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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.

Technical examination officers at Taiwan’s IP Court

Technical Examination Officers ( “TEO“) are officers of the court who assist judges at the Taiwan Intellectual Property Court (“IP Court“) in litigation involving complex technology.

There are currently 13 TEOs at the IP Court with expertise in fields such as electrical engineering, chemistry, and biotechnology. Most are patent examiners on secondment from the Taiwan Intellectual Property Office.

Taiwan’s Legislature authorized the appointment of TEOs when it established the IP Court in 2007. Intellectual Property Court Organization Act §15(1).  Taiwan’s TEOs are modeled on the judicial researchers at the Japan’s Intellectual Property High Court and the technical examiners at the Korean Patent Court.

Acting under instructions from a judge, a TEO “makes judgments about technology, collects technical information, and analyzes and gives opinions about technology.” Organization Act §15(3). In particular, a TEO can analyze and organize the issues in party briefs to clarify the issues in dispute and refer the Court to learned treatises in the field. Intellectual Property Case Adjudication Rules §13(1)(a).

A TEO may also “participate in the litigation.” Organization Act §15. This means that on instructions from a judge, a TEO can appear in court and question parties, their counsel, and witnesses or give opinions for the court’s reference on technical issues. Intellectual Property Case Adjudication Act §4;  Adjudication Rules §13(1)(c).

In more complex cases, a TEO may be ordered  by the IP Court to produce intermediate and final reports on technical issues. Adjudication Rules §16. While the parties do not have access to these reports, the IP Court will disclose opinions it has received on “specialized technical information” to the parties and give an opportunity to respond before using such opinions as the basis for its judgment. Adjudication Rules §16

As fact finders, the IP Court judges are not bound to adopt the views of the TEO and in complex cases, the IP Court will usually also appoint an neutral expert witness to evaluate the technology in dispute. Furthermore, the statements of TEOs may not be offered by the parties as evidence of facts in dispute. Adjudication Rules §18.

Between 2008 and 2012, TEOs were assigned to a total of 1,636 cases. 1,070 of those cases were civil matters, 550 were administrative and sixteen cases were criminal. TEOs provided assistance with mechanical technologies in 48% of these cases, IT in 26%, and chemistry in 8%.

Although the role of TEOs has been controversial in patent litigation and the subject of a number of Supreme Court cases, our experience has been that TEOs serve as able assistants to the judges on the IP Court.

WP named as Employer of Choice

Winkler Partners has been named by Asia Legal Business Magazine as an Employer of Choice for 2015. We were the only law firm in Taiwan to be given this award.

The survey was conducted by asking 3000 employees at law firms across Asia for their opinion of salaries, work life balance, career advancement opportunities and a variety of other criteria. We were rated highly for our work life balance, with counsel calling it ‘simply the healthiest, most enjoyable place I have ever worked.’

Winkler Partners was previously recognized as an Employer of Choice in 2010. You can view the entire article here.

Setting up a business in Taiwan: the basics

Taiwan ranks highly on both the World Economic Forum’s Global Competitiveness List and the World Bank’s Ease of Doing Business List.[1] With strong air, trade and freight links to China, Japan, Southeast Asia, and Silicon Valley, Taiwan is a convenient hub for doing business with the rest of Asia and abroad. It also has a sophisticated domestic transportation system. Taiwan is home to a robust research and development sector, advanced domestic infrastructure, a stable political climate and a free press, a sound legal framework, and a dynamic and educated workforce. These factors have recently led an increasing number of international businesses to choose Taiwan as their regional headquarters or regional hubs.[2]

Companies wishing to establish business operations in Taiwan typically form one of the following: a Representative Office, a Branch, a Limited Company, or a Company Limited by Shares. Set forth below is a brief introduction to each of these business forms and their typical business use.

Representative Office

Many foreign entities prefer to set up a Representative Office in Taiwan prior to making the more substantial commitment involved in establishing a branch or a subsidiary. Establishing a Representative Office is one of the easiest ways to establish a business presence in Taiwan. However, a Representative Office is very restricted in terms of the activities it can undertake. A Representative Office may operate in Taiwan only as the agent of its overseas principal and is not considered a separate legal entity. It may not engage in profit-seeking commercial activities nor act as principal in any domestic business transaction. A Representative Office is also not allowed to sell goods or provide services in Taiwan. Typically, a Representative Office functions as a sales or purchasing agent for international businesses which have no other presence in Taiwan. Representative Offices are also used to provide technical support and training as well as to oversee quality control in Taiwan.

Branch

A foreign company may also establish a Branch to conduct business in Taiwan. Like a Representative Office, a Branch is not considered an independent legal entity, and so does not need to have shareholders, directors, or supervisors, as would be the case with a subsidiary. The cost of corporate secretarial maintenance for a Branch, therefore, is lower than that of a subsidiary. The major benefit of establishing a Branch over a subsidiary is that all after-tax profit may be legally remitted to the home company overseas without incurring additional withholding taxes in Taiwan. The primary drawback of a Branch is that it is a legal extension of its foreign home company, and therefore the home company remains legally liable for all acts of the Branch. Branches are most appropriate in situations where considerable funds are to be expatriated to the foreign home company from Taiwan. Branches are also sometimes preferred in large public infrastructure projects as the Taiwan government and often commercial counterparties would like to have legal recourse to the assets of the foreign home company.

Limited Company

In addition to Representative Offices and Branches, which are merely local extensions of the foreign home company, foreign companies may also establish a legally distinct subsidiary in Taiwan. The simplest form of subsidiary is a Limited Company. Taiwan Limited Companies are similar in structure to US limited liability companies. Taiwan Limited Companies are organized by one or more members, with each member, in general, being only liable to the extent of his or her individual capital contribution. A Limited Company, as opposed to a Company Limited by Shares (described below), has more flexibility in terms of structuring its corporate governance. This flexibility, however, comes at the cost of a significant impediment to transfer of interests in a Limited Company. If a director of a Limited Company wishes to transfer his or her interest in such company, the transfer must be consented to by all other members of the company. Any other member of a Limited Company who wishes to transfer his or her interest in such company must have the transfer consented to by a majority of other members. Many foreign companies choose to set up their Taiwan subsidiaries as Limited Companies, if such subsidiaries are to be wholly-owned for the foreseeable future.

Company Limited by Shares

International investors and business people choose to set up a wholly-owned subsidiary as a Company Limited by Shares if there is the possibility of selling some part of their interests in the Taiwan subsidiary. A Company Limited by Shares is similar in form to a US corporation. Shareholder liability is limited to the amount of each shareholder’s capital contribution. A Company Limited by Shares is subject to certain corporate structural requirements: it must have shareholders (at least two individual shareholders or one juridical person shareholder), directors (at least three) and a supervisor (at least one). A Company Limited by Shares can, unlike a Limited Company, become a public company in Taiwan.


[1] See, Invest in Taiwan website: <<http://investtaiwan.nat.gov.tw/eng/show.jsp?ID=3&MID=2>>

[2]See, Starting a Business in Taiwan website: <<http://www.startabusinessintaiwan.tw/additional-resources/22-an-overview-of-taiwan/103-advantages-doing-business-taiwan>>

 

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