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Merger control FAQ (part 4 – process insights)

This article is the fourth and final in our series on merger control in Taiwan. This installment covers issues related to the primary regulatory agency and other insights into the application and approval process. For the first article on basic questions related to covered transactions and market share filing thresholds, click here. For the second article on relevant market definition, click here. For the third article on procedural issues, click here.

1. What is the nature of the agency which reviews merger transactions?

Taiwan’s Fair Trade Commission (the “FTC”) is an independent commission under the executive branch of the Taiwan government. An important consequence of the FTC’s being an independent commission is that unfavorable FTC rulings may be directly appealed to the administrative courts, and need not be heard first by other bodies under the executive branch.

2. What is the typical or recommended approach in dealing with the reviewing agency?

Generally speaking it is advisable to contact the FTC to discuss matters which are likely to pose competition issues as early as practicable. Confirmation of smaller, more discrete points may often be obtained through anonymous conversations between one of the transaction participant’s Taiwan counsel and the FTC.

It is also worth noting that in global transactions involving foreign merger control authorities, the FTC will often consider interpretations and guidance from such authorities on issues that are the same or similar to those faced in Taiwan.

3. What level of confidentiality does a merger control filing enjoy?

Merger control filings are confidential until the time at which the FTC either (i) seeks public opinion in respect of the proposed transaction or (ii) approves or disapproves the transaction. If public opinion is sought, the FTC will publish the relevant participants’ names and products and services as well as a general description of the transaction on its website. Upon an unconditional approval of a transaction, the FTC will issue a news release containing basic information on the participants, a description of the transaction structure, the relevant market definition used by the FTC, and the FTC’s competition impact assessment. If the FTC’s transaction approval is conditional, the agency will issue a formal decision letter. This letter may contain additional details including portions of the merger control filing.

The FTC’s published transaction approvals usually do not contain transaction participants’ specific business data. If specific participant information needs to be disclosed, the FTC will ask for the relevant participant’s approval prior to making any such disclosure.

A transaction participant may also actively request confidential treatment of particular information in the merger control application materials. The FTC typically respects such requests.

4. If the statutory waiting period expires without a challenge, is there any possibility of a post-closing challenge?

No, there is no possibility of a post-closing challenge, provided that the information in the merger control filing remains accurate and complete and all procedural filing requirements were properly followed.

5. Are there ways to protect a transaction from post-closing challenge?

The best protection against post-closing challenges is the receipt of a formal FTC response letter either approving the proposed transaction or confirming that review is not required, each after submission of a complete merger control filing.

If the participants believe that a proposed transaction does not exceed the market impact thresholds outlined in part 1 of this FAQ, the participants may submit a request for written confirmation from the FTC that a merger control filing need not be made with respect to the transaction. This confirmation request should be accompanied by basic market share and sales revenue figures. Should the FTC concur that no merger control filing is required, it will typically issue the requested confirmation within approximately 30 business days of the submission of the confirmation request. While not legally binding on the FTC, so long as the information on which the confirmation was based was accurate at the time of the consummation of the relevant transaction, such a confirmation would be extremely persuasive evidence that filing was not required.

6. What are the consequences of failing to notify the FTC of a qualifying transaction?

Under the Fair Trade Act 2017, in cases in which the parties involved (a) fail to notify the FTC of a transaction that is in excess of the relevant market impact thresholds or (b) close a transaction without proper notification to the FTC or before the expiry of the applicable waiting period, the FTC may (a) prohibit the transaction, (b) require the enterprises involved to split or for one or more of the enterprises to divest itself partially of the shares or assets of the other or make any other necessary dispositions, or (c) require the enterprises to remove certain persons from their positions. Such violations may also carry administrative penalties of between NT$200,000 and NT$5 million.

In the event that an enterprise violates an order of disposition made by the FTC, the FTC may order dissolution of the enterprise or the suspension or termination of the enterprise’s operations in Taiwan.

For more information on mergers and acquisitions in Taiwan, please contact Gregory A. Buxton at gbuxton@winklerpartners.com.

Options for employers to add more flexibility to work hours

The 2018 amendments to the Labor Standards Act (LSA), while intended to provide more flexibility in favor of employers in Taiwan, have nevertheless raised some questions regarding the distribution of work hours for employees. The new amendments contain provisions allowing for the adjustment of mandatory rest days, meaning that, in certain situations, workers may work a maximum of twelve consecutive days. This ideally gives employers more options for covering shifts in case of an emergency or in cases in which time limits for project-based work require employees to work more than the current limit of six consecutive days. However, it’s not immediately clear from the English language information currently available just how such a flexible schedule may be legally implemented. Below, we outline a few ways in which an employee or multiple employees at a company in Taiwan may be permitted to work more than six consecutive days.

1. The Four Week Work Hour Adjustment System

This method of redistributing work hours may be used by companies belonging to one of 42 different industries designated by the Ministry of Labor (MOL). The criteria for determining whether a company belongs to one of these designated industries are its primary economic activities and output value (e.g. the company’s income). The Four Week Work Hour Adjustment System requires that employees be given at least two mandatory rest days every two weeks, and eight rest days in every four week period. In order for a company to use this system to determine work hours for its shift workers, it must first obtain the approval of the relevant labor union, or if there is no labor union, the approval of a labor-management conference.

2. Adjustment of the employee’s mandatory rest day

Whereas the other three options in this list are existing means of adjusting work hours, the following method is a new amendment to the LSA.

According to Article 36 Paragraph 4 of the LSA, an employer may adjust an employee’s mandatory rest day in a seven day period. Such an adjustment may only be carried out by certain businesses/industries designated by the MOL and must also meet the conditions for adjustment of mandatory rest days, based on each designated industry’s needs. These include extenuating circumstances related to time (e.g. seasonal hours, national holiday hours, etc.), location (e. g. work on the ocean or in the mountains), the nature of the work (e.g. work conducted overseas, in response to weather conditions, etc.), and special situations (e.g. holding extraordinary meetings or events). Of course, approval of the labor union or labor-management conference must be obtained before such changes can be made. Companies with more than 30 employees that adjust their employees’ mandatory rest day must report this to the local labor authority.

3. Categories of workers exempt from work hour restrictions

Article 84-1 of the LSA provides that specific types of workers that meet certain criteria may negotiate with their employers to set their own working hours, rest days, national holidays, and (if female) night shift hours. The agreement between such workers and their employers shall be submitted to the local labor authority for its approval.

4. Force Majeure

According to Article 40 of the LSA, “an employer may require workers to suspend all leaves of absence” if “an act of God, an accident, or an unexpected event requires the continuation of work.” The interpretation of the last two factors is quite narrow, with “accident” intended to mean any human-caused incident, such as war or a financial crisis, and “unexpected event” read to be any event that is unpredictable, not routine, and whose degree of seriousness is extremely severe.

If none of the above applies, employers are still able to adjust mandatory rest days to help cover shifts as long as the employee still receives one day off in seven.

As evidenced above, some flexibility in work hour adjustment is possible; however, the government has stressed that the methods we describe above to allow employees to work more than the current limit of six consecutive days are exceptions rather than the rule and are therefore subject to increased scrutiny by the authorities. Any employer wishing to make such changes should consult with their local labor authority before implementing such a plan.

For more information on Taiwan employment matters, please contact Christine Chen at cchen@winklerpartners.com or on +886 (0) 2 2311 8307.

Taiwanese dolphins listed as endangered

The National Oceanic and Atmospheric Administration (NOAA) in the United States has issued a ruling on a petition by several US-based environmental groups which lists the Taiwanese humpback dolphin (Sousa chinensis taiwanensis) as an endangered species under the Endangered Species Act (“ESA”). This ruling will further help efforts to protect this population of dolphins that live in shallow waters off Taiwan’s west coast.

In their ruling, the NOAA outline the steps they took to reach this decision, including a review of the petition and all available information as well as a public consultation period to determine whether the dolphins should be listed as threatened or endangered. The low population (currently under 100), ongoing over-development of coastal areas, fresh water diversion and other factors led them to determine that the dolphins warrant listing as endangered. An endangered species is any species which is in danger of extinction throughout all or a significant portion of its range. The NOAA gave the following reasons for the listing:

  1. the best available information indicates that the subspecies has a critically small population of less than 100 individuals, which is likely declining;
  2. the Taiwanese humpback dolphin has a very restricted range, occurring only in the shallow waters off the western coast of Taiwan;
  3. the subspecies possesses life history characteristics that increase its vulnerability to threats, including that it is long-lived and has a late age of maturity, slow population growth, and low rate of reproduction and fecundity;
  4. the subspecies is confined to limited habitat in a heavily impacted area of coastline where ongoing habitat destruction (including coastal development, land reclamation, and fresh water diversion) contributes to a high risk of extinction;
  5. the Taiwanese humpback dolphin is experiencing unsustainable rates of fisheries interactions,including mortality and major injuries due to bycatch and entanglement in fishing gear; and
  6. existing regulatory mechanisms are inadequate for addressing the most important threats of habitat destruction and fisheries interactions.

By being listed as endangered, the dolphins are protected under US law and prohibit actions by federal and state agencies or persons subject to US jurisdiction, including those at high sea, that would cause harm to the animals and their habitat. While no population of Taiwanese dolphins live in areas subject to US jurisdiction, such a decision by the US government holds considerable weight and provides further momentum to conservation efforts on the ground in Taiwan.

Winkler Partners has been a long term supporter of Wild at Heart Legal Defense Association, and in particular, their efforts at protecting the dolphins and their habitat. You can read more about our support of Wild and the dolphins on the 1% For The Planet website here.

2017 Environmental Report

Winkler Partners has at its core, a commitment to environmental protection and sustainability, as well as a commitment to the constant professional development of our staff. In 2006, we established a Green Office Department, to undertake the greening of the office, implement methods to reduce our use of energy, promote the use of environmentally friendly products and services, design rainwater collection and conservation systems, reduce our carbon emissions and advocate for green office initiatives throughout our community by way of open visits to our office and roof garden. As part of that commitment, we will be publishing annual reports on how we are performing. At a glance, in 2017 we managed to:

  • Cut our total emissions by 57% over 2016′s total. Our total emissions for 2017 were 44 tons CO2e.
  • Install solar panels which produced 5,274 kilowatt hours of electricity in the last four months of 2017. By doing this, we saved a total of NT$24, 546 (approx. US$835) from our energy bills between August and December 2017. We were also able to sell 10% of the energy generated back to the grid for use by other customers.
  • Reduce overall electricity usage by 2%. Since 2004 we have reduced electricity usage by 56%. Anyone can make the same reductions by using air-conditioning sparingly, installing energy efficient lighting and setting computers to sleep.
  • Reduce our water usage by 3%. We increased the amount of rainwater we can collect from our roof and installed water-saving toilets throughout the office.
  • Implement a carbon offset policy for air travel, which accounted for 65% of our total 2017 emissions. We do this by partnering with fellow B Corp ClimateCare.
  • Reduce single-use cup and lunchbox container waste by 19%. Total waste however increased by 2%, mainly due to an increase in staff numbers.

Goals for 2018

For the coming year, we plan to continue our energy saving initiatives to further reduce our carbon footprint by 5%. To achieve this we will be increasing monitoring of air-conditioning/heating loss from open windows and doors as well as turning off all computers and extension cables after one hour. Staff training will also be increased. The full report is available in English here and in Chinese here. For inquiries regarding our energy saving initiatives or B Corporation certification, please contact James Hill at jhill@winkerpartners.com.

As part of our mission to contribute to the wider community, the general public is welcome to visit our roof garden to learn about urban farming and our green office program. To arrange a visit, please contact City Shen at +886 (0)2 2311-2345 ext. 346 or cshen@winkerpartners.com.

WP recognized as Employer of Choice

Winkler Partners has been named by Asian Legal Business Magazine as an Employer of Choice for 2018, the fourth year in a row. Only three law firms in Taiwan were given the award this year.

The survey was conducted in February 2018 by asking employees at law firms across Asia for their opinion on salaries, firm reputation, work life balance, career advancement opportunities among other criteria. Asian Legal Business notes that a Winkler Partners’ colleague stated that the firm ‘is the ‘healthiest’ place I have ever worked. The firm cares deeply about its people, community and clients’.

We were previously recognized as one of three Taiwan-based law firms in 2016 and 2017, and as the sole Employer of Choice in 2015. You can view the entire article here.

Contratos con empresas en Taiwán – consideraciones importantes

This is a Spanish translation of our English article “Tips on entering into manufacturing supply agreements with Taiwanese companies”, which you can find here. Esta es la traducción al español de nuestro artículo en inglés “Tips on entering into manufacturing supply agreements with Taiwanese companies”, el cuál se encuentra disponible aquí.

Como dueño de una marca internacional o empresa importadora de diversos productos, tienes un proveedor en Taiwán? Muchas empresas lo tienen, dado que Taiwán tiene trayectoria de ser líder en servicios de manufactura y productos para marcas y empresas alrededor del mundo en diferentes industrias, desde artefactos y componentes tecnológicos a prendas y accesorios deportivos.

Para la negociación de contratos de suministro de productos o servicios de manufactura, muchas marcas y empresas internacionales (“Contratante”) prefieren utilizar un contrato estándar con el deseo de que dicho contrato pueda cubrir todos los aspectos de la relación contractual con sus proveedores a nivel mundial.  En base a nuestra experiencia, el uso de un contrato estándar es un muy buen comienzo, sin embargo, éste debe ser adecuado para su uso en Taiwán para garantizar su cumplimiento con las leyes y normativas aplicables, y así, maximizar la protección de los derechos del Contratante. Debajo proporcionamos algunos consejos a tomar en cuenta para la negociación de contratos con empresas taiwanesas.

1. Detalles que no pueden pasar desapercibidos

Sin importar si el Contratante modifica un contrato estándar o decide preparar un contrato completamente nuevo, los siguientes detalles deben ser considerados con sumo cuidado: (i) protección y título de propiedad intelectual, especialmente en los casos de contratos con fabricantes de equipos originales (OEM por sus siglas en inglés) o fabricantes de diseño original (ODM por sus siglas en inglés); (ii) confidencialidad; (iii) protección de datos; (iv) ley aplicable; (v) foro de resolución de controversias; y (vi) requisitos de formalidad del contrato.

A modo de ejemplo, los contratos estándares usualmente citan a los diversos convenios internacionales como ley aplicable para la protección de la propiedad intelectual. Sin embargo, es importante dar a conocer que Taiwán no es miembro de muchas convenciones internacionales. Pese a que las leyes de Taiwán proporcionan protecciones similares a las de los convenios internacionales, los contratos deben ser modificados para reflejar la terminología y contenido propicio de acuerdo a las leyes y regulaciones taiwanesas.

Otro ejemplo es que las partes de un contrato de suministro (especialmente los de suministro de productos o servicios de manufactura) frecuentemente eligen el arbitraje como el mecanismo de resolución de controversias y la sede del arbitraje la disponen en una jurisdicción neutral. Dado que Taiwán no es miembro del Convenio sobre el Reconocimiento y la Ejecución de las Sentencias Arbitrales Extranjeras (Convención de Nueva York), tratar de ejecutar una sentencia arbitral extranjera en Taiwán resulta ser significativamente más complicado que en otras jurisdicciones. Es por esto que en el caso de no existir circunstancias especiales, es siempre recomendable disponer la sede arbitral en Taiwán.

2. Cubrir todas las bases

Por razón de las tendencias actuales en la operación de negocios, muchas empresas taiwanesas operan fábricas o trabajan con subcontratistas en otras jurisdicciones, particularmente en China y cada vez más, en países del Sudeste Asiático, como ser Vietnam. Por tanto, se recomienda que cualquier contrato que se suscriba con un proveedor taiwanés también tenga alcance a todas aquellas entidades relacionadas al proveedor.

3. El sello de aprobación

Muchos países tienen su propia forma de operar negocios y Taiwán no es la excepción. Por ejemplo, las empresas extranjeras generalmente pasan por alto algunas formalidades que se tienen que llevar a cabo para que un contrato obtenga plena validez en Taiwán.  En la mayoría de los países, la sola la firma de los representantes autorizados de cada parte es suficiente para que un contrato tenga efecto legal. En Taiwán, para evitar circunstancias en las que la parte taiwanesa niegue o ponga en duda la eficacia del contrato, el sello de la empresa y del representante legal tienen que ser puestos en el contrato al momento de la firma. Taiwán exige a todas las empresas que registren estos dos sellos en la base de datos de la autoridad competente como los sellos autorizados de la empresa. Este procedimiento puede parecer trivial a muchos, pero proporciona una capa adicional de protección al Contratante.

Pese a que un contrato estándar probablemente pueda ser suficiente en muchos casos, un contrato propiamente adecuado puede maximizar la protección al Contratante. En general, las leyes taiwanesas se encuentran alineadas con la mayoría de los estándares internacionales; sin embargo, resulta siempre mejor el contratar a un abogado local para la revisión de cualquier contrato a ser suscrito con partes taiwanesas. Un abogado local podrá confirmar si el contrato como tal cumple con las leyes de Taiwán, y a su vez, plantear la mejor forma para modificar el contrato.

Para más información sobre temas de contractuales en Taiwán, por favor contáctese con Roxana Cheng rcheng@winkerpertners.com.

WP welcomes new associates

We recently welcomed several new members to our legal and consulting teams.

Hsin-hsin Cheng joins Winkler Partners from a well-known Taiwanese law firm where she handled civil and criminal matters. Hsin-hsin will be focusing on data protection, intellectual property enforcement and employment matters. She is a member of the Taipei Bar.

Autumn Chiu will be supporting our intellectual property team with prosecution and protection matters. She previously worked at an intellectual property law firm in Taiwan helping clients obtain trademark registrations in the United States, the European Union, Japan, Korea and Singapore.

Woang-ling Huang joins Winkler Partners with a focus on trademark prosecution and intellectual property-related disputes. She previously worked in-house at a Taiwanese conglomerate focusing on trademark strategy and disputes involving copyright and patents in several Asian, North American and European markets.

Peter Lavelle joins our intellectual property team with a focus on trademarks. He previously worked at intellectual property firms in Canada and China. Peter is a barrister and solicitor with the Law Society of Upper Canada. He also interned at Winkler Partners in 2014 as part of our international intern program.

Jeremy Olivier joins Winkler Partners Consulting with a focus on corporate services, including assisting clients with business management matters.

Tips on entering into manufacturing supply agreements with Taiwanese companies

As an international brand owner, do you have a supplier located in Taiwan? Most brand owners do, as Taiwan has long been known as a leading provider of manufacturing services to companies worldwide operating in a variety of industries, from tech gadgets and components to sporting goods and garments.

In negotiating supply agreements, most international brand owners would prefer to use a standard agreement hoping that such an agreement will cover all aspects of their relationship with their suppliers worldwide. Based on our experience, while this is often an appropriate starting point, the standard supply agreement should still be tailored for its use in Taiwan in order to comply with the applicable laws and regulations and maximize the protection to a brand owner’s rights. Here, we outline a few tips to pay close attention to when negotiating a supply agreement and in dealing with a Taiwanese supplier in general.

1. The devil is in the details

Regardless of whether you alter your standard agreement or decide to draft a completely new document, you should pay particular attention to (i) intellectual property protection and ownership (especially in the case of original design manufacturer (ODM) and original equipment manufacturer (OEM) arrangements); (ii) confidentiality; (iii) data protection; (iv) governing law; (v) dispute resolution forum; and (vi) contract formality requirements.

By way of example, standard agreements usually cite international conventions as a basis for the protection of their intellectual property. However, Taiwan is not a member to most international conventions, and although Taiwanese laws do provide similar protections as those provided by international conventions, supply agreements must be tailored to reflect the terminology and content in accordance with Taiwan laws and regulations.

Another example would be that parties to supply agreements often choose arbitration as the dispute resolution mechanism and set the seat of arbitration at a neutral location. Because Taiwan is not a member to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), trying to enforce a foreign arbitral award in Taiwan proves to be much more cumbersome and time consuming than in other jurisdictions. This is why absent any special circumstances; it is always advisable to set the arbitration forum in Taiwan.

2. Cover all the bases

In light of current business operation trends, many Taiwanese suppliers maintain factories or work with subcontractors in other jurisdictions, particularly in China and increasingly, South East Asian countries such as Vietnam. Hence, it is advisable that any agreement entered into with a Taiwanese supplier must also cover any such entities.

3. A stamp of approval

Most countries have unique approaches to conducting business and Taiwan is no different. By way of illustration, foreign companies often overlook certain formalities in order for an agreement to have full force and effect in Taiwan, since in many countries, only the signature of the authorized representative of each party is needed for an agreement to take effect. In Taiwan, in order to avoid any circumstance whereby the Taiwanese supplier might challenge the contract, the company chop of the supplier and the seal of its chairman must be affixed on the agreement at the time of execution. The authorities in Taiwan require all companies to record these two chops in a database as the registered and authorized chops of the company. While it may seem archaic to some, this small step provides an additional layer of protection.

Although a standard supply agreement would probably be sufficient in most cases, a properly localized agreement can maximize the protection afforded to a brand owner. In general, Taiwanese laws are in line with most international standards; however, it is still best to retain local counsel to review any supply agreements to be executed with Taiwanese parties. They will be able to confirm whether the agreement as-is complies with Taiwan law, and at the same time, raise any issues or concerns and provide advice on how best the agreement can be altered. As supply agreements are, particularly those related to manufacturing, one of the most common types of commercial agreements seen in Taiwan, experienced counsel will be well versed in the specifics of contract and intellectual property law in the country.

For more information on contract matters in Taiwan, please contact Ling-ying Hsu at lhsu@winklerpartners.com, Roxana Cheng at rcheng@winkerpertners.com, or Peter Dernbach at pdernbach@winklerpartners.com.

Merger control FAQ (part 3 – procedural issues)

This article is the third in our series on merger control in Taiwan. This installment focuses on procedural questions related to merger control filings, including timing and content of the filings. For the first article on basic questions related to covered transactions and market share filing thresholds, click here. For the second article on relevant market definition, click here. The fourth and final installment in the series wraps up with some thoughts on the reviewing agency and other insights into the application and approval process, here.

1. Is there an expedited filing procedure for merger control filings in Taiwan?  If so, what are the relevant qualifications?

Yes. Regulated transaction participants may apply to the Fair Trade Commission (the “FTC”) for expedited review of their transaction provided the following conditions are met in respect of the specified type of transaction:

  • horizontal mergers – (i) the combined market share of the participants is less than 20% or (ii) the combined market share of the participants is less than 25% and the market share of one of the participants is less than 5%; provided that, such rules do not apply or are modified under certain circumstances related to high levels of market concentration;
  • vertical mergers – the aggregate market share of the participants in each relevant market is less than 25%;
  • conglomerate mergers – there is no significant potential competition between the participants; or
  • related party mergers/acquisitions – one of the participants directly owns at least 1/3, but less than 1/2, of the voting rights or equity capital of the other participant.

It is important to note that expedited review is not available for transactions involving a financial holding company. The FTC may also decide not to grant expedited review if it determines that: (i) a transaction involves significant public interest, (ii) the relevant market is difficult to identify, (iii) the participants’ market shares are difficult to assess, or (iv) there are other significant concerns related to possible competition-limiting effects such as high market concentration or market entry barriers.

If the FTC rejects an application for expedited review, the transaction participants must resubmit a full, general review application.

2. What information is required in a merger control filing, and how long does it typically take to compile such information?

Transaction participants should expect to spend at least three to four weeks preparing a merger control application due to the volume of information required by the FTC and the fact that all information provided must be in Chinese.

An expedited review application requires financial information for the last two fiscal years and information regarding each participant’s three main products or services and its three primary competitors. A general review application requires financial information for the last three fiscal years and information regarding each participant’s five main products or services and its five primary competitors. Each of the expedited and general review filings, require among other things:  (i) information on the type of merger (horizontal, vertical, or conglomerate) and whether it is extraterritorial, (ii) a description of the business of each participant, (iii) an overview of the relevant market(s), (iv) a description of market entry barriers, and (v) an explanation of the overall positive and negative economic impacts of the proposed transaction.

3. When is the earliest time a filing may be made?

A filing may be made before there is a binding transaction. However, the application must establish that there is a high likelihood that the transaction will proceed. Otherwise, there is a risk that the FTC may not commence its review.

4. How long does it typically take to “clear” a transaction?

The FTC’s default review period under the general application process is 30 business days. Transaction participants may not close the relevant transaction during this review period.

The review period commences only upon receipt of written notification from the FTC that the relevant application is complete (i.e., no further requests for information will be made by the FTC). It typically takes a minimum of four to six weeks from the time of initial submission of an application to get the application in form acceptable to the FTC such that the review period can commence.

The FTC may adjust the duration of the review period as it deems necessary provided that the total review period does not extend longer than 90 business days. Should the FTC alter the duration of the default 30 business day review period, it will notify the transaction participants in writing. Larger, more complex transactions typically have review periods of 60 business days or more.

5. Who makes the filing?

As a general rule, each transaction participant must be party to the filing. In certain related party transactions, the ultimate controlling entities are required to file. A financial holding company must also file if it or any of its subsidiaries participate in the transaction.

6. Are there fees with respect to merger control filings?

No.

For more information on mergers and acquisitions in Taiwan, please contact Gregory A. Buxton at gbuxton@winklerpartners.com.

A look at likely changes to divisional invention applications

Taiwan’s Intellectual Property Office (TIPO) has proposed further changes to the Patent Act that if passed would benefit patent applicants, and bring Taiwan’s patent regime further in line with the international community. In this article, we will outline one of the possible changes, divisional applications.

The Status Quo

Under Taiwan’s patent laws, invention patent applications that involve two or more inventions may be divided into separate divisional applications, at the request of either the TIPO or the applicant. The applicant may file a divisional application in either of the following circumstances:

1. Within 30 days of receiving the notice of allowance of the original application.

2. During the re-examination stage: Any time before a re-examination decision on the original application is rendered, regardless of whether it is a decision of allowance or refusal.

Divisional applications are accorded the filing date and other priority rights claimed in the original application. Given the 30-day period indicated in the first circumstance, if the applicant is unable to submit the claims intended for the divisional application before the deadline, the applicant may file amendments to the claims any time before the first office action is issued.

Requests for a substantive examination of a divisional application must be filed either within 3 years from the filing date of the original application or within 30 days from the filing date of the divisional application, whichever is later. The divisional application will be published within 18 months of the filing date of the original application.

Further divisional applications may be filed within 30 days on receiving the notice of allowance for the preceding divisional application, and the foregoing rules apply to any further divisional applications.

Amendments Contemplated by the TIPO

The TIPO is contemplating introducing the following amendments:

1. Allowing applicants to file divisional applications following receipt of notice of allowance of the original application in the re-examination stage.

2. Extending the statutory time limit for filing of divisional applications from 1 month to 3 months.

The proposed changes would therefore benefit IP holders and patent applicants because the timeframe for filing divisional applications would be lengthened. This would also bring Taiwan’s rules further in line with international norms. As these changes move through the legislative process, we will be monitoring their implementation.

For more information on patent matters in Taiwan, please contact Peter Dernbach at pdernbach@winklerpartners.com or Betty Chen at betty@winklerpartners.com.

 

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