Intellectual property rights (IPR) protection has long been one of AmCham Taipei’s top priorities. Considering that IP law continues to play a crucial role in maintaining Taiwan’s competitive position in the global economy, particularly in the areas of copyright law and trade secrets protection, it is vital to continue to ensure that Taiwan has a comprehensive and healthy legal environment to provide sufficient protection to rights-owners.
Some encouraging developments in Taiwan’s IPR protection have occurred recently. Article 87.1(8) of the Copyright Act was enacted in April 2019 to address piracy issues in over-the-top (OTT) devices, a reform welcomed by many rights-owners. In terms of trade secrets law, the Ministry of Justice has been prioritizing investigations for major trade secrets cases, strengthening the working guidelines for the Ministry of Justice Investigation Bureau (MIJB) and Prosecutors’ Offices.
The Committee applauds similar efforts by the Judicial Yuan in drafting the “Court-facilitated Speedy Trial and Decision Program for Cases Involving Major Trade Secrets Act Violations” and “Reference Manual for Judges Handling Criminal Cases Involving Intellectual Property.” We are pleased to know that many internal workshops for judges have been held to address concerns over trade secret law, and we look forward to further developments on that front.
However, the Committee believes that further steps to provide adequate protection for intellectual property would greatly benefit Taiwan’s stakeholders. We saw little or no improvement on the issues brought up in last year’s White Paper – issues that continue to be of great concern. Offshore online copyright infringement continues to damage the market, and Taiwan still lacks effective enforcement measures either administratively or judicially for offshore online piracy. The recent draft amendment to the Copyright Act does not include any solution for current piracy issues, but instead further weakens protection for rights-owners. A consistent method for calculating damages in trade-secrets cases continues to be lacking. In all these areas, the government needs to make a determined effort, working with industry to protect IPR by finding viable solutions.
Below, the Committee presents suggestions for each of the issues cited. We recognize that many countries face similar situations, and that the challenges are growing as trade in counterfeit and pirated goods increasingly moves in the direction of online purchases and small-scale shipments. The Committee hopes that the following suggestions will help facilitate increased cooperation between the U.S. and Taiwan authorities, enabling each side to benefit from the other’s expertise. We commend the continued efforts to make Taiwan one of the more efficient IPR enforcement systems in the Asian region.
Suggestion 1: Adopt effective measures to tackle online piracy.
Enforcement against rampant overseas pirate websites, mobile device piracy, and OTT piracy platforms in 2019 continued to be hampered by the lack of an adequate legal framework and effective government action to address the problem.
Foreign-based websites that provide illegal content for either streaming or downloading remain a significant problem and severely impact rights-holders’ legitimate interests in Taiwan. Stream-ripping services, another popular form of infringement, convert audio or video streamed from legitimate streaming platforms like Spotify or YouTube into MP3/MP4 files available for downloading without compensating rights-holders. Significantly, most of the stream-ripping services are located outside Taiwanese jurisdiction.
Pirate OTT devices make it easier for unsophisticated users to connect to piracy sites, most of which are hosted overseas, to access unauthorized copyrighted content. Enactment of Article 87.1(8) was a welcome development, as mentioned above. But the “receiving benefit” requirement – the stipulation that only those who obtain some benefit from transmitting or broadcasting pirated material will be deemed to have engaged in infringing activities – makes this new law unenforceable due to the heavy burden of proof on rights-holders.
Many of the above-mentioned online services – whether built on the infringing activities of others or themselves facilitating infringement – are located outside of Taiwan. Yet a significant amount of infringing activity occurs within Taiwan and should create a nexus for action.
Administrative or judicial solutions to this problem have already been adopted in at least 40 countries or territories around the world. Taiwan needs to address the fact that it is falling behind the rest of the world on this issue. The Committee therefore continues to urge the Taiwanese government to adopt every available measure to tackle online piracy as soon as possible, including fixing the shortfalls in the current legal framework that leave rights-holders with no effective redress – either administrative or judicial – when confronted with online piracy from overseas.
Suggestion 2: Suspend the Copyright Act review process until all shortcomings in the proposed draft amendment and existing legal framework are fixed.
Recent draft amendments to the Copyright Act released by the Taiwan Intellectual Property Office (TIPO) in late January are unfriendly toward copyright-holders. The draft amendments not only fail to entitle sound recordings to an exclusive right covering public performance as provided in other territories/countries adopting a copyright system, but seek to introduce a “neighboring rights” system that would entitle the record producer only to a remuneration right, instead of a full copyright, for public performance of sound recordings. It would be an unacceptable step backward for copyright protection.
TIPO’s draft amendments excessively widen the scope of fair use, in violation of the three-step test of the 1967 Berne Convention. Particularly problematic are the proposed extension of fair use to include re-transmission of sound recordings via “ordinary household receiving devices” – as well as extending it to cover undefined “infrequent activities” – thus weakening the criminal penalties against optical disc piracies. In addition, the draft amendments do nothing to fix overseas-based online infringements or to extend Taiwan’s term of copyright protection in line with the evolving global norm of at least 70 years.
The Committee therefore suggests the following means to remedy the deficiencies in the draft amendments:
Provide producers with exclusive (rather than remuneration) rights for public performances and retransmissions of sound recordings.
Provide a mechanism to address the problem of foreign-hosted piracy websites engaged in substantial copyright infringement targeting users in Taiwan; also review the current ISP liability framework to ensure adequate and effective enforcement against online piracy.
Ensure that penal provisions are at least as high as those set out in the current Copyright Act and apply the criminal penalties against optical disc piracy to copyright offences involving digital storage media.
Extend the copyright protection term to at least 70 years, consistent with the global trend, and refrain from using that extension as leverage when seeking to join bilateral or multilateral trade agreements.
The government is urged to suspend the Copyright Act review process until the above-mentioned changes can be adopted.
Suggestion 3: Introduce court guidelines and reference documents for handling major trade-secret cases and adopt consistent standards for assessing damages.
Trade secrets are recognized as extremely valuable assets that are vulnerable to theft, especially in tech-related industries. Frequent incidents of trade-secret theft have posed a serious threat to Taiwan’s economic competitiveness in technology and other key sectors. Effective and timely law enforcement is crucial to address this concern.
As mentioned in the introduction, the Committee appreciates the Ministry of Justice’s long-term efforts in institutionalizing and prioritizing investigations for this type of crime through the working guidelines provided to the MIJB and Prosecutors’ Offices. The Committee also welcomes similar efforts by the Judicial Yuan to study and strengthen judges’ ability to handle trade-secret cases, including drafting a “Court-facilitated Speedy Trial and Decision Program for Cases Involving Major Trade Secrets Act Violations” and the “Reference Manual for Judges Handling Criminal Cases Involving Intellectual Property.” Such auxiliary reference material helps to speed up case reviews and ensure that they more closely address the industrial realities, thereby strengthening the protection of trade secrets.
The Committee hopes to play an active role in improving the efficiency of trade-secret case reviews and providing capacity-building opportunities for judges. We respectfully suggest that the Judicial Yuan invite industry leaders such as chamber of commerce representatives to participate in the relevant development plans and drafting of reference books, so that industrial needs and insights can be incorporated in a timely fashion. We hope that these plans and resources can be put in place as soon as possible to strengthen the protection of Taiwan’s scientific and technological advances and boost economic security.
The Committee highly appreciates the Judicial Yuan’s recent decision to revise the “Guidelines for Speedy Trial and Decisions in Serious Criminal Cases in Court,” making trade-secret criminal cases involving illegal profits exceeding NT$50 million subject to the Guidelines. The Committee urges full and consistent implementation of this revision in trade secret cases, where timely action is often crucial. As for the method of estimating the monetary value, we recommend that a consistent standard be established using the valuation on the Case Detail Information Form, an appendix to Article 6 of the “Guidelines for Handling Serious Trade Secrets Act Violations by the Prosecution Authority.”