Co-Authored by Winona Chen of Lee and Li, and Chris Hampton of Nexsen Pruet
December 6, 2016
After a phone call and some tweets, Taiwan is back in the news. Now seems like the perfect time to write about the enforcement of intellectual property rights on the island.
Taiwan, the unassuming island 100 miles off of China’s Southern coast once called Formosa (“beautiful island”) by Portuguese traders in the 16th Century, packs quite the economic punch. Taiwan is the 19th largest economy in the world, has an annual surplus in excess of $4 billion, and enjoys the fifth largest foreign currency reserves in the world at $425 billion.  Not bad for an island the size of New Jersey.
That surplus is driven by a healthy manufacturing industry, many sectors of which compete directly with our industry here in the Carolinas. Taiwan is well known as a global leader in PC and motherboard production along with optoelectronics. Perhaps striking closer to home is its recent emergence onto the green technology and biotech scenes, backed by investment from established industry and government incentive programs.
Of course, Taiwan is a player in many other industries as well, placing it squarely on the radar of many companies seeking to protect their intellectual property portfolios.
Unlike the United States, Taiwan has a court dedicated solely to intellectual property matters. The Taiwanese government, recognizing the importance of strong intellectual property protection as a driver of foreign investment and domestic growth, established the Taiwan Intellectual Property Court on July 1, 2008. Taiwan’s IP Court has jurisdiction over IP-related civil, criminal, and administrative litigation matters. It has eight first-instance judges and eight second-instance judges. Notably, the Taiwan IP Court has 13 Technical Examination Officers who advise judges on technical issues related to each case.
For businesses in the Carolinas competing with Taiwanese businesses or manufacturing products on the island, it may be worth considering a Taiwanese patent. The likelihood of enforcement is key to valuing any patent. We now have enough data to see trends in patent cases brought in Taiwan.
According to official statistics issued by the Judicial Yuan, from July 2008 through 2014, the success rate for patentees filling suit in the first-instance by foreign parties is around 19%. The success rate for cases filed by Taiwanese patentees is only 13%. Foreign companies thus experienced a higher success rate when bringing cases in the Taiwan Intellectual Property Court. Some countries fare better than others. From July 2008 to 2011, patentees from the United States enjoyed a 50% success rate during this period, though the data sample is limited to eight cases.
For comparison, in 2014, patentees in U.S. courts won only 26% of cases that went to a definite merits resolution.
The average length of first instance cases that closed in 2015 was 278 days. For the second instance the number was 254 days. For comparison, a typical U.S. patent litigation case takes between two and three years to resolve. Larger cases brought in the U.S. can last eight years or more.
For U.S. companies, the higher success rate in enforcement actions compared with other foreign and domestic patentees, the relatively streamlined docket, and the availability of technical experts are all things to consider when deciding to apply for a Taiwanese patent.
Winona Chen is an Associate Partner at Lee and Li, Taiwan’s largest law firm. Ms. Chen focuses her practice on intellectual property law/licensing, patent enforcement and litigation, and civil/administrative litigations. She is also familiar with the fair trade law issues, daily corporate issues and dispute resolution. Winona handles both litigation and non-litigation cases and has represented several large enterprises in patent infringement cases, provided legal consultation on intellectual property matters and represented enterprises and government agencies in administrative litigation.
Chris Hampton is a litigation associate at Nexsen Pruet, a Carolina’s based law firm with offices throughout North and South Carolina. Mr. Hampton focuses his practice on white collar, business and intellectual property litigation. While clerking at Nexsen Pruet during law school, Mr. Hampton joined a Nexsen Pruet partner to work with a team of lawyers from Lee and Li representing a U.S. company before the Taiwan Intellectual Property Court.
 Dissemination Standards Bulletin Board of Central Bank of the Republic of China (Taiwan)
 US companies have won 36% of their trademark cases and 12.5% of their copyright cases in Taiwan during this time. Overall, U.S. plaintiffs won 34.45% of their cases (patent, copyright and trademark) from July 2008 through 2014. By comparison, Japanese plaintiffs won 26.32% of their cases and companies from the U.K. won 8.13% of their cases.