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 seldom to 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 Demand of Intellectual Property Management for Taiwanese Enterprises,STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=55&tp=2&i=171&d=7558 (Date:2024/06/20)
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Intellectual Property Management Standards of Taiwan: Development and the Status Quo

Oct/30/2006 I. Intellectual Property Management among Taiwanese Firms: Status Quo and Problems 1. Current status of management of intellectual properties among Taiwan-based enterprises Way from Taiwan's participation into World Trade Organization (WTO) effective January 1st, 2002, huge impacts have been brought upon our domestic enterprises, since, apart from competition coming from giant international manufacturers, they have to meet challenges coming from elsewhere in the world. Besides, the arrival of a time when knowledge became an integral part of the economy in which we find ourselves, profits realizable to an enterprise depends largely on the control of market and on R&D of key technology, such that intellectual property alone is a sure key to the earning of profits and growth of modern enterprises to which admirable economical worth may be created commensurably. Intellectual properties owned by the enterprise should make it such that corporate know-how is thereby transformed into marketable commodities to stand in a viable position among competitors. An overall observation of the management system in our domestic enterprises or organizations indicated that management of intellectual properties is scattered among Education or Training units, R&D units, Legal Service Units, rather than detitle with collectively or through flow control. Management of intellectual property as such by and large would fail to produce immediate or admirable benefits to the enterprise, serving at most to avoid occasioning of losses, in fact and indeed it is but through strategic exploitation of an intellectual property management system would it be possible to pursue a share of the market or to realize licensed proceeds. 2. Problems facing domestic enterprises with respect to management of intellectual properties Renowned firms based in Taiwan and active in the prosecution of management of intellectual properties do so primarily because their executive realized how grave a loss could be incurred to corporate assets and corporate operation due to infringement charges, Taking the infringement charge by an alien firm against a certain domestic firm early January, 2006, for example, to reach a compromise a payment amounting to approx, US$85,000,000 was necessary, and that claiming a share of 10% of the Company's annual revenue, that lesson has taught the Company to pour mass resources in the establishment and execution of intellectual management system. In the Knowledge-based Economy of today, no top management of any enterprise or organization would deny the importance of the management of intellectual properties, understanding alone, however, would not suffice to push the Company getting to work forthwith, because the buildup of an intellectual property management system will of necessity incur a lot of costs, seeing the want of possibility to obtain any investment return all at once, most enterprises or organizations would have their intellectual property management systems designed essential to prevent infringement upon other part's intellectual properties. Notwithstanding that our local manufacturers have gradually come to their senses as regards the importance of intellectual properties, larger scale ones, confronted with cutthroat pricing competition in the global market, is largely harassed with litigation on infringement of intellectual properties; whereas the medium and small businesses, owing to inadequate manpower and funding resources, were largely unable to go for in-depth development of intellectual properties, still, a key to consistent development of our local industries lies in a sound planning of the intellectual property management system, amid the current of the Knowledge-based Economy featuring the 2lst century, the creation and protection of intellectual property rights is a critical index to the upholding of our national competition. So top issues on the agenda for competent authorities in charge of industrial sectors include; assisting local businesses or organizations to implement systematic management of intellectual properties, to retain, accumulate intellectual properties produced by its employees and convert same into intellectual assets, to thereby upgrade their competitive margin, this chain of efforts must be formed in a grand cycle encompassing all the staff, to stand firm and last. II. Formation and orientation of Taiwan's standards on management of intellectual properties 1. The origin of Taiwan's regulation of the standards on management of intellectual properties Impacts brought to local industries in the wake of Taiwan's participation in WTO have taught both the Administration and the Industry to realize, in the long run, that protection of intellectual strength and exploitation of intangible assets can redound much to build up competitive margin, Now that our nationwide economic and trade activities have entered global, international scale, the number one issue is to emphasize protection of intellectual properties if only it accounts to move further into transnational frontier and let our national competition be felt there, what's more, protection of intellectual properties is an obligation laden upon all the member states of WTO, and that consistent with our national interests Yet protection of intellectual properties is a comprehensive, integrally interrelated task demanding nationwide consensus, calling for unreserved cooperation across governmental, civil, administrative and legislative channels, if only any effect to be expected accounts, yes indeed it is but through an environment propitious to the safeguarding of intellectual properties can R&D tank go deeply rooted in this country, therein lies rightly a sure key to permanent survival of our nation at large. The buildup of a convenient, effective and low-cost intellectual property management system in lieu of discrete controls seen traditionally in our local enterprises or organizations, will help the enterprises to effectively control and safeguard their intellectual properties, and that sub serving to protect their proper interests, reduce risks of theft, and restraint from encroaching upon the intellectual properties of third parties, besides, roytitleies through licensing arrangement will redound to corporate revenue, that paralleled with boosted marketing competition, intellectual properties protected and exploited as such will mark a resounding foundation for lasting development in our times where know-how alone is the king. The foreground being recited above, in 2003 and 2004 the Intellectual Property Office, a department of the Ministry of Economic Affairs (IPO for short), appointed Science and Technology Law Center, a unit under Institute for Information Industry (STLC for short), to establish an intellectual property management system suitable for local enterprises (Then known as “Intellectual Property Management System Standard”, in the hope that by the implementation of standardized intellectual property management procedure and promotion of same, local enterprises may remain less likely to getting involved in infringement charges, among other benefits foreseeable with exploitation of properly owned intellectual property rights. 2. Orientation of Taiwan's intellectual rights standards On December 9, 2004, the Ministry of Economic Affairs held a Conference on “Deliberation on the instituting and promotion of standards for the management of intellectual properties of Taiwan”, whereat a resolution was reached to work for Taiwan Intellectual Property Management System basing on the Intellectual Property Management System Standard proposed by STLC under trust for Intellectual Property Office, eventually it is hoped that through national standard certifying processing said Intellectual Property Management System Standard be instituted as our National Standard, to build up a nationally acknowledged credibility. Enterprises would then be encouraged to introduce for themselves a certifying mark once entitled through certification, and efforts will follow to see that the Intellectual Property Protection System be instilled in day-to-day realities, the whole system would by then be promoted internationally so that the image of our nation as an active protector of intellectual properties will one day be known to the world at large. However, as it will take years to have a national standard institutionalized, moreover, the enterprises at large are not sufficiently informed with the notion of the management of intellectual properties, the first step might well be to build up an Intellectual Property Management System Rating Scheme, to be followed with specification of supplemental procedures, and the same on completion, be recommended to the industry circle, and progression to applying for national standard would begin only if extensive consensus is obtained in the first place, paralleled with correlation with international realities, After the task was transferred to the Industrial Development Bureau of the Ministry of Economic Affairs (IDB for short), in 2005, it was reoriented to the positioning of industrial specification, that anyway helps local enterprises or organizations to build up a wholesome intellectual property management system. To adapt to industrial convention respecting specifications, the Intellectual Property Management System deliberate herein is named “Taiwan Intellectual Property Management System” (TIPS for short). The TIPS which is in the charge of the IDB is indicated for autonomous introduction by individual enterprises or organizations, in the hope that a systematic model for the management of intellectual properties would help correlate existent hardware facilities with ad hoc Intellectual Property Management so that a convenient, effective and low-cost management system be easier founded for the enterprise or organization concerned, in place of traditional trivial, random management practices 3. Process of formation of Taiwan intellectual property management standards While the establishment of Intellectual Property Management Standard was still in progress for the STLC, there was already lots of matured management standard system among international communities for consultation, including, for example, the ISO Quality Management System. So eventually in 2003, 2004, the Intellectual Bureau encrusted the STLC to analyze the ISO9001:2000 Quality Management System in terms of its spirits and structures, and to look into the possibilities for combination with Intellectual Property Management as well, so that, in the affirmative case, what needs be done is to work out an Intellectual Property Management Standard to which all kinds of business and industry may fit, and that will help to achieve procedural flow, efficiency and standardization all at the same time. The ISO9001:2000 Quality Management System is a standard established by ISO (International Organization for Standardization), and which is currently a Quality Management System running around the world. In the year 2000 ISO combined through amendments of ISO9001, ISO9002 and ISO9003 published titleogether in 1994, to form ISO 9001:2000. ISO 9001:2000 since replaces all the previous standards and stands as the only and sole standard for certification, featuring emphasis on the consolidated functioning of Quality Management Systems and the target for comprehensive Quality Management. The ISO 9001:2000 based the entire system structure on PDCA Management Cycle (Plan-Do-Check-Action), way up from the Management Level, setting corporate quality policies and targets as dictated by customer needs, whereby planning of corporate resources is decisive in production and service outputs, what with measuring and monitor mechanism to persistently improve functioning of the entire quality system. With respect to various operational procedures in an enterprise or organization, a four-step PDCA comprising: (1) Plan, whereby quality policy is formulated; (2) Do; (3) Check, as to the outcome of what has been done; and (4) Action, corrective and preventive by nature; will intervene to help resolve problems as they arise and hence, achieve the targets. Abiding by aforementioned PDCA model, the STLC will firstly incorporate the Intellectual Property Management Standard into ISO 9001:2000 Quality Control System, thence consult the ISO system structure to split into 0 to 8 units: General Description, Scope of Application, Reference Standards, Definitions, Intellectual Property Management System, Management Commitment, Resource Management, Procurement, of Intellectual Proprieties, efforts as such should help the enterprises to promptly set up hard environments necessary to the management of corporate intellectual properties, and make the STLC easier in lending a hand to facilitate substantive functioning of corporate intellectual property management systems. Intellectual Property Management Standards incorporated to ISO system will prove more structurally effective, and help the enterprise to rapidly lay a foundation for the management of their intellectual properties, so that hopefully they may more effectively manage, make use of their intellectual properties, whereby to fortify their competitive margin, so that in the long run the overall international competitive margin of our industries is upgraded. A common goal for the design and setup of intellectual property, management standards lies in searching for the maximum possible assent from the industrial society so that an auditing or certification platform be created to benefit the intellectual property management system that is working for any enterprise or organization in this country, in order for such systems one by one will necessarily conform to prescribed standards, minimum requirements from given organizations or stipulated in statutes inclusive, not to mention the ultimate goal of better protection and exploitation of intellectual properties, in a lawful and satisfying manner. However, as yet no consensus has been reached as regards the establishment of a national standard respecting management of intellectual properties, yet there is still a need for management of intellectual property rights among local enterprises or organizations, to offer the utmost assistance possible to them all, the Ministry of Economic Affairs has taken the initiative to revise what was once Intellectual Property Management Standard into Intellectual Property Management Specifications, and such is positioned as an industrial specification. By instructive posture, subjects considered suitable to accept said Intellectual Property Management Specifications include all kinds of organizations irrespective of their category, scale, products or services offered. Even units or ad hoc groups in a given organization may qualify for inclusion, including, for example, a company in its entirety, or a specific division of that company, a laboratory or production program. 4. Anticipated Benefits That the IDB is sparing no effort in the preparation of Intellectual Property Management Specifications is underlined with multiple objects, to offer a unified structure for the management of measurable intellectual properties, to help enterprises simplify their procedures of management of intellectual properties, to enlighten the object enterprises or organizations with the understanding and what to expect from an Intellectual Property Management System. If only management of intellectual properties is incorporated into routine operation of an enterprise whatsoever, and that concept spread afar internationally, that would certainly help to build our national image as a country that is brave enough to initiate protection of intellectual properties. In the mean while, with ever increasing demand for the setup of intellectual property management systems, a reality as such in the foreground, a good chance is struck to enlarge the service market or intellectual property management services emanation from Taiwan, and that sub serving to the development of know-how service industry, a surplus for the service industry by any rate. An enterprise or organization by the establishment of intellectual property management system may expect the following benefits; Increased competitive strength and creation of additional value. Once an Intellectual Property Management System is there, the facilitation to maximize intellectual properties will redound to corporate competition, while help creation more of additional value. Taking our sports implements industry or the vehicle lights manufacturers in Taichung area for example, intellectual properties are present in the products and in the production process as well, to make available diversified options for the purchasing parties, thereby greatly enhancing additional value to the products, interpreted to mean more profits realizable over pure OEMs. Avoidance of vicious cycle, increased will to placement of purchasing order. If only optimum use is made of intellectual properties such that they are represented in the products, in the process or even in the technology itself, Taiwanese manufacturers who are basically OEMs may avoid the painful dilemma of vicious competition, and may even make it may avoid the painful dilemma of vicious competition, and cay even make it for overseas buyers to be core willing to place orders, Taking again as an example a TIPS induced manufacturer, 2005, the Universal Scientific Industrial Co., Ltd., after the USI has built internal intellectual property management system pursuant to TIPS specifications, alien clients on the point of placing orders may very soon be adequately informed with the model the USI takes respecting their management of intellectual properties, satisfied that the products being purchased are largely safe from infringement of other's proprietary rights, the alien buyer may be willing to place more and greater orders. Reduced management costs, creation of greater profits. Most Taiwan-based medium and small businesses are far from being able to input mass manpower or material resources simply to build up systematically structured intellectual property management system. The meaning of introducing TIPS specifications lies simply in the close embodiment of existent hard equipments with management of intellectual properties for any intending enterprise whatsoever, so that a full set of convenient, effective and low-cost management may come into being in lieu of random and discrete management practice which has been the case for years or even for generations. Obvious benefits with such an arrangement include protection of proper interests, preclusion of encroachment upon the proprietary rights of third parties, and perhaps the possibility of granting licensing arrangements to earn roytitleies for the company. III. Implementation of Taiwan Intellectual Property Management Standards: History and Current Situation From 2006, the way to promoting the Intellectual Property Management System is prosecuted in the form of specifications submitted to industries in the hope that industries would establish their own intellectual property management systems using such specifications, through systematic flows, efforts as such should help to boost corporate competition, and the keynote has therefore shifted from once where it was, that was, verifying if a given industry had introduced and honestly follow specified Intellectual Property Management System against given standards. What follows below is a phase-wise account of the history of implementation of Taiwan's Intellectual Property Management Standards: 1. Trial Phase Emphasis placed on Intellectual Properties following Taiwan participation in WTO has driven the IPO to appoint the STLC to formulate a full set of standards for the management of intellectual properties based on a structure and morale embodying ISO 9001:2000 Quality Control Systems, and the same intended for trial introduction into local industries in addition to personnel training and promotion purposes. In this phase important businesses on the agenda include: To launch the institution, the intellectual property management standard will be firstly introduced into three manufacturers beginning in 2004, whereby manufacturer's comments collected in the counseling process will turn to account for reference for amendment considerations respecting said Intellectual Property Management Standard, with outcome of the introduction serving as a model for other manufacturers. As regards promotion, suitable promotion scheme will be put into effect to introduce Intellectual property Management Standard to enterprises or organizations to which predecessor experiences will be supplied as well, whose newly gained experiences would be shared among other enterprises for reference in Outcome Sharing Party activities. As regards counseling input, there have been 3 manufacturers in 2004, Asia Optical Co., Inc., Cheng Uei (Foxlink) Precision Industry Co., Ltd. and HiTRUST Inc., receiving trial introduction of Intellectual Property Management Standard whereby each has had their own Intellectual Property Management System established. As regards personnel training, seeds have been chosen who, after having received training on relevant curriculums, betook themselves to assisting enterprises or organizations introducing Intellectual Property Management Standards, this in turn benefits the seeds with on-job experiences such that they turned out better prepared to demonstrate counseling, assessment capabilities in the face of future promotion tasks, As regards R&D tasks, consistent brainstorming for the working of supplemental or operating procedures necessary for the promotion of Intellectual Property Management Standards, prepping up comprehensive implementation programs based on experiences accumulated over practical and personal involvements. 2. Demonstrative Introduction Phase Since promotion task is passed to the IDB in 2005, efforts to institute Intellectual Property Management Standard switched to introducing Intellectual Property Management Specifications where the top concern is to be helpful for the industries concerned. On the basis of as is Intellectual Property Management Specifications and prep up verification mechanism; Seen in the result of institutional promotion, out of stipulations and regulations conditioning the promotion of intellectual property management system that is persistently deliberated by the STLC on behalf of the IDB, a total of 11 documents nave been released pertinent to supplemental procedures and relevant date, plus up to 10 errands comprising reviewing of statutory provisions and effecting of major amendments. As regards promotion efforts; done are printing of notes on application of counseling services, brief introduction of Intellectual Property Management System, Specification of Intellectual property Management System, Paragon of Management Handbook and Guide to Assessors. Promotion efforts were consummated in 3 promotion seminars which took place in the north, central and southern part of Taiwan respectively, also done is an outcome share party where the protagonist is paragon manufacturer introducing the system in question; cooperation has been an event with Economic Daily News which has given an in-depth coverage on paragon counsel case. Forum on the media Economic Daily News whereat reputed scholars on intellectual property issues and experts in practice, such as Professor Ming-Yan Shieh of National Taiwan University, Professor Chung-Jen Cheng of Shih Hsin University, have been attending. As regards counseling for introduction, a total of 8 middle or smaller businesses have been successfully counseled into introduction for exemplification purposes in 2005, they are: Yulon-Nissan, Asia Optical Co., Inc., Advanced Connectek Inc. (ACON), Meifu Technologies, Universal Scientific Industrial Co., Ltd. (USI), Cycling & Hetitleh Tech Industry R&D Center (CHC), Apex Nanotechnology Corporation, and AURORA Office Automation Corp. 4 counsel execution meetings have been held, plus one Pre-assessment Seminar, on-the-spot written evaluation has been conducted with respect to 8 exemplary induced manufacturers. As regards personnel training, a total of 98 person-rounds have benefited under training programs encompassing: induction seeds, internal auditors, exemplary counselors, reserved seeds. 3. The Weighted Promotion Phase Following conclusion of infrastructural consolidation in 2005, diagnostic service was given to have a close check on existent intellectual property management system that was working in enterprises and organizations, this effort in concert with experiences accumulated through exemplary inducement, in 2006, in order to find out actual needs against differentials in place for promotion and rectification of the specifications in use of the management of intellectual properties: Institutionally, way from 2006 the unified designation “Taiwan Intellectual Property Management System” (TIPS) will apply as a common technical specification in sectors including: industry, government, schools, R&D interests, Follow-up promotion tasks will continue in the form of a team comprising interested scholars, experts invited by the grace of the Industry Bureau, in charge of strategic planning, execution, supervision, and literature screening. As regards promotion and propagation, in 2006 it is largely through self-assessment and evaluation, to which participation is on a voluntary basis with notices served on induced enterprises of organizations, To spread afar the inducement movement so that more and more people are adequately enlightened with what is all about TIPS, a total of 3 instruction seminars have been sponsored in the north, central and south to go pursuant to the inducement experience concluded in 2005, plus several occasions of manufacturers’ conceptual exchange meetings. As regards counseled inducements, a total of 30 manufacturers have benefits under the TIPS diagnostic service as offered, they are: Tatung Co., Taiwan Design Center (TDC), King Car Industrial Co., Ltd., Systex Corporation, National Nano Device Laboratories (NDL), National Center for High-Performance Computing (NCHC), Chi Mei Frozen Food Co., Ltd., Eastech Electronics (Taiwan) Inc., Lee Chi Enterprise Co., Ltd., WisTek, PRIT Biotech Co., Ltd, Intech Taiwan Corporation, Yeastern Biotech Co., Ltd., Yangsen Biotechnology Co., Ltd., Apex Biotechnology Corp. (ApexBio), Taiwan Electric Voice Co., Ltd. (TEV), Gewise Industrial Inc., SportsArt Industrial Co., Chien Yuan Food Chemicals Co., Ltd., Unicare Biotechnology Corp., Tek Maker Corporation, Chi Lin Technology Co., Ltd., Ihetitleh Co., Ltd., A3000 System Co., Ltd., Standard Chem. & Pharm. Co., Ltd., Jwo Ruey Technical Co., Ltd., Omni Hetitleh Group, Alinc Taiwan Co., Ltd., Marie International Co., Ltd., S.Z.S. Co., Ltd., each of them outstanding and highly revered in their respective field of avocation. From them 5 manufacturers have been chosen to account for exemplary TIPS inducement cases, these are: TDC, King Car Industrial Co., Ltd, Systex Corporation, Yeastern Biotech Co., Ltd., SportsArt Industrial Co., to demonstrate how the recommended Intellectual Property Management Specification works in reality, As regards personnel training services: one round of Tips inducement trainee course and one round of TIPS self-assessment trainee course have been sponsored to benefit a total of 91 person-rounds 16 professionals have been entered on registration as counselors, one round of assessment commissioner pre-task seminar has been sponsored. IV. Outlook of Future Planning Based on the consensus reached in “Conference to Work for the Instituting and Promotion of Taiwan Intellectual Property Management Standard” sponsored by the Ministry of Economic Affairs, universal promotion of the intellectual property management system will be implemented continually in phases so that same may be introduced to industries different in scale or fields of interest with more flexibilities, comprising both enterprises and organizations: Institutionally, specifications will adapt to the scale and classification of the industry concerned, with possibilities to allow for the planning of simplified versions and industry-specific versions, besides, the introducing of TIPS specifications will inevitably incur the necessity of integrality with existent ISO systems, owing to limited timing allowed for counseling intervention, the Industry Bureau will firstly strive for the buildup of TIPS with as many as possible manufacturers. Embodiment of ISO with TIPS is a precondition to introducing the latter, since ISO is an internationally recognized standard, in so far as TIPS fails to be combined with ISO, to target industries the inducement task is always a mission impossible, As regards promotion and propagation, the government is planning to qualify industries to which the suggested intellectual property management system has been introduced successfully as eligible for extra score when they go applying for benefit under Creative R&D Counsel Plan, or for favorable terms in closing same plan, this as an incentive to induce more manufacturers, Being considered is the editing of Inducement Manual which would include introduction of exemplary cases, exemplary inducement procedures, to help build up interchange of inducement experiences among manufacturers, More concrete encouragement means will be offered to pilot manufacturers who are willing to set themselves as paragon in the inducement movement, and manuals disclosing governmental resources relevant to the issue of intellectual properties will be compiled for manufacturers' reference; sponsoring promotion seminars addressed to specific group of manufacturers, whereat pilot manufacturers will give an account of their own initiation experiences. As regards inducement counseling, a review of the background of manufacturers to which TIPS has been introduced will yield the notion that most of our traditional industries or medium and small technique R&D oriented concerns fell short of the manpower and experience necessary for management of intellectual properties, so they very much need and wish that the government assist them to build their own Intellectual Property Management System. To alleviate cost burden on the intending enterprises or organizations, being envisioned is enlargement of scope of reach of services in coordination with e-mail dominant autonomous verification system, phase-wise inducement mode may be introduced eventually to help reinforce the autonomous verification software capabilities, and to assist induced plants in operation. Currently the target is set at reaching titleogether 300 manufacturers who are able to run autonomous verifications under TIPS by the year 2008, meanwhile 50 rounds of TIPS external assessments are completed for the manufacturers and titleogether 120 clients having received TIPS diagnostic services. As to personnel training, being continually sponsored are training courses, under planning are certifying training agency buildup programs so that the training service may spread wide afar, by the year 2008 a total of 280 TIPS professionals will have been turned out due to training efforts; it is believed that more individuals would be attracted by appealing on the importance of intellectual properties with respect to corporations and individuals alike, so as to prolong and spread benefits by reason of resource input. As regards R&D progressions, as incessant improvements, researching efforts are indispensable to the buildup of impeccable intellectual property management system; current status of intellectual property management among local industries will be surveyed persistently in parallel with studying of present status of intellectual property managements around the world. It is hoped that through personnel training, what with publication, exchange and transmission of experiences accumulated with intellectual property management system or institutions, incessant improvement of intellectual property management system, setup of evaluation scheme respecting and so as to make more wholesome intellectual property management systems, the day will come sooner for “Wholesale and universal institutionalization of generalized intellectual property management systems across the manufacturers, legal persons, consortium in particular, researching institute throughout Taiwan” to come true. V. Conclusions: A Reliable statistic source in 2006 claimed that the percentage of commercialization by local manufacturers to whom patent rights have been granted against application is merely 0.3%, which figure is 10 times behind the corresponding average in international communities, the latter being 3% It is advisable for our manufacturers to realize that innovation and intellectual property management are independent of capital resources, management subsequent to the acquisition of patent privileges must never go slow or put aside. The prime object of implementation of TIPS by the government is to push for universal buildup of intellectual property management system so that local manufacturers whose interests are associated therewith may best exploit as well as protect their properly owned intellectual privileges thanks to subsequent relevant planning, that they be alerted to application of patented rights once granted to them. For any enterprise or organization to establish their own intellectual property management system after TIPS, they will have to understand in the first place their own strengths and weaknesses and orientation for future operations, they will then fix defined policy and corporate objective, and that supported by the top management level, the next step, is to decide as to whether an ad hoc unit be installed by taking into consideration corporate scale and resources, or if it is more desirable to commission intellectual property management to outside concerns. Creation of intellectual property depends upon the character of corporate products, the setup of an intellectual property management system is meant to manage the creation, up keeping and application of intellectual properties, the training mechanism functions to promote conceptions about intellectual property by instilling same among corporate employees, concrete safety guarding measures are required to physically protect intellectual properties. Safeguarding operations to provide protection of intellectual properties must be checked periodically, the PDCA model will intervene to appropriately amend both policy directive and systems of intellectual properties so that the system may best achieve its intended purposes by incorporating the auditing, accounting and financial management of intellectual properties at the same time. Fair and just verification scheme will be built to verify what happens to an industry to which the system has been introduced for some time, so that the industry may remain alert as to where it stands in the system; the need for counseling services arising as a result of corporate aspiration to pass evaluation will help create a market of counseling service addressed to service industries intending to offer systematic management services to needy clients, Then corporations or organizations will sooner pay more attention to the management of intellectual properties, while knowledge service industry will develop and prosper in like measure, the causes interacting with each other to bid birth to more innovation and growth, and Taiwan is brought closer and closer to fulfilling its affectionately nicknamed designation: Intelligence Island.

A Preliminary Study on The Legal Effect of the Blockchain-Generated Data in Taiwan

A Preliminary Study on The Legal Effect of the Blockchain-Generated Data in Taiwan I. Preface   Governments around the world have set various regulations and guidelines to deal with the increasing application of blockchain technology, trying to keep the law up to date with technological development and the latest trends. Among them, the application of blockchain technology to regulations has become a hot topic. Because of its features, such as immutable, easy to verify and transparently disclosed, it can improve the efficiency of law enforcement and reduce cost. Moreover, decentralization and the verification mechanism generated by mathematical computation can avoid the disputes arising from the existing system, in which the mechanism is set up and controlled by independent institutions, and thus the credibility could be universal. The international trend also shows the importance attached to the application of blockchain technology in the legal field. In 2017, the “Legal Services Innovation Index”, a study conducted by the Michigan State University College of Law and Google evaluated the level of innovation of law firms according to the search data on innovation indicators of the world’s major law firms. Blockchain has the highest number of clicks among all indices, and the average number of clicks of blockchain is more than twice that of AI.[1] In addition, there are international cases regarding the connection between the blockchain technology and legal provisions as well as the real cases that used blockchain technology to handle legal matters.[2] An organization, such as the Global Legal Blockchain Consortium (GLBC), work with enterprises, law firms, software development units, and schools to study the standards formulation and application methods of the application of blockchain technology to law-related matters. [3] This article will first discuss the legal enforceability of data generated by the blockchain technology through international cases, then review Taiwan’s current status and the legal enforceability of the data generated by the blockchain technology and to explore possible direction for regulatory adjustment if the government intends to ease the restriction on the application of blockchain in the fields of evidence authentication and deposition. II. International cases 1. US case: adjust the existing regulations and recognize the enforceability of blockchain technology   The amendment HB2417[4] to the Arizona Electronic Transactions Act (AETA) signed by Arizona in April 2017 defines the blockchain technology and smart contracts and recognizes their legal effect on signatures, records and smart contracts. HB2417 defines “blockchain technology” as a “distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by “tokenized crypto economics or tokenless” and provides that the “data on the ledger” is protected with cryptography, is immutable and auditable and provides an uncensored truth.” It’s worth noting that although, by definition, the data is true, it is uncensored truth in nature, which emphasizes the originality of the data. A “smart contract” is an “event driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger that can take custody over and instruct transfer of assets on that ledger.” Under the original AETA regulations, records or signatures in electronic form cannot be deprived of legal validity and enforceability merely because they are in electronic form. To eliminate the legal uncertainty of any blockchain related transactions and smart contracts related to digital assets, HB 2417 states that a signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature, and a record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record. The statute also provides that smart contracts may exist in business, and a contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a “smart contract term.” This makes the enforceability of electronic signing and electronic transactions made by Arizona’s blockchain technology equivalent to that of the signature and contract made by the traditional written format. In the following year, the Ohio governor signed the amendment SB220[5] to the Uniform Electronic Transactions Act (UETA) in August 2018, which took effect from November. The focus of the amendment is the same as that in Arizona. Although, unlike HB 2417, SB220 does not define blockchain technology, the added content can still guarantee the enforceability of electronic signatures and contracts made by the blockchain technology. The focus of the two amendments in the US is to supplement and revise the laws and regulations made in the past so that they are applicable to the transaction method under blockchain technology and have the same effect as other recognized methods. This reduces the uncertainty related to blockchain technology at the regulatory and commercial application level, and is expected to attract the blockchain related companies, investors and developers. 2. Case of China: The enforceability of blockchain technology in evidence deposition is recognized in line with courts’ new type of judgment.   In September 2018, the Supreme People's Court implemented “The Provisions on Several Issues Concerning the Trial of Cases by Internet Courts,”[6] in which Paragraph 2 of Article 11 mentions that where the authenticity of the electronic data submitted by a party can be proven through electronic signature, trusted time stamp, hash value check, blockchain or any other evidence collection, fixation or tamper-proofing technological means, or through the certification on an electronic evidence collection and preservation platform, the Internet court shall make a confirmation. It shows that the Internet court can recognize the evidence deposited by blockchain technology, and its enforceability is equivalent to that of other technologies if its authenticity can be proved. Paragraph 1 of the same article also proposes the basis for review and judgment on the relevant standards for the broad definition of electronic evidence recognition. “The authenticity of generation, collection, storage and transmission process of the electronic data shall be examined and judged, and the items to be reviewed include whether the hardware and software environments such as the computer system based on which electronic data is generated, collected, stored and transmitted are safe and reliable; whether electronic data originator and generation time are specified, and whether the contents shown are clear, objective and accurate; whether the storage and safekeeping media of electronic data are definite, and whether the safekeeping methods and means are appropriate; whether electronic data extractor and fixer, and electronic data extraction and fixation tools and methods are reliable, and whether the extraction process can be reproduced; whether the contents of electronic data are added, deleted, modified or incomplete, or fall under any other circumstance; and whether electronic data can be verified in specific methods.” The judgment is based on a clear review. It is a supplement to the notarization process, which was the solo judgment basis for the enforceability of digital evidence. In addition, the rules on proof are clearly set out in Article 9, which covers two situations: online and offline. For offline evidence, the parties can convert it into electronic materials by scanning, re-shooting and duplicating, and then upload it to the litigation platform. For online evidence, it can be divided into two situations. One is the online electronic evidence possessed by the party, which can be imported to the litigation platform by providing links or uploading materials. The other is that the Internet court can obtain the structural information of the relevant cases from the e-commerce platform operators, Internet service providers and electronic data deposition and retrieve platform, and import it to the litigation platform to directly provide the information to both parties so that they can select and prove their claims. In this way, the court can use technical means to complete the migration and visual presentation of information. Before the Supreme People's Court enforced the provisions, the Hangzhou Internet Court of China recognized the enforceability of electronic evidence under the blockchain technology when hearing a copyright dispute in June 2018. The court's judgment pointed out that after reviewing the impartiality, technical level and evidence preservation methods of the blockchain evidence deposit service provider, the enforceability of the evidence is recognized, and thus the case was deemed infringement.[7] Beijing Dongcheng District Court also reviewed the blockchain deposition technology in an infringement of information network communication in September of the same year, including data generation, deposition, preservation, and recognized the enforceability of electronic evidence made by the blockchain technology. The court adopted the electronic evidence[8]. The Beijing Internet Court allows evidence deposition of the litigation files and evidence uploaded to the electronic litigation platform through the Balance Chain of evidence deposition established by the blockchain technology when handling the litigation cases online. This can prevent tampering and ensure the safety of litigation while keeping possible litigation evidence to facilitate verification in the future. While the Balance Chain is going online, the supporting standards, including the Beijing Internet Court Electronic Evidence Platform Access and Management Standards, the Enforcement Rules of the Beijing Internet Court Electronic Evidence Platform Access and Management Standards, the Application Form for Beijing Internet Court Electronic Evidence Deposition Access and the Instruction on the Beijing Internet Court Electronic Evidence Deposition Access Interface, are released simultaneously. These supporting standards prescribe the requirement of receivers, the requirement for the electronic information system of the receiver and the requirement for the juridical application of the evidence platform in details from the practical point of view so that the potential receivers can interconnect in a compliant manner while ensuring the quality of the connected data. III. Taiwan’s current situation   In the above cases, the United States amended the laws and regulations related to the electronic transaction by increasing the scope of the terms, such as electronic forms of records, signatures and transactions so that the records, signatures and transactions made by the blockchain technology is as effective as that of other technologies. According to Article 9 of the Taiwanese Electronic Signatures Act, the enforceability of the data generated by blockchain technology shall still be judged case by case in terms of the technology for electronic documents, signature and transaction formation, and its applicability or exclusion shall be determined by laws or administrative agencies. In China, the role of electronic data is discussed in the relevant standards used by the Internet Court to examine the cases. Regarding the definition of electronic materials, electronic records and electronic documents, Paragraph 1 of Article 2 of the Taiwanese Electronic Signatures Act defines electronic document as a record in electronic form, which is made of “any text, sound, picture, image, symbol, or other information generated by electronic or other means not directly recognizable by human perceptions, and which is capable of conveying its intended information.”[9] In addition, Article 4 states “With the consent of the other party, an electronic record can be employed as a declaration of intent. Where a law or regulation requires that information be provided in writing, if the content of the information can be presented in its integrity and remains accessible for subsequent reference, with the consent of the other party, the requirement is satisfied by providing an electronic record. By stipulation of a law or regulation or prescription of a government agencies, the application of the two preceding paragraphs may be exempted, or otherwise require that particular technology or procedure be followed. In the event that particular technology or procedure is required, the stipulation or prescription shall be fair and reasonable, and shall not provide preferential treatment without proper justifications.” [10] The electronic records, regardless of the type of technology, are given the same effect as paper documents with the consent of both parties. In litigation, electronic records, electronic evidence or similar terms are not found in the Criminal Code of the Republic of China, the Civil Code, the Code of Criminal Procedure and the Taiwan Code of Civil Procedure. The adoption of electronic records often refers to Paragraph 2 of Article 220 of the Criminal Code of the Republic of China[11]. An audio recording, a visual recording, or an electromagnetic recording and the voices, images or symbols that are shown through the computer process and are sufficient evidence of intention shall be considered a document. The content that is considered meaningful is that the identity of the person expressing the content is identifiable according to the content and can be used to prove legal relationship or fact in social life. The relevant standards for proof under the electronic evidence follow Article 363 of the Taiwan Code of Civil Procedure[12]. For non-documentary objects which operate as documents, including those are accessible only through technological devices or those that are practically difficult to produce their original version, a writing representing its content along with a proof of the content represented as being true to the original will be acceptable. However, the way of proof or recognition standards are not sufficiently described. Or according to Paragraph 2 of Article 159-4 of the Code of Criminal Procedure, “documents of recording nature, or documents of certifying nature made by a person in the course of performing professional duty or regular day to day business, unless circumstances exist making it obviously unreliable. In addition”, and Paragraph 3 “ Documents made in other reliable circumstances in addition to the special circumstances specified in the preceding two Items.” [13] In fact, the Juridical Yuan started to promote the electronic litigation platform (including online litigation) in 2016, and has launched the online litigation business by gradually opening the application for different types of applicants and litigation.[14] However, there is no description on the technical type and inspection standards of electronic evidence. Moreover, only the litigation evidence is uploaded. There is no evidence deposition before litigation for comparison during litigation.   Under Taiwan’s laws and regulations, electronic evidence and its proving method is not significantly different from other types of evidence. The judgment of evidence shall still depend on judges’ recognition on the evidence. Taking the practice of criminal litigation as an example, it can be viewed at three levels[15]: 1. The submission of the evidence. If the evidence is collected illegally, not following a statutory method or is not logically related to the pending matters, it will be excluded. This is the way to determine whether the evidence is eligible to enter the evidence investigation process. 2. In the investigation of evidence, the method of investigation (e.g., whether it is legal), the determination of relevance and the debate on evidence (e.g., to confirm the identity of the person producing the electronic evidence, whether the electronic evidence is identical to the original version without addition, deletion or alteration) are investigated during the investigation procedure. 3. The debate on evidence is to determine the power of the evidence by considering the relationship among the elements that constitute the whole and whether the evidence can prove the connection among all elements. In addition, whether the electronic evidence is consistent with the original version is often based on Article 80 of the Notary Act, "When making notarial deeds, notaries shall write down the statements listened to, the circumstances witnessed, and other facts they have actually experienced. The means and results of the experience shall also be stated in the notarial deeds.” [16] A notary shall review the electronic evidence and record the inspection process and the inspection results to demonstrate its credibility. VI. Conclusions and recommendations   According to the latest 2050 smart government plan[17] announced in the Executive Yuan’s 3632nd meeting held on December 27, 2018, the government is planning to connect the database of each government agency through blockchain technology, and the plan also includes establishment of digital identification. It is foreseeable that there will be more and more electronic materials, documents and records connected by blockchain technology in the future. When it comes to improve management efficiency and reduce the barriers to introduce this technology to various sectors, it is necessary to adjust the related regulations. At present, there are no statutory provisions for the technology that assist the use of the electronic evidence involved in traditional litigation channels or online platforms, including using blockchain for evidence deposition and authentication . This also poses uncertainty to the judges when they make judgments. If we consider the continuous development and breakthrough of technology, which is relatively faster than the legislative process, and the traditional tangible transactions and contracts are still the majority in life, Taiwan has defined electronic materials, electronic records and electronic documents in the Electronic Signatures Act to ensure and strengthen the legal rights and benefits under the adoption of the technology. In addition, the Electronic Signatures Act also reserves the right to determine whether the technology is applicable to the laws and regulations or administrative agencies. In other words, the technology behind electronic materials, records and documents are not specified, and the aforementioned electronic materials have the same effect as the contracts and signature as the traditional written format. However, there are no standards to specify which standards are valid for evidence deposition and authentication for electronic materials on the level of deposition and authentication. In the future, when improving the relevant functions of the online litigation platform, the Juridical Yuan can also consider using technologies, such as blockchain or timestamps to provide evidence deposition service, which is expected to enhance the efficiency of evidence verification for online litigation in the future and prevent wasting review resources on invalid evidence for a better operation mode. This is in line with the government's policy direction. By providing support and demonstration of emerging technologies, not only limited to blockchain, on the legal level, it can reduce the public’s uncertainty and risk on introducing or applying the technology to legal process. This is very helpful in realizing a large scale application of the technology. [1] Legal Services Innovation Index, Phase 1, Version 1.0, https://www.legaltechinnovation.com/law-firm-index/ (last visited on Jan. 11, 2019). [2] For example, Arizona's Arizona Electronic Transactions Act (AETA) and Ohio’s Uniform Electronic Transactions Act (UETA) described the electronic signature and the enforceability of contracts under blockchain technology; in China, Beijing Internet Court provides litigation files and litigation evidence deposition service based on blockchain technology for future litigation. [3] The Global Legal Blockchain Consortium website, https://legalconsortium.org/ (last visited on Jan. 11, 2019). [4] H.B. 2417, 53th Leg., 1st Regular. (AZ. 2017). [5] S.B. 220, 132ND General Assembly. (OH. 2017-2018). [6]“The Provisions on Several Issues Concerning the Trial of Cases by Internet Courts,” the Supreme People's Court of the People’s Republic of China http://www.court.gov.cn/zixun-xiangqing-116981.html (last visited on Jan. 11, 2019). [7] Tencent Research Institute, <The era of judicial blockchain has arrived? ——from the two cases of blockchain electronic deposition>, October 23, 2018, https://ek21.com/news/1/132154/ (last visited on Jan. 11, 2019). [8] Securities Daily, <Beijing Dongcheng District Court confirmed the evidence collection by blockchain for the first time-- application of "blockchain + justice" for new opportunities in history> October 20, 2018, https://www.jinse.com/bitcoin/258170.html (last visited on Jan. 11, 2019). [9] Paragraph 1 of Article 2 of the Electronic Signatures Act [10] Article 4 of the Electronic Signatures Act [11] Paragraph 2 of Article 220, “A writing, symbol, drawing, photograph on a piece of paper or an article which by custom or by special agreement is sufficient evidence of intention therein contained shall be considered a document within the meaning of this Chapter and other chapters. So shall be an audio recording, a visual recording, or an electromagnetic recording and the voices, images or symbols that are shown through computer process and are sufficient evidence of intention.” [12] Article 363 of the Taiwan Code of Civil Procedure, “The provisions of this Item shall apply mutatis mutandis to non-documentary objects which operate as documents. Where the content of a document or an object provided in the preceding paragraph is accessible only through technological devices or it is practically difficult to produce its original version, a writing representing its content along with a proof of the content represented as being true to the original will be acceptable. The court may, if necessary, order an explanation of the document, object, or writing representing the content thereof provided in the two preceding paragraphs.” [13] Paragraph 2 of Article 159-4 of the Code of Criminal Procedure [14] Liberty Times, <The Juridical Yuan is promoting “E-litigation.” Two new systems are on the road.” August 1, 2018, http://news.ltn.com.tw/news/society/breakingnews/2506118 (last visited on Jan. 11, 2019). [15] Chih-Lung Chen, “Seminar on the Reform of the Code of Criminal Procedure 3: Revision Direction of Rule of Evidence,” The Taiwan Law Review, Issue 52, Page 71-73 (1999). [16] Article 80 of the Notary Act. [17] BlockTempo, <The Executive Yuan Announced the Smart Government New Plan: the Taiwan Government will Use Blockchain Technology to Establish Information Exchange Mechanism of Various Agencies>, January 2, 2019, https://www.blocktempo.Com/taiwan-gv-want-to-use-blockchain-tech-build-data/ (last visited on Jan. 11, 2019).

The Taiwan Intellectual Property Awareness and Management Survey

The “National Intellectual Property Strategy Program” was announced by the Taiwan government in November 2011 in an effort to promote and raise the intellectual property capability of Taiwanese firms. As policy adviser to the Ministry of Economic Affairs in drafting the “National Intellectual Property Strategy Program,” the Science and Technology Institute under the Institute for Information Industry (STLI) conducted a survey in 2012 in order to gain a broad overview of the level of IP awareness and IP management and use among Taiwanese firms. The survey was distributed to 1,384 firms that are listed either on the Taiwan Stock Exchange or the Gre Tai Securities Markets. 281 companies responded to the survey, achieving a survey response rate of almost 20%. The content of the survey was divided into three parts: IP knowledge and understanding, current IP management within the companies and IP issues that companies face. The Importance of IP to Businesses Intellectual property has become a commonplace asset owned by firms. The growing significance of intellectual property to companies in general is undeniable, and firms are recognizing this as well. An overwhelming 93% of the respondents claim to own some form of intellectual property. The most common type of intellectual property owned by companies is trademarks, followed by patents and trade secret. Many companies are also actively seeking to obtain more intellectual property. Over 68% of the respondents indicated that they have submitted applications for formal intellectual property rights in the past two years. 84% of the respondents agreed with the statement that they believe intellectual property can bring added value for the firm. In addition, over 78% of the respondents also believe that intellectual property helps enhancing the company’s market position. It is clear that the majority of Taiwan firms already consider intellectual property to be a vital asset for their business and that building up and expanding their IP portfolio has become a top priority. This is also reflected in the annual spending that firms allocate for intellectual property. The survey respondents were asked whether a specific budget is allocated toward spending related to intellectual property every year, and the majority of the respondents, almost 70%, responded in the positive. Particularly, the respondents pointed out that they commit the most resources to obtaining and maintaining intellectual property rights every year. 10% of the respondents even indicated that they spent over NT$5 million annually on obtaining and maintaining intellectual property rights. The respondents were also asked about spending on inventor incentive, IP personnel, IP disputes and litigations and staff IP training. The results showed that companies commit the least spending on providing IP training for staff, with more than half of the respondents noting that they spend less than NT$500,000 on IP training each year and only 14% of the respondents noted that they will increase spending on IP training the following year. Weakness in Generating Value from IP As noted above, Taiwan firms are actively seeking to obtain more intellectual property and building up their IP assets. With almost 70% of the respondents noting that they have applied for intellectual property rights in the last two years shows that companies are generating quite a lot intellectual property, but whether all the intellectual property generated is being exploited and creating commercial and economic benefits remains doubtful. Most of the firms, almost 86% of the respondents, acquired their intellectual property through their own research and development (R&D). In contrast, the proportion of firms using other means of acquiring intellectual property is quite low, with only 17% of the respondents acquiring intellectual property through acquisition and 28% through licensing, while 41% percent of the respondents acquired their intellectual property by joint research or contracted research with others. With R&D being the major source of intellectual property for firms, firms are clearly putting in a lot of investment into acquiring intellectual property. However, the returns on these investments may not be proportionate. When asked whether the firm license out their intellectual property, only 13.5% of the respondents claimed to be doing so. This suggests that most Taiwanese firms are not using their intellectual property to generate revenue and commercial value. Instead, intellectual property is still mostly regarded and used as merely a defensive tool against infringement. Companies in Taiwan are also facing increasing risks of being involved in IP-related disputes and litigations. More than 30% of the respondents have already been involved in some kind of IP-related disputes and litigations in the past. The most common type of litigations faced by Taiwanese companies are patent infringement, followed by trademarks infringement, piracy and counterfeit, and disputes with (former) employees. Furthermore, more than 50% of the firms that have been involved in IP litigations noted that patent infringement and trademarks infringement pose the most detriment to the company’s business operations in general. It is evident that intellectual property has become a competitive weapon in businesses, and IP disputes and litigations are inevitable threats that most firms must face in today’s business world. Hence, it is essential for firms to have the necessary strategies and protection in place in order to minimize the risks created by potential legal disputes. With this in mind, it is worrisome to observe that most firms have not incorporated intellectual property into the company risk management program. Nearly 86.1% of the respondents claim to have some kind of risk management program in place within the company, but when asked what is included in the risk management program. Only 40.7% of the firms with risk management programs said that intellectual property is included, which is considerably lower than other types of risks generally seen in risk management programs. With IP disputes and litigations becoming an increasing threat that may bring negative impact for businesses, Taiwanese firms need to incorporate and strengthen IP risk management within the company. IP still not widely considered as business strategy With intellectual property being an important asset, firms should also have the necessary infrastructure and resources to manage IP accordingly and integrate IP into the company’s overall business operations. However, more than 50% of the respondents do not have designated personnel or department that is specifically responsible for managing the company’s intellectual property. Nearly 33% of the respondents indicated that the responsibility for managing IP is shared by other departments within the firm. When further asked about the tasks of the designated personnel or department that is responsible for IP, it is observed that the designated personnel/department mostly undertake routine tasks such as filing for patent applications and trademark registrations and maintaining relevant databases. Tasks such as patent mapping and competitive landscape analysis are the least performed tasks. The proportion of designated personnel/department for IP that are involved in the company’s business and research strategic decision making process is also quite low. This suggests that despite the importance of IP to firms, many Taiwanese firms still have not integrated IP into their overall research and business strategies and utilize their intellectual property as a strategic tool in their business operations. Low Levels of IP Awareness and Training within Firms In order to gauge the level of IP knowledge and understanding in Taiwanese firms, the survey also contained 10 very basic questions on intellectual property. Surprisingly, the respondents that answered all the questions correctly were less than 4%. The proportion of respondents that correctly answered 5 or less questions did not even reach 50%. This means that Taiwanese firms still lack fundamental IP knowledge and understanding in general. This is also reflected in the response to the question whether the company has an overall IP policy in place, which also serves as an indication of the level awareness and concern with intellectual property within the firm. An IP policy that is distributed to company staff means that IP awareness is promoted within the company. However, almost 40% of the respondents claimed that there is no overall IP policy within the company, and nearly 30% of the respondents noted that even if there is an IP policy, it is not made widely known to company staff. This reveals that many Taiwanese companies still need to undertake more IP awareness promotion within the firm. More IP awareness promotion is also justified by the results to the question as to whether the company provides IP training for company staff. The results showed that almost 44% of the respondents do not provide any form of training in IP to company staff at all. This also corresponds to the result noted earlier that most respondents commit the least funding to providing IP training each year. Providing regular IP training to staff is certainly still not the norm for most Taiwanese firms. Issues facing businesses and their policy needs Taiwanese firms still faces many difficulties and challenges in their intellectual property management and hope that the government could provide them with the assistance and resources needed to help them enhance their intellectual property capacity and capability. Some of the major difficulties that the respondents pointed out in the survey include the lack of IP experts and professionals. It is difficult for firms to find and hire people with adequate professional IP skills, as the education and training currently provided by universities and professional schools do not seem to meet the actual IP needs of companies. Another major difficulty faced by Taiwanese firms is the lack of information and knowledge regarding international technical standards and standard setting organizations. A significant portion of the respondents expressed the wish for the government to help them gain entry and participation in international standard setting organizations. Among the other difficulties, the regulatory complexity and lack of clarity with the ownership of intellectual property arising from government-contracted research, which poses as barrier for firms in obtaining licenses for use and exploitation, is also an issue that the majority of the respondents hope the government could improve. In addition to the difficulties mentioned above that Taiwanese firms hope the government would help them encounter, the respondents were also asked specifically what other resources and assistance they would like to seek from the government. 69.4% of the respondents hope that the government could provide more training courses and seminars on IP. Many respondents are also seeking a common platform that can unify all resources that could help enhance IP management. Expert assistance and consultation on obtaining intellectual property rights and providing information on international IP protection and litigation are also resources that Taiwanese firms desire. More than 50% of the respondents also indicated that they would like to receive assistance in establishing IP management system within their firms. Conclusion The results of the survey provided insight into the level of IP management among companies in Taiwan. Although the importance of intellectual property for businesses is undeniable and widely recognized by firms, the results of the survey revealed that there is still much room for improvement and for Taiwanese firms to put in more efforts into strengthening and enhancing their IP capabilities. In general, Taiwanese firms have not incorporated their intellectual property into their management strategies and derived adequate value. Intellectual property remains mostly a defensive tool against infringement. Furthermore, there is still need for greater promotion of IP awareness among firms and within firms. With these IP management difficulties and deficiencies in mind, it should be noted that the respondents of this survey are all listed companies that are already of a certain size and scale and should have greater resources in their disposal to commit to their IP management. It would be reasonable to assume that small and medium firms, with significantly less resources, would face even more difficulties and challenges. Using this survey results as reference, the “National Intellectual Property Strategy Survey” would seek to help Taiwanese companies address these IP issues and provide adequate assistance and resources in overcoming the challenges Taiwanese companies face with their IP management. It is also hoped that this survey would be carried out regularly in the future, and that the survey results from 2012 would serve as a baseline for future surveys that will assist in observing the progress Taiwanese businesses are making in IP management and provide a whole picture of the level of IP awareness and management within Taiwanese firms.

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