Intellectual property rights

IP protection for software

Which intellectual property rights are available to protect software, and how do you obtain those rights?

Software can be protected by intellectual property rights such as patent, copyright or trade secret. As to patent, an inventor may file an application with Taiwan’s Intellectual Property Office, and the patent right will be obtained once the application is approved. For copyrights and trade secrets, there are no registration or filing requirements for a copyright or a trade secret to be protected by law. However, there are certain features that qualify a copyright or trade secret, such as ‘originality’ and ‘expression’ for copyrights, and ‘economic valuable’ and ‘adoption of reasonable protection measures’ for trade secrets.

According to the Patent Act of Taiwan, the subject of a patent right is ‘invention’ and an invention means the creation of technical ideas, utilising the laws of nature. As a general rule, business methods are regarded as using social or business rules rather than laws of nature, and therefore may not be the subject of a patent right. As for software-implemented inventions, if it coordinates the software and hardware to process the information, and there is a technical effect in its operation, it might become patentable. For instance, a ‘method of conducting foreign exchange transaction’ would be deemed as a business method and thus unpatentable; however, a ‘method of using financial information system to process foreign exchange transactions’ might be patentable.

IP developed by employees and contractors

Who owns new intellectual property developed by an employee during the course of employment? Do the same rules apply to new intellectual property developed by contractors or consultants?

Intellectual property developed by an employee during the course of employment

With regard to a patent, the right of an invention made by an employee during the course of performing his or her duties under employment will be vested in his or her employer and the employer should pay the employee reasonable remuneration unless otherwise agreed by the parties.

A trade secret is the result of research or development by an employee during the course of performing his or her duties under employment and it will belong to the employer unless otherwise agreed by the parties.

For copyright, where a work is completed by an employee within the scope of employment, the employee is the author of the work but the economic rights to this work will be enjoyed by the employer unless otherwise agreed by the parties.

 

Intellectual property developed by contractors or consultants

In respect of patent rights and trade secrets, the agreement between the parties will prevail, or these rights will be vested in the inventor or developer in the absence of such agreement. However, if there is a fund provider, the funder may use this invention.

In respect of copyright, the contractor or the consultant who actu­ally makes the work is the author of the work unless otherwise agreed by the parties; the enjoyment of the economic rights arising from the work should be agreed by the parties, or these rights will be enjoyed by the contractor or the consultant in the absence of such agreement. However, the commissioning party may use the work.

Joint ownership

Are there any restrictions on a joint owner of intellectual property’s right to use, license, charge or assign its right in intellectual property?

In respect of patents and trademarks, each joint owner may use the jointly owned rights at his, her or its discretion; however, a joint owner may not license or assign the jointly owned rights without consent of all the other joint owners. In respect of copyrights and trade secrets, each joint owner may not use, license or assign the rights without unanimous consent of the other joint owners, while the other joint owners may not withhold the consent without reasonable cause.

Trade secrets

How are trade secrets protected? Are trade secrets kept confidential during court proceedings?

Trade secrets are protected if they satisfy the following constituent elements:

  • information that may be used in the course of production, sales or operations;
  • having the nature of secrecy;
  • economic value; and
  • adoption of reasonable protection measures.

 

To keep the trade secrets confidential during court proceedings, the court trial may be held in private if the court deems it appropriate or it is otherwise agreed upon by the parties. The parties and a third party may also apply to the court for issuing a ‘confidentiality preservation order’, and the person subject to this confidentiality preservation order should not use the trade secrets for purposes other than those related to the court trial or disclose the trade secrets to those who are not subject to the order.

Branding

What intellectual property rights are available to protect branding and how do you obtain those rights? How can fintech businesses ensure they do not infringe existing brands?

The Trademark Act in Taiwan provides for the protection of brands. The rights of trademarks can be obtained through registration with Taiwan’s Intellectual Property Office. The term of protection is 10 years from the date of publication of the registration and may be renewed for another 10 years by filing a renewal application.

Every registered trademark will be published on the official website maintained by the Intellectual Property Office and the trademark search system is accessible to the general public. On the search system, a fintech business may check whether an identical or similar trademark exists and who the proprietor of a registered trademark is.

Remedies for infringement of IP

What remedies are available to individuals or companies whose intellectual property rights have been infringed?

Patent

With regard to infringement of an invention patent, the patentee may claim for damage suffered because of the infringement. The amount of damages may be calculated by:

  • the damage suffered and the loss of profits as a result of the infringement;
  • profit earned by the infringer as a result of patent infringement; or
  • the amount calculated on the basis of reasonable royalties.

 

If the infringement is found to be caused by the infringer’s wilful act of misconduct, the court may at most triple the damages to be awarded. Patent infringements have been decriminalised since 2003.

 

Copyright

The damage suffered because of copyright infringement may be claimed in the process of civil procedure. As for criminal liabilities, there are different levels depending on different types of infringement, ranging from imprisonment, of no more than three years, and detention to a fine of no more than NT$750,000.

 

Trademark

The damage suffered because of trademark infringement may be claimed in the process of civil procedure. As for criminal liabilities, any person shall be liable to imprisonment for a period not exceeding three years or a fine not exceeding NT$200,000, or both, if he or she:

  • uses a trademark that is identical to the registered trademark in relation to identical goods or services;
  • uses a trademark that is identical to the registered trademark in relation to similar goods or services and hence there exists a likelihood of confusion for relevant consumers; or
  • uses a trademark that is similar to the registered trademark in relation to identical or similar goods or services and there exists a likelihood of confusion for relevant consumers.

 

On 4 May 2022, the Legislative Yuan amended the Trademark Act to stipulate that any person who intends to use identical merchandise or services with a registered trademark and a collective trademark for himself or herself or any person, and sells, manufactures, possesses, displays, exports or imports labels, tags, containers or products related to services with a sign identical or similar to another person’s registered trademark or collective trademark shall be liable to imprisonment for a period not exceeding a year or a fine not exceeding NT$50,000. The same liability also applies to any person who infringes a trademark on social media and the internet. The Executive Yuan has yet to determine the effective date of this amendment.

 

Trade secrets

The damage suffered because of infringement of trade secrets may be claimed in the process of civil procedure. As for criminal liabilities, a person may be sentenced to a maximum of five years imprisonment and, in addition, a fine between NT$1 million and NT$10 million if he or she:

  1. acquires a trade secret by an act of theft, embezzlement, fraud, threat, unauthorised reproduction or other wrongful means, or uses or discloses a trade secret that has been acquired;
  2. carries out an unauthorised reproduction of, or uses or discloses, a trade secret that he or she has knowledge or possession of;
  3. fails to delete or destroy a trade secret in his or her possession as the trade secret holder orders, or disguises it; or
  4. knowingly acquires, uses or discloses a trade secret known or possessed by others that is under the circumstances specified in points (1) to (3) above.