Entrepreneurs urge closer IP protection cooperation between Taiwan and China

During the recent negotiations between Taiwan and China over the bilateral investment agreement (BIA) under the Cross-Strait Economic Cooperation Agreement regime, IP rights protection unexpectedly became a hot topic. Dissatisfied with the joint efforts of both governments under the Cross-Strait IP Rights Protection Cooperation Agreement, signed on 26th June 2010, some Taiwanese entrepreneurs have urged the government to aim for closer cooperation on IP rights protection and to consider establishing special mechanisms under the BIA to resolve IP-related disputes across the Taiwan Strait.

The IP agreement established a platform between both governments' IP administrative authorities, as well as:

• Achieving mutual recognition of priority rights for patent, trademark and plant varieties.
• Making easier the authentication of Taiwanese audiovisual works.
• Promoting cooperation when acting against piracy and false labelling and in the protection of well-known marks.

The IP agreement creates no additional legal remedies, procedures or causes of action for private parties; instead, IP rights protection will still be handled by Taiwan and China, respectively, in accordance with the applicable laws and regulations effective in each jurisdiction. A Taiwanese private party may, when pursuing a remedy under Chinese law and encountering unreasonable difficulty, ask the Taiwan Intellectual Property Office (TIPO) to assist only by communicating with the relevant Chinese authority in accordance with the principles of the IP agreement. In no event may TIPO take direct action regarding any matter occurring in China.

Some enterpreneurs have urged the government to extend further the IP agreement or to establish a new mechanism under the BIA in order to resolve the difficulties of effectively and efficiently protecting technology-oriented patents and know-how that are essential to the high-tech industry. In particular, many high-tech Taiwanese companies have moved their manufacturing bases to China and suspect that local competitors unlawfully infringe patents or improperly misappropriate trade secrets through their former employees. Although they take and even exhaust all available legal remedies, the results are often unsatisfactory. Since the business-to-business and business-to-government special venue and dispute resolution mechanisms in relation to investment protection are implicated in the BIA negotiations, Taiwanese enterprises have urged the government to consider IP rights disputes within the scope of investment protection.

Thus, on 4th July 2012 the Taiwanese Ministry of Economic Affairs convened a meeting and invited IP scholars and practitioners for an in-depth discussion. Some developments demonstrating efforts towards ensuring trustworthy judicial proceedings were mentioned at the meeting - Chinese courts in certain districts have set up special sections to handle disputes involving Taiwanese nationals or enterprises, in order to provide a better quality of judicial proceedings. In addition, arbitration institutes in both China and Taiwan are jointly working on mechanisms for cross-straits mediation and arbitration. While the participants in the meeting recommended mediation and arbitration instead of litigation to resolve IP rights-related disputes, it was also recognised that the adoption of such alternative dispute resolution mechanisms is conditional on the parties’ mutual consent, which can be difficult in cases of infringement. As a result, no special venue or mechanism under the BIA was settled on at the meeting. However, the participants agreed that TIPO shall help enterprises to collect information on legal remedies to protect IP rights in China and to interact with the Chinese authorities to share insights and exchange experiences regarding law enforcement. In individual cases, TIPO shall identify any unreasonable difficulties encountered by Taiwanese enterprises, in accordance with the IP agreement.

To date, there has been no conclusion regarding the establishment of special IP protection venues or mechanisms across the Taiwan Strait. However, the IP authorities of both Taiwan and China will continue to work together to achieve more effective IP rights protection.