Opening Statement by Yu-Chi Wang, General Director, STLC, Institute for Information Industry

For the past 11 years, the Science and Technology Law Center (STLC) has played an important role in the development of technology law and policy in Taiwan. The STLC has not only helped the Taiwanese government in drafting several pieces of technology legislation and providing professional advice about others, but also serves as a platform for the exchange of ideas about technology law and policy for government officials, academic researchers, and industry workers.

Today, the significance of us being this platform is expanded even further in the age of globalization. We publish the first English version of this electronic quarterly in full acknowledgement that STLC has to interact more with our peers in the rest of the world. We are aware of our social responsibility to introduce to the international community the progress and achievements in legislation and academic works done by our research fellows and other academics in the area of technology law and policy in Taiwan.

This electronic quarterly is one of the things we people at STLC would like to contribute to our profession at a global level, and to meet the new challenges in the twenty–first century. We hope you like it.

After 13 years, the Legislative Yuan passed the Artificial Reproduction Act on March 5 of this year. The Act indicates that artificial reproduction techniques shall be applicable only to married couples that are infertile or suffer from a hereditary disease. Unmarried couples, same sex couples, and unmarried, cohabitating couples are not eligible for artificial reproduction techniques.

In addition, a written consent of the infertile married couple is required before any procedure is performed. The purpose of the Act is to assure that the children of artificial reproduction will grow and develop in a healthy environment and to reduce the number of children that are born into single parent families. In order to prevent business or commercial transactions, the Act provides that the eggs or sperm donor for the reproduction shall be voluntary. The donor shall not designate the receiver and vice versa.

According to the Act, the eggs or sperm from the donor can only be used for one married couple in order to prevent complication of blood relationships from arising. The eggs or sperm acquired for artificial reproduction shall be destroyed when one party passes away, the eggs or sperm have been preserved for more than 10 years, or the donor requests to do so. Any developing embryo shall also be destroyed should the couple divorce, the marriage be nullified, one person in the couple pass away, preservation have exceeded 10 years, or the couple withdraw from the artificial reproduction procedure. Therefore, the Artificial Reproduction Act completely excludes the possibility of sperm retrieval after death.

Furthermore, at least one person out of the married couple shall have healthy eggs or sperm and the wife shall be capable of carrying the baby in her own womb. The issue of surrogate motherhood is not discussed in the Artificial Reproduction Act due to its complication involving science, ethics, law, and social morality. The Department of Health will provide a draft to regulate such matters in the future.

The Bio-Technology Meeting held by the Executive Yuan, Taiwan, R.O.C. on February 26 of this year discussed and reviewed issues related to many problems facing the bio-technology industry such as: investment, laws and regulations, finance and tax policies, pharmaceutical affairs. The Meeting also passed many significant resolutions that will loosen tax regulations on services, knowledge, technology, and intellectual property transactions.

The main resolutions passed by the Meeting are as follows:

Lower the threshold regarding deferred tax liability for technology investments prescribed in Sub-Section 2, Section 1, Article 19-2 of the Statute for Upgrading Industries in order to create investment incentives for industries. In other words, several limits to deferred tax liability will be lifted like the number of shareholders not exceeding five and shares to be subscribed with 20% restriction of the outstanding shares of the company.

The Executive Yuan will request the related departments to review the tax exemption principle for royalties applicable to manufacturing-oriented industries or related service industries prescribed in Sub-Section 21, Article 4 of the Income Tax Act and to consider if the principle shall be also applied to knowledge-oriented industries such as the bio-technology industry. In addition, the industries also hope the government can reduce the royalty withholding tax rate from 20% to 10-15% in order to strengthen intellectual property transactions. Furthermore, the related tax deduction period for investment losses prescribed in Article 39 of the Income Tax Act is shorter than that of competitors and other advanced countries so that the Bio-Tech/Pharmaceutical companies established in Taiwan may not be able to take advantage of this rule. The Ministry of Finance agrees to study this and plans to extend the deduction period to at least 7 -10 years. The current deduction period in Europe, the United States and Singapore is up to 20 years or even has no time limit.

Regarding pharmaceutical affairs, the examination process for new pharmaceutical products will be simplified on a large scale. The Drug Review Committee in the second phase will be reorganized as a Consulting Committee. In the future, if the new drugs reviewed by the Center for Drug Evaluation (CDE) have no problems, then they will be directly passed. Furthermore, review time is scheduled to be completed in 30 days, the same speed as the U.S. Food and Drug Administration (FDA). In order to remove internal and external obstacles caused by the application and review process of active pharmaceutical ingredients, the Department of Health agrees to modify regulations related to drugs permitted only for export. During the interim period, the application process will be simplified like the over-the-counter process and shortened from a time period of several months to 15 minutes.

In order to enhance industrial research and development capabilities and competitiveness, and to utilize draftees' expertise in research and development, the modified Enforcement Statute for Substitute Services, Taiwan, R.O.C. was passed this January, which will provide authority for a research and development substitute service system. This service type will be implemented in 2008. According to this Statute, high-tech experts shall not only serve the country with their specialty knowledge and expertise, but can also fulfill their military obligations.

According to the Enforcement Statute for Substitute Services, draftees with a master's degree or above from a Taiwan or foreign college or university can apply for the research and development substitute service and be selected to engage in research and development regarding technology or industry in government agencies, public research institutions (organizations), colleges and universities, government or foundation-based research organizations and civil industries recognized by the competent authority.

According to the Enforcement Statute for Substitute Services and the Ministry of Interior's planning, the service term and pay chart for draftees selected to serve in the research and development substitute service will be divided into three stages. During the first stage, draftees will go through basic military training and professional training, and they will be paid according to the standard for conscripted soldiers. The second stage is from the assignment date to the end of service term based on their physical examination grade for substitute services, and they will be paid according to the standard of conscripted non-commissioned or commissioned officers. The third stage is from the end of service term based on their physical examination grade for substitute service to the expiration of the service period, and they will be paid according to the departments in need of substitute services, and related labor laws will be applied.

In order to enhance the protection of intellectual property rights, the Legislative Yuan, Taiwan, R.O.C. has passed the "Intellectual Property Case Hearing Act" after three readings this January and has passed the "Intellectual Property Court Organization Act" after three readings this March. These Acts clearly prescribe that the Intellectual Property Court's jurisdiction should include civil, criminal and administrative litigation cases; and the Judicial Yuan can set up a professional court to handle related cases pursuant to laws.

There are five chapters, with a total of thirty-nine articles, in the "Intellectual Property Case Hearing Act" which will provide a more professional, comprehensive and efficient litigation system. For example, for civil or criminal litigation involving intellectual property disputes, the court has the discretion to determine whether there is a cause for revocation or invalidation with respect to the disputed intellectual property right, without waiting for administrative judgment results. This will help to shorten litigation time. The Act will also improve shortcomings of current litigation; for example, preservation of evidence and provisional injunctions will be reasonably adjusted in order to meet industry and enterprise requirements.

The "Intellectual Property Court Organization Act" clearly provides that the jurisdiction scope of civil litigation will cover the first and second instances of civil trials caused by intellectual property rights protected under the Patent Act, Trademark Act, Copyright Act, Optical Disk Act, Trade Secrets Act, Integrated Circuit Layout Protection Act, Plant Variety and Plant Seed Act, and the Fair Trade Act.

The first and second instances of civil trials which involve intellectual property disputes will be included in the jurisdiction of the Intellectual Property Court. As for criminal trials, the second instance will be included but the first instance will be excluded. Therefore, in the future, all litigations related to intellectual property rights , including the first and second instances of civil trials, the second instance of criminal trials, and the first instance of administrative trials, as well as procedures for preserving evidence and provisional proceedings, will solely be governed and handled by the Intellectual Property Court.

According to the "Intellectual Property Court Organization Act", the Intellectual Property Court and High Court are at the same judicial level. The corresponding Intellectual Property Division, High Court Prosecutors Office will also be established. Because intellectual property cases often involve technical and professional issues, the Act also creates posts of Technical Examination Officers, who will assist judges in making decisions on professional and technical issues.

The "Regulations Governing the Broadband Wireless Access Service" was made and came into effect since 30 March 2007.

To promote and implement the broadband wireless access services, industrial development, and to achieve perspectives on the "M-Taiwan" program, the National Communications Commission (NCC), in line with the efforts to encourage the development of the new technologies and services relating to communications as well as to exercise fair and open management of rare and precious resources in a technology-neutral manner, adopted the "Regulations Governing the Broadband Wireless Access Service".

According to the regulations, the Government is to release 90 MHz of bandwidth from 2.5 GHz to 2.9 GHz for broadband wireless access service use, but the guard band must be planned by the operators themselves within their designated bandwidths. The authority is to grant six geographic area licenses in a manner that qualifications of the applicants will be reviewed in advance, and than the qualified applicants shall participate in the bidding. The term of validity for a license is 6 years.

Otherwise, licensees intending to run telephone services shall use telecommunications numbers in accordance with "Regulations Governing Telecommunications Numbers," provide subscribers with Emergency Calls of 110 and 119 and universal telecommunications services, and comply with Communication Protection and Supervision Act. Those intending to run broadcasting or television services shall proceed in accordance with "Broadcasting Law".

The NCC has disclosed the Revision of the Regulations Supervising and Guidance Internet Protocol Address and Domain Name Registration Management Services" in February 2007 to hear and collect public response.

The IP Address and Domain Name are critical mechanisms to maintain the proper interconnecting operations of the Internet. Currently the agency taking charge of domain name registration and IP address [allocation] is the Taiwan Network Information Center (TWNIC), which is a neutral and non-profit organization. With a view to keeping the Internet in stable and reliable operation as well as to consider the public interest of Internet communities, and through a "bottom up" coordination and management scheme to be instituted in the private sector, the competent authority concerned, NCC, is planning to revise the Regulations Supervising and Guiding Internet Protocol Address and Domain Name Registration Management Services.

First of all, to clarify the interrelationship between the competent authority and the Registry, the revision asserts that only parties having been approved by the competent authority and certified by international organizations are entitled to sign contracts with the competent authority and be allowed to engage in IP address or domain name registration management services. Next, the competent authority's supervisory system for the Registry's service charges is in a so-called "notification" mode right now, however, to better protect the registrant's rights and benefits, the revision will change it to an "approval" mode, stipulating that the provision of service charge standards ought to be on a break-even basis. Besides, according to the stipulations at present, the Registry shall promulgate service regulations and file them to the competent authority for record, but, for the protection of the registrant's rights and benefits, the revision will change it to the approval mode.

This forthcoming revision of "Regulations Supervising and Guidance Internet Protocol Address and Domain Name Registration Management Services" is largely aimed at the modification of current supervisor and management measures. The NCC has already disclosed the Revision in February, 2007 and is prepared to listen to public opinion, so the contents of the Revision should be going through a further follow-up.

Most of the new drugs we use today are chemical drugs. Since late 1990s, the marketing numbers of new drugs have been declined, although the R&D spending on new drug doubled in comparison to the 1980s. This gap between supply and need has forced government officials to develop new or alternative healthcare policies to meet the need in an approaching ageing society. In 2002, the WHO published the WHO Traditional Medicine Strategy 2002-2005. In this study, the WHO emphasized the healthcare value of herbal medicine and encouraged his member countries to adopt policies and measures to take full use of its advantages.

Along with the trend, another WHO report in 2005 revealed that many countries acknowledge the benefits herbal medicine may bring. Some countries even considered legalize the herbal medicine; that is to say to include the herbal medicine in their national healthcare system. Not long ago, the US FDA finalized the Guidance for Industry-Botanical Drug Products (July 2004). In the EU, a new Directive on Traditional Herbal Medicinal Products became effective on 31 October 2005, which introduced an abbreviated marketing procedure for traditional herbal medicine. The aforesaid development has made herbal drug/herbal medicine to be the next star industry.

From the viewpoint of western medicine, herbal drug or herbal medicine is a kind of herbal therapy. It is one of the most use means in traditional medicine. In Taiwan, the society has a long use history of herbal medicine. Several valuable codex remains exist. Internationally, the laws & regulations on the R&D and marketing of herbal drug become more and more clearly in recent years. Since Taiwan stands at an advantageous starting point to develop herbal drug industry, the Taiwan government has invested a lot of resources in order to transform such traditional knowledge into real benefits. This article introduces the laws & regulations on herbal drugs, taking USA and EU as examples. After the review and analysis on the regulatory details, this article also provides some suggestions with the intention to help research institutions and industries to take the challenges and make good use of any opportunities.

<Source: Huei-Hsien Huang, On Opportunities and Challenges of the Development of the Herbal Drug Industry in Taiwan: From an Aspect of Regulatory Trends in USA and EU , Science & Technology Law Review Vol. 19 No.1, Jan 2007, p.p. 24~46.>

With the release of FASB Statement No. 142, enterprises have to face their internal Intellectual Property in every aspect. The step-out mechanism of Intellectual Property is important for them but rarely discussed, especially on the procedure of civil execution. To attain the goal of the utility of Intellectual property, this article will present the update challenges and propose some suggestion toward related rules and regulation.

<Source: Eva Wu, The Judicial State of Play and Dilemma of Coping with Intellectual Property in the Civil Execution Procedure in the R.O.C, Science & Technology Law Review Vol. 19 No.1, Jan 2007, p.p. 47~61.>

This paper introduces differences in the way copyrights are seen in Germany and the US from the point of view of intellectual property rights protection history, and also examines the essence of copyright protection from legal, economic, and sociological angles. In order to transmit culture and promote innovation, many countries are making diligent efforts to adjust their copyright laws so as to find a point of balance between legal regulation, technological innovation and protection, and appropriate compensation for rights holders. Nevertheless, as technological protection measures have been incorporated in copyright laws, the balance between free use and use only after permission has been abandoned, and we are leaning more and more towards being a permission culture as a result. This paper believes that fair use is not something forced upon copyrights by necessity, but is rather a means of controlling copyrights' exclusivity and monopoly rights. As a consequence, the control of fair use is certainly not a priority for copyrights. In a time when cultural change and technological liberation are intersecting in virtual space, a key issue is whether our copyright protection methods and their strength are in the public interest.

<Source: Hong Yi Shiao, Copyrights: Being and Becoming, Science & Technology Law Review Vol. 19 No.2, Feb 2007, p.p. 24~49.>

The venture capital is one of the modern kinds of business operation, which has its characteristics of both investment and finance. The environment of venture capitals in Taiwan, based on the efforts of both government and business community, has shown a solid foundation. Faced with the future, the venture capitals of Taiwan have to improve and offer more values to the invested companies, and help them establish a positive image in the security market. Security market grows and falls, but an individual company may show its value through its own emulation.

The transnational connection of venture capitals could assist Taiwan venture capitals in learning the related skills from foreign venture capitals and private equities. At present, digital content industry has not shown and provided as much incentives as expected, and therefore, the skills of venture capitals would become very important to chase profits.

<Source: Ruo Fan Li, The Environment and Operation of Taiwan Venture Capitals: As the Example of Digital Content Industry, Science & Technology Law Review Vol. 19 No.2, Feb 2007, p.p. 50~61.>

In recent years, green technology and environmental science technology have become hot topics internationally. In addition to the public and private institutions' devotion to enable the development of green technology, many countries also start to support the development of Eco-industries within certain districts. The old notion of treating environmental protection as an opposite concept against economic development has proven to be wrong. Many newly developed products and services of green technology not only can help achieve the objective of improving the environmental condition, but also have great potential to contribute to the economic growth within certain districts. In other words, the development of green technology and eco-industries can kill two birds in one stone - it is beneficial from both the viewpoints of environmental protection and economic growth.

As a result, many countries have put special efforts to encourage the development of green technology and eco-industries.

Green technology is still an unexploited area. And it is also a very niche area in terms of the innovation of green technology and the development of the market. Therefore, many developed countries have designed projects to enable the R&D of green technology, to remove the obstacles during development, to enable the commercialization of technologies, to enrich the incentive for a market-oriented development, and to design the taxation and tax incentives on environmental related projects. This article researches and analyzes the rule of law and policies of developed countries, and makes recommendations based on the research results. The goal is to make contribution to the foundation of Taiwan's rule of laws in the development of green technologies.

<Source: Ko-Yi Lee , The Analyzes of International Laws and Policies in the Development of Green Technologies , Science & Technology Law Review Vol. 19 No.3, March 2007, p.p 22~44.>

I introduce and make some comments on the Organization Act of Intellectual Property Court (Draft) and the Procedural Law of Intellectual Property Litigation (Draft) in this article. Pursuant to those acts, there will be an intellectual property court established in the future. In addition, well-trained intellectual property judge equipped with technology examiner will preside at trial under the special procedural rules in order to resolve the intellectual property issues properly and efficiently.

I think the legislative purposes are good, but the system design is poor. There are many problems, such as the intellectual property judge and technology examiner may be unprofessional, key words definitions of the laws are unprecise, it may be improper to force the intellectual property court to decide the validity of patent, the procedure for preliminary injunction hearing is insufficient, and lack of integrated system design.

In conclusion, I think the legislators have no deep thought on the patent and design the new system only from the viewpoint of traditional judicial bureaucracy. Further, the legislators are not aware of the environment change resulting from the globalization and in essence judge-centered legal system is not suitable for the resolution of patent disputes. Therefore, I am sad about the future of those acts. I predict that the intellectual property court will follow the unfortunate destiny of the administrative court.

<Source: Ching Cheng Hou, An Introduction and Comment on the Organization Act of Intellectual Property Court (Draft) and the Procedural Act of Intellectual Property Litigation (Draft) , Science & Technology Law Review Vol. 19 No.3, March 2007, p.p 45~64.>