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Assessing design infringement under the revised Directions for Determining Patent Infringement

In February 2016, the Taiwan Intellectual Property Office (TIPO) issued the revised “Directions for Determining Patent Infringement” (“Directions”), which include substantive changes regarding how Taiwan courts assess infringement of design patents. Prior to revision, the Directions employed a two-step test to determine design patent infringement: 1) the “ordinary observer test;” and 2) the “point of novelty test”. Under that approach, even in cases where a patented and an accused design were nearly identical in appearance, the courts typically found no infringement if the accused product failed the “point of novelty” test. Under the revised Directions, the “point of novelty test” is removed, leaving an “ordinary observer test” and a new auxiliary “three-way comparison test”.

Application of the modified test

Vehicle designs constitute 10% of all design patent applications in Taiwan. Not surprisingly, the courts have taken up a number of infringement cases in recent years involving vehicle designs. Looking at how the IP Court compares the patented design with the allegedly infringing product in these cases can cast some light on the changing way in which design patent infringement is determined in Taiwan.

Under the two-step test of the earlier Directions:

In Honda Motor Co., Ltd. v Kwang Yang Motor Co., Ltd. (2009), the IP Court took the view that, given the crowded scooter market, the scope of protection of Honda’s patented design should be limited. On the “point of novelty” test, the court concluded that the accused product did not include any of the novel features of the patented design in major positions (handlebars, handlebar stem, seat, tank hole cover on the rear shell) and, therefore, the accused product was deemed not to infringe the patented design. Images of the patented design on the left, and accused product on the right:



Under the revised Directions:

Under the revised Directions, the perspective of “ordinary observer” is the primary mechanism employed in determining whether an accused product infringes a patented design. Additionally, where the “ordinary observer test” is inconclusive, there is an auxiliary “three-way comparison test” to assess similarity based on visual analysis of the prior art, the patented design and the accused product.

In Giant Electric Vehicle (Kun Shan) Co., Ltd. v Tei Sheng Development Co., Ltd. and Wei Sheng Marketing Enterprise Limited (2016), the IP Court concluded that with regard to electric bicycles, the front and side portions are the most visible in normal use. Moreover, the identical features in both the patented design and the accused product are in those portions, which comprise a very large visual area of the entire bicycle. Ordinary purchasers viewing the electric bicycles at issue would mistakenly deem that the accused product is the same type of electric bicycle as the patented product. Therefore, the accused product fell into the scope of the patented design’s claims and was deemed infringing.

In February 2017, the IP Court of Appeals affirmed the above decision. It found that although the accused product contained several features that differ from those of the patented design, the court concluded that these differences are minor, do not affect the overall visual impression, and are simply modifications of prior art. As the identical features in the patented design and the accused product exist in the front and side portions of the vehicles, they were therefore infringing. Images of the patented design on the left, and accused product on the right:


Conclusion

The IP Court applied the standard under the new Directions, in which the determination on infringement is the result of the ordinary observer test using overall observation and comprehensive comparison. The identical features and different features in both the patented design and accused product should all be considered in comprehensive comparison. However, an overall observation gives greater weight to those features that are most visible in normal use and those identical features that more readily affect the overall visual impression.

The reduction of the two-step test to a single “ordinary observer test” to determine infringement under the new Directions and the IP Court’s application of the same is encouraging in that design patent owners can expect more reasonable and predictable decisions regarding design patent infringement going forward.

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

WP represents a third of the world’s biggest brands for the second consecutive year

Interbrand has released its 100 Best Global Brands list for 2017. Winkler Partners represents a third of the brands that made the list for this year, and half of the top ten.

Brands such as Facebook (8th), whose value increased 48% year on year, and Amazon (5th), whose rose 29%, show that increasingly, the brands with the most value are associated with technology and the Internet. The most valuable brand in the world for the 5th consecutive year is Apple, which saw a 3% rise in its brand value over 2016, while Netflix (78th), an entertainment and on-demand media provider, made it into the list for the first time. Two other brands that made their inaugural entry in the list are luxury car manufacturer Ferrari (88th) and software solutions provider Salesforce (84th). Social media, ecommerce, software and IT solution providers as well as familiar hardware manufacturers feature heavily in the list, as do consumer goods and several luxury fashion brands including Louis Vuitton (19th), Hermès (32nd) and Gucci (51st).

Winkler Partners currently represents 32 of these top global brands of 2017, a slight decrease from 35 in 2016, and an increase from 25 in 2015, and just 18 in 2010. Brands that we have worked with are active in many fields, including fashion, software, hardware, consumer goods, ecommerce, beverages and media.

The full list of Best Global Brands 2017 can be found here.

Restrictions on unregistered foreign companies in Taiwan

We are often asked whether a foreign business with no registered presence in Taiwan can conduct marketing or other activities. The answer depends very much on the specific facts of the proposed activity, but in general unregistered foreign companies must not “transact business or perform legal acts in the course of business.” Taiwan Company Act §§19,371, and 386.

A person who transacts business or performs legal acts in the course of business in the name of an unregistered foreign business is subject to criminal liability including a fine of up to NT$150,000 and up to one year imprisonment.

Transacting Business

A review of the cases on transacting business shows that the Taiwanese courts use a totality of the circumstances test. Factors that have been considered include:

  1. Relationship of business transacted in Taiwan to the foreign company’s line(s) of business,
  2. Continuity and repetition of commercial activities,
  3. Fixed business premises,
  4. Hiring of employees, and
  5. Business contacts, price negotiations, and payments.

Most of the cases particularly emphasize factors 2, 3 and 4.

For example, the responsible person of a Hong Kong company that ran a legitimate but unregistered cartoon licensing business was convicted of unlawfully transacting business in Taiwan. The Taiwan business had office space and a number of employees. It also collected substantial royalties and provided post-sales services.[1]

A very typical case involved an unregistered foreign futures trading business that also had premises and employees. The business also took orders for margin currency trading. The responsible person was also convicted for unlawfully transacting business. Cases such as this one involving unregistered financial services business (often boiler room operations) are the most common type of case that results in prosecution and conviction.[2]

In contrast, the responsible person of a Hong Kong company that privately sought investors in Taiwan was found not guilty of transacting business in Taiwan despite the fact that investors invested in his company.[3] The court reasoned that this type of fundraising was unrelated to the Hong Kong company’s primary business and did not constitute transacting business even though the company was not registered in Taiwan.

A foreign company may transact business in Taiwan by establishing a branch or subsidiary in Taiwan.

Legal Acts in the Course of Business

A legal act in the course of business is “act that objectively suffices to create a predetermined legal relationship.”[4] For example, using the name of a dissolved company to entering into contracts to sell a vehicle and distribute auto parts are examples of legal acts in the course of business. Another example is the endorsement of a promissory note on behalf of the same defunct company. [5]

The Ministry of Economic Affairs has provided further guidance in a letter of interpretation that lists the following as legal acts in the course of business: “signing contracts, price quotations, price negotiations, bids, and procurement.”[6]

The takeaway from this somewhat abstract discussion is that the unregistered representative of a foreign company should not come to Taiwan and engage in legal acts such as signing contracts, engaging in price negotiations, or submitting bids on government contracts. If the representative wishes to engage in these activities in Taiwan, she and foreign company should register a representative office in Taiwan. Needless to say, she is perfectly free to engage in these activities with Taiwanese business people outside of Taiwan.

An interesting case involving legal acts in the course of business suggests that at least in some cases, marketing activities by an unregistered company may be fine. The defendant was a Taiwanese national who was in process of setting up a finance company.[7] Before the company was registered, he printed up marketing materials for the company’s post formation activities using the unregistered company’s name. The court held that the distribution of marketing materials was an act that did not suffice to create a legal relationship. Hence the Court concluded that no legal acts in the course of business had been performed and found the defendant not guilty.

Policy Considerations

Policy considerations behind the prohibition on unregistered foreign companies transacting business in Taiwan or performing legal acts in the course of business include:

[These rules] are intended to prevent foreign corporations from competing unfairly in Taiwan by doing business and earning profits on the one hand while evading Taiwanese regulation on the other. If foreign companies are not regulated in this manner, they might use their vast monetary resources and advanced technology to earn huge profits in Taiwan without being subject to Taiwan’s various restrictions on legal persons such as the benefits and protections available under the [Taiwan] Labor Standards Act, the various types of insurance available under the [Taiwan] National Insurance Act, and the various tax obligations under Taiwanese tax law. This would be unfair to Taiwanese companies and detrimental to their competitiveness. Most leading jurisdictions have similar rules.[8]

Conclusions

The restrictions on transacting business and performing legal acts in the course of business preclude an unregistered foreign company from engaging in extensive business operations in Taiwan and at least theoretically from coming to Taiwan to negotiate or sign contracts with Taiwanese parties in the course of ordinary activities. Nonetheless, there is some room for unregistered foreign companies to engage in limited marketed activities or corporate transactions without running afoul of these restrictions. The analysis of which activities are permissible is highly fact specific and a Taiwanese lawyer should be consulted in advance of any proposed activities in Taiwan by an unregistered foreign company.

For more information on company formation and corporate matters in Taiwan, please contact Chen Hui-ling at hchen@winklerpartners.com.


[1]臺灣高等法院 92 年上易字第 2625 號刑事判決

[2]臺灣臺中地方法院 102 年金訴字第 6 號刑事判決

[3]臺灣高等法院 104 年上字第 1036 號民事判決

[4]台灣高等法院86年上易字 2532刑事判決

[5] Ibid.

[6]經濟部92.10.29經商字09202221350函,經濟部97.04.28經商字0970204508函

[7] The prohibitions on transacting business or performing legal acts in the name of a unregistered company also apply more generally to Taiwanese nationals.

[8] 灣高等法院 92 年上易字第 2625 號刑事判決

WP welcomes new associates

We recently welcomed several new members to our legal team.

Brian Yang joins Winkler Partners from a well-known Taiwanese law firm. He will be focusing on intellectual property enforcement matters, investments, employment and dispute resolution. Brian is admitted to practice in Taipei.

Danny Yang has joined our Legal Translation Department, where he will be specializing in the translation of securities laws, contracts and government documents.

Lewis Chen joined Winkler Partners’ Legal Information Department in 2004, but has recently transitioned to working as part of our employment and intellectual property practices.

Yen-yi Wu will be supporting our intellectual property protection and dispute resolution work, with a particular focus on trademarks. Yen-yi originally interned with us as part of our trainee lawyer program.

Yu-ti Tsai will be working as part of our intellectual property enforcement and employment law teams. Yu-ti also joined us as part of our trainee lawyer program.

WP installs solar panels to generate 18% of our energy needs

This weekend we successfully installed solar panels on our roof and once we get the all clear, will begin generating our own power later this month. The panels cover approximately 23 ping (76 square meters), or roughly half the available roof space. The panels are capable of generating 13,000 kilowatt hours of electricity annually.

According to estimates by our Green Office team, this is equivalent to around 18% of our own energy needs. The panels will help us reduce our carbon footprint, as well as lowering our reliance on other energy sources. Any energy that we do not use will be sold back to the grid, so other energy users in Taiwan will benefit too. Of course, the actual amount of energy produced will depend on the number of sunny days we receive.

So, in future, the energy you use may have been generated on our roof, and our hope is that more businesses will install solar power to meet their own and others’ needs. Our commitment to install solar panels is one of Winkler Partners’ 2017 Oath of Actions for 1% for the Planet.

How does Taiwan’s Fair Trade Commission define the relevant market?

This article is the second installment in our FAQ on merger control in Taiwan (Here you can read part one).  Here, we set out in broad brush strokes the factors and methodologies that the Fair Trade Commission (the “FTC”) and Taiwan courts use to determine the relevant market in horizontal merger cases.

The Fair Trade Act (the “FTA”) defines the relevant market with respect to any particular product or service as the geographic area or scope in which firms compete with respect to such product or service.  In 2015, the FTC issued relevant market definition guidelines (the “Taiwan Guidelines”) based on the European Union’s Commission Notice on the Definition of the Relevant Market for the Purposes of Community Law, the United States’ Federal Trade Commission’s 2010 Horizontal Merger Guidelines, and the FTC’s own past cases.[1]

According to the Taiwan Guidelines, demand substitution is the primary market constraint that the FTC evaluates in its analysis of relevant markets; however, the FTC may also evaluate supply substitution as part of its analysis.

The FTC evaluates the effect of these competitive constraints to define the relevant market both in terms of the nature of the product or service being offered and the geographic sales area of such product or service.  The Taiwan Guidelines separately list the factors used to assess (i) product or service scope and (ii) the appropriate geographic sales area.  However, these factors are largely the same and are each aimed at providing information as to the substitutability of a product or service within a geographic area.  According to the Taiwan Guidelines when establishing the appropriate relevant market, the FTC will typically consider a variety of factors, including:

  1. the general nature of the product or service and its use;
  2. views of customers and competitors regarding substitutability of the product or service generally and specifically within a particular geographic area;
  3. historical data on past substitution of similar products or services;
  4. the cross-price elasticity of demand;
  5. effects of price variation generally, the effect of price changes in different regions and related transportation costs between such regions, and the diversion of orders to other geographic areas in response to price changes; and
  6. costs to customers associated with switching to different products, including ease with which customers can obtain products from different regions and transaction costs for customers purchasing products from different regions.

When assessing the considerations listed above, the FTC employs familiar qualitative and qualitative analysis methodologies including (i) reasonable interchangeability of use; (ii) the hypothetical monopolist test (and the related concept of a small but significant non-transitory increase in price); and (iii) cross elasticity of demand measurements.  It is important to note, however, that the FTC emphasizes that it may use other tests depending on the particular circumstances of each case.

In most cases, we recommend that the best practical approach to determining the relevant market in Taiwan for any particular product or service is to begin by analyzing the relevant market as if preparing for an antitrust inquiry in the United States or the European Union.  However, each case is unique and we strongly recommend anyone contemplating a business combination that may impact the Taiwan market to contact us to get more specific advice as to how the relevant market should be defined for the purposes of (i) determining whether a Taiwan merger control filing is required and (ii) making any such filings, if required.

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


[1] 公平交易委員會對於相關市場界定之處理原則.   No English translation available.

Taiwan labor law amendments: five key takeaways for employers

In December 2016, Taiwan’s Legislative Yuan made controversial amendments to the Labor Standards Act (the “LSA”) in order to implement a five-day work week and protect employees’ annual leave rights. In order to further clarify how employers can comply with these new laws in practice and to deal with some commonly raised concerns, the Ministry of Labor made various amendments to the Enforcement Rules of the LSA (the “Rules”) which were announced and put into effect in June 2017.

Five of these key amendments most pertinent to employers are:

(1) Working hours on flexible rest days are expressly treated as overtime

In line with recent amendments to the LSA regarding flexible rest days, working hours on rest days are expressly treated as overtime.

(2) Itemization of pay slips and ways of providing pay slips to employees

Employers must provide a detailed itemization of employees’ pay slips, including the employee’s total base salary as agreed upon between the employer and employee, the amount of each item which makes up the employee’s total base salary, any deductions which are required by law or by mutual agreement between the employer and employee, and the actual payment amount. When employers are required to provide employees’ pay slips, they can choose to provide hard copies, send the information electronically, or provide some other means for employees to access and print the information at any time.

(3) Acceptable methods of recording employee work attendance

In order to clarify how employers can record employees’ work attendance and comply with relevant laws, the amendments to the Rules now list the following as acceptable methods of recording employee attendance for both employers and employees to follow:  attendance books, attendance cards, swipe card machines, entry access cards, biometric identification systems, and computer attendance record systems.

(4) Relaxation of the period within which annual leave must be used

While employees’ annual leave is provided based on years of service and calculated from each employee’s on-board date, the period within which accumulated annual leave must be used has now been relaxed. The period must be mutually agreed upon between the employer and employee, and can be based on service years, calendar years, school years, fiscal years, or any other kind of annual system agreed upon between the employer and employee. Furthermore, employers must inform employees that they can arrange their annual leave and their annual leave entitlements within 30 days of the employee being eligible for annual leave.

(5) Calculation and payment of wages in respect of unused annual leave

Where an employee’s service year ends (if applicable) or where their employment contract is terminated, one day’s regular wages must be paid for each day of unused annual leave remaining. An employee’s “daily wage” is based on their regular working hours and wage at the time one day prior to the end of their service year or termination of their employment contract. Where an employee is paid monthly, “daily wage” is based on their regular working hours and wage at the time one month prior to the end of their service year or termination of their employment contract, divided by 30.

Employers can pay this amount either on the employee’s regular pay day, or within 30 days of the end of the employee’s service year. In the case of termination, the amount should be paid to the employee immediately.

Employers should notify their employees of their annual leave entitlements and the total amount to be paid in respect of unused annual leave on an annual basis, and should record this information in each employee’s salary roll. Employees should be notified in writing, electronically, or be provided with some means to access and print out the information, prior to the period when wages are usually paid each year.

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

Exenciones a los requisitos para el permiso de trabajo en Taiwán: El Mecanismo de Consulta

This is a Spanish translation of our English article “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, which you can find here.
Esta es la traducción al español de nuestro artículo en inglés “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, el cuál se encuentra disponible aquí.

Los requisitos para la obtención del permiso de trabajo en Taiwán pueden ser un tanto inflexibles, sin embargo, existen algunas exenciones disponibles para dos de los cuatro requisitos: ingresos/capitalización mínima del empleador y experiencia laboral mínima del empleado (adquirida después de la culminación de los estudios universitarios).

Los Requisitos Básicos

La mayoría de los profesionales extranjeros en Taiwán, fuera de los que trabajan como profesores, corresponden a la Clase A (profesionales o técnicos).

Para contratar a empleados extranjeros bajo la Clase A, el posible empleador del candidato extranjero debe aplicar a un permiso de trabajo ante la Agencia de Desarrollo del Empleo (“WDA” por sus siglas en inglés) bajo la tuición del Ministerio de Trabajo.

En general, cuatro requisitos básicos deben ser cumplidos:

  1. ingresos /capitalización del empleador;
  2. nivel académico/experiencia laboral del empleado;
  3. trabajo profesional o técnico; y
  4. salario mensual mínimo de NT$47,971

Existen exenciones tanto para el requisito de ingresos/capitalización del empleador como para el de educación/experiencia del empleado. Estas exenciones no son disponibles para trabajos que no formen parte del alcance del trabajo profesional o técnico. Tampoco existen exenciones al salario mensual mínimo de NT$47,791 para profesionales extranjeros que posean títulos de universidades extranjeras (no taiwanesas).

Requisito de ingresos/capitalización

Para contratar a un profesional extranjero en la Clase A, el empleador debe ser una empresa nueva con un capital registrado de NT$ 5 millones o una empresa existente con ingresos (del último año fiscal) de NT$ 10 millones (o ingresos promedios de NT$ 10 millones durante los últimos tres años).

Requisito de nivel académico y experiencia laboral

En general, para ser contratado, un empleado extranjero debe tener un diploma universitario y dos años de experiencia laboral relacionada al trabajo por el cual se lo pretende contratar. La experiencia laboral debe ser aquella adquirida después de la culminación de los estudios universitarios.

Exenciones

Las exenciones disponibles corresponden a lo que el Ministerio de Trabajo denomina el “Mecanismo de Consulta” .

Si un empleador no llega a cumplir con el requisito de ingresos/capitalización mínima, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Si el candidato no llega a tener los dos años de experiencia laboral relacionada al trabajo que se lo pretende contratar, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Favor tomar en cuenta que los candidatos extranjeros por lo general no pueden aplicar a permisos de trabajo o a las exenciones por su cuenta. El empleador es el que debe aplicar por el permiso para contratar al candidato.

Alta tasa de aprobación

Las exenciones bajo el Mecanismo de Consulta han estado disponibles desde el 2010. Estadísticas parciales del WDA muestran que las exenciones son otorgadas a la mayoría de las aplicaciones. Desde el 2010 al 2015, 176 empleadores aplicaron a la exención del requisito de ingreso/capitalización mínima. De éstas, 156 (89%) han sido aprobadas. De forma similar, durante el mismo periodo, 50 empleadores aplicaron a la exención del requisito de experiencia laboral mínima de dos años. De éstas, 47 fueron aprobadas, alcanzando así una tasa de aprobación del 94%.

Pese a que las tasas de aprobación son altas, el número de aplicaciones es sorprendentemente bajo. Esto puede deberse a que hasta hace algún tiempo el WDA no tenía una guía clara sobre el Mecanismo de Consulta ni en inglés ni en chino.

EZ WORK Taiwán: Información sobre el Mecanismo de Consulta y Permisos de Trabajo en general

Como mencionamos anteriormente, el WDA no tenía un mecanismo directo y eficaz para transmitir información. Sin embargo, a finales de 2016, el WDA añadió una nueva sección a su página web EZWORK Taiwán, la cual proporciona información completa sobre el Mecanismo de Consulta en chino e inglés. Candidatos profesionales extranjeros pueden familiarizarse con el Mecanismo de Consulta en inglés aquí. Dado que es muy probable que el departamento de recursos humanos de las empresas taiwanesas no tenga familiaridad con el Mecanismo de Consulta, los candidatos pueden remitir a sus posibles empleadores a la misma información en chino aquí.

De forma general, la página EZ WORK Taiwán proporciona información completa en inglés y chino para la obtención de permisos de trabajo para trabajos profesionales y técnicos de la Clase A y también para otras clases de permisos de trabajo profesional incluyendo aquéllos para profesores, artistas e intérpretes. Reiteramos que remitir a los posibles empleadores a la versión en chino de la página puede ser de mucha ayuda especialmente si es la primera vez que la empresa contrata a un empleado extranjero.

Reglas especiales para graduados de universidades taiwanesas y empleados de algunas empresas emergentes (startups)

Cabe mencionar que existen reglas especiales para graduados extranjeros de universidades taiwanesas y empleados de algunas startups que cumplen ciertos requisitos (“startups calificadas”). Estas reglas especiales se encuentran fuera del alcance de este artículo pero más información sobre el Sistema de Puntaje para graduados extranjeros de universidades taiwanesas se la puede encontrar aquí. Empleados de startups calificadas no están sujetos al requisito de experiencia de trabajo mínima de dos años.

Amendments to Trade Secrets Act proposed

The Taiwan Intellectual Property Office (“TIPO”) has recently held a series of public hearings on proposed amendments to Taiwan’s Trade Secrets Act (the “Act”). The amendments under discussion include provisions that would give foreign corporations standing to bring private prosecutions for trade secret misappropriation and extend trade secret protection to foreign nationals from jurisdictions that are parties to multilateral treaties. Participants in the hearings also took the opportunity to urge that a mechanism be created to redact sensitive parts of judgments and that the Act address fair competition issues in trade secret protection.

Private Prosecutions and Scope of Trade Secret Protection

Currently foreign corporations without a presence in Taiwan do not have standing to file criminal complaints or private prosecutions for trade secret misappropriation.[1] The TIPO has proposed adding a new Article 13-5 to the Trade Secrets Act that would create a statutory exception permitting such private prosecutions.

The TIPO has also proposed amending Article 15 of the Act to extend trade secret protection to jurisdictions that are members of multilateral treaties to which Taiwan is also a party. Since Taiwan is a member of the WTO, this amendment would extend trade secret protection to businesses from other WTO member jurisdictions. Article 15 currently provides that Taiwan’s protection of trade secrets extends to those jurisdictions whose laws protect Taiwanese trade secrets. The draft amendment of Article 15 clarifies that such laws need not be statutory laws. In other words, if a jurisdiction’s case law protects Taiwanese trade secrets, Taiwan trade secret protection would reciprocally protect trade secrets from that jurisdiction.

Access to Confidential Information

The Act currently permits a judge to issue a protective order restricting access to party filings during litigation. A judge can also order closed hearings to protect trade secrets. The TIPO is proposing a new Article 13-6 that would give prosecutors similar powers during the investigative proceedings that precede an indictment. This amendment has been controversial and it is unclear whether the TIPO will revise its draft of 13-6 or abandon it entirely.

Judgements and Fair Competition

In addition to the amendments proposed by the TIPO, participants in the hearings also discussed whether there should be a mechanism to allow parties to trade secret litigation to comment on judgments before they issue. Proponents of this mechanism take the view that the court should consider the views of the parties as to whether a judgment discloses confidential information before the judgment is published. Such a mechanism could ultimately lead to partial redactions of published judgments to avoid disclosures.

Others at the hearings recommended adding language to the Act prohibiting competitors from obtaining trade secrets by means of coercion, incentives, or other unfair means. A similar prohibition in the Taiwan Fair Trade Act was removed in 2015.

Future Developments

The proposed amendments to the Act reflect the continuing concerns that Taiwanese technology companies have about the adequacy of Taiwan’s trade secret protection. The TIPO will now consider the views expressed during the hearings with a view to revising the proposed amendments prior to submitting them to the Executive Yuan for approval. If approved by the Executive Yuan, a bill will be introduced to the legislature where lawmakers may make further changes before enacting or rejecting the bill.

We recommend that businesses concerned with trade secret protection in Taiwan monitor these amendments as they make their way through the legislative process. There will be further opportunities for international businesses to make their voices heard on this important issue before the law is changed.

For more information about trade secret protection and other intellectual property matters in Taiwan, please contact Christine Chen at cchen@winklerpartners.com.


[1] A 1931 Judicial Yuan interpretation generally precludes unregistered foreign corporations from filing private prosecutions under Article 319 of Taiwan Code of Criminal Procedure unless the legislature has created a statutory exception. Judicial Yuan Interpretation 533. Taiwan Copyright, Trademark, and Patent Acts already have statutory exceptions for unregistered foreign corporations. Taiwan’s Supreme Court has however held that US companies may file private prosecutions under the Treaty of Friendship, Commerce and Navigation between the United States of America and the Republic of China.

Taiwan constitutional court issues decision on marriage equality

Taiwan’s constitutional court today issued Interpretation 748 holding that Book IV Chapter II (marriage) of the Taiwan Civil Code is unconstitutional to the extent that it does not permit same-sex couples to enter into a permanent, exclusive, and intimate relationship in violation of Articles 22 (freedom of marriage) and Article 7 (right to equality before the law) of the Taiwanese Constitution.

The court gave the Taiwan Legislature two years to amend the current Civil Code or enact a new law consistent with Interpretation 748. While the court deferred to the Legislature to decide what form equal protection for marriage freedom should take, it also set a time limit for legislative action.  If the Legislature fails to take action within the next two years, same sex couples can register their marriages under the existing Civil Code.

 

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