Based on the consideration of the needs for economic and trade development as well as overall national interests, Taiwan has been aggressively working on joining the Trans-Pacific Partnership Agreement (hereinafter “TPP”) so as to mutually benefit from free trade and a level playing field along with other countries and regions. However, Taiwan’s intellectual property-related laws and regulations, including the Trademark Act and the Copyright Act, still comprise provisions inconsistent with those of the TPP, which need to be adapted accordingly. The Intellectual Property Office, the Ministry of Economic Affairs (“TIPO”) thereby recently completed draft amendments to the Trademark Act and the Copyright Act on May 10th, 2016.

Regarding the Trademark Act, the aforementioned draft amendment consists of four focal points:

  1. Amending the subjective essentials of infringement liabilities arising from counterfeiting trademark labels or packaging or otherwise:

As provided in Paragraph 3, Article 70 of the current Trademark Act, any act of manufacturing, possessing, displaying, selling, exporting or importing labels, tags, packagingor containers, or services relevant to articles that have not been applied in relation to goods and services, shall be deemed an infringement of trademark rights if the actor performs such activities without the consent of the proprietor of a registered trademark, and knowing that such articles would likely infringe trademark rights as prescribed in Article 68. However, the TPP regulates in Article 18.74 that civil liabilities of trademark infringement shall cover circumstances wherein an infringer knowingly, or with reasonable grounds to know, engages in infringing activities. The aforementioned provisions of the existing Trademark Act are, therefore, to be amended to specify that acts of counterfeiting trademark labels or packaging or otherwise, either knowingly or with reasonable grounds to know, shall be deemed an infringement of trademark rights.

  1. Adding criminal penalties for counterfeiting trademark or collective trademark labels or packaging:

Referring to the provisions in Paragraph 3, Article 18.77 of the TPP, criminal penalties are to be added for acts of counterfeiting identical or confusingly similar trademark labels or packaging, on a commercial scale, for goods and services that are identical to those of the registered trademark. Moreover, in light of the flourishing digital transactions through the Internet, the draft amendment specifies that criminal penalties shall also apply to the same infringement through electronic media and the Internet.

  1. Amending criminal penalties for counterfeiting labels of certificate marks or otherwise:

According to Paragraph 2, Article 96 of the current Trademark Act, any person shall be liable for criminal penalties if the person counterfeits labels of certificate marks, knowing the likelihoodof infringement. “Knowing” here is limited to direct intention. Such provisions are inconsistent with those set forth in Paragraph 3, Article 18.77 of the TPP. Therefore, the essential of “knowing” is to be deleted, and the subjective essential of criminal penalties for counterfeiting labels of certificate marks or otherwise shall cover the direct intent and indirect intent as applicable to the principle of general criminal penalties. Moreover, in light of the flourishing digital transactions through the Internet, the draft amendment specifies that criminal penalties also apply to the same infringement through electronic media and the Internet.

  1. Amending the subjective essential of criminal penalties for sale or intention of selling infringing articles or otherwise:

The criminal penalties regulated in Article 97 of the current Trademark Act are imposed with an essential that the infringer sells or intends to sell infringing articles, knowing the likelihoodof infringement. “Knowing” here is limited to direct intent. Such provisions are inconsistent with those set forth in Paragraph 3, Article 18.77 of the TPP. The essential of “knowing” therefore is to be deleted, and the subjective essential of criminal penalties for sale or intent to sell infringing articles or otherwise shall cover the direct intent and indirect intent as applicable to the principle of general criminal penalties. Moreover, in light of the flourishing digital transactions through the Internet, the draft amendment specifies that criminal penalties also apply to the same infringement through electronic media and the Internet.

Regarding the draft amendment to the Copyright Act, the focal points are as follows:

  1. Extending the term of economic rights for works:

Copyright-related provisions in the TPP provide that the term of protection for economic rights is calculated on a basis of 70 years. In adaptation to such disciplines, the term of protection for economic rights in Taiwan is proposed to be extended from “the author’s lifetime plus 50 years after the author’s death” to “the author’s lifetime plus 70 years, or to 70 years beginning from the time of public release.” To achieve a balance between rights protection and the public interest, the draft amendment proposes to exclude an extension for the works which have already become public goods due to expiration of the term subject to the current Copyright Act before the enforcement of the draft amendment.

  1. Adding criminal penalties for circumventing technological protection measures:
    1. With respect to acts of disarming, destroying or any other means circumventing (circumvention behavior) the technological protection measures employed by copyright owners to prohibit or restrict others from accessing works (access controls); for instance, an enterprise which does not purchase legitimate software but instead uses the software by installing an illegitimate version and entering a serial number; the current Copyright Act imposes only civil penalties on infringers as pursuant to Paragraph 1 of Article 80-2. However, such circumvention behaviors which are of commercial nature should be deemed significant in terms of damages caused to the copyright holder. It is obviously insufficient to impose only civil penalties on the infringers. Therefore, in reference to the TPP, Article 1204 of the U.S. Copyright Act and Subparagraph 3-2, Paragraph 2, Article 136 of the Korean Copyright Act, criminal penalties are thereby to be added to punish circumvention behaviors for commercial purposes or with intent to make profits.
    2. In addition, Paragraph 2, Article 80-2 of the current Copyright Act provides that any equipment, device, component, technology or information for disarming, destroying, or circumventing technological protection measures shall not, without legal authorization, be manufactured, imported to be offered to the public for use, or offered in services to the public. Any person in violation of this provision shall be punished with criminal penalties pursuant to Subparagraph 2, Article 96-1 of the existing Copyright Act. Such regulations, however, fail to distinguish between commercial purposes and non-commercial use. Adjustments are thereby proposed in response to additional criminal penalties for circumvention behaviors to focus on combating acts violating technological protection measures with commercial purposes. Such amendments will reduce possible excessive interference by public authorities and avoid wasting judicial resources. Violation of technological protection measures by individuals with non-profit purposes will not be liable for criminal penalties to balance between public welfare and the Copyright holder.
  2. Adjusting crimes prosecuted ex officio in adaptation to prosecution upon initiative:

In response to permissions granted by the TPP, which allow its competent authorities to act in prosecuted ex officio to initiate legal action against copyright piracy and distribution on a commercial scale, the amendment to the Copyright Act redefines two infringements as crimes prosecuted ex officio: reproducing the work with the intent to sell or rent set forth in Paragraph 2 of Article 91, and distributing a copy in digital format with the intent to make profits and knowing that the copy infringes on economic rights set forth in Paragraph 2 of Article 91-1. Moreover, in response to an increase in online piracy due to the development of digital technologies, any infringement of the public transmission right pursuant to Article 92 of the current Copyright Act is redefined as a crime prosecuted ex officio.

  1. Adding civil and criminal protections for encrypted program-carrying satellites and cable signals.

Please be advised that the aforementioned draft amendments are indicative of future financial policy directions and have been listed as part of the executive power transition. The draft amendments will not be finalized until they are explained to, and discussed with, the successive administration. There are, therefore, possibilities that further adjustment might be madeto the content of these draft amendments.