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Taiwan Intellectual Property Survey Report 2023

Taiwan Intellectual Property Survey Report 2023

2024/06/27

Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Institute for Information Industry has conducted the survey of “The Intellectual Property Survey Report” to listed companies since 2012. The Intellectual Property Survey Report 2023 on Taiwan's Listed and Over-the-Counter Companies was released in February 2024.

Among the 331 publicly listed companies surveyed in 2023, the information technology sector had the largest representation, accounting for 44% (145 companies). This was followed by the manufacturing sector at 27% (90 companies), the pharmaceutical and livelihood sector at 18% (58 companies), and the industrial and commercial services sector at 11% (38 companies).

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig. 1 types of industry

 

Based on the survey result, three trends of intellectual property management for Taiwanese enterprises have integrated with detail descriptions as below.

 

Trend 1: Positive Growth in Intellectual Property Awareness and Intellectual Property Dedicated Department/Personnel, Budget and Projects
1. Taiwanese enterprises believe that intellectual property plays an important role

 

More than 70% of companies believe that intellectual property can enhance product/service value, help profitability, and protect research results/core competitiveness. Specifically, 72% believe that intellectual property can enhance product/service value and help profitability, and 78% believe it can protect research results/core competitiveness. Additionally, 65% of companies believe that intellectual property can protect and enhance brand value, and 65% believe it can reduce the likelihood of disputes and infringements with others.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig.2 The benefit of intellectual property for the company

 

2.Taiwanese enterprises maintain investment in the dedicated department and full time personnel for intellectual property

 

33% of listed companies set up full time personnel for intellectual property and over 32% of those have established dedicated department to handle its business that is higher than 35% in 2023.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig.3 Department or personnel for intellectual property by year

 

3. Taiwanese enterprises plan budget for intellectual property each year

 

79% of enterprises have invested a certain amount of funds this year in acquiring, maintaining, and managing intellectual property. By industry, the information technology and pharmaceutical/livelihood sectors have a higher proportion of investment in related expenses, both exceeding 80%

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig. 4 fixed budget for intellectual property each year

 

Trend 2: Taiwanese enterprises are willing to disclose their intellectual property information to the public, which can have a positive impact on the company.

 

1. Enterprises have a positive attitude towards disclosing intellectual property information.

 

72% of enterprises believe that disclosing intellectual property helps external parties objectively assess the company's value and competitiveness. This is followed by highlighting brand value (52%) and improving the internal management and control of intellectual property.

 

By industry category, 77% of manufacturing companies believe it helps external parties objectively assess the company's value and competitiveness, which is higher than other industries. In the business services sector, 81% believe it helps highlight brand value, a significantly higher proportion.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig. 5 Benefits of disclosing intellectual property management information for enterprises

 

2. The main channels for public disclosure are company annual reports, sustainability reports, and intellectual property management plans

 

The proportion of companies disclosing intellectual property plans in annual reports reaches 72%. Additionally, approximately 39% and 38% disclose in sustainability reports or intellectual property management plans, respectively. The proportion disclosed in company marketing and promotional materials is 29%, while the proportion in English-language sustainability reports is 20%.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig. 6 Channels for publicly disclosing corporate intellectual property management information

 

Trend 3: Taiwanese enterprises use various types of intellectual property rights to protect their core competitiveness.

 

1. Trade secrets are considered crucial by enterprises but are less commonly owned forms of intellectual property

 

Enterprises consider trademark rights, invention patents, utility model patents, and trade secrets to be more important, each with an importance score above 4. Design patents and copyrights are considered somewhat less important, each with an importance score of 3.8. However, there is a gap between the importance and the ownership rates of some types of intellectual property. The importance and ownership rates are consistent for trademarks, with an importance score of 4.5 and an ownership rate of 88%. Patents have an importance score of 4.7 and an ownership rate of 70%. Trade secrets have an importance score of 4.6 and an ownership rate of 49%. Copyrights have an importance score of 3.8 and an ownership rate of 30%.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig. 7 Owned and Importance of Various Intellectual Properties

 

2. The priority of using intellectual property rights varies across different industries

 

Patents are used to protect important assets by the largest proportion of companies, about 86%. This is followed by trademarks at 77%, trade secrets at 66%, and copyrights at 33%.

 

By industry, the order is consistent in information services, manufacturing, and pharmaceutical/livelihood industries: patents, trademarks, trade secrets, and copyrights. In the business services sector, the order is trademarks, trade secrets, patents, and copyrights.

 


Data source: Innovation & Intellectual Property Center, Science & Technology Law Institute (STLI), Taiwan Intellectual Property Survey Report 2023.
Fig.8 which type of intellectual property rights do companies use to protect important assets

 

The complete survey report can be accessed in the Taiwan Intellectual Property Management System (TIPS) website. The download link is https://www.tips.org.tw/body.asp?sno=BGCHDC#460

 

※Taiwan Intellectual Property Survey Report 2023,STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=105&tp=2&i=171&d=9196 (Date:2026/06/13)
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Lo, Yu-Ju
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The Demand of Intellectual Property Management for Taiwanese Enterprises

Science & Technology Law Institute (STLI), Institute for Information Industry has conducted the survey of “The current status and demand of intellectual property management for Taiwanese enterprises” to listed companies for consecutive four years since 2012. Based on the survey result, three trends of intellectual property management for Taiwanese enterprises have been found and four recommendations have been proposed with detail descriptions as below. Trend 1: Positive Growth in Intellectual Property Awareness and Intellectual Property Dedicated Department/Personnel, Budget and Projects 1.Taiwanese enterprises believe that intellectual property plays an important role 74.18% of Taiwanese enterprises believe that intellectual property can increase economic value and 58.61% of those believe that it can effectively prevent competitors from entering the market. Source: created by project team members Graph 1 The benefit of intellectual property for the company 2.Taiwanese enterprises increase investment in the dedicated department and full time personnel for intellectual property Nearly 80% of listed and OTC companies set up full time personnel for intellectual property and over 50% of those have established dedicated department to handle its business that is higher than 30% in 2012. Source: created by project team members Graph 2 Specialized Department or personnel for intellectual property by year 3.Taiwanese enterprises plan budget for intellectual property each year 81% of respondent companies plan certain budget for intellectual property each year. Among the expenses items, the percentage of 90.95% for intellectual property application is the highest. Next are 58.29% for inventor bonus payment and 56.28% for intellectual property education training. Source: created by project team members Graph 3 Taiwanese enterprises plan budget for intellectual property each year Trend 2: Insufficient Positive Activation for Intellectual Property 1.Interior intellectual property personnel is seldomto be involved in the core decision making in Taiwanese enterprises Based on the importance and difficulty of intellectual property, most items in the area of high importance and difficulty are demand of professionals and practical experiences (e.g.: lack of interior talent, do not understand international technology standard and specification, lack of platform to obtain experiences and cases). Only application time is for administrative procedure of Intellectual Property Offices. Therefore, it is known that intellectual property department of respondent companies lacks experienced talents. Source: created by project team members Graph 4 Importance and difficulty of intellectual property In addition, most of the jobs of intellectual property personnel are “keeping close cooperation and communication with R&D department”, “coordinating issues relevant to intellectual property between departments” and “keeping close cooperation and communication with marketing or sales department” instead of “R&D strategy involvement” and “marketing and operation strategy involvement” (see Graph 5). Therefore, it is demonstrated that the work of intellectual property personnel is mainly for providing coordination and assistance to other departments other than corporate strategy with intellectual property as basis. Maybe it is the reason for insufficient activation and lower investment of intellectual property in the business. Source: created by project team members Graph 5 The job of intellectual property department or personnel 2.Insufficient positive activation for intellectual property in Taiwanese enterprises It is shown that 60% of firms are without and did not obtain technology transfer (among which the traditional manufacturing sector has the highest percentage). 22.95% of firms are without but obtained technology transfer and 4.51% of those are with but did not obtain technology transfer. In addition, most of the jobs of intellectual property are administration other than activation such as treatment of authorization contract and transaction and sending warning letter of infringement. Therefore, it is assumed that intellectual property is not the key for profitability in the business. 3.Taiwanese enterprises with higher R&D expenses ratio intend to have more positive activation of intellectual property Although the entire firms are not positive for activation of intellectual property, it is found that enterprises with higher R&D expenses ratio (the ratio of R&D expenses / total operating expenses is higher than average) intend to have more positive activation of intellectual property. For example, intellectual property department with higher R&D expenses ratio involves more in the decision making of R&D strategy in the business. Compared with the enterprises with higher R&D expenses ratio, the enterprises with lower R&D expenses ratio also has higher ratio in the absence and failure of technology transfer. (see Graph 6) Source: created by project team members Graph 6 Presence and achievement of technology transfer in the different sector 4.Most of Taiwanese enterprises R&D on their own so to lack of introduction experience of external R&D results Among the survey, nearly 90% of firms R&D each item on their own except the copyright part with lower percentage of 78.5%. 15.89% of it is from outsourcing development and 13.08% of it is from authorization. In addition, the outsourcing development and authroization of invention patent part have higher percentage which is 17.34% and 15.61% respectively. However, the speed of self R&D can’t meet the speed of product elimination nowadays. Therefore, under global open competition, corporate may try to cooperate with universities and research institutions to speed up R&D progress. Table 1 Source of Intellectual Property Right Source: created by project team members Further, among the services s that corporate ask for assistance from government, there are high demand for promotion of cooperation between industrial, academic and research sectors as well as assistance provided by academic and research institution to enhance corporate’s R&D ability. Based on this, it is clear established that a smooth access can help enterprises to cooperate with academic and research institutions for R&D instead of doing it on their own. Source: created by project team members Graph 7 The Government Policy for Intellectual Property 5.Taiwanese enterprises focus only on patent and trademark but ignore trade secret and copyright From the intellectual property items enterprises possessed each year, it is found that trademark has the highest percentage (over 80% for four-year average) and next items are invention patent and utility model patent. The awareness that corporates have on intellectual property is only limited to patent and trademark. They overlook that their core ability may be protected by trade secret and copyright. Source: created by project team members Graph 8 Owned IP right Trend 3: Increasing Demand on International Intellectual Property Service 1.The overseas intellectual property risk Taiwanese enterprises faced greatly varies from sectors Among the 2015 survey, 85% of respondent firms developed to overseas. Under which the highest percentage is 79.81% for overseas sale then 56.25% for self-establishment of overseas factory for manufacturing. Furthermore, the percentage of outsourcing in traditional manufacturing sector is the highest than that of other industries which 77.36% of traditional manufacturing firms established overseas factory for manufacturing. The percentage of overseas sale in pharmaceutical and livelihood sector is 91.3% and slightly higher than that in other industries. The result shows that different industry will select different overseas development strategy based on its sector characteristics and R&D difficulty. Source: created by project team members Graph 9 The overseas intellectual property risk As a whole, the highest risk that might be occurred from enterprises developed overseas is leakage of trade secrets. Next risks are 47.12% for being accused of product infringement and 42.31% for patent being registered. Further, the risk control greatly varies from different sector. The risks that industry and commerce service sector regards are quite different from other sectors. For example, its risk of dispute of employee jumping ship or being poached which accounted for 50% is higher than that of other sectors. In addition to the three common risks mentioned above, information and technology sector believes that there might be risk of patent dispute which accounted for 35.29% and is higher than that of other sectors. Source: created by project team members Graph 10 The overseas risk control which might be occurred by enterprises 2.The most dissatisfied part that Taiwanese enterprises have to the intellectual property outsourcing service is insufficient experiences on the treatment of international affairs Based on the 2012 and 2013 data, the too expensive fees is the primary factor that intellectual property outsourcing service didn’t meet the demand. However, from the 2014 and 2015 survey result, the experiences on the treatment of international affairs became the primary factor. It is shown that enterprises increase demand for international intellectual property work but current services from providers can’t satisfy it. From survey data, it is found that different sector has different demand on overseas development. Among which the pharmaceutical and livelihood sector has higher demand on the management of overseas trademark use, investigation of overseas infringement risk, contract of overseas patent authorization, contract of overseas trademark authorization, contract of overseas technology transfer and contract of overseas mutual R&D (See Graph 11). Source: created by project team members Graph 11 The outsourcing professional resources unsatisfied with demand – annual comparision Recommendation 1: Taiwanese enterprises shall build intellectual property creation strategy based on a variety of intecllectual property rights Enterprises may apply for patent, trademark, trade secret and copyright. For instance, brand management can be conducted with trademark and copyright and core technology or service can be protected by patent and trade secret instead of using trademark or patent alone as primary strategy. Recommendation 2: Provide Taiwanese enterprises with assistance of overseas intellectual property consultation 85% of respondent firms have overseas business which greatly varies from different sector so to accompany with different overseas intellectual property risk. Therefore, government may provide enterprises with the information of overseas intellectual property and even real time consultation services of overseas intellectual property risk which is the requirement to be satisfied immediately. In addition, the actual overseas intellectual property demand of enterprises can be found through this introduction of consultation services. To satisfy enterprises’ demand, service providers may need to improve their ability together. Recommendation 3: Build cooperation access of industry, academics and research to assist Taiwanese enterprises to enhance R&D ability Under the fast-evolved and competitive environment, enterprises shall not only depend on their own R&D. Moreover, they shall leverage the R&D result of academic and research institutions to improve so to make subsidy of those institutions from government have real impact on them. Therefore, there is demand of cooperation between industry, academics and research. The cooperation access between them should be built to achieve synergy of R&D. Recommendation 4: Experienced professionals of intellectual property are requried to be cultivated and demand of intellectual property human capital is needed to be expanded for Taiwanese enterprises Enterprises lack of experienced professionals of intellectual property. This demand could be satisfied only through on-the-job training for large personnel other than new graduates of department of intellectual property. Furthermore, enterprises can make department of intellectual property contribute its professional services into R&D and marketing strategy through design of organization work procedure to reduce risk of intellectual property they have to face.

The Introduction to the Trade Secret Management Guidelines

The Introduction to the Trade Secret Management Guidelines 2024/09/09 Due to an open, collaborative culture and the need to balance knowledge sharing with protection, research academic institutions always face unique challenges in managing confidential information. However, trade secret protection is still essential for research academic institutions in order to safeguard their competitive advantages and valuable research results. Accordingly, the “Trade Secret Management Guidelines”, released by the Taiwan Intellectual Property Office (TIPO) on May 27, 2024, is specifically tailored for the trade secret protection in the research and academic circumstance. Taking into account the essential differences between research academic institutions and enterprises, these guidelines use a phased and scalable approach to implement trade secret protection measures. With these guidelines, each research academic institution can evaluate its own size, research field, available resources, etc., and establish an appropriate trade secret management system to effectively identify, protect and manage its trade secrets. The Trade Secret Management guidelines outline 13 measures for managing trade secrets, covering the entire life cycle of trade secret protection. In addition, these guidelines recommends that research academic institutions adopt a phased implementation strategy, starting from the "entry-level" stage focusing on basic measures, and gradually entering the "basic" and "enhanced" stages to improve each management measure. The following is an overview of each measure: 1.Distinguishing Trade Secrets In order to facilitate the protection of trade secrets, institutions should distinguish what is trade secret information at the entry stage, whether it is self-developed or obtained from others. As progressing to the basic stage, institutions should define and provide examples of trade secrets they produce or acquire. When entering the enhanced stage, institutions should develop a process for identifying whether an information is a trade secret. 2.Access Control To prevent unauthorized disclosure, institutions should control access to trade secrets. At the entry stage, institutions must set access permissions for trade secrets. As progressing to the basic stage, access should be granted based on the need for the information. When entering the enhanced stage, institutions need to adjust access permissions in response to job changes and personnel turnover. 3.Identification Identifying trade secrets helps ensure that those accessing the information are aware of its confidentiality. At the entry stage, institutions need to identify information considered to be trade secrets, but there are no restrictions on the identification method. As progressing to the basic stage, institutions need to clearly define how trade secrets will be identified. When entering the enhanced stage, the key is to ensure that all contacts know that the information they come into contact with is a trade secret. 4.External Disclosure Review In order not to affect subsequent research or applications, institutions should review the information that will be disclosed to the public. At the entry stage, institutions should ensure that information is reviewed by responsible personnel before it is disclosed to the public. As progressing to the basic stage, institutions need to identify which items should be reviewed. When entering the enhanced stage, institutions shall distinguish what should be reviewed based on the nature of the information disclosed to the public. 5.Circulation Control Controlling the circulation of trade secrets can prevent them from being arbitrarily disclosed. At the entry stage, institutions should ensure that responsible personnel have consent to the circulation of trade secrets. As progressing to the basic stage, the key is whether the behavior of circulating trade secrets is recorded. When entering the enhanced stage, institutions should take countermeasures to prevent trade secrets from being leaked during the circulation process. 6.Reproduction Control Controlling the reproduction of trade secrets can ensure that the use of trade secrets is limited to a controllable scope. At the entry stage, institutions should limit the reproduction of trade secrets. As progressing to the basic stage, the key is whether the behavior of reproducing trade secrets is recorded. When entering the enhanced stage, institutions should take measures to avoid the increased risk of leakage of trade secrets after the reproduction behavior. 7.Destruction At the entry stage, institutions should ensure that the consent of the responsible personnel is obtained when destroying trade secret. As progressing to the basic stage, institutions should consider the impact of destruction before destroying trade secrets and ensure that records of destruction are retained. When entering the enhanced stage, the key is whether the trade secrets are destroyed in an irrecoverable way. 8.Usage record retention Keeping the usage record of trade secrets can help provide evidence in litigation. At the entry stage, institutions should keep records of access and use of trade secrets. As progressing to the basic stage, institutions should further specify the items that need to be retained in the records. When entering the enhanced stage, institutions should ensure that the records retained are authentic and will not be arbitrarily tampered with. Therefore, if necessary, a third party agency can be entrusted with the preservation of evidence. 9.Designating Responsibility for Implementation Setting up responsible personnel can help ensure that the trade secret management mechanism is effectively implemented. At the entry stage, institutions simply need to ensure there is someone responsible for driving trade secret management. As progressing to the basic stage, institutions shall assign dedicated personnel to be responsible for trade secret management. When entering the enhanced stage, institutions must establish a dedicated unit to coordinate the protection of trade secrets through a clear division of powers and responsibilities. 10.Confidentiality and Ownership Arrangements Signing confidentiality and ownership agreements can ensure that internal personnel who may have access to trade secrets understand their confidentiality obligations. At the entry stage, institutions only need to sign a written confidentiality agreement with those who may have access to trade secrets. As progressing to the basic stage, institutions shall clearly define the items that must be included in the confidentiality and ownership agreement. When entering the enhanced stage, institutions need to further evaluate whether to adjust the contents of confidentiality and ownership agreements in response to job changes and personnel turnover. 11.Promotion and Training Through promotion and training, institutions can gradually improve personnel's awareness of confidentiality and help them understand the key points of trade secret management. At the entry stage, institutions can promote the importance of trade secret management and provide appropriate training to all personnel. As progressing to the basic stage, institutions should establish promotional materials, explain the management objectives and specific practices in the training, and conduct an evaluation of effectiveness. When entering the enhanced stage, institutions need to adjust the content required for training based on differences in units, objects, trade secret characteristics, etc. 12.Departure Management At the entry stage, institutions should remind departing personnel of their confidentiality obligations. As progressing to the basic stage, institutions shall further require the departing personnel to hand over the trade secrets they held during their tenure. When entering the enhanced stage, institutions need to conduct exit interviews with important departing personnel to ensure that they clearly understand their confidentiality obligations. 13.Confidentiality and Ownership Arrangements with External Parties Signing confidentiality and ownership agreements with external parties can help prevent institutions mired in unnecessary controversies. At the entry stage, institutions only need to sign confidentiality agreement with external parties before providing trade secrets to them. As progressing to the basic stage, institutions shall clearly define the items that must be included in the confidentiality and ownership agreement. When entering the enhanced stage, institutions needs to confirm with external parties and reach a consensus on the management measures that both parties need to take. The Trade Secret Management guidelines provide a comprehensive framework for research academic institutions in Taiwan to protect their trade secrets. Regardless of the size of the research academic institutions or the field it focuses on, as long as they follow the above-mentioned 13 measures and adjusts according to their current management situations, they can gradually establish a trade secret management system that meets their own needs.

Mainland China changes domestic regulation for game consoles

In 2000, the General Office of the State Council of the People’s Republic of China issued “the Notice on Launching a Special Campaign against Illegal Electronic Game Rooms”(國務院辦公廳轉發文化部等部門關於開展電子遊戲經營場所專項治理意見的通知). From then on, Mainland China has strictly enforced prohibition on gaming consoles, however in December 21, 2013, “the State Council released the Comprehensive Plan for the China (Shanghai) Pilot Free Trade Zone, the State Council’s Decision to Temporarily Adjust Relevant Administrative Laws and State Council Regulated Special Administrative Measures for Approval or Access in the China (Shanghai) Pilot Free Trade Zone”(國務院關於在中國(上海)自由貿易試驗區內暫時調整有關行政法規和國務院文件規定的行政審批或者准入特別管理措施的決定). As a result of the thirteen year long prohibition on game consoles, the development of the game consoles market has been limited in Mainland China, while mobile phone and online games have dominated the video games market in the country. Mainland China’s lifting of the ban on game consoles will lead to a reshuffling of the gaming market, and is certainly worth a deeper look. This following article will review the evolution of the gaming regulatory policy in Mainland China over the recent years, and identifies the changes and problems that may arise during the deregulation process. The sale of game consoles has been prohibited in Mainland China since 2000 According to “The Notice on Launching a Special Campaign against Illegal Electronic Game Rooms” issued by General Office of the State Council in 2000, “companies and individuals were prohibited from the manufacture or sale of game consoles, as well as the production or sale of related accessories”. As a result, the mobile game consoles and the television game consoles both lost their legitimacy in the video game industry in Mainland China. The stated intent of the ban against video arcades was to protect the youth and ensure public order. And yet, in spite of potentially impacting youth in a similar manner, the online game sector has been listed as a key industry for development and has been strongly supported by the government. This has clearly contradicted the reason of banning the game consoles. Thus, the major console manufacturers, Sony, Microsoft, and Nintendo, have been trying in various ways to enter the Chinese market, and have called on the Mainland China government to open their domestic market for the sale of game consoles. Announcement of reopening the sale of game consoles in China (Shanghai) Free Trade Zone in 2013. After thirteen long years, the State Council issued the “the Comprehensive Plan for the China (Shanghai) Pilot Free Trade Zone”, permitting foreign enterprises to produce and sell game equipment in the Free Trade Zone. Five days later, Blockbuster that under Shanghai Media Group announced a cooperation with Microsoft in a joint venture company within the Free Trade Zone, claiming their main business as " design, development, production games, entertainment applications and derivative products; sales, licensing, marketing and production for third-party games and entertainment applications software; technical advice and services related to video games ". In December 21, 2013, “the State Council released the Comprehensive Plan for the China (Shanghai) Pilot Free Trade Zone, the State Council’s Decision to Temporarily Adjust Relevant Administrative Laws and State Council Regulated Special Administrative Measures for Approval or Access in the China (Shanghai) Pilot Free Trade Zone”, officially lifted the prohibition on game consoles in the Free Trade Zone, and also opened the gates to investors. Potential problems facing China’s game consoles market As the case study above describes, Microsoft chose to enter the Mainland China market through a joint venture, the main reason being that foreign investment in entities engaged in internet data operations is still prohibited in China (Shanghai) Free Trade Zone. Thus, Microsoft will need to rely heavily on Blockbuster for the data operation and set-top box business license, which was the main subject as the Internet service content provider. In addition, apart from the joint venture between Blockbuster and Microsoft, there are two other companies in the industry: Sony and Nintendo, which retain a large part of the game consoles market, but have not taken action at the moment. These two companies have a pivotal position in the game consoles industry, and therefore it is predicted they will likely follow the Blockbuster and Microsoft example to look for a license holder vendor as a way to enter the mainland China market. On the other hand, at the end of June 2014 the updated announcement regarding the China (Shanghai) Free Trade Zone “negative list”, still clearly stated that foreign enterprises in the Free Trade Zone are “prohibited from direct or indirect participation in online game operations and services”. Due to the trend among game consoles towards online connectivity, the classification of related games as online games, and prohibition of foreign enterprises from entering this space, domestic game developers have enjoyed a safe monopoly over the industry in Mainland China. But if the industry is not restricted under the scope of foreign operation of online games, and foreign enterprises may be allowed involvement in the management of their operations directly or indirectly, “fully localized” online game industry in Mainland China may be challenged in a noticeable way. In addition, although Mainland China has begun to loosen control over game consoles, the publication of electronic publications licensed by a foreign copyright owner (including online gaming works) will be determined under the General Administration of Press and Publication (新聞出版廣電總局). An enterprise who wishes to enter the Mainland China market has to create content which is able to pass a content review, at the same time maintaining the original integrity of the game. Moreover, consumers in Mainland China have long been accustomed to "cheap" or "free" Internet games, so are they going to change their behavior and be willing to pay for their games? These are big obstacles to be overcome by the industry.

 Antitrust Liability to the Conduct of “Refusal to License” of the Standard Essential Patent

Antitrust Liability to the Conduct of “Refusal to License” of the Standard Essential Patent 2022/07/19 　　The notion of Standard Essential Patent（SEP）emerges in the era when manufacturers seek ‘‘compatibility’’ and ‘‘interoperability’’ of their products. The concept of SEPs is proposed to help manufacturers ‘‘talk’’ to each other so the collective manufacturers enjoy the advantage of economies of scales. Meanwhile, the compatibility and interoperability derived from SEPs enhance the consumers’ valuation of the product which creates the ‘‘network effect’’ of the products. 　　There is a long-debated issue in the field of SEP—to what extent shall the SEP holders license their patents in the various level of the supply chain. This issue has much to do with the ‘‘FRAND commitment’’, and is worthy of further analysis. I. SEP and FRAND Commitment 　　The concept of SEP is—when any certain patented technology is selected by the ‘‘Standard Setting Organization’’（SSO）as the commonly used standard, such the patented technology is categorized as a SEP. The SEP holder therefore enjoys stronger ‘‘market power’’ because market participants have no choice but to use the SEP and are required to seek license from the SEP holders. 　　Therefore, to prevent the SEP holders from abusing their market power, SSOs usually require SEP holders to make the FRAND commitment; that is, to license on ‘‘fair, reasonable and non-discriminatory’’ terms. Once the SEP holder breaches the commitment, the SSOs might exclude that technique from the standard. II. “License to all”or“Access to all”issues under FRAND Commitment 　　The FRAND commitment, by textual reading incorporates the wording of ‘‘non-discriminatory’’, and can infer two co-related yet debatable concepts—the ‘‘License to all’’ or ‘‘Access to all’’ arguments. 　　The ‘‘License to all’’ argument holds that all participants in the supply chain retain the access to the specified SEP, while the ‘‘Access to all’’ argument, on the contrary, contends that FRAND commitments don’t necessarily ask SEP holder to license to all practitioners, but when a SEP holder is going to license, he must license on FRAND terms. 　　According to observations, there is a common phenomenon in the SEP licensing practice—most SEP holders tend to license only to the End-Product manufacturers rather than to the manufacturers of the ‘‘Smallest Saleable Patent Practicing Unit’’（SSPPU）. What the SEP holders expect through ‘‘refusal to license’’ to the SSPPU manufacturers are to maximize the potential royalties. Cases inclusive of the Qualcomm case[1] and the Continental case[2] have shown such practical tendency, and only when the SSOs can well define the definitions of FRAND commitments might the issue be truly settled. 　　There are some End-Product manufacturers that consider it ‘‘discriminatory’’ and against the FRAND commitments if the SEP holders refuse to negotiate with SSPPU manufacturers requesting to be the licensee. On the other hand, some consider it inappropriate for the End-Product manufacturers to refuse all negotiations when the SEP holder requests it to be the party to the licensing negotiations[3]. III. The ‘‘refusal to license’’ and the derived Anti-Trust Issue 　　As generally admitted, a firm has no general duty to deal with others[4]; however, there are times when SEP holders’ ‘‘refusal to deal∕license’’ behaviors can constitute wrongful monopoly under Sherman Act section 2. The U.S. judicial practices have categorized three main ‘‘refusal to deal∕license’’ behaviors as wrongful monopoly under Sherman Act section 2; they are[5]: 1.dominant firm forces its customers not to do business with new competitors of that firm, or the dominant firm will terminate business with the customer[6]; 2.dominant firm tries to abandon or alter an existing relationship[7]; 3.dominant firm refuses to provide access to ‘‘essential facility’’ (the equipment or techniques that is indispensable when others would like to compete in the relevant market with the dominant firm). 　　As SEP can be categorized as an ‘‘essential facility’’, this paper will only focus on the third category. The ‘‘Essential Facility Doctrine’’ is—when any monopolist withholds an essential facility and refuses to provide his competitors with the access to the said essential facility, a wrongful monopoly due to the Facility holders’ ‘‘refusal to deal∕license’’ is constituted. 　　According to the leading case—the MCI case[8], four factors are to be proved by the plaintiff when seeking resort to ‘‘Essential Facility Doctrine’’; they are:（1）the monopolist’s control of an essential facility;（2）the inability of a competitor to duplicate that essential facility;（3）the monopolist’s denial of access to that essential facility to a competitor;（4）the feasibility of providing the essential facility to the competitor by the monopolist. 　　As we can shortly conclude here, if a SEP holder constitute wrongful monopoly because of his ‘‘refusal to license’’ behavior, the perquisite is that the SEP holder would like to join in the ‘‘competition’’ in the relevant market himself. IV. Conclusion—the commonly seen ‘‘refusal to license’’ behavior of SEP holders doesn’t constitute wrongful monopoly 　　As mentioned before, ‘‘competition’’ serves as the prerequisite for the ‘‘Essential Facility Doctrine’’; thus, some SEP holders’ refusal to license to SSPPU manufacturers behaviors—such as Qualcomm in the Qualcomm case and Nokia in the Continental case—are not in accordance with ‘‘Essential Facility Doctrine’’ and do not constitute wrongful monopoly. Qualcomm and Nokia chose not to license to SSPPU manufacturers merely because they want to earn more royalties by licensing to End-Product manufacturers; they didn’t make this choice because themselves would like to compete in the SSPPU markets. However, since there is no clear definition of FRAND yet, whether the SEP holders have truly breached the FRAND commitment remains unsolved puzzle and shall retain to SSO’s clearer definition and the Court’s further rulings. [1]FTC v. Qualcomm Inc., 969 F.3d 974 (9th Cir. 2020). SEP holder Qualcomm would only like to license to the cellphone OEM manufactures rather than to other chips manufacturers. [2]Continental Automotive Systems, Inc. v. Avanci, LLC, et al, No. 20-11032 (5th Cir. 2022). SEP holder Nokia and a licensing platform—Avanci (that Nokia had joined) would only like to license to car manufacturers rather than to Telematics Control Unit（TCU）manufacturers. [3]Japan Patent Office [JPO], GUIDE TO LICENSING NEGOTIATIONS INVOLVING STANDARD ESSENTIAL PATENTS (2018), https://www.jpo.go.jp/e/support/general/sep_portal/document/index/guide-seps-en.pdf(last visited July 19, 2022). [4]See United States v. Colgate & Co., 250 U.S. 300 (1919);Pacific Bell Telephone Co. v. linkLine Communications, Inc., 555 U.S. 438 (2009); Aerotec Int'l v. Honeywell Int'l, 836 F.3d 1171 (9th Cir. 2016) [5]ANDREW I. GAVIL, WILLIAM E. KOVACIC & JONATHAN B. BAKER, ANTITRUST LAW IN PERSPECTIVE: CASES, CONCEPTS AND PROBLEMS IN COMPETITION POLICY 630-654 (2002). [6]See Lorain Journal Co. v. United States, 342 U.S. 143 (1951) [7]See Image Technical Services, Inc. v. Eastman Kodak Co., 504 U.S. 451 (1992); Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) [8]MCI Communications Corp. v. American Tel. & Tel. Co., 708 F.3d 1081 (7th Cir. 1983)

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