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Franchising in Taiwan: preliminary injunctions

In Part I and Part II of this series of articles we discussed the need to take the common sense precautions of registering any applicable intellectual property and performing appropriate due diligence on potential franchisees. These matters handled, we now turn our attention to drafting the franchise agreement. In this and subsequent articles, we will identify a couple of potential risks that may be mitigated by informed drafting of the franchise agreement. These issues represent only a very small portion of the important matters that should form the subject of your franchise agreement. However, these are recurrent issues which we see on a fairly regular basis and which may represent a difference between the legal environment in Taiwan and that in your home jurisdiction.

One such issue involves the granting of preliminary injunctions in franchise-related disputes. In general, courts proceed slowly in Taiwan. It may take years for a court to render a judgment in a dispute between a franchisor and franchisee making it advisable to seek injunctive relief in certain circumstances, particularly in cases where the franchisee’s behavior is causing ongoing damage to the franchise brand.

Taiwan courts will grant preliminary injunctive relief. However, they grant such relief hesitantly and only in situations in which the franchisor can demonstrate to the court’s satisfaction that the franchisor would be irreparably and seriously damaged if the preliminary injunction is not granted. There is no bright line rule as to what constitutes irreparable and serious damage. In most cases, the court attempts to balance (i) the damage which would likely be caused by the defendant’s continued behavior and (ii) the negative effects which would likely (or certainly) be caused by granting the injunctive relief being sought. Suppose a franchisee were to begin to operate a competing business under a different brand within the defined territory, all in clear violation of the franchise agreement. A Taiwan court deciding whether to grant the franchisor’s request to enjoin its franchisee from continuing to operate the competing business would weigh (i) the damage to the franchisor’s brand on the one hand against (ii) the economic impact of closing the competing business (e.g., lost employment opportunities, wages, etc.). More often than not, Taiwan courts do not grant such preliminary injunctions. The success rate for preliminary injunctions at the Intellectual Property Court is approximately one in three.

Despite this apparent uphill battle to obtain a preliminary injunction, there are a few ways for a franchisor to increase its chances of success. They are:

3. Make it about trade secrets

Taiwan courts are more willing to grant preliminary injunctions if trade secrets are involved. In order to be protected under Taiwan law, trade secrets need to be: (a) commercially valuable, (b) only known to a limited group of persons, and (c) reasonably protected by the owner. Protected trade secrets include technical information as well as commercial information. Franchisors should carefully identify trade secrets in the franchise agreement and explicitly set out how such trade secrets are to be used and protected by the franchisee.

4. Place reasonable limitations on non-compete provisions

Taiwan courts are only willing to grant preliminary injunctions enforcing non-compete provisions if these provisions are bounded by reasonable time and geographic constraints. As an example, a court would be more willing to grant a preliminary injunction prohibiting a franchisee from running a health food restaurant within three kilometers of the original franchise business location for a period of two years, compared to one prohibiting the franchisee from operating any restaurant in Taipei City for a period of ten years. A Taiwan court would most likely strike down an overly broad non-compete provision rather than reformulate the boundaries of the provision, even if the agreement granted the court the authority to modify the provision. In an extraordinarily small minority of cases, a court may modify the scope of a non-compete provision after discussions with the parties. We cannot, however, overemphasize the rarity of such an occurrence.  Therefore, we recommend drafting these provisions such that they offer adequate protection but do not overreach.

In our next article we will look at governing law provisions and enforcement of foreign arbitral awards. If you have any questions or require additional information on franchising in Taiwan, please contact Greg Buxton at gbuxton@winklerpartners.com.

A ray of hope for transnational same-sex marriage rights in Taiwan

This is a translation of the original Mandarin Chinese article by Kai-yu Chang and Christine Chen, which can be found here. Translation by Paul Cox.

How Things Stand Now in Taiwan

In 2017, Taiwan’s Constitutional Court held unconstitutional the provisions of Taiwan’s Civil Code that do not allow two persons of the same sex to create a union of exclusive nature for the purpose of living a common life. The Court gave the legislature two years to amend the law or issue new legislation to protect equal rights to freedom of marriage. In 2019, Taiwan became the first country in Asia to legalize same-sex marriage with the promulgation of the Act for Implementation of J.Y. Interpretation No. 748.

Persisting Inequality Under the Current System

Although same-sex marriage has been legalized in Taiwan, in practice, this legal protection is not yet available to all couples: some transnational same-sex couples remain unable to register marriages. The reason is that a majority of the local household registration agencies responsible for registering marriages have interpreted Article 46 of the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements (hereinafter, the “Choice of Law Act”) to mean that if a marriage is not allowed under the national law of one of the parties, the marriage cannot be formed.[1] The result of this interpretation is that if a Taiwanese national wishes to marry a same-sex partner who is a foreign national, and that foreign partner is from a country whose law does not recognize same-sex marriage, the household registration office will refuse to legally register their marriage in Taiwan.

Some may take the view that this interpretation by the household registration agencies does not violate the right of equality because Article 46 applies both to same-sex and opposite-sex marriages. Nevertheless, the application of the article has resulted in de facto inequality, causing Taiwanese to suffer discriminatory treatment, based on their sexual orientation, in their ability to exercise freedom of marriage. Given that most of the world’s countries recognize opposite-sex marriage but not same-sex marriage, a Taiwanese national who is heterosexual does not have to worry about what the law of their partner’s country dictates. Indeed, the household registration office is not going to make any special examination of whether that country’s law recognizes heterosexual marriage. But a gay Taiwanese national does not enjoy protection of their marriage rights unless the law of their partner’s country also recognizes same-sex marriage. This is a de facto inequality in the current system and arguably is an infringement of the constitutionally protected rights of equality and freedom of marriage..

Redressing the Inequality

Equality advocacy groups have proposed various methods for resolving the predicament described above. One possibility would be to amend the Choice of Law Act to exclude the application of Article 46 in same-sex marriages, so that all transnational same-sex couples would be entitled to marry lawfully in Taiwan, without needing to worry about whether the other country recognizes same-sex marriage.

Short of amending the law, it has also been proposed that Taiwan’s executive branch could issue an interpretive order stating that Article 46 of the Choice of Law Act does not apply to same-sex marriages; or, stating that, based on an exclusion provision in Article 8 of the same Act (discussed in more detail further below), the laws of countries that do not recognize same-sex marriage will no longer be applied.

Finally, it has been suggested that, after all other possible avenues of remedy have been exhausted, Taiwan’s constitutional court could be petitioned to declare the current marriage provisions of the Choice of Law Act unconstitutional, thus protecting the rights of transnational same-sex couples to marry.

Actual Case

It was the case of Mr. Chi Chia-wei, whose attempt at registering his marriage with his same-sex partner was rejected in 2013, that ultimately led to the Constitutional Court interpretation holding the prohibition of same-sex marriage unconstitutional. But when, after the legalization of same-sex marriage, Mr. Chi and his Malaysian partner went to the household registration agency to register their marriage, they were rejected once again, this time on the grounds that the law of Malaysia does not recognize same-sex marriage.

Chi Chia-wei and his partner filed an administrative appeal with Taiwan’s executive branch, but the appeal was unsuccessful. They then brought litigation in administrative court, asking the court to void the outcome of the administrative appeal. They prevailed in the litigation, and the High Administrative Court issued Administrative Judgment No. 108-Su-1805 ordering the household registration authorities to register Mr. Chi and his partner’s same-sex union.

Comments on the Taiwan High Administrative Court Judgment

The Taiwan High Administrative Court Judgment cited above holds that the administrative agency contravened Taiwan’s public order and boni mores in its refusal to register Chi Chia-wei and his Malaysian partner’s marriage on the grounds that Malaysian law does not recognize same-sex marriage. The Court holds the agency’s rejection decision unlawful under Article 8 of the Choice of Law Act, which provides, “Where this Act provides that the law of a foreign State is applicable, if the result of such application leads to a violation of the public order or boni mores of the Republic of China (Taiwan), that law of the foreign State is not applied.”

The High Administrative Court judgment further explains that in J.Y. Interpretation No. 748, the Constitutional Court had already expressly held that same-sex marriage is a constitutionally protected basic right of the public, and Taiwan law already contains express provisions recognizing the right to same-sex marriage. The court thus concludes that it is already an established part of Taiwan’s legal order that two partners of the same sex may lawfully marry, regardless of whether the law of another country recognizes same-sex marriage.

The Court therefore held that the agency’s refusal to register Chi Chia-wei and his partner’s marriage based on Article 46 of the Choice of Law Act contravenes the public order and boni mores of Taiwan, and so, under Article 8 of the Choice of Law Act, the law of the foreign country should not be applied. Based on this reasoning, the Court voided the agency’s decision, and issued its judgment favoring the plaintiffs on this issue.

Impact of the Judgment and Progress on Legislative Amendments

Although the Taiwan High Administrative Court held in the judgment cited above that the result of applying Article 46 of the Choice of Law Act violates the public order and boni mores of Taiwan and adjudicated in favor of Chi Chia-wei, court judgments in Taiwan’s system are binding only on the case at hand. So, this judgment does not bind administrative agencies across the board in cases with analogous circumstances. Other transnational same-sex couples are unable to rely on this judgment to successfully register their marriages. Indeed, other cases addressing the issue of transnational same-sex marriage registration are also currently making their way through the courts.

Meanwhile, regarding progress on legislative amendments, the Civil Department of Taiwan’s Judicial Branch on 22 January 2021 announced a draft amendment adding the following proviso to Article 46 of the Choice of Law Act: “However, if the application of the national law of one party would result in inability to form the marriage, and the other party is a national of the Republic of China (Taiwan), the law of the Republic of China will prevail.” If successfully passed into law, the addition of this proviso to the existing Article 46 would mean that if the national law of one of two same-sex partners (one of whom is a Taiwanese national) does not recognize same-sex marriage, only the law of Taiwan needs to be followed.

This draft amendment should be applauded as a positive move in the direction of adopting an express legislative provision to comprehensively protect the rights of same-sex partners to freely form permanent exclusive unions of their own volition. It strongly deserves our continued attention and efforts to nudge its successful passage and enforcement.

Reflections to Date

At the same time as many are advocating for the use of legislative amendment to resolve the current predicament, perhaps we should also take a fresh look at the interpretation of Article 46 of the Choice of Law Act.

Examining the record of the Legislature’s article-by-article discussion of the Choice of Law Act draft bill in 1953, the legislators’ interpretation of Article 46 at the time was: “The requirements for marriage include both substantive requirements and formal requirements, which in principle can follow the national laws of the parties, following the national law of the man with respect to the man and the national law of the woman with respect to the woman” (spoken by Legislator Chen Guyuan). In other words, to determine whether two people from different countries are eligible to marry, it must be examined whether each person individually meets the required conditions for marriage under the law of their own country of nationality. For example, if Party A, a Taiwan national, and party B, a foreign national, wish to marry in Taiwan, and Party A is marriage-eligible under Taiwanese law, and Party B likewise is marriage-eligible under the law of Party B’s country, then Parties A and B may legally register marriage in Taiwan.

So, based on the original interpretation and reasons of the legislators, if Chi Chia-wei, under Taiwanese law, has reached marriageable age and has no other legal impediment to marriage such as already being married, and his partner, under Malaysian law, likewise has reached marriageable age and has no impediment to marriage, then Chi Chia-wei and his partner may legally register marriage under the law of Taiwan. This interpretation leads to an outcome opposite to that of the interpretation currently held by Taiwan’s administrative agencies responsible for marriage registration.

Another issue that merits consideration is: why must the eligibility of Taiwanese nationals to legally marry in Taiwan be left up to the laws of other countries to decide? Our country’s power to enforce our own laws is in fact an expression of our national sovereignty. Premising the effectiveness and enforceability of Taiwan’s laws on the provisions of laws of other countries diminishes our national sovereignty and is a self-imposed handicap. This is not to mention that the provisions of law at issue in this case involve restriction of people’s rights and are inextricably related to the protection of basic constitutional rights. Having to look to the laws of other countries to determine the effective scope of the fundamental rights vested in the public by our own country’s constitution undermines the very spirit of our country’s constitutional protection of people’s fundamental rights. We call on the government to immediately alter the current practice regarding the registration of same-sex transnational marriages, therefore safeguarding the constitutionally protected basic rights of Taiwanese citizens.

For more information on marriage equality in Taiwan, please contact Christine Chen at cchen@winklerpartners.com.


[1] Article 46 (translation): “The formation of a marriage is governed by the national law of each party. However, a marriage is also effective if it satisfies the formal requisites prescribed either by the national law of one of the parties or by the law of the place of ceremony.”

Taiwan COVID-19 entry restrictions as of 1 March 2021

Taiwan’s Central Epidemic Command Center (CECC) has announced new entry restrictions for people entering the country. These new rules came into force on 1 March 2021. Entry restrictions were first introduced on 19 March 2020 with a mandatory 14-day quarantine for Taiwan nationals and foreign residents wishing to enter the country. To date, Taiwan has reported just around 1,000 confirmed COVID-19 cases, of which the vast majority were imported from abroad, and ten deaths in total.

On 1 March 2021, the CECC eased entry restrictions into Taiwan, reintroducing reduced quarantine periods for short-term business travelers from low- and medium-risk countries/regions and reintroduced entry for medical care. However, social visits and tourism are still banned. Qualifying reasons for entry have expanded for all types of travelers (foreign nationals, Hong Kong/Macao residents and Mainland Chinese residents), as long as those entering the country receive approval from the respective government department before travel.

For example, patients seeking medical care should receive approval from the Ministry of Health and Welfare while international students should receive approval from the Ministry of Education. Those entering based on humanitarian grounds, emergencies or other special reasons should receive approval from the Ministry of Foreign Affairs.

Short-term business travelers, which include employees of international companies who have been transferred to Taiwan to fulfill business contracts, are again eligible to apply for shortened quarantine periods. To qualify for the shortened quarantine period, the business traveler must meet the following conditions:

  1. The business traveler is eligible to enter the country in accordance with CECC announcements;
  2. The business traveler is applying for a duration of stay in Taiwan of less than three months;
  3. The purpose of the visit is business activity and relevant documents outlining the purpose have been provided by legally established businesses in Taiwan;
  4. The business traveler is traveling to Taiwan from low- and medium-risk countries as listed by the CECC and has not traveled to other countries or regions in the 14 days prior to boarding their flight to Taiwan.

Those who meet the above conditions must also provide a travel itinerary for their stay and a disease prevention plan. A certificate of a negative COVID-19 RT-PCR test result issued within three days of boarding their flight is still required. Once in Taiwan, the business traveler may apply for a COVID-19 test taken at their own expense to end their quarantine period. Those from low-risk countries/regions may apply for this test on the fifth day of arrival, and those from medium-risk countries on the seventh day of arrival. If results are negative, the business traveler may then apply to the local health authority to end their quarantine early; however, they should still observe enhanced self-health management until the 14th day after entry. During this observation period, business travelers should avoid going to crowded places or use public transportation and can only conduct limited business activities. The host company must also keep a daily log of the business traveler’s activities in Taiwan, including the names of the people that they meet, which should not include anyone not mentioned in their travel itinerary. Designated personnel must also pick up the business traveler and always accompany them throughout their stay, and the business traveler should always wear a face mask when going outside. Additionally, for the first two weeks of their visit, the business traveler is required to stay at a government-mandated quarantine hotel.

As of 24 March 2021, the following countries and regions are considered low- and medium-risk countries/regions:

Low-Risk Countries/Regions

New Zealand, Macao, Palau, Fiji, Brunei, Laos, Nauru, The Marshall Islands, Bhutan, Australia, Singapore, Vietnam

Medium-Risk Countries/Regions

Cambodia, Hong Kong, Mauritius

Travelers planning on entering Taiwan should check the latest announcements from the CECC’s official website before arranging travel.

For questions about immigration matters in Taiwan please contact Christine Chen at cchen@winklerpartners.com.

Franchising in Taiwan: due diligence

As in our first installment of this series of articles on franchising in Taiwan, in this second installment we are going to focus on basic common sense. Like the need to register related intellectual property covered in our previous article, it should go without saying that franchisors should perform adequate due diligence on their potential Taiwan franchisees.

2. Do adequate diligence on your Taiwan franchisee

So, what is adequate due diligence in the context of identifying and signing a new Taiwan franchisee? We advise clients to take a two-pronged approach, using the diligence process: (i) to determine whether the potential franchisee has the finances, experience, and connections to be successful in the Taiwan market and (ii) equally as important, to determine the exact corporate structure of the potential franchisee and identify assets of the franchisee and any guarantors which would become the focus of future legal action should the franchisee breach its obligations under the franchisee agreement. The first aspect of diligence is looking at upside potential. The second is attempting to mitigate downside risk.

We cannot overemphasize the importance of this second aspect of the due diligence exercise. Of course, any well-drafted franchise agreement will have the franchisee represent and warrant to its current corporate structure and covenant that control of the franchisee will not change without the consent of the franchisor. These provisions, however, have no “teeth” unless the franchisor and any guarantors have significant assets against which a franchisor can enforce its franchise agreement rights. You, the franchisor, are granting the franchisee the rights to use and exploit your most valuable assets, your brand and your system. It is prudent to identify equally significant assets of the franchisee against which enforcement may be taken in the unfortunate case of a material breach by the franchisee of its obligations.

In a particularly egregious case we have seen recently, a franchisor (prior to engaging us) executed a franchise agreement with an individual as the franchisee and another individual as guarantor. Having not identified any significant assets of either individual, when the franchisee ultimately violated the franchise agreement, the franchisor was left with no viable leverage to prevent further violation. The franchisor was left (i) attempting to obtain a preliminary injunction (which are notoriously hard to obtain in Taiwan and which are the subject of a separate part of this series) and (ii) seeking monetary damages in an offshore arbitration proceeding which if successful would still need to be enforced here in Taiwan.

On a more positive note, Taiwan does allow guarantors to guarantee the full performance of the franchisee’s obligation under the franchise agreement. The guarantor and the franchisee may be jointly and severally liable for any liabilities that result from the franchise agreement. Provided that the guarantee language specifically so states, Taiwan law also allows the franchisor to make claims directly against a guarantor without the need to take any prior action against the franchisee or other contracting party.

In our next part of this series, we will examine obtaining preliminary injunctions in a franchising dispute. If you have any questions or require additional information on franchising in Taiwan, please contact Gregory Buxton at gbuxton@winklerpartners.com.

2020 Environmental Report

For many years Winkler Partners has aimed to reduce our negative impact on the natural environment, while looking for meaningful ways where we can create positive impact, both in our immediate community and further afield. In 2006, we set up a Green Office Department that coordinates office greening, looks for ways to reduce energy usage, promotes the use of environmentally friendly products and services, and shares our experience with other businesses and our community by inviting them to visit our offices and roof garden. As part of that commitment, we publish annual reports on our progress. At a glance, in 2020 we managed to:

  • Achieved net zero. Winkler Partners is now a carbon neutral business.
  • Generated 13,458 kilowatt hours of electricity from our rooftop solar panels.
  • Purchased green energy certificates covering the remaining electricity we used. This means that 100% of our electricity is sustainably sourced.
  • Entered into a direct power purchase agreement to source renewable energy (rooftop solar and onshore wind) supplying 90% of our energy needs from 2021 onward.
  • Reduced printed paper usage by 28%.
  • Offset our international travel emissions, which in 2020 were 3 tons, down 95% from 2019 levels due to the pandemic. We did this through a fellow B Corporation, Climate Care.
  • Offset the remaining emissions, 12 tons, through a Gold Standard project in Changhua County, Taiwan.

Goals for 2021

This year, we will look for ways to remove our historical emissions (2002 onward) from the environment. This could be achieved by participating in reforestation projects or through offsetting. We will also continue to strengthen our in-house waste reduction policies, as this year our general waste increased by 32%. This could be in part due to an increase in the use of disposable face masks and other PPE because of the pandemic.

Our full environmental report is available in English here and Chinese here. For inquiries regarding our energy saving initiatives or our roof garden, please contact City Shen at cshen@winkerpartners.com.

Franchising in Taiwan: protecting your trademarks

Franchising arrangements are essentially just a specialized form of intellectual property license. A franchisor, or rights owner, licenses its intellectual property to a franchisee to use, subject to certain conditions, for the purpose of operating a business in a particular territory. The licensed rights often include trademarks, copyrighted material, and trade secrets, which together comprise a unique method of doing business or business system.

Along with direct investment, franchising is a common method used by brand owners to expand their business in Taiwan. Our team advises a number of brand rights holders with respect to their franchising activities in Taiwan. Over the course of a multi-part series, we will set out five points we see as essential for brand rights holders to consider when they are evaluating entry into the Taiwan market. In this first segment, we look at Taiwan’s trademark laws and stress the need for brand owners to register and monitor the use of their marks in Taiwan.

1. Register and monitor your marks in Taiwan

This first point seems to be common sense. However, brand owners sometimes rely on their existing overseas trademark rights and fail to appreciate that Taiwan is a “first-to-file” not “first-to-use” jurisdiction.

We recommend that brand owners file an application with the Taiwan Intellectual Property Office as soon as they or any of their licensed master franchisors plan to begin franchising efforts in Taiwan. Marks may be registered in Taiwan prior to use. Taiwan trademark laws give the owner three (3) years from registration in which to use the mark.

The alternative would be to commence franchise operations using marks which are registered overseas but unregistered in Taiwan. However, such marks would not be protected under Taiwan law except in certain special circumstances involving particularly well-known brands. Using marks that are unregistered in Taiwan makes it almost impossible to prove infringement in Taiwan. It also opens up the possibility that a franchisee or other unrelated party may register the foreign mark in Taiwan before the rightful brand owner. And, while we have an excellent litigation team which can help to recover rights in such circumstances, registration of the marks in Taiwan at the outset will save significant time and expense.

In addition to registration, we recommend that brand owners task their master franchisors, if any, and their franchisees with a positive obligation to monitor the relevant territory and report any suspected infringement of the brand owner’s marks to the brand owner. In addition to the obvious benefit of assisting the brand owner to monitor the Taiwan market for infringing behavior, it also adds a potential claim against a franchisee who begins to compete with the business of the brand owner indirectly through family members or other related parties. In such instances, it may be difficult to prove violation of the relevant non-compete provisions of the franchise agreement as the relationship between the franchisee and the competing parties may be tenuous (at least on the surface). It is usually easier to show that the franchisee failed in its obligation to report known infringement by these same parties.

In the next part of this series, we will examine franchisee due diligence and related matters. If you have any questions or require additional information on franchising in Taiwan, please contact Gregory Buxton at gbuxton@winklerpartners.com.

WP ranked as top IP firm

Winkler Partners has been ranked as a top tier firm for intellectual property (enforcement and litigation) by the World Trademark Review. Only three law firms in Taiwan appear in the top tier for 2021.

In their annual WTR1000 report, The World Trademark Review says that our firm is a “leading player in litigation and the go-to firm for multinational and top-dollar brands” and has been “growing its sports entertainment and media work, as well as over the top-related trademark matters”. They also note that we “are responsive, detail-oriented and flexible when clients have budgetary concerns”.

Individually, the World Trademark Review also recommends partners Peter Dernbach as “a standout choice when it comes to IP strategy, protection and enforcement”; Christine Chen as “a leading figure in anti-counterfeiting and IP enforcement”; and Gary Kuo, who ”regularly deep dives into myriad civil and criminal litigation cases”.

We were also ranked in the second tier for prosecution and strategy.

You can read the full WTR1000 rankings for Taiwan here.

Exploring statistics at the Taiwan Intellectual Property Court: part IV administrative litigation

Having highlighted some interesting statistics regarding civil judgements rendered by the Intellectual Property Court (“IP Court”) in the previous section of this report, we turn now to statistics regarding judgements in administrative litigation cases.

Note that in terms of statistical basis, win rates of all administrative litigation cases, actions for revocation and actions seeking to impose an obligation are based on figures published by the Judicial Yuan, which include all cases heard by the IP Court. However, the proportion and win rates of patent and trademark litigation cases are calculated using the dataset provided by the Judicial Yuan at “data.gov.tw”, which includes only those judgements that are accessible by the public.

Win rates for plaintiffs in all administrative litigation cases

Win rates for plaintiffs in all administrative litigation before the IP Court are calculated as follows: total wins (each complete win counted as 1 case; each partial win is counted as 0.5 case) divided by all cases in which either the plaintiff or the defendants prevailed.

One of the characteristics of administrative litigation in Taiwan is the low win rate for plaintiffs. In most cases, the defendants (i.e. the authorities) prevail. This is also the case for IP related cases. We can see from the following chart that the win rates for plaintiffs in administrative litigation before the IP Court were lower than 20% in all but one year since 2008. However, since 2016 the win rate has trended upward somewhat to reach 23.5% in 2019 – the highest rate on record. It appears that in recent years where a plaintiff was dissatisfied with the decision made by the Taiwan Intellectual Property Office (the “TIPO”) and filed an administrative action, the plaintiff was more likely to obtain a favorable judgement.

Win rates for plaintiffs in all administrative litigation cases closed from 2008 to 2019

Source:Judicial Yuan

Win rates for plaintiffs in actions for revocation and actions seeking to impose an obligation

There are two types of administrative litigation in Taiwan: actions for revocation and actions seeking to impose an obligation. The former refers to simply revoking an unfavorable decision. In trademark matters for example, where the TIPO renders a decision that “the opposition is justified and the disputed trademark shall be cancelled”, the trademark owner may file an administrative action requiring the court to revoke their decision so that the trademark registration remains active as the cancellation becomes invalid. This kind of administrative action is called an action for revocation.

An action seeking to impose an obligation requires the court to order the authority to render a favorable decision. This kind of action also requires the court to revoke the previously rendered decision, as it is necessary to revoke the decision rejecting the plaintiff’s request before rendering another favorable decision in the same matter. In a trademark matter for example, if a trademark application is rejected by the TIPO, the applicant may file an administrative action requesting the court to order the TIPO to approve the registration. If the court believes the plaintiff’s request is reasonable, the court will first revoke the rejection made by the TIPO, then order the TIPO to approve the plaintiff’s trademark application.

As shown in the chart below, the win rates in actions seeking to impose an obligation have always been higher than actions for revocation. Furthermore, both kinds have had opposite trends since 2016, the win rates in actions for revocation declined from about 15% in 2016 to the lowest point of 9.9% in 2019, and the win rates in actions seeking to impose an obligation increased from about 20% in 2016 to the highest point of 34.9% in 2019. As such, we can see an obvious gap between the win rates for these two kinds of action.

Win rates for plaintiffs in actions for revocation and actions seeking to impose an obligation closed from 2008 to 2019

Source:Judicial Yuan

Win rates for plaintiffs in patent and trademark administrative litigation cases

The following section considers the proportion and win rates of different categories of patent and trademark administrative litigation cases. Note that the TIPO has authority to review and amend fee rates set by copyright collective management organizations in accordance with the Copyright Act and Copyright Collective Management Organization Act. However, as there are very few copyright administrative litigation cases, we do not consider them in this analysis.

Win rates for plaintiffs and proportion of various types of patent cases

Looking at patent cases first, we find an interesting trend of win rates for plaintiffs in all patent administrative litigation cases. In 2010, the win rate of 29.6% was the highest on record, after 2010, the win rates fell steadily to the lowest point of 11.1% in 2014 before recovering in subsequent years. The win rates for plaintiffs has been approximately 24% for four consecutive years since 2016.

Win rates for plaintiffs in patent administrative litigation cases closed from 2008 to 2019

Source:data.gov.tw

Patent administrative litigation cases are divided into four types: (i) invention patent; (ii) utility model patent; (iii) design patent; and (iv) others. In observing the proportion of the four types of administration litigation cases, we note that the proportion of utility model patents has been decreasing, from nearly 60% in the early years of the relevant period to only 30% to 40% in more recent years. On the other hand, the proportion of invention patents used to account for only about 35% in early years, but there is an increasing trend in more recent years. The proportion of cases regarding invention patents has been more than 50% from 2016 through 2019, and even exceeded 70% in 2017. As for design patents, it has always been the minority among patent cases. The proportion has never reached 10%, even the highest point in 2014 was only 9.8%.

Patent administrative litigation cases closed from 2008 to 2019


Source:data.gov.tw

We can observe from the win rates for plaintiffs in the different types of patent administrative litigation cases that, as the number of design patent cases is small, the win rates in design patent cases varied very significantly from 0% to 100%. As for the win rates for plaintiffs in invention patent cases and utility model cases, the win rates show similar trends, with rates reaching a peak in 2010 or 2011, then falling to the lowest point in 2014, and bouncing back thereafter. The win rate for plaintiffs in the above two types of patent cases was approximately 25% in 2018 and 2019.

Win rates for plaintiffs in patent administrative litigation cases closed from 2008 to 2019

Source:data.gov.tw

Win rates for plaintiffs and proportion of different kinds of trademark cases

As for trademark administrative litigation cases, the win rates for plaintiffs fluctuated between 10% and 19% in the period before 2018. There has been a noteworthy consecutive increase in the win rates in the most recent four years, from 11.4% in 2016 to a peak of 25% in 2019.

Win rates for plaintiffs in trademark administrative litigation cases closed from 2008 to 2019

Source:data.gov.tw

Turning to administrative litigation regarding (i) trademark registration; (ii) trademark opposition; (iii) trademark invalidation; (iv) trademark cancellation; and (v) other cases, we note an interesting trend in terms of their proportion. The proportion of trademark registration cases decreased from almost half of all cases in the early years to only 20% to 25% after 2014. In terms of trademark opposition cases, the proportion remained relatively consistent at between 30% an 40%, while the proportion of trademark registration cases decreased, trademark opposition cases have became the dominant type of trademark litigation case after 2014.

Trademark invalidation cases accounted for around 30% of all trademark administration litigation cases in 2010 and 2011, but the proportion declined afterwards. Since 2015, the proportion of trademark invalidation cases has never exceeded 20%. Lastly, the proportion of trademark cancellation cases show an increasing trend. In 2008, trademark cancellation cases accounted for only 3.5%, but in 2019, the proportion was 20.6%, which was more than five times the proportion in 2008.

Proportion of trademark administrative litigation cases closed from 2008 to 2019


Source:data.gov.tw

The win rates for plaintiffs in trademark registration cases have shown a steady increase. In 2008, the win rate was only 10%, but by 2019, it had increased to 23.5%. The win rates for plaintiffs in trademark opposition cases between 2012 and 2015 remained at around 20%, but from 2016 to 2018, the win rates decreased to nearly 10%. Then in 2019, the win rate suddenly soared to 34.5%, which is the highest on record for the relevant period. There is no obvious trend regarding win rates for plaintiffs in trademark invalidation and trademark cancellation cases.

In 2019, the win rates for plaintiffs in different types of trademark administration litigation cases showed the following order, from the highest to the lowest: trademark opposition, trademark registration, trademark cancellation, then trademark invalidation.

Win rates for plaintiffs in trademark administrative litigation cases closed from 2008 to 2019


Source:data.gov.tw

Conclusion

In the four parts of this report, we have examined various statistics regarding Taiwan’s IP Court. In part one, we looked at statistics including the number of cases closed/lodged and number of days to close a case. Then in part two, we looked at broader statistics of the numbers and proportion of different kinds of litigation cases. For parts three and four, we further observed detailed statistics concerning civil and administrative litigation cases, including median value of claims raised and win rates.

The statistics examined in this report offer insights into the operation of the IP Court, and hopefully serve as a helpful reference for legal practitioners and researchers. However, further research is needed to understand the reasons behind the trends identified and whether these trends will continue in the future.

In addition, as per the Commercial Case Adjudication Act and the amendment of the Intellectual Property and Commercial Court Organization Act, from 1 July 2021, the IP Court will be renamed “Intellectual Property and Commercial Court”, and the IP Court will begin accepting commercial cases unrelated to intellectual property. It is worth following what changes in statistics and trends occur after the reorganization of the court.

For more information on IP matters in Taiwan, please contact Gary Kuo at gkuo@winklerpartners.com.

*Sources: (1) Judicial Yuan (2) IP Court (3) data.gov.tw.

*Note: Some of the figures provided in this report are calculated using raw data and may differ from those figures officially reported.

WP featured in article on family-friendly work environments

Winkler Partners’ child friendly policies were recently featured in an article by Social Enterprise Insights that looked at how businesses in Taiwan can do more to support families. This is an English translation of the original Chinese-language article.

To work or to parent—does it have to be either/or? Family-friendly work environments support healthy child rearing

Author: Yu-Ching Su

When Patty Chen joined the law firm Winkler Partners, a certified B Corporation, as a secretary, she wasn’t yet married, and was focused on forging her career. Today, nearly 20 years later, she is the mother of two children, aged 7 and 4. But she has never had to step away from pursuing her career ideals.

During her work life, she has never fretted that others might look askance at her taking maternity or parental leave, nor feared for her job security after taking leave. On the contrary, her employer Winkler Partners makes special efforts to give its employees an environment conducive to child rearing, surpassing the requirements of Taiwan’s Labor Standards Act. It invites employees to bring their children to work, so they can keep their kids close to them without sacrificing their professional aspirations.

Taiwan law entitles women to 8 weeks of maternity leave and men, 5 days of paternity leave. Both parents may apply for unpaid parental leave during the period before their child reaches the age of three. From Winkler Partners’ perspective, the law sets only a bare minimum standard. More than a decade ago, to improve on this standard, the firm began collecting suggestions from employees, holding firm-wide discussions, and drafting and revising proposals. It ultimately decided to extend maternity leave to 12 weeks for female employees and paternity leave to 30 days for male employees.

“This process began with our employees themselves voicing their needs, our listening to their needs, and after mutual discussion and revision, putting new systems in place to satisfy each proposal to the greatest extent possible,” explains Firm Partner Peter Dernbach, who takes pleasure in helping each employee balance the varying demands of work and family encountered at different stages of life.

Outlooks like this are not found at every workplace in Taiwan, however.

Taiwan’s Act of Gender Equality in Employment requires employers to provide employees with benefits including maternity and paternity leave, flexibility in working hours, and family care leave. However, a 2020 survey by the Womany Media Group found that less than 30% of respondents felt supported by their workplace in this regard. Many parents of both sexes encounter negative pressures from the workplace when it comes to applying for leave, which can deprive them of the opportunity to enjoy this basic right.

The Ministry of Labor’s 2018 Survey on Employment Equality at the Workplace likewise shows that female employees have suffered unequal treatment in the workplace related to their pregnancy or giving birth. Most prevalently, this takes the form of obstacles to applying for leave. Because prevailing attitudes in society and the workplace are often less than friendly to the needs of employees to balance work and parenting, the matter of applying for leave is a common cause of emotional stress for employees.

Improving this state of affairs will depend on business and government becoming more attuned to the needs of the public and taking steps to create childcare-friendly workplace environments, so that everyone can enjoy the right to work-life balance.

We’ve got your back in child rearing! This Taiwan business firmly believes in offering benefits surpassing legal requirements

Businesses taking the right actions is key to creating a family-friendly workplace environment. For example, Winkler Partners, a law firm with some 60 employees, not only provides more maternity and paternity leave than is required by law, it also has voluntarily created a childcare space at its office. (Article 23 of Taiwan’s Act of Gender Equality in Employment requires employers having 100 employees or more to provide childcare facilities and measures.)

Winkler Partners has set up a modest-sized childcare area, and its employees are welcome to invite their parents or a nanny to come to the office and help take care of their kids. For employees’ children who are already in kindergarten or elementary school, Winkler Partners, in cooperation with the Department of Early Childhood and Family Education of National Taipei University of Education, has arranged for students of the department to come to its workplace and engage the kids in after-school play and learning activities.

Patty Chen shares that being able to bring her kids to the office has spared her a lot of inconvenience and slog: “Because the kids usually travel with me to and from work, we can keep a shared daily routine, and I’m not burdened with having to separately coordinate the kids’ schedules after leaving the office,” Patty says. “Also, having the nanny and kids at the office means I can look in on them whenever I want, which puts my mind at ease.”

Winkler Partners has been implementing its unique childcare system for 16 years now. Peter Dernbach observes, “Since we began letting employees bring their children to work, our employee turnover has decreased, and our colleagues feel closer to each other.

But does having kids present in the office environment cause distraction for the employees as a whole? The key lies in the design of the work areas and leisure and childcare areas. At Winkler Partners, the leisure and childcare spaces are in a corner of the office at a slight distance from the main work areas. The sounds of children laughing and playing may occasionally carry into the work areas, but not to a degree that interferes with employees’ ability to concentrate on their jobs.

What are other countries doing? Some possible directions for public policy and social innovation

From an international perspective, Northern European countries, which rank relatively high in birthrate worldwide, use policies including moderately shortened or flexible working hours and lengthened maternity, paternity, and parental care leave to create a balance between family life and work.

Standards adopted by the International Labor Organization call for countries to legislate a minimum of 14 weeks (approximately 3 months) of maternity leave for female employees. According to a study by the US-based Maternal and Child Health Journal, maternity leave makes a crucial contribution to new mothers’ physical health and ability to cope with stress.

In Denmark, which is recognized for having a high level of public well-being and happiness, women are entitled to 18 weeks (approximately 5 months) of paid pregnancy and maternity leave during the period before and after giving birth. Their spouse is entitled to 2 weeks of leave after the birth. There then follows an additional 32 weeks (approximately 8 months) of parental leave that the two spouses can freely share between them. This system promotes the sharing of responsibilities within the family, and lets both parents have ample time to spend on childcare. Denmark furthermore has the lowest average working hours in the world, with workers working an average of around just 7 hours a day. This further helps both parents to balance their time spent on work and child rearing.

Sweden, which is well reputed for gender equality and child-friendliness, provides each working parent with 480 days (around 16 months) of flexible maternity, paternity, and parental leave that don’t expire until 8 years from the child’s birth (or adoption) and can be broken up and taken in periods of months, weeks, days, or hours, according to the specific needs of each family. Sweden also offers another special childcare benefit: parents can claim a payment of up to 80 percent of their usual wage if they need to stay home from work when their child is unwell.

In 2020, the Finnish Government announced that it would extend paid parental leave for both parents from 2-4 months to 7 months. Finland is also well known for promoting flexible working hours and remote work mechanisms, which help working parents tailor their work times and places to best meet their needs and balance family life and work.

Countries around the world are actively introducing legislation and promoting cooperation between businesses and government to improve workplace environments. In Japan, some private businesses have launched programs to help mothers tend to both family and work. Mama Square, a Japanese company launched in 2014, operates as a customer service center that provides a staffed daycare center for its employees. This setup benefits the employees, whose work time is freed up by the on-site nursery workers. It also solves the company’s problems of high turnover of service staff and difficulty of recruitment.

“Declining birthrate is a shared issue facing government, families, businesses, and society. Each of these can address it in different ways. What businesses can do is, when employees face the life challenges that come with having children, we can provide a better work environment, so that our employees can work with greater peace of mind. In turn, they can perform better in their work, and provide better service. This is definitely a winning situation all around,” says Peter Dernbach with conviction.

This article was planned by Social Enterprise Insights and YongLin Foundation and independently produced by Social Enterprise Insights. The translation was performed by Winkler Partners Head of Translation, Paul Cox. Social Enterprise Insights has granted us permission to republish this article. The original Chinese-language article can be found here.

此專題由社企流與永齡基金會共同企劃、社企流獨立製作,由本所翻譯部主任柯保羅翻譯。本文獲社企流授權轉載,原文標題:工作、育兒只能二選一?促進友善職場環境,讓公司成為員工生育的後盾。想看原文請點

WP welcomes new associates

We recently welcomed new members to the Winkler Partners team.

Megan Chiu joins Winkler Partners as a Compliance Specialist, assisting clients establish Taiwan entities, handling company registration and compliance issues, and assisting foreign professionals apply for work authorization and residency. Megan previously worked at one of the Big Four accounting firms.

Bryan Tan previously worked at a well-known corporate law firm in Hong Kong, where he is a licensed solicitor. Bryan’s practice covers capital markets, mergers and acquisitions, private equity and venture capital investments, corporate restructurings, and other general corporate transactions. He is admitted in Hong Kong.

 

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