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Quarterly Issue Dec 2007 NO.04
 
LATEST LEGAL NEWS
 
  TAIWAN HAS PASSED THE STATUTE FOR THE DEVELOPMENT OF BIOTECHNOLOGY NEW DRUG INDUSTRY AND RELATING BYLAWS AND GOVERNMENTAL POLICIES ARE UNDER STUDY AND PLANNING
   

The Legislature Yuan passed the "Statute for the Development of Biotechnology New Drug Industry"(Hereafter, the Statute) on July 4, 2007 to improve the developing legal environment and assistant the promotion of the development of the biotechnology industry in Taiwan. After the promulgation of the statute, the Industrial Development Bureau of MOEA immediately organized a task force to take a proactive stance in working out a new set of rules and measures for the implementation of this Statute. These are the "Regulation Governing Tax Deduction for the Encouragement of Investment for the Research and Development and Human Resources Training of Biotechnology New Drug Industry", "Regulation Governing Tax Deduction for the Encouragement of Investment for Shareholders in Biotechnology New Drug Companies", and "Particulars of MOEA on Approval of Biotechnology New Drug Companies in the Issuance of Stock Options" and are expected to come into full force in mid November, 2007.

Despite the attractive Biotechnology Development Status has already launched successfully, the definition of "Biotechnology New Drug Company" therein is still too narrow, to the extent that many domestic biotechnology and pharmaceutical firms expressed their considerations over the applicability of the new law. MOEA stated that a number of public seminars have been held to smooth the anxiety of the public. In the future, additional efforts will be made for extensive communication and exchanges among the industry, government, academic circle, and the R&D sectors on the extended application of the Biotechnology Development Statute and related implementation procedures for consensus.

For implementation of the Statute, related rules and regulations, Taiwan Government adopts Article 5III of the Statute to apply Biotechnology New Drug Companies who are engaged in the research and development of new medicines, high risk medical care equipments, and related human resources training are entitled to corporate income tax deduction up to the equivalent of 35% of their spending on the said areas. In addition, the "Regulation Governing Tax Deduction for the Encouragement of Investment for the Research and Development and Human Resources Training of Biotechnology New Drug Industry" will be instituted for granting such deduction within the scope of deduction in the first 5 years after the companies started to pay corporate income tax. This rule aims at providing the necessary condition for application, applicable deadline, application procedure, effective period, deduction rate and related issues pertinent to such deduction of corporate income tax. With the legal authorization of Article 6III of the Statute, the "Regulation Governing Tax Deduction for the Encouragement of Investment for Shareholders in Biotechnology New Drug Companies" is also instituted whereby the definition of establishment, expansion, initial subscription of shares and solicitation of capital, and the continued holding of shares by shareholders for at least 3 years from the day shareholders paid their investments as stated in Article 6 of the Statute are clearly explained. Under this provision, deduction for shareholders is operational provided that the aforementioned conditions are met and related conditions and details are explicitly regulated.

As the Biotechnology New Drug industry is capital-intensive, knowledge-intensive, and technology-intensive, and furthermore it entails large capital investment, high risk and profits, Government in establishing an ideal legal environment is necessary for the development of this industry. In addition, the massive support of capital from the Government is also indispensable. Therefore, Executive Yuan has recently announced its allocation of NT$10 billion from the national development fund in incentive for the promotion and encouragement of the Biotechnology New Drug industry through relevant legislation in order to guide biotechnology in Taiwan and boost the local economy for a brighter future.

 
  THE SESSION OF EXECUTIVE YUAN PASSED THE NON-PROFIT ORGANIZATIONS ACT
   

Executive Yuan passed the Bill of "Non-Profit Organizations Act" (Hereafter, the Bill) in September 2007 to improve the legal environment, regulate effectively the establishment, administration and supervision of non-profit organizations and to encourage non-profit organizations in their commitments to social charity and improvement of social well-being. This bill of "Non-Profit Organizations Act" contains 9 chapters with 53 articles. The chapters set forth explicitly state the regulations of the assets application, management, and investments of non-profit organizations. This bill does not restrict the investment of non-profit organizations in stock market, but sets forth the total investment limits to the half of the total assets of the organizations registered in the court. Meanwhile, the principle of "Safety and Reliability" is in effect while non-profit organizations make investment in stock market.

Further to the emphasis on supervision and public interest, passage of the bill of the Non-Profit Organizations Act aims at the elimination of the unethical practices of non-profit organizations in "giving from the left hand to the right hand" which means seeking profits under the cover of social charity. Because the Bill strictly governs the use of the fund, restrictions on the donation, accrued interests, and other incomes to non-profit organizations are also explicitly stated in the provisions whereby no earnings can be paid out. The violations of these provisions shall be subject to a fine from NT$100,000 up to NT$500,000.

Asset management of non-profit organizations is also stated in Article 29 through Article 31 of the Bill whereby the assets of non-profit organizations shall be registered or deposited under the titles of the organizations and also subject to the supervision of the competent authority. The assets of non-profit organizations are not permitted to be deposited at financial institutions without license for deposit business, or loan to their directors or other third parties. According to the Bill, the methods of management are: (1) deposit at financial institutions; (2) for the purchase of government bonds, treasury bills and saving bonds issued by the Central Bank, debentures, and negotiable certificates of deposits, bank acceptance or guaranteed commercial papers; (3) procurement of movables and real properties for business purpose; (4) investment with return under the principle of Safety and Reliability and the total investment limits to the half of the assets registered in the court but with the expectation of the investment by exclusive know-how or intellectual property rights developed by the organizations; (5) the approval use of assets to help the operation of the organizations. Under the Article 32 of the Bill, non-profit organizations shall establish an accounting system, internal control, and audit systems, and, shall report to the competent authority for reference in order to ensure proper control of assets as required by Government.

Finally, Articles 34 and 35 of this Bill require the "Information Disclosure" by non-profit organizations. These two provisions require non-profit organizations to propose the annual work plan and yearly budget before January 31of every year, and the work report, budget settlement, asset list, and financial statements of the previous year should be approved by the Board and recorded in the competent authority by May 31 of every year, These above-mentioned requirements aim at preventing possible financial fraud of the non-profit organizations. In conclusion, passage of this bill can successfully allow the government to regulate various forms of unregulated non-profit organizations more uniformly and systematically in the future.

 
  MINISTRY OF ECONOMIC AFFAIRS INSTITUTED THE RULES FOR THE VERIFICATION OF GREENHOUSE GASES
   

In the wake of the global warming issue, the crisis of the worldwide energy shortage has also surfaced over the years. The quest for alternative energy that can never dry out has already emerged as the vital topic for all countries in pursuing their energy policy. In the 2007 Industrial Technology Strategy Conference held by the Executive Yuan, Government officials, scholars in the field, and enterprises gathered to discuss how to proactively develop alternative energy (such as: bio-energy, solar power systems and wind power systems) against the challenge of global development of bio-energy in the future.

Until now, EPA and MOEA have jointly launched a platform for inquiry so that the industrial sectors can login the platform and inquire the information they need. For the prompt establishment of the inspection mechanism, Taiwan Government has promulgated the "Regulation for the Verification of Greenhouse Gas Emissions" in November 2007. Under this Regulation, the Standardization and Inspection Bureau of MOEA will conduct evaluation on the declaration of reductive quantity of greenhouse gas emissions by the industries or the actual and objective declaration of such greenhouse gas emissions in accordance with the ISO 14064-1 standards. At the same time, MOEA will issue certificates for proof of compliance in favor of the firms for their efforts in the control of the quantity of greenhouse gas emissions, the removal quantity, the reduction in emission quantity or removal quantity in conformity with applicable standards.

In addition, Taiwan government has launched the program in supervising the companies to reduce the greenhouse gas emissions as encouragement for domestic companies in such policy in order to assist domestic companies to conduct internal inspection and verification of the greenhouse gas emissions in accordance with relevant international standards at the organizational level ,such as ISO 14064-1 and ISO 14064-2 and the reduction of greenhouse gas emissions at the planning level. In the future, Government will refer to the practices in Japan , South Korea , and the UK in providing direct subsidy to those companies under the supervision, verification, and reduction of greenhouse gas emissions.

The reduction of greenhouse gas emissions is a worldwide focus. In Taiwan, both the government and private enterprises can no longer avoid this topic. Through planning, industries can apply for the recognition of reduced quantity in greenhouse gas emissions from the result of reduction of greenhouse gas emissions at the planning level. The relevant limit will be granted upon recognition. This limit will be used for writing off the quantity of such gas emission from new investment of facility by the firms and also used as reference for the allocation of rights for the greenhouse gas emissions. This will be the guideline for the government in its proactive efforts in pursuing the policy of the reduction of greenhouse gas emissions before proper legislation.

 
  MINISTRY OF ECONOMIC AFFAIRS LAUNCHES MASSIVE USE OF BIO-ENERGY IN THE HOME MARKET
   

In the wake of the global warming issue, the crisis of the worldwide energy shortage has also surfaced over the years. The quest for alternative energy that can never dry out has already emerged as the vital topic for all countries in pursuing their energy policy. In the 2007 Industrial Technology Strategy Conference held by the Executive Yuan, Government officials, scholars in the field, and enterprises gathered to discuss how to proactively develop alternative energy (such as: bio-energy, solar power systems and wind power systems) against the challenge of global development of bio-energy in the future.

Under the rapid development of energy technology, the immediate issue to Taiwan is to keep abreast of the trend of energy development, to integrate resources from all sectors, to apply systematic means in the development of bio-energy technology and enhance the efficiency of research and development and industrialization. Currently, Taiwan government has already used bio-energy, solar energy, and wind power as alternative energy, achieving the output value about NT$159,000 million in 2010. At present, Taiwan heavily relies on the imported energy. During the Era of High Petroleum Price, Taiwan government has planned to pursue autarkic supply of bio-energy in our home market by the year of 2010. Under this plan, the gravity for the development of the new energy industries will include the production of bio-ethanol with a view of using ethanol fuel as an alternative for motor vehicles to reduce carbon dioxide emissions.

Accordingly, the Energy Bureau of MOEA, has launched bio-ethanol related policies with the promotions of the green official cars and dual-track biofuel stations and etc, science this Sep. In Taipei, the supply of E3 ethanol fuel has started in 8 gasoline stations since this August and the supply in Taipei and Kaohsiung in full-range is anticipated to be accomplished by the end of January, 2009. By 2011, the supply of ethanol fuel will be whole island wide. Currently, a number of enterprises, including Taiwan Sugar Corporation, CPC Corporation, and Taiwan Celluhols Co. Ltd have launched their investment programs in the production of bio-ethanol and they are going to be on stream in 2010. The projected quantity of production is 100,000 KL. In addition, applicable law also provided as an incentive for the promotion of the development of new energy industries. Under Article 4I of the Regulation for the Encouragement of Investment: Government shall offer preferential tax deduction to those companies using energy saving equipment or technologies in order to encourage their savings in energy use or the use of new and clean energy. Therefore, Those Companies procures energy to save equipment or technologies or using new or clean fuel are entitled to preferential treatment.

Because of the alternative energy technology is still at primary stage, thus Government shall make relevant adjustment and change in line with the rapid development of technologies, industry, society and the environment. Government should conduct objective evaluations with proper scientific data for avoiding waste of national treasure, when seeking for alternative energy and its proper policy in Taiwan.

 
  NATIONAL COMMUNICATIONS COMMISSION PROPOSED THE BILL OF REGULATION OF COMMUNICATIONS
 

 

National Communications Commission (NCC) has released the first version of Bill of Regulation of Communications on September 11 2007 and has organized 6 public hearings. The second draft of the bill has been proposed in November the same year and communication with all social sectors for different opinions is in progress.

The new draft of the bill has gravity on the followings . First of all, attention has been paid to the demand for control and adjustment brought about by the convergence of technologies whereby the vertical regime of supervision structure is transformed into a horizontal one . The supervision structure will be classified into three layers under the spirit of medium to high level of convergence : basic network layer, operation management layer, and content application layer. Secondly, the licensing structure has been simplified in order to lower the entrance barrier of the market. It is expected that the registration system is adopted for the basic network layer and the special permit or registration system will be adopted for the operation management layer depending on the type of services rendered .

This new bill puts emphasis on the compatibility and interoperability of technologies in basic construction and fair competition in the network layer market in accord with its policy of competition in the communications market. In improving the market order in specific communication service s , a concrete action plan has also been proposed in the bill, including the re-confirmation of the substitutability in the product and geographic aspects and redefining the specific market s. The bill also review s the criteria of defining the "market share" and "revenue", and give s ex ante announcement on business with a significant role in the market. Those who receive the announcement may be subject to connection obligation or special regulation of the fees they may charge .

Further to the aforementioned principle s of regulation , this bill also clarifies the policies regarding important issues to the public, e.g. control of foreign capital, pricing by categories , "must carry" obligation and the emerging IPTV technology . In sum, this bill has reflected the compelling needs of reviewing the current regulation of communications under the trend of technology convergence and has drew the attention of the public to the direction of the development of this proposed new law even though it is just at the stage of requesting for public opinions for evaluation and adjustment .

 
  NATIONAL COMMUNICATIONS COMMISSION AMENDMENT TO "REGULATIONS ON INSPECTION AND CERTIFICATION OF CONTROLLED TELECOMMUNICATIONS EQUIPMENT " (AUGUST 30 2007)
 

 

Famous game company, Nintendo has launched the Wii that triggered red-hot demand of the product throughout the world. Yet, this product has not been officially imported to Taiwan and launched in the domestic market. As a result, the domestic market of Taiwan is flooded with parallel imported items of the product. In the middle of March, National Communication Commission ( NCC ) has issued a press release stating " To purchase low power controlled telecommunications equipment with type approval labels issued by NCC is permitted ". According to this statement, it seems to be identified Wii as a radio frequency device under the announcement of January 7 2000, as it has a wifi module and blue tooth module wireless radio frequency function. If such item without accreditation called " type approval label ", its wireless transmission wave may cause frequency interference of other users

According to Articles 3, 12, and 16 of the "Regulations on Inspection and Certification of Controlled Telecommunications Equipment", consumers who intend to purchase Wii for personal use or importers who purchase Wii through parallel import must ask for type approved label , recognition of inspection ,, and special program authorization document in advance before they 1 install and possess the device. In addition, importers must be granted the import license of controlled telecommunications equipment issued by NCC before import ion of such device , otherwise they shall be ruled as unlawful on the unauthorized manufacturing, import, sale, or public display of the device. The violator shall be subject to the confiscation of the device and/or a fine from NT$100,000 to NT$500,000. Most Wii products at present in Taiwan market are through parallel import or brought in privately from overseas . Without type approved label and import license, it means all Wii devices in Taiwan are unlawful. Such harsh regulation and interpretation arouses vigorous criticism .

After gathering the comments from different sectors, NCC conducts a second review of the content of the regulation governing controlled telecommunications equipment. In August 2007, NCC amended the "Regulations on Inspection and Certification of Controlled Telecommunications Equipment" and announced the new version of Articles 3, 6~14, 16~19, 21, and 22. In this new version, NCC simplifies the procedure of licensing the business of controlled telecommunications equipment and the procedure for importing such products. Application for licensing and importing will be changed from over-the-counter work to online application.

Furthermore, NCC also simplifies the import procedures for personal use of wireless telecommunication terminal devices and low power radio frequency electrical devices. Import by mail within 2 items or by hand carrying of no more than 5 items of such devices is exempted from licensing. The requirement of inspection in private use of controlled telecommunications equipment not for use in radio stations, is waived. Finally, the restriction of the quantity of import of industrial, scientific and medical use electromagnetic wave radioactive devices for private use is also lifted. Similarly, the requirement of licensing for the import of sea navigation equipment by surface vessels is also lifted by excluding sea navigation equipment from the list of permitted controlled telecommunications equipment in telecommunications.

After the promulgation, the public can bring in Wii for private use through customs without type approval and recognition of inspection (Amendment to Article 12I). Furthermore, the import of less than 2 items of such product via mail or less than 5 items by hand carrying will also be exempted from import licensing (Amendment to Article 18). Businesses who intend to import such product for sales can proceed to the related accreditation, business licensing and import licensing in accordance with the simplified procedure.

 
RECENT DEVELOPMENTS
 
  DISCUSSION OF THE CONTROVERSY ABOUT TSM TEST AND PATENT'S NON-OBVIOUSNESS IN U.S.
 

 

The U.S. Court of Appeals for the Federal Circuit has developed the "teaching, suggestion, or motivation" test (TSM test) in order to prevent the use of hindsight to defeat patentability. TSM test requires a showing of the teaching, suggestion or motivation to combine prior art references as the claimed invention did. By comparing TSM test to the U.S. Supreme Court opinions, this article argues that the determination of non-obviousness is elementally a value judgment and how to apply the non-obviousness requirement is closely related to the purpose of patent policy. Then this article goes further to review the controversy about TSM test. It is demonstrated that TSM test is problematic because it attempts to substitute the value judgment of the invention itself for an evidentiary requirement. And at the end of this article, the suggestion about what can be learnt from the controversy about TSM test is provided.

<Source: Sen-Yin, Li, Discussion of the Controversy about TSM Test and Patent's Non-Obviousness in U.S., Science & Technology Law Review Vol. 19 No. 10, Oct 2007, p.p. 42~60.>

 
  DATA MININGĦBCOMPUTER-ASSISTED PASSENGER PRE-SCREEN SYSTEM(CAPPS II)ĦBEU-US PNR AGREEMENTĦBPERSONAL DATA PROTECTIONĦBINFOAMTION SECURITY
   

Data mining-a technique for extracting knowledge from large volumes of data-is being used increasingly by the government and by the private sector. Many data mining efforts from government side involve the use of personal information, which can originate from government sources as well as private sector organizations.

Following the terrorist attacks of September 11, 2001, data mining has been used increasingly as a tool to help detect terrorist threats. In order to get more data resource to utilize its tool, Computer-Assisted Passenger Pre-screen System(CAPPS II), US Department of Homeland Security negotiate with EU from 2003, until now is still debating. From those debates, we can learn the impact the government agent operate data mining tool on privacy. This article therefore purports to discuss impact of the data mining on the issue of privacy from the perspective of Taiwan's Computer-Processed Personal Data Protection Law.

<Source: Joanne Wu, Data MiningĦBComputer-Assisted Passenger Pre-screen System(CAPPS II)ĦBEU-US PNR agreementĦBPersonal Data ProtectionĦBInformation Security, Science & Technology Law Review Vol. 19 No. 11, Nov 2007, p.p. 21~39.>

 
  HOW THE FREEDOM OF GOVERNMENT INFORMATION LAW APPLIES TO SCIENCE AND TECHNOLOGY PROGRAMS OF TAIWAN
   

On December 28, 2005, Taiwan's government announced "The Freedom of Government Information Law (FGIL)". This Law is enacted to establish the institution for the publication of government information, facilitate people to share and fairly utilize government information, protect people's right to know, further people's understanding, trust and overseeing of public affairs, and encourage public participation in democracy. In addition, the government's measures directly related to people's rights and interests as well as government information shall be made available to the public actively and timely. However, the government information shall be restricted from available to the provision when it accord with the conditions stipulated in Article 18.

Furthermore, since 1970s Taiwan government's investment into research and development, which advances the high-tech industry development, has shown the up trend. In order to exploit the investment to R&D effectively, the government has built a regulatory system to control or manage its information of R&D investment. After FGIL has been approved, how the law and the regulatory system apply to the R&D investment has become an issue in Taiwan. For example, do the gaps or conflicts exist between the law and the regulatory system? Should the government publish the R&D investment's information actively or provide it to people with their requests? What kind of information will fit in with the restrictions under article 18 of FGIL?

To find out the solutions, I try to discovery what information of R&D investment should be made available to the public by discussing the meaning of information and find out the reasons why making government information available to publics has become a right to people. Then I point out the information of the R&D investment which should be published actively by government, and which people can request government to provide for them. However, if the information has been regarded as national secrets, trade secrets, personal privacy or etcĦK, it would be restricted from publishing or providing to publics

<Source: Yi-Chen, Liu, How the Freedom of Government Information Law Applies to Science and Technology Programs of Taiwan, Science & Technology Law Review Vol.19 No. 11, Nov 2007, p.p. 40~61.>

 
  A SURVEY INTO REGULATIONS CONCERNING THE PLATFORM OF BROADBAND WIRELESS MULTIMEDIA
 

 

The European Union made the Framework Directive, Authorization Directive and Audiovisual Media Services without frontiers Directive conform to the trend of digital convergence. Compare to the European Union's reaction, Taiwan's authorities have planned to renew the regulatory framework for years, but the new regulatory framework is still in discussion today. This article suggests the Taiwan's authorities to change the regulatory framework and simplify the process of authorization as soon as possible. At the same time, Taiwan's authorities may consider to make basic rules apply to all kinds of content services to prevent the negative effects the content services may bring to our society.

<Source: Pei-Yu, Wu, A Survey into Regulations concerning the Platform of Broadband Wireless Multimedia, Science & Technology Law Review Vol.19 No. 12, Dec 2007, p.p. 25~40. >

  A STUDY OF NATIONAL SPECTRUM MANAGEMENT SPECIFICALLY IN DISCUSSING SPECTRUM MONITORING, SPECTRUM INSPECTION AND INVESTIGATION WITH REFERENCE TO INNOVATIVE SOLUTION IN ARGENTINA
 

 

Radio-communications have become an increasingly vital part of the telecommunications infrastructure and consequently economy of a country and economic approaches to national spectrum management are becoming essential. Knowledge of the actual use of the spectrum is needed before decisions can be made on frequency assignments and even frequency allotments. This paper focuses on the tasks, functions and objectives of spectrum monitoring, inspection and investigation which are essential elements while processing the spectrum management daily tasks. Monitoring supports the overall spectrum management effort by providing the actual use and general measurements of channels and band usages, including channels availability statistics and the effectiveness of spectrum management procedures. As part of the overall enforcement efforts, inspection and investigation support the general process of spectrum management. Inspection of new licensed transmitters before they become active, getting unauthorized transmitters turned off, and interference elimination are also necessary for a usable and interference free spectrum. Finally, this paper takes an innovative solution for example in setting up a national spectrum management in Argentina. The Argentina spectrum monitoring system put in place supports the development of Argentina's telecommunication infrastructure with a view to achieving the country's strategic economic and social growth objectives. Taiwan, as one member of international community, thus should learn from this example building similar system for future spectrum management.

<Source: Chun-Hung, Lin, A Study of National Spectrum Management Specifically in Discussing Spectrum Monitoring, Spectrum Inspection and Investigation With Reference to Innovative Solution in Argentina, Science & Technology Law Review Vol.19 No. 12, Dec 2007, p.p. 41~59. >

 
 
 

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