Legislation

Taiwan's first post World War II copyright law consisted of articles adopted by the Republic of China government in 1928, later amended by Presidential Order in Taiwan in 1949.  As Taiwan's economy developed, laws regarding copyrights became increasingly robust.  The Copyright Act underwent significant revisions in the mid-1960s, late-1980s, and early 1990s.  In 1993, Taiwan's Coordination Council for North American Affairs signed an agreement with the American Institute in Taiwan to provide full reciprocal copyright protection.  Taiwan joined the World Trade Organization in 2002 and committed to fully comply with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs).  In 2003 and 2004, Taiwan enacted amendments to the Copyright Act to further strengthen protection of copyrighted materials.

Notably, recent copyright legislation has strengthened penalties for online piracy and illegal reproduction of optical disks.  Over the past several years, the Taiwan Intellectual Property Office (TIPO) , under the Ministry of Economic Affairs, has actively promoted Taiwan's anti-piracy policy through an increase in raids of illegal factories, public awareness campaigns, and IPR-related judicial training.  Nonetheless, piracy continues to be a problem, particularly involving illegal CD/DVD burning, reproduction of computer game cartridges, and online audio/visual file sharing. 

Coverage – What Does the Copyright Act Protect?

Under Article 5 of the Copyright Act, copyright protection is afforded to the following:

• Oral and literary works
• Musical works
• Dramatic and choreographic works
• Artistic works
• Photographic works
• Pictorial and graphical works
• Audiovisual works
• Sound recordings
• Architectural works
• Computer programs

Taiwan law defines copyrights as the "moral" and "economic" rights subsisting in a completed work.  Moral rights protect the author's reputation and the right to prevent others from "distorting, mutilating, modifying, or otherwise changing the content, form, or name of the work."  Economic rights protect the author's rights to the financial benefits deriving from their works.  While moral rights are protected indefinitely, economic rights are set for a fixed period of time.  In Taiwan, economic copyright protection begins upon the completion of a work and extends for the lifetime of the author plus fifty years.  Economic rights include rights to broadcast, reproduce, perform, exhibit, etc. 

The Copyright Act provides that the works of foreign entities that are first published outside of Taiwan are protected under bilateral and international agreements to which Taiwan is a party.  Taiwan does not belong to the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, or the World Intellectual Property Organization Convention (WIPO).  However, as a member of the WTO and a signatory to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Taiwan has agreed to recognize the copyrights of nationals of all WTO member states including the U.S.

What Does the Copyright Act Not Protect?

The Copyright Act does not protect the Constitution, laws, regulations, and official documents, or translations thereof.  Other items not protected include slogans, symbols, numerical charts, forms, almanacs, test questions, and news reports. 

Article 10 further states that copyright protection covers only "the expression of the work in question, and shall not extend to the work's underlying ideas, procedures, production processes, systems, methods of operation, concepts, principles or discoveries." 

In principle, copyrighted material may not be reproduced if it is being used to secure a profit.  The Copyright Act permits some reproduction of copyrighted material for "fair use" in education, government, and public services under guidelines outlined in Articles 44-65.  Such use must not infringe upon the copyright holder's moral or economic rights.  Article 65 explains that "fair use" of a copyright is evaluated on the following basis: (1) the purposes and nature of the exploitation, including whether such exploitation is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the work; (3) the amount and substantiality of the portion exploited in relation to the work as a whole; (4) the effect of the exploitation on the work's current and potential market value.

Registration

Taiwan terminated its copyright registration requirement in 1998.  Unlike patents and trademarks, copyrights may not be registered in Taiwan.  Instead, copyright protection is provided automatically upon the completion of a work.  Nationals of WTO member states and other countries with which Taiwan has bilateral copyright recognition agreements receive full copyright protection for their works in Taiwan.

Market Entry Planning

Since joining the WTO, Taiwan has strengthened its laws and amendments regarding IPR.  However, despite stronger statutory protection, Taiwan continues to face challenges from counterfeiters and intellectual property pirates.  According to the International Intellectual Property Alliance (IIPA), piracy losses in Taiwan for motion pictures, records and music, business and entertainment software, and books totaled U.S. -$315 million in 2004, with piracy rates running at a 45 percent average across all copyright industries.  This figure actually represents a significant improvement since 2002, when losses due to piracy in the same industries peaked at U.S. $847.9 million. 

Taiwan has made notable efforts to reduce illegal production of pirated optical disks.  In 2003, the Copyright Law was amended to allow police officers to conduct raids at night markets and to give customs officers ex officio authority to inspect and seize goods.  In 2004, further amendments reinstated minimum sentences for copyright infringements and clarified the definition of piracy.  This legislation has resulted in an overall decrease in illegal factory production of pirated media.  On the other hand, it has forced pirating operations to go further underground.  Currently, sales of pirated music and movies are frequently conducted through the Internet and mail orders.  To reduce inventory and likelihood of discovery, pirates commonly market their products on a "burn-to-order" basis, or through direct downloading from Peer to Peer (P2P) and "warez" websites.  The IIPA notes that Taiwan produces more blank OD media than any other country, exporting CD-Rs and DVD-Rs to China, Malaysia, Latin America, and other countries where they are available for use by copyright infringers.  Other areas of concern include illegal reproduction of textbooks and journals at universities and off campus photocopying facilities, and production of component parts of counterfeit videogame cartridges.  Sales of illegal copies of branded goods, including clothing, handbags, and luxury items through the Internet, night markets, and small retail stores continue to be a concern.

A well-developed, comprehensive IPR strategy should be a part of any company looking to do business in Taiwan and the greater China region.  A company must identify its IPR, control, and protect it. 

Prevention: The best way to avoid copyright infringement is to prevent it.  Be clear of your rights and use all legal means available to mitigate your risks, including:

• Incorporate copyright protection into contracts and marketing strategies.
• Enter into written and enforceable contracts that require agents, suppliers, distributors, and employees to protect your copyright.
• Refuse to assign or license your copyright until you fully understand the consequences.
• Make certain that your rights to the copyright remain upon termination of the assignment, license, transaction, or investment.

Protection: If you discover that your copyright has been violated, do something immediately to protect and enforce your rights.  Investigations, raids, seizures, as well as civil litigation and criminal prosecution, are some of the tools available.  Before deciding which tool(s) to use, however, consider the following questions:

• Is the infringement taking place in Taiwan or overseas?
• What is the source of the infringement? (e.g., competitors, employees, agents, or contractors)

If it is determined that the source of infringement is located in Taiwan, it is best to engage the assistance of legal professionals with both Taiwan and IPR expertise early in the process.  You may also wish to involve them in your overall IPR business strategy.  Membership in industry or professional organizations can also be of assistance.

What Constitutes an Infringement?

Article 87 of the Copyright Act states that the following actions constitute an infringement of copyright or plate rights:

• Exploitation of a work by means of infringing upon the reputation of the author;
• Distribution of articles that are known to infringe on plate rights, or public display or possession of such articles with the intent to distribute;
• Import of any copies reproduced without the authorization of the economic rights holder;
• Import of the original or any copies of a work without the authorization of the economic rights holder;
• Exploitation for business purposes of a copy of a computer program that infringes on the economic rights of such computer program;
• Distribution, by any means other than transfer of ownership or rental, of articles that are known to infringe on economic rights; or public display or possession, with the intent to distribute, of articles that are known to infringe on economic rights.

HOW TO ADDRESS INFRINGEMENT

Copyright infringement cases are primarily resolved through civil and criminal litigation, with additional provisions for mediation.  Copyright holders may also apply to customs authorities for suspension of the release of imported or exported goods that they suspect infringe on their rights.  Often, it is most effective to take a multi-pronged approach to resolve copyright disputes.   

Mediation

Although the Copyright Act provides a mechanism for mediation under Article 82, it is almost never used in Taiwan.  In general, copyright holders prefer to approach disputes through criminal and civil litigation for best results.

Current law concerning mediation states that a Copyright Examination and Mediation Committee may meet with a rights holder and the party accused of infringement to discuss terms for a settlement.  Once a settlement is agreed upon, a written statement is presented to the court handling the case.  If the settlement is approved by the court, the parties must agree not to initiate further litigation or criminal prosecution. 

In practice, disputing parties that wish to reach a settlement usually do so through meetings between their attorneys.  In contrast to some states in the U.S., in particular California, Taiwan does not require disputing parties to participate in mediation before a trial.  Taiwan's judicial process does not include a discovery period, and attorney fees and trial costs are generally much lower than in the United States.  With the exception of cases involving large corporations, most IPR disputes are resolved through criminal trials and supplementary civil actions.  Parties are encouraged to settle at any time preceding or during a trial.  Those who settle during the trial do not face penalties imposed by the court.

Civil Remedies

 Articles 88-89 of the Copyright Act describe the means through which copyright holders may file a civil suit claiming damages for copyright infringement.  Under Article 88, the copyright holder bears the burden of proof of damages as outlined in Article 216 of the Civil Code, which states the following:

"Unless otherwise provided by the act or by the contract, the compensation shall be limited to the injury actually suffered and the interests which have been lost.  Interests which could have been normally expected are deemed to be the interests which have been lost, according to the ordinary course of things, the decided projects, equipment, or other particular circumstances."

Article 88 of the Copyright Act further states that when the copyright holder cannot determine the amount of damages as prescribed by Article 216 of the Civil Code, he or she may:

• Base the damages on the difference between the amount of expected benefit from the exercise of such rights under normal circumstances and the amount of benefit from the exercise of the same rights after the infringement; or
• Base the amount on the benefit obtained by the infringer on account of the infringing activity.

In the event that the copyright holder cannot prove the amount of damages, it may ask the court to determine compensation based on the seriousness of the infringement.  Compensation may range from 10,000 to one million New Taiwan Dollars (NTD).  In a very serious case, the amount of compensation may be raised to five million NTD.  It is important to note that Taiwan's judicial system does not include a discovery process.  In cases involving small, non-listed companies, it may be difficult to prove the amount of damages because financial records may not be readily available to prosecuting attorneys.

The Copyright Act also allows copyright holders to "request destruction of goods produced as a result of the infringing act, or of articles used predominantly for the commission of the infringing acts."  Injured copyright holders may also require the infringing party to publish all or part of the judgment in a newspaper or magazine.

Criminal Prosecution

Article 91 of the Copyright Act provides that a person who infringes on the economic rights of another person may be subject to criminal prosecution. It is important to note that, in most criminal cases, prosecutors may not bring an indictment unless the copyright owner files an official complaint. 

Examples of acts subject to criminal prosecution include:

• Reproducing a work without authorization
• Reproducing a work without authorization with the intent to sell or rent
• Reproducing a work without authorization onto an optical disk
• Distributing the original or copy of a work by transfer of ownership without the owner's authorization

Criminal sentences for copyright infringement include imprisonment and fines depending on the severity of the infringement. 

Initiating a Complaint and Litigation

Suits may be initiated in one of several ways: 1) through criminal prosecution, 2) as a civil action supplementary to a criminal case, or 3) as a stand-alone civil case.  To begin the process, a copyright holder must first file a complaint with the police, the prosecutor's office, or the court overseeing the jurisdiction in which the infringement occurred. 

Anyone may file a complaint, however, most U.S. companies hire local counsel to represent them in Taiwan.  If hiring an attorney, a U.S. copyright holder must present a power of attorney valid in Taiwan. 

Before filing a complaint, the copyright holder must first determine whether sufficient prima facie evidence exists to support their claim.  If further evidence is needed, a copyright holder must either independently or through a private investigator, gather evidence to support the complaint.  In the event that a raid must be conducted, the complaint must be filed with the police, who will in turn coordinate the raid.  In addition to evidence of infringement, copyright holders must present both the date of first publication and a copy of the relevant copyright certificate (if applicable) when filing a complaint.

Civil vs. Criminal Approach

When considering what type of suit to file, keep your company's end goals in mind.  What is your ultimate objective?  Is your end goal to stop the infringement, receive compensation, or both?  What is at stake?  What are the assets of the infringer?  Is the infringer a large corporation or a small-scale illicit business?  What legal resources are available to you in Taiwan?

A criminal approach is most effective when the end goal is to stop the infringement from reoccurring, and/or when the infringer's assets are not sufficient to warrant a civil case.  On the other hand, a civil approach works best when the copyright holder's objective is to claim damages and the infringer has resources to make the litigation worthwhile.  A final approach combines both criminal and civil charges.  Supplementary civil complaints may be filed during the criminal proceedings.  It is important to note that Taiwan does not charge court fees for criminal cases, whereas it does charge fees for civil cases.  If a civil action is filed as a supplement to a criminal case, the court does not charge any additional fees.  

Suspension of Release of Goods

Another agency that rights holders may approach to combat copyright infringement is the Customs Authorities.  Article 90 of the Copyright Act provides copyright holders with the right to "apply to Customs Authorities to suspend the release of imported or exported goods that infringe on their copyright." 

The Implementation Regulations for Suspension of Release of Goods Infringing on Copyright or Plate Rights by Customs Authorities explain the process for filing an application for suspension of release of imported or exported goods.  According to regulations, the copyright holder must submit the following information to the Customs Authorities at the port where the suspect goods are to be imported or exported:

• Proof that he or she is the owner of the said copyright;
• Descriptions which may sufficiently identify the infringing goods;
• The facts of the infringement.

Regulations also state that the applicant must post a bond to serve as a security deposit for the party whose goods are being held.

If Customs agrees to suspend release of goods, it will notify both the rights holder and the owner of the detained goods.  The copyright holder must initiate litigation within twelve days of notification by Customs.  Upon the applicant's receipt of a final civil judgment determining that an infringement has occurred, Customs will confiscate the infringing goods at the expense of the goods' owner.

Frequently Asked Questions

Q: What does a U.S. copyright holder have to do to become eligible for copyright protection in Taiwan?  Must the copyright holder register with the Taiwan authorities?

Because the United States and Taiwan have entered into bilateral treaties and are both members of the WTO, U.S. copyrights holders may receive copyright protection in Taiwan, even if the work was first published in the United States.  Works of foreigners first published in Taiwan are also eligible for copyright protection in Taiwan. 

Q: What is the duration of copyright protection in Taiwan?

Copyrights are valid for the life of the author plus fifty years.  If the author is deemed to be a company, the copyright is valid for fifty years after the date of first publication.

Q: Are my copyrights transferable?

Subsection 3, Articles 36-43 of the Copyright Act states that economic rights may be transferred to another person or may be jointly held with another person or group of people.  The scope of rights transferred may include all or partial rights and must be agreed upon in writing by all parties involved.  Copyright owners may also license their work to other parties. Licensing agreements must include the territory, term, content, method of exploitation, and other details as required.  If a specific right is not clearly addressed in the transfer or licensing agreement, it will be assumed not to have been transferred or licensed.

Q: What are the criteria for criminal prosecution?

Copyright infringers may be prosecuted only if the rights holder files a complaint.  Exceptions to this include "vocational offenders" who earn a living by pirating copyrighted goods, manufacturing pirated optical disks for sale, and distributing pirated optical disks.

Q: Is it possible to prevent the infringer from destroying evidence?

Yes.  It is advisable to involve the police as early as possible.  Before conducting a raid, ask the police to obtain specific records that may be relevant to the case.  If you are pursuing a civil action in lieu of a criminal filing, you may wish to ask the court for a preservation of evidence order requiring the infringer to turn over copies of information relevant to the case such as import/export records, bank statements, shipping statements, etc.

Q: How are electronic copyrights protected in Taiwan?

Taiwan's current economic policy emphasizes growth in the online services sector and in 2003, it adopted legislation to protect electronic copyrights.  Article 80 of the Copyright Act states, "technological protection measures employed by copyright owners to prohibit or restrict from accessing works shall not, without legal authorization, be disarmed, destroyed, or by any other means circumvented."  Under Taiwan law, it is illegal to manufacture, import, or otherwise offer to the public any type of device or information for disarming, destroying, or circumventing technological protection measures.  Nonetheless, if using the Internet to publish copyrighted digital or written content, it is best to take all measures possible to prevent infringement by computer hackers.  The best possible protection is prevention.

Additional Resources

Information on organizations, government agencies, and law firms handling IPR-related issues is available on this website.