Updates

National Development Council announces plans to simplify incorporation

The National Development Council and other agencies recently announced three planned measures to simplify procedures for foreign investors wishing to establish business entities in Taiwan.

1. A university may allow a startup to register its business address at a university incubator

A business in Taiwan must register the actual premises from which the business is conducted as its address. Universities however have been reluctant to allow startups to register their business addresses at university incubators because universities are in general not permitted to allow for-profit businesses to use university property.

As a solution, the NDC, the Ministry of Education and the tax authorities have reached a consensus that allowing universities to permit startups  to register their businesses addresses at university-operated incubators serves policies to encourage academic-business cooperation. Consequently, a university incubator will be permitted to allow a student startup to register its business address at the incubator instead of having to make other arrangements such as leasing off-campus premises. It appears that student startups will include startups founded by non-degree students who take courses in entrepreneurship.

2. Foreign investors may appoint agents to open bank accounts and file for tax registration

Currently, a foreign investor must come to Taiwan to open corporate bank accounts and register for taxes in person.  In many cases,the foreign investor must make two trips to Taiwan during the process. The NDC now plans to allow foreign investors to appoint an agent (typically a lawyer or an accountant) to open corporate bank accounts and file for tax registration on behalf of the foreign investor.

3. Foreign investors may appoint an agent to use the online company registration system without use of a digital certificate

The Ministry of Economic Affairs has created a one-stop website that investors can use for routine company filings including name reservation, incorporation, and business registration. To use the website, users must currently create a cumbersome digital certificate using a Chinese interface. To simplify use of the website, the Ministry of Economic Affairs has agreed that foreign investors will be permitted to authorize an agent to make routine filings on their behalf without the foreign investor’s having to obtain a digital certificate.

According to the NDC’s press release, these measures will be adopted in one month.

While all of these measure are steps in the right direction, allowing agents to open bank accounts and file for tax registration  has the most potential to simplify the process of setting up a business in Taiwan for foreign investors.

Peter Dernbach quoted in Asia IP on 3D printing

Partner Peter Dernbach was recently interviewed about 3D printing and its implications for intellectual rights holders, as well as the current state of trademark legislation in Taiwan, by Asia IP. In the May and June edition of Asia IP, Peter says that many of the industry’s key players hail from Taiwan and that Taiwan’s Premier has recently said that a plan will be developed to provide further support at the governmental level. From an intellectual property point of view, Peter notes that, “It will be important for industry groups to educate customers about potential risks in using 3D printers to produce items that look like the original goods, but may not share all of the same properties“.

In a further section titled Trademark Survey 2015,  Peter notes that while Taiwan’s Trademark Act was last amended in 2012, some new administrative measures have recently been proposed. “The TIPO (Taiwan Intellectual Property Office) plans to make some administrative changes to further protect trademark owners’ rights. In March 2014, they announced that in order to protect rights, they would shorten the administrative remedial process by setting up a dedicated unit within the TIPO to handle objections, hear disputes and speed up the process from objection to ruling”.

Peter adds that the biggest challenge for trademark owners is the sale on counterfeits online. Meeting that challenge will require greater cooperation between Internet service providers, the IP police and parties which handle the financial transactions for those sites engaging in the sale and distribution of counterfeits. You can read the full article on 3D printing here.

1st quarter trends in IP released

Taiwan’s Intellectual Property Office (TIPO) has released IP registration figures and trends for the first quarter of 2015.

A total of 17,221 new patent applications were made, an increase over the first quarter of 2014 of 11.88%. There were a total of 3,967 invention patent applications originating in Taiwan and 6,558 originating abroad, a decrease of 12% year on year. The top foreign patent applicants were Intel (173 applications), Toshiba (158) and Tokyo Electron Taiwan (120). The TIPO also notes that while overall applications by Hon Hai Precision Industry Co. (the single largest patent applicant in the country) have decreased, Hon Hai’s applications for Internet of Things and cloud technologies have increased.

In addition, the TIPO received 17,379 trademark applications, and while applications originating in Taiwan decreased by 3.23%, foreign applications increased by 6.62% over the same period last year. The largest number of foreign applications came from the United States (888), China (847) and Japan (801). Applications from China increased 50.71% over the same period last year, a trend the TIPO notes has continued for the last four quarters.

The full report is available on the TIPO’s website in Chinese here.

Taiwan to begin issuing entrepreneur visas from July

According to reports in the Chinese language media, National Development Council (NDC) Minister Woody Duh has announced that Taiwan will begin issuing entrepreneurial visas to foreign nationals from July, in a bid to attract talent, strengthen Taiwan’s startup ecosystem and create jobs.

2,000 visas a year will be available to foreign nationals (including nationals of Hong Kong and Macau), which come with one year of residence. Extensions of a further two years are available to those entrepreneurs who can provide evidence of operating a bona fide business, such as registering a business or generating revenue. Entrepreneurs who lawfully reside in Taiwan for five years are then eligible for permanent residency.

The report notes that other countries such as Chile, South Korea, Canada, Singapore and the UK have issued similar plans. The NDC has been charged with developing Taiwan’s startup ecosystem under the Headstart Taiwan project, with the aim to assist entrepreneurs through deregulation, attracting investment and developing startup clusters, most notably Taiwan Startup Stadium. For more on the Headstart Taiwan project please visit the NDC’s website.

Taiwan and the right to be forgotten

A case of first impression involving the right to be forgotten recently came before the Taipei District Court. Despite an inconclusive District Court decision, Taiwan’s history of adopting European data protection standards and shifting public opinion in Taiwan suggest that the right to be forgotten could be created in the future.

Shi v. Google International LLC (Taiwan)

The facts of Shi v. Google International LLC (Taiwan) were similar to Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, Mario Costeja González, the Spanish case decided by the Court of Justice of the European Union in 2014. In Costeja, the Court of Justice held that Google Inc. was a data controller and that a search operator had a duty to remove links that are “inadequate, irrelevant or no longer irrelevant, or excessive in relation to the purposes of the processing at issue carried out by the operator of the search engine, not kept up to date, or that they are kept for longer than is necessary unless they are required to be kept for historical, statistical, or scientific purposes…”

Mr. Shi was an owner of a Taiwanese baseball team that was accused of throwing games a number of years ago. Mr. Shi was indicted on fraud charges but ultimately found not guilty. Nonetheless, information about his alleged involvement in throwing baseball games still appears in Google search results.

In 2014 Mr. Shi brought legal proceedings against Google International LLC, Taiwan Branch (“Google Taiwan“) asking that Google Taiwan be ordered to remove its links leading to information about Mr. Shi’s alleged involvement in the scandal. In January of this year, the Taipei District Court issued a judgment against Mr. Shi. 103 Su Zi No. 2976.

In its opinion, the District Court did not reach the issue of whether a right to be forgotten should be recognized in Taiwan. The District Court was unwilling to infer from the fact that Google’s search engine may be used in Taiwan that its searches and organization of information take place in Taiwan. Nor was it willing to infer that Google Taiwan had control of the Google search engine. It found that Google Search is operated by Google Inc. and that Google Taiwan was a branch of Google International LLC, another entity in the Google group. As a result, Mr. Shi had no standing to bring his claim against Google Taiwan. This ruling contrasts sharply with Costeja where it was held  that Google Inc. was subject to the European data protection law because despite not having a formal legal presence in Spain, its activities there in combination with its Spanish affiliate amounted to an establishment in Spain.

While Mr. Shi is said to be appealing, the case highlights once again the great importance the Taiwanese courts place on the distinctions between different legal entities even in the same group of companies and the reluctance of the lower courts to squarely address new legal theories such as the right to be forgotten.

Taiwan Looks to Europe

The predecessor of Taiwan’s current Personal Information Protection Act (the “PIPA“) was the 1995 Computer Processed Personal Data Protection Act. This statute was based largely on the 1980 OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data and the Council of Europe’s 1981 Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data.

Even before the PIPA took effect in 2012, a delegation from the Ministry of Justice traveled to Europe to study the draft General Data Protection Regulation (GDPR). At the time, officials from the Ministry of Justice also stated that the Ministry was following the development of the right to be forgotten in Europe with a view toward including it in the next set of amendments to the Personal Information Protection Act. While these amendments have not yet appeared, the Ministry of Justice has also formally requested the Ministry of Foreign Affairs to monitor the progress of data protection legislation in Europe.

Debate on Internet Regulation in Taiwan

Finally, heightened public concerns over internet abuse and the growing perception in some quarters that Taiwan’s freewheeling internet culture needs to be better regulated have lead to renewed calls for a right to be forgotten in the first half of this year. To be sure, suggestions that greater control be exercised over the kinds of speech and information available on the Internet in Taiwan are vigorously opposed by many influential voices. Still, there is noticeably little opposition to the concept of a right to be forgotten to date.

In sum, Taiwan’s courts have thus far declined to recognize a right to be forgotten by sidestepping the issue. Nonetheless, Taiwan’s tendency to follow European developments in data protection and growing concerns about the social cost of an unregulated internet make it foreseeable a version of the right to be forgotten will be proposed by the academic experts who advise the Ministry of Justice on data protection. It is equally foreseeable that any such proposal will engender a public debate similar to the one in Hong Kong on whether the right to be forgotten is in fact a device to protect the wealthy and powerful from what they deem to be excessive public scrutiny.

Issuing gaming points in Taiwan

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

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

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

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

Registering your .taipei domain and protecting your brand online

In August, Taipei City Government reached an agreement with ICANN to release the .taipei domain and make it available to businesses and individuals. Spearheaded by Taipei’s Department of Information Technology (DOIT), the .taipei project follows a trend set by other world cities such as New York, London and Berlin, which, in recent years, have launched their own city-level domains. According to the organizers, the new domains are a good way to market goods and services to the local community; attach a geographic location to brand identity; highlight a business’ location in relation to competitors; and provide a boost to search engine optimization (SEO).

From December 1, holders of global trademarks registered with the Trademark Clearinghouse (TMCH) will be given priority to register their new .taipei domains, following that in January 2015 Taipei-based companies and organizations will be able to register their .taipei addresses. General registrations won’t be permitted until March 31st.

Registrations will be processed in four waves:

Sunrise Period: December 1-31: Owners of trademarks registered with TMCH
Taipei Enterprise Sunrise Period
: January 21-February 19: Entities registered in Taipei City or New Taipei City only
Landrush Period
: February 24-March 26: First come, first served
Open Registration: March 31 onwards

*For detailed period policies please click the respective link

Domains registered in the Sunrise Period will cost a total of NT$4800 (approximately US$155) for three years. Taipei Enterprise fees will be NT$1920 for three years, while registrations made in the Open Registration Period will cost NT$800 for one year, according to information provided by Net Chinese (in Chinese), the domain registrar handling the .taipei project. Trademark holders wishing to register during the Sunrise Period can only register domains that exactly match the trademark listed with TMCH. During the Taipei Enterprise period, both full and partial matches are permitted.

The priority given to trademark holders allows for the protection of these marks online, and prevents domain squatting, a practice that can seriously damage a brand’s online identity and reputation, and can cause confusion amongst consumers. WP’s Daniel Chen, who has worked on many domain dispute cases for our international clients says, “We advise our clients, and indeed all trademark holders, to register their respective domains early to avoid the often lengthy and costly process of obtaining a suspension and/or transfer of domains registered by squatters”.

Additionally, Partner Peter Dernbach is active in the ICANN community as a member of the IP Constituency, currently serving as a member of the PDP Working Group on Translation/Transliteration of Contact Information. Peter also serves as a Panelist for WIPO’s Arbitration and Mediation Center, and has helped resolve numerous domain name disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP).

Businesses interested in registering a .taipei address should visit the .taipei project website for more information, or contact Net Chinese.

3rd quarter trends in IP registrations released

Taiwan’s Intellectual Property Office has released IP registration figures and trends for the third quarter of 2014.

Total patent applications have dropped 4.28%, but at a slower rate than the previous quarter. Even though pending invention applications from both international and domestic panel, semiconductor and computer manufacturers is still relatively high, the TIPO reports that the total number of applications has fallen from the previous quarter to under 110,000 cases. Trademark applications are stable however, having grown 1.40% this quarter.

A total of 19,218 new applications were made in the third quarter, of which 11,150 came from Taiwan. Of those 11,150 applications, 4,617 were invention patents. The TIPO speculates that a drop in applications made by industry leader Hon Hai Precision Industry Co. (the single largest patent applicant in the country) is due to changes in their application procedure. Hon Hai’s applications are down 70% year on year.

Invention patents filed from abroad include Japan (3,115 applications), the United States (1,619 applications), South Korea (508 applications), China (374 applications) and Germany (300 applications). Design application figures are largely the same year on year, with Japan, the United States, Switzerland, Sweden and Germany making up the majority of the 884 applications made.

19,574 trademark applications were made, of which 5,236 were made by foreign parties. The most trademark applications came from the United States, Japan and China.

The TIPO also notes that applications from both foreign and domestic technology companies are comparatively strong. Firms that have filed applications this quarter include familiar brands such as LG, Microsoft, Acer, Fuji, AU Optronics and Hewlett Packard.

The full report is available on the TIPO’s website in Chinese here.

Points test for foreign graduates of Taiwanese universities makes work permits easier

In early July, Taiwan’s Ministry of Labor amended its regulations governing work permits for foreign professionals to allow foreign graduates of Taiwanese universities to obtain work permits more easily. Previously, only an employer who was willing to pay the foreign graduate an average monthly salary of NT$37,619 could sponsor a foreign graduate for a work permit.

Under the new rules, the rigid minimum salary requirement has been replaced with a more flexible points system that awards points based on factors including compensation, language ability, and experience living abroad. If the foreign graduate scores 70 points, the employer can sponsor the student for a work permit for professional employment (‘specialized and technical work).

There is a quota of 2,000 work permits in the first year.

Although the new point system is not expected to increase the number of foreign professionals in Taiwan immediately, it is a very significant first step away from the minimum salary requirements that have discouraged Taiwanese employers from hiring foreign professionals.

The application period is 3 July 2014 to 2 July 2015. Application information in Chinese for employers is here.

As a public service, Winkler Partners has translated the eight-factor point system into English. It can be downloaded here.

Translations of Taiwan securities laws and regulations updated

Taiwan’s official portal for securities-related laws and regulations was recently updated with thirteen new or revised  English translations by Winkler Partners.

The Winkler Partners Translation Department has produced the English translations of securities laws and regulations for the portal since 2002. The portal is updated twice a month with new and revised content.

Currently, the site contains 1,489 securities laws and regulations, 665 of which have been translated into English. The site also contains 6,824 administrative letters of interpretation and 2,199 court judgments.

  1. GreTai Securities Market Rules Governing the Use of the Gofunding Zone
  2. Regulations Governing the Go Incubation Board for Startup and Acceleration Firms
  3. Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals
  4. Procedures and Fees for Inquiry, Examination, and Issuance of Copies of Computer-
  5. Processed Personal Data in the Securities and Futures Industries
  6. Standards Governing the Security of Personal Data Files in the Securities and Futures Industries
  7. Taiwan Stock Exchange Corporation Rules Governing Information Filing by
  8. Companies with TWSE Listed Securities and Offshore Fund Institutions with TWSE Listed Offshore Exchange-Traded Funds
  9. GreTai Securities Market Procedures for Press Conferences Concerning Material
  10. Information of Companies with GTSM Listed Securities
  11. GreTai Securities Market Rules Governing Information Reporting by Companies with GTSM Listed Securities
  12. Establishment of an Information and Communications Security Inspection System for Futures Commission Merchants
  13. Directions for Futures Trading by Overseas Chinese and Foreign Nationals
 

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