The "Biotechnology and New Pharmaceutical Industry Development Act" was passed after the third reading in June of this year. The Bill was passed upon speedy negotiation between the Executive Yuan and all of legislators of ruling and opposition parties in the Legislative Yuan. Apparently, the production, government, academic and research circles in Taiwan have acknowledged that the biotechnology and new pharmaceutical industry will be critical to Taiwan‘s economic development. In the past, Taiwan imposed too many restrictions on the manufacturers in the development of biotechnology and pharmacy, such as difficulty in fund raising, taxation and acquisition of talents. The new "Biotechnology and New Pharmaceutical Industry Development Act" will ease the restrictions sharply. Accordingly, the breakthrough of biotechnology and pharmaceutical industry in Taiwan is foreseeable.

Because tremendous funds are required for the investment in the biotechnology and the profit may not necessarily be gained at the initial stage of the investment, the Government altered its tax incentive measures. For example, a biotechnology and new pharmaceutical company may credit up to 35% of the expenditure spent by the company in investment, R&D and training of talents against the profit-seeking business income tax payable per year within five years since the profit-seeking business income tax is payable. Further, if the R&D expenditure in the current year exceeds the average of the R&D budget for the previous two years, or the expenditure in training of talents in the current year exceeds the average of the training budget for the previous two years, the excess expenditure may be credited at 50%.

Any R&D talents who are the governmental and research organizations‘ staff recognized by the Executive Yuan and Examination Yuan may work with a private organization to commercialize the technology upon prior consent of the organizations hiring them. Additionally, in the past, the technology shares distributed by a company to attract excellent talents were taxable pursuant to the relevant requirements. However, from the point of view of technology exporters, if it is necessary for them to contribute the critical skills but the shares shall be taxable before the profit is earned, it will impair the attraction for talents. Therefore, the Act requires that the technology shares are not taxable until they are actually transferred.

Upon promulgation of the Act, the biotechnology companies engaged in new pharmacy and implantable medical devices will benefit. Despite the dispute about the enactment of the Act while the sunset of the Statute for Upgrading Industries is coming, the Act is the promise made by the Government to the high-ranking technology. In order to grow the biotechnology and new pharmaceutical industry, it is still necessary to provide the biotechnology industry with the protection under independent legislation even if the Statute for Upgrading Industries will cease to be effective soon.

The Ministry of Finance will propose the amendments to the Income Tax Act to extend the term of losses deduction from five years to ten years, and all industries may apply the new requirement uniformly. Therefore, the biotechnology, life insurance and BOT industries will be benefited and able to draft more flexible tax plans.

Financial and Economic Group of the Executive Yuan initially required the Ministry of Finance to research whether the term of losses deduction may be extended from five to ten years subject to the characteristics of investment in the biotechnology industry. In consideration of the high risk and slow payoff of the biotechnology industry, traders in the industry often have to suffer the long-term losses before making money. However, according to the Income Tax Act, the term of losses deduction is only five years, which cannot meet the demand. Besides, the relevant terms of losses deduction in industries have been extended internationally. For example, it is 20 years in the U.S.A., and even there is no term limitation in multiple countries of Europe in Singapore. The European Chamber of Commerce also lobbied the Ministry of Finance in its White Paper for the European life insurance business in Taiwan last year in hopes of extending the term. This is because the life insurance business has to suffer long-term losses at the initial stage and five years cannot meet its demand. To cope with the international trend, the Ministry of Finance is willing to follow the trend and to propose the amendments to Article 39 of the Income Tax Act, which extend the term from five years to ten years.

According to the Ministry of Finance, the profit-seeking enterprises may be entitled to the preferential treatment for "losses deduction" upon meeting the three requirements, including (1) complete accounting books and records, (2) application of the "blue return form" referred to in Article 77 of the Income Tax Act or the return of losses deduction audited and certified by a CPA in the years of return of losses deduction, and (3) return of income tax as scheduled. Losses deduction is not limited to any specific industries. As long as the requirements are met, any industries may apply for losses deduction with the tax collection authority; provided that if the term of losses deduction is extended, the losses of any enterprise incurred in the operation may be retained for a longer period and this will be more favorable to the industries of long-term R&D and slow payoff.

The relevant tax provisions in the Statute for Upgrading Industries will cease to be effective at the end of 2009. In order to achieve the industrial development perspective for 2015 and promote the industrial development on an on-going basis, the Ministry of Economic Affairs has drafted the bill for "Three Major Industrial Laws" to response to the upcoming sunset of the Statute for Upgrading Industries. The Minister also invited the responsible persons of Taiwan Confederation Of Trade Unions, General Chamber of Commerce of the R.O.C., National Association of Small & Medium Enterprises, R.O.C. and other organizations of industry and commerce in the middle of August this year to brief them on the bills for the new-generation "Three Major Industrial Laws".

The preferential tax treatment, most concerned by all industries, maintains the R&D and talent training investment credit and adds the tax exemption for nationals‘ creations. Further, the bills continue to maintain the tax exemption treatment for five years applicable to the emerging important strategic industries, provided that the exemption amount shall be no more than the invested amount. With respect to the shareholders‘ investment credit, it will be narrowed drastically to be applicable to the "enterprises of high risk and long payoff period". In order to attract international industry talents, it also adds the preferential tax provision that allows the international industry talents who meet the specific requirements may be entitled to the withholding tax rate declining from 20% to 10%. Additionally, in order to persuade suppliers to base their headquarters in Taiwan, the bills also amend the minimum tax exemption applicable to the inward remittance if the investment of the headquarters in the then year is more than the inward remittance of income applicable to tax exemption overseas.

With respect to the "Three Major Industrial Laws", President of Taiwan Confederation Of Trade Unions, Chen Wu-hsiung, claimed that the Constitution shall expressly provide that the budget for promotion of economic development must account for a specific proportion of the total budget by citing Article 164 of the Constitution stating that the educational budget shall account for a specific proportion of the Central Government‘s total budget. Moreover, the industries also strongly oppose that the Ministry of Finance proposes the cancellation of preferential tax treatment for upgrading industries and decrease in profit-seeking business income tax as the give-and-take conditions for the amendments to the Law. The industries consider that it is not suitable for the existing tax environment in Taiwan and therefore suggest that the Ministry of Economic Affairs maintain the preferential tax treatment without narrowing it.

Meanwhile, though the "Three Major Industrial Laws" may provide the headquarters with the preferential investment tax treatment in Taiwan, the industries consider that the functions of a headquarters should not be limited to the investment in hardware. All of financial operation, R&D centers and marketing strength for receiving orders overseas are essential to a headquarters. However, the industries do not think that such policy incentives are enough in the respects. Many of them believe that the Government‘s cross-strait policy should be adjusted in order to accelerate the connection of industries with the world and persuade suppliers to base their headquarters in Taiwan.

Following the continuous media coverage of the preservation of cord blood, many new parents have shown interest. However, the contract drafted by the traders independently causes the disputes over preservation fees, equipment, manners and liability for breach of contract. Given this, Consumer Protection Commission of the Executive Yuan has completed the draft for the "Standard Form of Contract for Cord Blood Preservation" together with the Department of Health, and scheduled to enforce the form as of September this year, which not only defines the interests and rights and liabilities of consumers and traders, but also highlights that traders shall advise that cord blood cannot cure all of hereditary diseases in order to call on all consumers to evaluate it carefully beforehand.

According to the officials, the standard form defines the interests and rights and liabilities of traders and consumers with respect to the preservation fees, equipment, manners, trust and breach of contract; however, it does not define the ownership of the cord blood. The period for review of the contract shall be at least five days. Where the collection of cord blood is not completed, the contract will become null and void automatically. If consumers have paid traders any expenses or fees, the traders shall refund them in full without interest. Additionally, if the cord blood volume is less than 40 CC (exclusive of anticoagulant) or there is microorganism pollution or mother‘s blood or cord blood test shows positive reaction, the effectiveness of the contract will be affected. Besides, consumers will be entitled to recall the cord blood preserved on a consignment basis.

The clauses most concerned by consumers in the standard form are the indemnity against damage to cord blood. Considering that cord blood acquisition is only once, in order to prevent traders from damaging or losing any cord blood in the process of transportation, the form expressly states that other than force majeure, if the cord blood is damaged or lost due to any causes, the traders shall pay the consumers the compensation equal to the contract amount even if they may prove that they should not be held liable for it. If they fail to prove it, they shall pay the compensation equivalent to double the contract amount. If they are proven to have intention or gross negligence, they shall pay the consumers the compensation equivalent to triple the contract amount.

Moreover, the standard form also requires that the traders shall expressly advise consumers that "the preservation of cord blood cannot necessarily cure all diseases", "the research of its medical effect is still under the R&D stage", "implantation or future application should have direct connection with the volume of cells in the cord blood" and other information to help consumers make decision. Consumer Protection Commission hopes to decrease the information asymmetry between enterprises and consumers by virtue of the research and drafting of the standard form of contract for cord blood preservation, so as to prevent consumers‘ dispute and protect consumers‘ interest and right.

National Communications Commission (NCC) published the second stage WiMax license bidding results on July 26 according to the royalty proposed by the qualified tenders at the first stage. As a result, Farestone, First International Telecom, Tatung Telecom, VMAX, Global On Corp. and VSTAR Cable TV System Co., Ltd. were awarded the right to enter the WBA market, while Taiwan Mobile invested by Chunghwa Telecom and Taiwan Mobile Co. did not get the right.

NCC plans to issue three regional licenses separately in the North District and the South District, in frequency bands ranging from 2565 MHz to 2595 MHz, and will retain one for each District to be issued to the new commer, as defined in the Rules for WBA to stimulate the competition in the telecommunication market.

With respect to the fact that Chunghwa Telecom and Taiwan Mobile, which are the significant market power failed to get license, Vice Chairman of NCC and also the spokesman, Shih Shi-hao, indicated that, in order to encourage effective market competition, NCC limited those operators to get WBA license.

According to the Rules for WBA, licensees shall pay a performance bond of NT$40,000,000 and a minimum deposit for royalty of NT$210,000,000 within 30 days upon receipt of the awarding notice, and then may acquire the permit for incorporation. Additionally, the licensees shall complete the registration to be a business with promised capital in the plan within three months. The Rules also provide that the licensees shall build up the network infrastructure within two years at latest, and start operating after six months.

The booming development of internet technology surprises many people. However, according to the investigation conducted by the Police Task Force Dedicated to Intellectual Property Right Protection of the Ministry of Interior, 86% of the infringement cases uncovered in the first six months of 2007 took place on the Internet. Moreover, the Internet platform providers‘ copyright infringement liability is most concerned by the various sectors.

In the past, the Internet platform providers who provided the Peer to Peer services ("P2P") instead of establishing audio and video databases were punished as the helper, instigator or co-principal offender against the copyright infringement, because there was no definite legal basis.

In order to resolve the dispute, Copyright Law added the "P2P" clause on July 11, 2007. According to Paragraph 7 of Article 87 of the Law, as amended, "any persons who benefited from providing the public with the computer programs or other technologies communicable or reproducible publicly out of the intent to enable the public to communicate or reproduce another person‘s work via the Internet and to infringe the economic right, without the economic right owner‘s prior consent or license" shall be deemed to constitute an infringement of copyright or plate rights.

The amendments to the Law also define the "intent" referred to in the preceding paragraph as "the intent referred to herein shall be sustained if the persons apply advertisements or other positive measures to instigate, induce, stir up or persuade the public to infringe on the economic right through computer programs or other technologies". Any persons in violation of the provision shall be sentenced to imprisonment of no more than two years or detention, or, in addition to, the fine of no more than NT$500,000 as referred to in Article 93 of the same Law.

Nevertheless, the provision only defines the liability for the "act of provision". The providers of technology are likely to bear the criminal and civil liability as accomplices to the actual user‘s subsequent copyright infringing acts.

According to the practical judicial opinion, the High Court rendered a judgment under (96) Shang-Yi-Tze No. 991 dated on June 20, 2007, holding that "it is necessary to determine the criminal facts according to the evidence with respect to whether there is any intent and act of infringement on copyright right by provision of the Internet platform to the public only, and where it is impossible to prove that the defendant is guilty, a not-guilty judgment shall be rendered accordingly". It is worth observing whether such opinion will be altered upon amendments to the Copyright Law, or will the judiciary still sustain the lenient interpretation as long as the appropriate disclaimer is added (e.g. "please release the work according to the Copyright Law; this website is only responsible for providing the platform; if you release the work in violation of this website‘s regulations, this website shall be entitled to remove the contents released by you or block your access to the website").

The reuse of government information is of vital importance because it is helpful to the development of digital content industry and applications of digital technologies. This article has a comparative study on legal frameworks of the reuse of government information in UK and USA. And, it is found that the attitude towards government information leads to the differences of their legal frameworks but the ambition to promote the private sector to reuse the government information is the same. This article also reviews the legal framework of the reuse of government information in Taiwan. And, it is found that regulations on the reuse of government information are not well developed. Therefore, it is recommended the concerned legal issues shall be reviewed and discussed further. Otherwise, this article suggests that there shall be a proper department in public sector to deal with the legal policy and promotion of the reuse of government information. Second, subject to the constraint of budget the concerned authorities shall digitalize government information they hold as possible as they can Finally, to help the business get government information and the government‘s permit on its reuse, the concerned authority shall try to build a database and an on line licensing system step by step.

<Source: Shu-Chun,Liao, A comparative study on legal frameworks of the resue of government information in UK and USA , Science & Technology Law Review Vol. 19 No. 7, July 2007, p.p. 35~61.>

Under the patent exhaustion doctrine, once the patentee has sold a product which fully embodies a patented invention without condition, he/she has no further rights to control the use or resale of the product. The application of patent exhaustion doctrine to a particular case is a way of defining the extent of the patent right at issue, and since there is always an interrelation between the extent of a patent right and the competitive situation in the market, the question of how to define the extent is also a question of how to establish the competitive rules in the market. Through reviewing several foreign judicial cases concerning the patent exhaustion doctrine, including the cases on the repair/reconstruction doctrine and those on the effectiveness of the post-sale restriction, this article argues that it is difficult to establish a clearly defined rule for applying the doctrine to various situations. The reason why it is difficult is because the question of how to apply the doctrine is not only a question of how to interpret the law reasonably but also a question of how to make a value judgment concerning the competitive situation in the market. Therefore, in order to make a fair and balanced judgment, it should not be forgotten that the reason why to build up the patent system is to improve public welfare by creating incentives for technical innovations, rather than to ensure the maximum profit of the patentee. It is necessary to consider the conflict of interest in the market situation so that the determination of the extent of a particular patent right can be made without having negative implications on the competitive situation in the market.

<Source: Sen-Yin, Li, Patent Exhaustion - A Doctrine Defining the Extent of a Patent Right , Science & Technology Law Review Vol. 19 No. 8, Aug 2007, p.p. 24~39.>

Along with the popularization of Internet and the improvement of the broadband service, "Online Game" has already become the core of compatriots‘ life nowadays. Especially while the MMORPG games become extremely popular, part of game players start to exchange virtual weapons and equipments with real money because of the expectation to enhance abilities of game characters in a short time. This situation triggers those virtual game properties, which are created to increase enjoyment of games in the first place, become part of the real world economy.

While the formation of the trading market, domestic game industries unanimously oppose players exchange virtual property through real money trading, and almost all companies embody prohibitive doctrines in their standard contract s to forbid those trading conducts. This attitude, however, is clearly opposite to players‘ demand. Hence, what is the legal position of "virtual property" has become a major dispute in the game market.

In this article, we will not only examine the current development of domestic and international game industries, but also will analysis and compare legislations and the newest cases between Taiwan and other nations in order to ascertain the legal position of online game virtual property and the possibility of real money trading. This research could be the reference of future operating strategies of domestic game industries.

<Source: Ron-Chin, Kuo, A Study about the Legal Position of Online Game Virtual Property and the Newest Trend of Game Industry, Science & Technology Law Review Vol. 19 No. 8, Aug 2007, p.p. 40~62. >

In light of the long-term existing problems in the U.S. patent system, such as (1) unsatisfactory quality of the USPTO patent examinations; (2) lack of harmonization with international patent system; and (3) flood of patent litigations and high cost thereof, the U.S. Congress introduced the Patent Reform Act of 2005, which was not enacted due to lack of a uniform agreement among the participants and thereafter it was followed by the similar Patent Reform Acts of 2006 and 2007. Since the series of U.S. Patent Reform Acts originated from the Patent Reform Act of 2005 and their contents are similar, this article uses the Patent Reform Act of 2005 as an example to introduce the U.S. Patent Reform Acts and provide comments therewith. In the Patent Reform Acts, the most dramatic change to the present U.S. patent law is switching from first to invent system to first to file system and this article provides detailed analysis.

<Source: Pao-Cheng, Sun, Introduction and Comments to the U.S. Patent Reform Act, Science & Technology Law Review Vol. 19 No. 9, Sep 2007, p.p. 18~39. >

On August 1, 2006 the French Parliament passed the law on copyright and related rights, known as DADVSI (loirelative au Droit d‘Auteur et aux Droits Voisins dans la Société de l‘Information), which implements the European Copyright Directive of 2001. The highlights are the legalization of technical protection measures for copyrighted works and the institution of legal mechanisms to protect and enforce these technical measures. Such new actions were designed to fighting against digital piracy, which should have been appreciated enthusiastically by the music industry. The safeguard of technical measures, however, had a few twists and turns in the legalization process and filled with compromise and bargaining. Apple, the market leader in music media players and online content distribution with its iPod player and iTunes platform respectively, was anxious with these twists. The DADVSI law institutes the conditions of interoperability for technical measures. In other words, all DRM-loaded music file must be playable on any device, no matter what brand it attached to or software used to read it. Such requirement of compatibility amongst rival DRM systems pressures Apple‘s exclusive DRM technology. Thus, the law threatens the bond between the iPod player and the music copies on iTunes, and further Apple‘s supremacy in both markets. This paper will describe how French lawmakers have managed to introduce the exceptional legal framework, based upon an independent body authorizing DRM interoperability and checking the balance between the interests of the right holders and those of the consumers, and conclude with some suggestions for our future legislations.

<Source: Yi-Min,Tang, Features of French New Copyright Legislations And Thoughts on Ours, Science & Technology Law Review Vol. 19 No. 9, Sep 2007, p.p. 40~62. >