Partners Translation Department.

Civil Code

Taiwan’s Civil Code is divided into five Books: General Principles, Obligations, Rights Over Things, Family, and Succession. A high quality English translation of the Code as amended in 1982 has been published in Major Laws of the Republic of China on Taiwan (Magnificent, 1991). A more current (2003) translation is available behind a paywall on Lawbank. The quality of this translation is uneven.