In-depth treatment of selected topics in Taiwan law for legal professionals

Electronic signatures in Taiwan

Signing a document is the most common way to indicate that a party accepts the terms and conditions of an agreement, acknowledges consent, or attests to the accuracy of information provided. The ongoing pandemic has accelerated a pre-existing trend towards exchange of electronic documents and signatures. This article examines the use and validity of electronic signatures in Taiwan in the context of cross-border transactions.

At the core of any cross-border transaction is one or more transaction agreements (the “Transaction Agreement”). A Transaction Agreement is typically a contract between or among private parties and usually may be governed by the law of the parties’ choosing.

Many transactions in which Winkler Partners participates involve a foreign purchaser of a local Taiwan company or business. In these situations, the Transaction Agreements may be governed by laws other than those of Taiwan law. Generally, Taiwan courts and arbitral tribunals will recognize and apply foreign law to contracts involving Taiwan counterparties, except in certain limited circumstances. Thus, if the governing law selected by the parties allows for the delivery of electronic documents and signatures to create a validly binding contract, a Taiwan court or arbitral body would most likely find such an agreement so executed to have legal and binding effect in Taiwan.

In some instances, the Taiwan party has market power sufficient to require that the Transaction Documents be governed by Taiwan law. In such cases, it is obviously necessary to understand Taiwan law on the subject of electronic documents and signatures if the parties expect to close the transaction virtually. We would also strongly encourage even those participating in transactions governed by foreign law but whose electronic Transaction Agreements may need to be enforced in Taiwan, to familiarize themselves with Taiwan laws related to electronic documents and signatures. It is our experience that Taiwan courts and arbitral bodies will understandably often interpret foreign law through the lens of Taiwan law.

With respect to private Transaction Agreements, under Taiwan law, a written “wet” signature or chop is not necessarily required to form a valid contract. Pursuant to Article 153 of the Civil Code, a contract would be validly constituted if the relevant parties have expressed their intention to form a contract and agreed to all the essential terms. There is no requirement that contracts bear “wet” signatures or chop, or even be in written form. By law, some contracts must be in written form; however, the use of written contracts and the form of their execution is largely a matter of evidence, i.e., how does a party prove that the other party(ies) to the contract agreed to the terms thereof.

Against the generally permissible backdrop created by the Civil Code, Taiwan adopted its Electronic Signatures Act (the “ESA”) in 2001. The ESA specifically addresses the use of electronic documents and electronic and digital signatures. The ESA basically establishes a default rule that electronic documents and electronic and digital signatures are legally valid, provided that (i) the relevant parties have agreed to the use of such electronic documents and signatures and (ii) no laws, regulations, or other requirements of government or regulatory agencies require otherwise.

This leaves most transactions in the situation where the Transaction Documents would be legally and validly executed and enforceable under Taiwan law if delivered and executed by electronic means provided that the parties agreed to such electronic delivery and execution. Referencing our earlier point regarding evidencing an agreement, we recommend using proven technologies such as Docusign or others that meet certain requirements and are authorized “certification service providers” in respect of digital signatures. Otherwise, issues may arise related to establishing the validity of signatures and, therefore, the agreement.

The general rule is that electronic documents and electronic and digital signatures are legally valid in Taiwan. However, certain legal and practical concerns preclude the broad adoption of such document delivery and execution methods. These concerns could all be generally categorized as problems of inertia.

In the private sector, Taiwan banks and large corporations, in particular, tend to be very conservative and may insist on wet chops and signatures. Although you may be correct as a legal matter that electronically executed agreements are valid and enforceable in Taiwan, sometimes it is not worth the time, energy, or cost to argue the point.

On the government side, many regulations and regulatory agencies continue to require wet ink chops or signatures on documents submitted, in particular notarized documents and powers of attorney.  So, while private Transaction Agreements may be validly delivered and executed by electronic means, many other transaction documents may still require wet ink chops or signatures. There are a number of such documents which our team encounters on a regular basis, the most common being corporate registration documents which must be filed with the Ministry of Economic Affairs (the “MOEA”). However, it is encouraging and worth noting that the MOEA has recently begun accepting shareholder consent letters, appointment letters, and certain other documents which have been executed solely by means of electronic signatures.

In sum, we strongly recommend that if you are expecting to engage in a transaction involving Taiwan counterparties or Taiwan governmental agencies and wish to close the transaction via electronic means, you should carefully examine all the necessary transaction documents and determine which ones, if any, can realistically be delivered and executed in electronic form.

If you have any questions or require additional information on electronically executing your transaction in Taiwan, please contact Greg Buxton at

Taiwan enhances parental leave policies

According to the Central Intelligence Agency (CIA)’s latest report on total fertility rates around the world, Taiwan was ranked last out of 227 countries. To reverse Taiwan’s declining fertility rate, the government has taken some steps to address this issue, most recently by amending rules related to parental leave, wage allowances and additional time off for antenatal appointments. These changes came into effect on 1 July.

Parental Leave

Previously, parents could only apply for 6 months’ continuous parental leave at least one time before their child reaches three years old. The total parental leave given must not exceed 2 years. Under the new rules, parents will no longer be bound to this 6-month period, instead they can choose anywhere between 1 and 6 months off. However, each period of parental leave should not be less than 30 days and each parent can only take up to 2 periods of this kind of short-term parental leave.

Parents applying for parental leave must file an application in writing (or other appropriate internal channel) with their employer at least 10 days before they plan to take leave. In addition to the increased flexibility around parental leave, the government has also increased the childcare allowance from 60% to 80% of the parents’ insured wages under the Employment Insurance Act. Parents must be enrolled in the insurance scheme to qualify.

Paid time off for antenatal appointments

Previously, employees were able to book up to 10 antenatal appointments, with medical fees covered by National Health Insurance (NHI). This has now been increased to 14 appointments during pregnancy.

Because of this additional allowance, the government also plans to amend the “Act of Gender Equality in Employment” to increase the amount of paid leave given to attend antenatal appointments. If the draft amendment is passed, paid time off will increase from 5 days currently to 7 days.

Even though the amendment is yet to become law, any employers who grant paid leave for the 6th and 7th days will be reimbursed by the government.

It remains to be seen whether these measures will encourage more people to have children and whether the measures go far enough to reversing Taiwan’s declining birth rate.

For more information on labor laws in Taiwan, please contact Christine Chen at

Franchising in Taiwan: governing law

In our previous article we took a look at obtaining preliminary injunctions in Taiwan. Now, we turn to governing law. Governing law and dispute resolution clauses are often relegated to the end of commercial agreements together with other “boilerplate” provisions. Franchise agreements are typically no different. However, these two provisions can have a significant impact on a franchisor’s ability to enforce its contractual rights in Taiwan.

International brand owners almost invariably insist on using a single governing law across all their franchise agreements worldwide. This is understandable as it promotes consistency in administration and enforcement of the franchisor’s contractual rights. However, by electing to litigate or arbitrate a dispute outside of Taiwan, a franchisor may inadvertently be erecting substantial impediments to enforcing its rights in Taiwan.

Taiwan is not a signatory to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents nor the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Although a successful plaintiff or claimant in a foreign proceeding can typically get its foreign judgment or award enforced in Taiwan, the process can take a significant amount of time. The foreign judgment or award would also be subject to challenge in Taiwan courts.

Challenges to foreign judgments would be brought under Article 402 of Taiwan’s Code of Civil Procedure. Challenges to foreign arbitral awards would be brought under Articles 49 and 50 of Taiwan’s Arbitration Act. Without going into too much detail, the most common successful challenges we encounter are challenges based on failure to provide proper notice to the defendant or respondent. Most Taiwan courts have held that if notice were delivered to the parties pursuant to the laws and/or arbitration rules by which the foreign proceeding was bound, the requirements of proper notice would be fulfilled. However, we note that in a minority of cases, some Taiwan courts required actual receipt of notice, and found foreign judgments and arbitral awards unenforceable in Taiwan on the grounds that the defendant or respondent did not receive such notice. If franchisors insist on having a single, foreign governing law and dispute resolution venue, we strongly recommend direct personal service of all related notices and documents. This single precaution greatly reduces the risk that Taiwan courts may reject requests to enforce the related foreign judgment or arbitral award.

If a franchisor is willing to consider amending its form franchise agreement, we recommend including a non-exclusive jurisdiction clause at least with respect to the franchisor, allowing the franchisor to initiate an action or seat an arbitration in its home jurisdiction or in Taiwan at the franchisor’s election. If the governing law of the franchise agreement were foreign law, such a provision would lead to Taiwan courts or arbitral tribunals applying foreign law, which they would do but which typically adds significant time and expense to the proceedings.  Therefore, we also suggest considering applying Taiwan law should the dispute resolution venue be located in Taiwan.

Of course, many factors affect any decision as to governing law and dispute resolution venue.  Franchisors rightly examine issues related to ease and cost of pursuing any action and the location of the counterparty’s assets. We suggest that if the franchisee has a substantial portion of its assets located in Taiwan, the franchisor should consider maintaining at least the option to pursue proceedings in Taiwan under Taiwan law.

In our next article we will look at fair trade and disclosure. If you have any questions or require additional information on franchising in Taiwan, please contact Greg Buxton at

New developments in Taiwan’s electronic payment market – what you need to know

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

Taiwan’s Legal Regime for Electronic Payments, Past and Present

An extensive amendment to the Act Governing Electronic Payment Institutions (“Electronic Payment Act”) was passed by Taiwan’s Legislature on 25 December 2020 and will take force on 1 July 2021. The competent authority for the Act, the Financial Supervisory Commission (FSC), has indicated that the revision and adoption of harmonizing secondary legislation will be completed by the end of June and will take force at the same time as the amended Act.

Glancing back at the history of electronic payments in Taiwan, some businesses began foraying into the electronic payment and third-party payment realms as early as 2001. In the ensuing years, though, the lack of a law specifically addressing electronic payments caused uncertainty and instability in regulatory supervision and legal compliance. Finally, the Electronic Payment Act was passed into law in 2015.

In Taiwan today there are five institutions engaging exclusively in electronic payment business, and many banks and electronic stored value card issuers that operate electronic payment services among their multiple lines of business. Electronic payment is a briskly developing sector. The names of the five dedicated electronic payment companies and their e-payment services are PChome InterPay Inc. (PChome InterPay), GAMA PAY Co., Ltd. (GAMA PAY), Jkopay Co. Ltd. (JKOPAY), O’Pay Electronic Payment Co., Ltd. (O’Pay), and ezPay Co., Ltd. (ezPay).

Although more and more businesses have launched e-payment services under the Electronic Payment Act prior to its amendment, the Act as originally passed lacks adequate flexibility and comprehensiveness to accommodate swift developments in the sector. One problem has been that Taiwan has two separate laws regulating electronic payments and electronic stored value cards respectively: the Electronic Payment Act and the Act Governing Issuance of Electronic Stored Value Cards (“Electronic Stored Value Card Act”). Some businesses, however, operate both types of business, and inconsistencies between the two laws have caused inconvenience in legal compliance. These issues prompted the Legislature’s overhaul of the Electronic Payment Act in late 2020. The amended Act allows greater flexibility in the electronic payment sector, accommodates the trend in business toward click-and-mortar (virtual-physical) integration, harmonizes the regulation of electronic payments and electronic stored value cards, and eliminates inconsistencies in supervision. What kind of changes will this extensive amendment likely cause in the e-payment market? And which are particularly worthy of note?

Changes You Should Be Aware Of

1. The Amended Act Integrates the Electronic Payment Act and the Electronic Stored Value Card Act

The most conspicuous change made by the current amendment is the integration of the Electronic Payment Act and the Electronic Stored Value Card Act. The pre-amendment law imposes a dualistic framework distinguishing between payments made using physical electronic stored-value instruments (for example, the EasyCard stored value card), and electronic payments made without a physical stored value instrument. Given the broad trend in business today toward online-offline integration and omnichannel services, the line between the physical and the digital is becoming increasingly blurred, and it now seems superfluous to treat these types of transactions differently.

The amended Electronic Payment Act expressly incorporates the originally separate category of “electronic stored value card issuers.” The current Electronic Stored Value Card Act is to be repealed after the amended Electronic Payment Act takes force. The Legislature, however, has not yet passed a bill for the repeal of the Electronic Stored Value Card Act. If the latter Act has not yet been repealed by the time the amended Electronic Payment Act takes effect, there may ensue a transitional period during which existing electronic stored value card issuers will be subject to simultaneous application of both Acts.

Article 58 of the amended Electronic Payment Act provides that electronic stored value card issuers that were approved by the competent authority before the amendment shall be deemed to have already obtained approval as electronic payment institutions (EPI). However, if an institution does not meet the requirements of the amended Act, it must adjust and come into compliance within 6 months after the amended act takes effect and submit relevant documents to the FSC for the record.

Taiwan currently has four electronic stored value card issuers, and all four concurrently operate electronic payment business under the pre-amendment Electronic Payment Act. The names of these companies and their e-payment services are EasyCard Corporation (EasyWallet), iPASS Corporation (LINE Pay Money), icash Co., Ltd. (icash Pay), and Yuan Hsin Digital Payment Co., Ltd. (Happy GO Pay). These four electronic stored value card issuers are likewise required to comply with regulations governing electronic payments and will need to adjust and bring their operations into compliance with the amended Electronic Payment Act.

2. The Amended Electronic Payment Act Relaxes the Scope of Business of EPIs

(1)   Deregulation of Fund Flows Across Different EPIs

In the past, users of electronic payment services could transfer funds only across the platform of the same EPI. Article 6 of the amended Act allows inter-institutional fund flow services. Now, consumers will be able to transfer funds between different EPIs, i.e., to make “account transfers” between different electronic payment platforms. However, under the constraints of the financial regulatory system, EPIs must route such inter-institutional fund flows through a clearing institution that satisfies the requirements of the Banking Act.

(2) Deregulation of Small-Sum Remittance Transactions

Article 4 of the amended Act allows EPIs to handle small-sum remittance transactions, and to engage in foreign currency trades related to electronic payments.

Along with deregulating small-sum remittance transactions, the amended Act also deregulates the types of currency that users can use to make payments. Under amended Article 23, fund transfers between EPIs and “contracted institutions” (that is, stores offering goods and services) must be made in New Taiwan (TWD) dollars, but consumers are allowed to make payments in Taiwan using TWD or foreign currency. Thus, consumers will now be able to use electronic payment platforms to obtain small sums of foreign currency and use foreign currencies to make electronic payments in and from Taiwan.

(3) Stored Value Cards and Electronic Wallets

In the past, stored value cards invariably took the form of physical instruments. In another step in the direction of virtual-physical integration, the amended Act allows EPIs to operate stored value business with or without the use of physical cards.

(4) Facilitation of Points and Coupons Systems

Now, in addition to providing stores with payment services, EPIs will also be able to help stores build loyalty point and coupon systems. This will give EPIs more room to diversify their business models and explore potential-rich niches in the e-payment sector. We can foresee consumers soon enjoying the benefits of loyalty point and coupon systems offered by stores through e-payment systems.

(5) Expanded Scope of Financial Goods and Services for Which EPIs May Handle Payments

Under Article 4 of the pre-amendment Act, an EPI’s operations of collecting and making payments for actual transactions as an agent may not involve any financial products or services except ones for which the FSC expressly allows agents to handle such operations. The FSC has previously issued orders announcing the types of financial products and services for which EPIs may act as collection and payment agents. However, this “positive list” approach has proven insufficiently flexible in keeping up with rapid advances in financial technology (“fintech”).

The current amendment moves the relevant provisions to Article 6 and deletes the requirement of express approval by the FSC. It does away with the “positive list” and allows EPIs to handle payments for any type of financial product or service for which payment through an agent is not expressly prohibited by law or regulation. This development will greatly increase EPIs’ flexibility and adaptability in the fintech industry and will contribute positively to the development of fintech in Taiwan. Under the new “negative list” regulatory framework, however, EPIs will need to be especially attentive to whether any financial product or service for which they intend to act as payment agent falls in a category prohibited by law or regulation.

3. The Amended Act Enhances Regulatory Supervision

While allowing greater flexibility in the e-payment business, the amended Act also beefs up supervision under the existing regulatory framework. For example, it adopts a differential approach to the minimum paid-in capital requirement, basing it on the scope of business operated by an EPI. The requirement is now set as follows: TWD $100 million for an EPI that operates only the business of collecting and making payments for actual transactions as an agent; TWD $300 million for an EPI that additionally engages in the business of receiving stored funds; TWD $500 million for an EPI that, in addition to both the above, also engages in domestic and foreign small remittance business.

The amended Act also introduces provisions aimed at preventing money laundering and crime. For example, Article 25 requires EPIs to implement identity verification mechanisms for users and contracted institutions and for their beneficial owners using a risk-based approach. Article 36 authorizes the FSC to prescribe rules for the handling of irregular or suspicious transactions.

4. The Amended Act Allows Non-EPIs to Operate Small Remittance Services for Migrant Workers

The amendment has received considerable attention for its opening up of services for handling foreign remittances in small amounts for migrant workers. Operators of these services will not be limited to EPIs only. Under Article 4, paragraph 3 of the amended Act, non-EPIs also may operate foreign small remittance services after obtaining approval from the FSC. The amended Act authorizes the FSC, in consultation with the Central Bank and the Ministry of Labor, to prescribe regulations governing various aspects of these services.

The deregulation of this small remittance business comes in response to an experiment under the Financial Technology Development and Innovative Experimentation Act (Taiwan’s regulatory sandbox law). In the future, any applicant, including a non-EPI, that meets the requirements of the applicable administrative regulations will be allowed to operate these services, which have long been in high demand. The availability of these services will advance the cause of inclusive financing and help protect the interests of migrant workers. The related administrative regulations have not yet been issued, however. Future developments in the supervision and regulation of remittances by migrant workers deserve our ongoing attention.

Some Things to Keep an Eye on After the Implementation of the Amended Act

The amendment to the Electronic Payment Act integrates the electronic stored value card and electronic payment regimes and gives EPIs clearer and more uniform standards for legal compliance. It also expands the scope and flexibility of electronic payment business, giving EPIs greater room to develop and innovate. With these developments, and corresponding adjustments to related supervisory regulations, we can anticipate that consumers will soon enjoy a wider selection of electronic payment platforms and more convenient and fast financial services facilitated by electronic payment mechanisms.

Numerous issues merit continued observation in connection with the amended Act. For example, Article 16, paragraph 1 authorizes the FSC to prescribe the amount of small remittances that EPIs will be allowed to handle. The amount that the FSC ultimately decides to allow will have a crucial bearing on the convenience and availability of this service for consumers and will impact the development of related business.

Also, because of concerns relating to financial institution stability and prevention of money laundering, the remittance business in principle has always been reserved for operation by banks under a high degree of regulatory oversight. The amended Act’s deregulation of the small remittance business by EPIs may be based on a recognition that EPIs, by the nature of their business, already have technology and experience handling fund flows, and so are equipped to handle remittances at reasonable scale. However, the amended Act also allows non-EPIs to operate small remittance businesses, with oversight based on administrative regulations prescribed by the competent authority rather than by the Electronic Payment Act.

This raises possible concerns about the stringency and robustness of these regulations. Given the vast numbers of migrant workers currently residing in Taiwan (approximately 700,000 in early 2021), though the typical amounts of individual remittances by these workers may be modest, the overall demand for remittance services and the total amount of resulting fund flows will be enormous. At a time when Taiwan has actively been following the worldwide trend to strengthen anti-money laundering and enhance related legislation, it will be worth watching whether the use of administrative regulations (rather than primary legislation) can suffice to adequately regulate the massive fund flows from migrant worker remittances. Also worth watching will be whether the eligibility requirements that the FSC imposes on businesses wishing to handle these remittance services can adequately protect the interests of migrant workers and ensure the reliability of remittance operations and the avoidance of money laundering.

For more information on electronic payments in Taiwan, please contact Christine Chen at

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

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

[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.”

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

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

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 “”, 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

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

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

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

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

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


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

*Sources: (1) Judicial Yuan (2) IP Court (3)

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

A new positive patent examination program for startups

Lack of funds and tangible assets is a common problem for startups, and one which often proves fatal. To address this issue, Taiwan began promoting intangible asset financing starting on 1 January 2021. As part of this program, the Taiwan Intellectual Property Office (TIPO) has announced a new patent examination program, the Positive Examination for Startup Application Program (“Startup Program”), which may prove to be a significant development for Taiwan’s startup ecosystem.

Key Features

The proposed Startup Program has two main features which distinguish it from existing patent examination programs.

First, applicants will now have a right to prioritized examination. Under the current patent examination program, it usually takes 12 to 18 months to complete the examination process for an invention patent application. Under the new system, TIPO expects that applications filed by startups will be substantively examined within one month. Applicants can therefore expect to receive a result from the examiner a month after filing a request under the Startup Program.

Second, the new program includes a “Positive Interview” section, which comes into play if the patent application is rejected. According to TIPO, the Positive Interview provides an opportunity for applicants to have a face-to-face interview with patent examiners, which will allow applicants and their patent attorneys to gain a clearer understanding of any flaws or shortcomings in their applications. More importantly, patent examiners will provide concrete suggestions for the application during the interview. This minimizes the possibility of the application being rejected, thereby speeding up the process and indirectly lowering the cost for applicants. It should be noted that the Positive Interview is only intended for the purpose of assisting startups in the patent application process. While the examiner’s advice will be useful as guidance for the applicants, there is no requirement that the applicant follow the advice provided, and the applicant may instead amend the application as they wish.

Using the two key features mentioned above, the Startups Program will shorten the time required for a patent application to only 4 months. By contrast, applicants filing an application under the current system usually spend 18 months waiting for the patent to be granted, and if there is any rejection during the examination process, it may take up to three years to complete the application process. The expedited process under the Startups Program can strengthen startups’ financial status by allowing them to quickly accumulate IP assets which can be used to obtain loans or investment.

Who can apply and how?

While the Startup Program is aimed at providing support for startups, there is no specific  nationality requirement, and the program is not limited to local companies. “Startup” is defined here as any company that has been established for less than 5 years, and for a foreign company, its set-up date will be based on the national law of the company’s jurisdiction.

After filing patent applications and requests for substantive examination, applicants will generally receive a notification from TIPO within 30 days. Those who intend to apply through the Startup Program should submit an electronic application specifically for the program, after the notification but before receiving the first examination result.


There will be a trial run for this Startup Program in January 2021, under which TIPO will review 30 applications according to the new system. The program is widely anticipated, and is expected to make Taiwan a competitive choice for startups seeking to file their first patent applications.

For more information regarding patents in Taiwan please contact Peter Dernbach at and Betty Chen at