Deep & Far Newsletter 2010 ©
Divisional Patent Practices
It is interesting to note that the divisional practices are subject to amendments in major patent territories in recent years. For example, in Mainland China, a divisional application can be submitted prior to the expiration of two and a half months after the notice of allowance of the parent application is issued from July 1, 2006. Also, under the amended paragraph (1) of Rule 36 EPC Implementing Regulations entering into force on 1 April 2010, the opportunities for filing the divisions are restricted. The amended text is quoted here for easy reference where the amended part is underlined: (1) The applicant may file a divisional application relating to any pending earlier European patent application, provided that: (a) the divisional application is filed before the expiry of a time limit of twenty-four months from the Examining Division's first communication in respect of the earliest application for which a communication has been issued, or (b) the divisional application is filed before the expiry of a time limit of twenty-four months from any communication in which the Examining Division has objected that the earlier application does not meet the requirements of Article 82 (directed to unity of invention), provided it was raising that specific objection for the first time.
Under the most recent Japanese divisional patent practices, there are the following 3 chances for filing a divisional application, namely:
Within the time by which the description, claims or drawings may be amended (Article 44(1)(i), where English version of Japanese Patent Law can be obtained from the website http://www.cas.go.jp/jp/seisaku/hourei/data/PA.pdf), which includes the following 4 opportunities:
A. Before the transmittal of a certified copy of an examiner’s decision that a patent is to be granted (except after the applicant receives the first notice of reasons for refusal) (main text of Article 17bis(1));
B. Within the designated time limit where the applicant receives the notice of reasons for refusal from the examiner (including the appeal examiner after a trial is demanded) (Article 17bis(1)(i) and (iii));
C. Within the designated time limit where the applicant receives a notice under Article 48septies after receiving a notice of reasons for refusal (Article 17bis(1)(ii));
D. Within 30 days of such demand where the applicant demands a trial under Article 121(1) (Article 17bis(1)(iv)).
2. Within 30 days from the date on which a certified copy of an examiner’s decision that a patent is to be granted has been transmitted, excluding such decisions listed in A. and B. below (Article 44(1)(ii)):
A. A decision that a patent is to be granted made in reconsideration by the examiner before appeal (provision of Article 51, as applied mutatis mutandis pursuant to Article 163(3));
B. A decision that a patent is to be granted in the case where an application was put into further examination based on an appeal decision (Article 160(1).
3. Within 30 days from the date on which a certified copy of an examiner’s initial decision of refusal has been transmitted (Article 44(1)(iii)).
Since the IPO got known to the fact that the opportunities to file a divisional application in Taiwan are relatively limited, in the proposed amended patent law, Taiwan IPO (TIPO) decides to liberalize the opportunities. Specifically, the former paragraph in the current Article 33(2) provides such opportunities by the provision “divisional applications in the preceding paragraph shall be effectuated before receipt of a reexamination action of the original application.” Although the wording in this clause is ‘before receipt of a reexamination action’, in practices, it is no more possible to file a divisional application as long as the applicant receives a first examination action allowing the original application. In order to rescue this hardship, TIPO leniently assumed to liberalize the divisional requirements by proposing to amend the above clause into a new paragraph Article 34(2) stipulating that “a divisional application shall be made within the following respective terms:
1. Before receipt of a reexamination action of the parent application;
2. Within 30 days upon service of an action allowing the parent application provided that the divisional application shall not be made after receipt of a reexamination action.”
At a first glance, one might mistake that TIPO is really lenient for having solved the problems encountered by most of applicants potentially making use of the divisional practices through such amendments since the applicants would normally review the claims after the notice of allowance has been received. Accordingly, if there are 30 days for consideration of the necessity of a possible divisional application, such practices should be friendly and acceptable. Nevertheless, after getting known to the fact that a reexamination action would include both situations for rejection and allowance, the 30 days would not be available for an application receiving a reexamination action allowing the application. Accordingly, the proposed Article 34(2)(2) is merely applicable to an application which has received a first action allowing the application. Although such proposed amendment has solved the problems for an application having a first action allowing the application, it still remains open or headache for applications receiving a reexamination action allowing the applications since they could get no avenue to file a divisional application under the same situation as they suffer now.
As is known, a US applicant is fortunately enough, so far as the divisional practices are concerned, since a US application can have a divisional application as long as the US application has not become issued or abandoned. Specifically, before a US patent can be issued, there must be a notice of allowance in advance, by which the applicant could decide whether or how many divisional applications are desired. It would not be too much wrong if we take the US has the most liberal divisional practices, which, however, will not harm in any way the operations of the patent system or the interests of any body, since the issuance or patent rights of a divisional application can only inter alia take effect from the issue date thereof.
In view of the US divisional practices and the use demand of a major client, this firm prepared in July 2009 a thesis discussing the nature and practices of the divisional application from viewpoints of comparative laws when TIPO entrusted Taiwan Scientific Law Association to collect tens of theses from academic and industrial sectors on the proposed amendments on the Patent Law. Among the collected theses, there are 6 ones including this firm prepared one and selected to report in the International Conference Room of Taiwan University. In the thesis, we propose to more liberalize the restrictions on the divisional filing practices in order to be something similar to those in the US by inter alia reasoning that:
1. There is no much difference between the necessities of reserving the possibilities for filing divisional applications after receiving the first and the second (final) office actions allowing the patent application. It is not persuasive for the IPO to assert that whenever the applicant has an opportunity to respond to an office action, it has got ample chances to exercise the discretion as to whether one or more divisional applications should be made;
2. It would appear that various major industrialized patent offices have selected to restrict the opportunities for filing divisional applications simply because of trying to squeeze down the administrative complexities. We are of the opinions that this is not a competent ground since any office is freely assertive to raise the specific official fee to cope with any kind of administrative complexity.
Although it appears that several hundreds of attendees including the moderator, a senior judge in the IP Court, feel somehow persuaded by our arguments, it turned out that the TIPO stands immovably at its original position.
Accelerated Examination for Patent Applications
After the pilot operation in 2009, TIPO accepts petitions for acceleration examination of patent applications, effective from January 1, 2010. Specifically, as soon as the applicant has received a notification that its patent application is going to be substantively examined or be reexamined, it may petition an accelerated examination in any of the following cases:
1. A foreign corresponding application has been granted through a substantive examination by a foreign patent office: A foreign corresponding application may be one belonging to the same patent family of the basic application from which the Taiwanese patent application claims its priority where the judging principle is that the invention in the claims of the Taiwanese patent application has been disclosed in the descriptions or drawings of the corresponding application. To this end, the required documents include a) a petition form, b) the issued claims from the foreign patent office and their Chinese translations, or the notice of allowance from the foreign patent office and the claims to be issued together with their Chinese translations, c) all office actions and search reports issued during the prosecution by the foreign patent office, provided if not in Chinese or English, brief Chinese descriptions thereof should be submitted, d) a statement describing the difference between the claims presented before TIPO and those in the Chinese translations in Item b), if any, and e) a copy of non-patent literature, if any, identified in any office action in Item c) but cited against novelty or inventive step of the corresponding patent application where no patent literature is required. Anything, e.g. a response to the foreign patent office, which the applicant considers helpful to corroborate the patentability or facilitate the accelerated examination of the Taiwanese patent application could be submitted for considerations by TIPO. TIPO adds that this practice applicable to all applications subject to the substantive examination is very lenient when compared to those of other countries adopting the PPH system limited to be applied to the applications having not yet subjected to the substantive examination (or having not yet received a substantive office action). In return to this leniency, TIPO warns that as long as the applicant has received an office action requiring limitation to the claims and has submitted its narrowed claims, it cannot submit the broader allowed claims in the foreign country as the bases for petitioning the accelerated examination. It appears TIPO is confident that the examination results for the accelerated examination are generally available within 6 months following completion of submitting the required documents.
2. There is a corresponding foreign application having received a non-final office action and the search report, if any, from US, Japanese or European patent office: In this connection, the required documents include a) a petition form, b) the claims based on which the US, Japanese or European patent office issues the office action and their Chinese translations, c) the office action and the search report issued by the US, Japanese or European patent office, provided if not in Chinese or English, brief Chinese descriptions thereof should be submitted, d) a statement describing the difference between the claims presented before TIPO and those in the Chinese translations in Item b), if any, e) a statement describing why the present invention is patentable if in the accompanying office action and search report, there is a literature identifying the corresponding application is in lack of novelty or inventive step, if any, and f) a copy of non-patent literature, if any, identified in any office action in Item e) but cited against novelty or inventive step of the corresponding patent application where no patent literature is required. By the same token, anything, e.g. a response to the foreign patent office, which the applicant considers helpful to corroborate the patentability or facilitate the accelerated examination of the Taiwanese patent application could be submitted for considerations by TIPO. According to TIPO, it will issue its examination results for the accelerated examination generally within 6 months if the submitted statement in the above Item d) reports there is no difference between two claims and generally within 9 months without such a no-difference-report statement following completion of submitting the required documents.
3. Wherever it is required for commercial practice: Under this situation, a petition for an accelerated examination is allowed in order that the applicant could determine the patentability of its patent application as early as possible. The required documents include a petition form and the relevant papers, e.g. a negotiated licensing agreement or an advertising catalogue, establishing the necessity required for commercial practice. As planned by TIPO, it will issue its examination results for the accelerated examination generally within 9 months following completion of submitting the required documents.
TIPO also makes the following clear:
1. There is no official fee for petitioning an accelerated examination (AE).
2. An AE could only be petitioned by the applicant.
3. An AE petition could be made only after an official notice notifying the patent application will subject to the substantive examination or re-examination is received. An AE petition made upon requesting the substantive examination or re-examination will be straightforwardly ignored.
4. When an AE petition is submitted after a notification of examination opinion is rendered but before a response thereto is made, the issues raised in the notification shall be attended in order to avoid the possibility that an office action directed to those issues will be rendered.
5. In theory, a single AE petition is good enough for prosecuting a specific application. Although TIPO cannot guarantee how long or how soon it will react a response an applicant makes for responding to a preceding official communication in response to the AE petition the applicant makes, TIPO expresses that it will never forget the specific application has been put under AE although TIPO also makes it clear that the applicant could petition another AE based on another reason, and is ready to accept another AE petition in the re-examination stage based on the same documents or reasons with those for the first AE petition in the preliminary examination stage since the two stages have different examiners.
6. If there is a second AE petition before TIPO issues its examination opinions in response to the first AE petition, the examination opinions will be issued within 6 (or 9) months following the first AE petition, subject to the completion of submission of all required documents. This time frame will be well-kept only with extremely exceptional cases.
7. It is optional for the applicant to accompany in a single AE petition several office actions respectively issued from various countries.
8. It is interesting to note that the claims in the corresponding application in the AE petition must be translated into Chinese whereas the office actions issued in respect of the corresponding applications need not be translated if they are in either Chinese or English. Further, it is to be noted that although the simplified Chinese used in Mainland China could normally be recognized by people in Taiwan who learn the complex (or standard, under the official terminology) Chinese, TIPO requires that the simplified Chinese be ‘translated’ into the complex or standard Chinese with the adaptation of some special terms popular in Taiwan area.
9. It is unnecessary to amend the claims before TIPO so as to be identical to those prosecuted before the patent offices in foreign counties. It goes without saying that if the time when an AE petition is made is in a period during which an amendment could be made, a desired amendment could be made.
10. A notification of examination opinions issued by a foreign patent office includes the “Intention to Grant” or “Communication About Intention to Grant a European Patent” issued by the European Patent Office but does not include the “International Preliminary Examination Report” (IPER) issued by European, US or Japanese Patent Office under the PCT system since TIPO opines that IPER is not a strict examination opinion after the substantive examination, while the search report under the AE petition includes European Search Report or International Search Report (ISR) prepared by the International Searching Authority (ISA).
11. The AE petition is different from the preferential examination under Article 39 in that the latter could be petitioned only when there is a non-applicant commercially practicing the invention after the patent application has been published so that an applicant desiring to commercially practice the invention could only make an AE petition rather than petition a preferential examination under Article 39.
In the past, the substantive examination fee for a patent application is fixed at NT$8,000 provided that an additional fee at NT$500 for every another 50 pages or a fraction thereof in addition to the initial 50 pages counting therein the specification and the drawing sheets will be collected. In a short notice from the IPO in early December 2009, it is declared that in the future effective from January 1, 2010, the basic number of the claim set for a fixed substantive examination fee at NT$7,000 with the same proviso as aforementioned will be 10, beyond which there will be an additional fee at NT$800 for any excessive claim. It is further provided that:
1. If there is a deletion or amendment to the claim set before an examination opinion notification is issued, the final number of the new claim set will determine whether an official fee is refundable. Specifically, as long as the final claim number is fewer than the initial claim number while the initial one is larger than 10, an official fee refund is possible;
2. If an examination opinion notification has been issued, no matter whether there is a deletion or amendment to the initial claims, the newly added claims will be counted into the total claim number. Specifically, the sum of the newly added claim number and the initial claim number will decide whether the excessive official claim fee is required.
Substantive Examination Fee or Reexamination Fee
Effective from January 1, 2010, the substantive examination fee or the fee for paying the request for reexamination after receiving the first office action is refundable if the application is withdrawn before a first examination opinion notification is received.
Effective from January 1, 2010, annuities are changed as follows:
Retrieving Materials from File Wrapper
There are some features in Taiwan, regarding retrieval of papers from the file wrapper of a specific application as follows:
1. Only the very party is accessible to papers in the following applications:
A. Unpublished pending patent applications;
B. Pending utility model or design patent applications;
C. Unpublished rejected patent applications;
D. Objected or rejected utility model or design patent applications.
2. Only the very party or interested party is accessible to papers in the following applications:
A. Pending applications in the invalidating proceedings;
B. Pending applications for corrections after issuance;
C. Pending applications for patent term extensions;
D. Pending applications for compulsory license;
E. Utility model patents whose materials are related to pending technical reports.
3. No one is accessible to materials/papers of the following cases in any an application:
A. Involving other’s trade secret or personal privacy;
B. Being internal drafts, letters, opinions or preparatory documents in TIPO if not expressly allowed;
C. Involving secrets in respect of national defense, military, diplomacy or general public affairs;
D. In the event of Article 46(2) of Code of Administrative Procedures, Article 18(1) of Government Information Publication Act or Article 18 of File Act.
Battle Between Fair Trade Law and Trademark Law
Article 20(1) of the Fair Trade Law provides “No enterprise shall have any of the following acts with respect to the goods or services it supplies:
During the public hearing for the proposed amended Trademark Act intended to provide protection for unregistered famous trademark, the majority of attendees are of the opinions that if the trademark law provides protection for unregistered famous trademark, the core principle of trademark protection subject to registration will be damaged. Under general recognition, the fair trade law is a general law and the trademark law is a special law so far as the trademark-related matter is concerned, so that the trademark law shall apply if it contains an express provision. That is, the fair trade law shall apply only when there is no provision in the trademark law. Nevertheless, dissenting opinions arise in view of continued occurrence or ineffective prevention of the following phenomena including the use of confusingly similar name or interior and/or exterior decorations, or the use of famous trademark in an irrelevant goods or service.
Accordingly, so far as whether the above Article 20 of the Fair Trade Law shall be deleted in view of broadening of eligible subjects protectible under the amended trademark law is concerned, there are arguments from pros and cons. We would like to summarize reasons from the pros first in the following. They provide arguments from the following two aspects:
1. For a famous symbol having been registered as a trademark:
A. At the time Articles 20(1)(1) and 20(1)(2) of Fair Trade Law were enacted, the term “symbol” was used to extend beyond the coverage of protectible subjects under the then-current Trademark Law and has a broader scope to depict any mark having distinctiveness or secondary meaning to be capable of identifying the source of goods or service;
B. In as much as the amended trademark law has extended the protectible subjects to follow the international tide, it is no more necessary to resort to the term “symbol” under the fair trade provision for protecting what are not available for protection under the trademark law;
C. The requirement of “commonly known to relevant enterprises or consumers” in Article 20 of Fair Trade Law is the same with that for a famous trademark;
D. Accordingly, as long as the symbol has been registered, the registrant no more needs the application of the Fair Trade Law.
2. For an unregistered famous symbol:
A. In as much as the current Fair Trade Law (FTL) is to both regulate the restricted competition and the unfair competition, the trademark infringement is a dispute of private rights in nature, which is to be addressed by a judicial authority rather than be interfered by an administrative agency, such as the Fair Trade Commission;
B. Even if the language, requirements, definitions and/or criteria for an unregistered famous symbol is provided in the fair trade law, there could not be different constructions or applications from what would be made under the trademark law since it is a branch for protection under the trademark system. Furthermore, the damages for trademark infringement are compensations for losses in principle, which is different from or contradictory to the punitive damages as provided in Article 32(1) of the Fair Trade Law (FTL). Accordingly, by providing the unregistered famous symbol in the fair trade law, the fair trade law would thus have different or contradictory principles for damages;
C. Although the protection is available only after registration in principle under the Trademark Law, there are exceptions therein, e.g. the protection for famous trademark or service mark under Article 23(1)(12) of the Trademark Law. Although it might be hard to explain away the questioning why it is necessary for one to get the registration for a trademark if an unregistered trademark is protectible under the Trademark Law, it is still hard to explain the same questioning away why the fair trade law is bothered to protect an unregistered symbol for its owner who rejects or ignores to seek the symbol registered under the trademark law;
D. Whether an original trade dress or overall design shall be awarded a short term protection of 3 years under the amendments to the fair trade law is another issue.
We would like to summarize reasons from the cons first in the following.
1. For a famous symbol under Articles 20(1)(1) and 20(1)(2) of FTL:
A. The focus of FTL is not the protection for the rights owners or interests of the competitors but the maintenance of the fair competition environment and the market ethics. Specifically, what are to be provided thereby are to provide which behaviors shall be prohibited rather than to distinguish whether the infringed rights subject bears the formality of registration protection. That is, as long as the extent of using results of others has been unfair, FTL will provide therewith remedies, which is the reason why it has a broader coverage than the subjects for registration protection under the Trademark Law, in order to provide a supplemental remedy for unfair competition behaviors ineligible for invoking the application of trademark provision;
B. When the market can find the behavior of counterfeiting a famous trademark to endanger the market competition, one could become easily known to the fact that it never merely involves the protection of private rights but presents the necessity of introducing an FTL provision;
C. There is no conflicts for us to regard the FTL as a special law of the general trademark law;
D. Although the proposed amended trademark law has liberalized or broadened the subject eligible for trademark registration, this is another topic since there are unfair competition behaviors which could not be regulated under the trademark law through the diversified changes or developments in the market so that supplemental remedial opportunities under the fair trade law should be made available;
E. In fact, the protection on the famous trademark or other symbol, which has not been publicly announced, under FTL is to maintain the competition order in the market, which in turn indirectly protects interests of the famous trademark owner. As long as the protection provided by FTL on the unregistered trademark is not superior to that offered by the trademark law in order to fend off the phantom that “an unregistered famous trademark has a better protection than a registered trademark, it should not be reprimanded for the FTL to serve as a supplemental common law;
F. In order to firmly stand at this position, however, for preventing behaviors of counterfeiting symbol and unfair competition, Article 20 of the Fair Trade Law is proposed to be amended as follows:
a. Civil Liability: Since FTL is supplemental to the Trademark Law, the registered trademark owner shall directly apply the provisions regarding damages in the Trademark Law instead of FTL. Nevertheless, in order to curb the possibility of claiming punitive damages under Article 32(1) of FTL for intentional infringement after loss compensation of damages under Article 31 of FTL by an unregistered famous trademark owner under Article 20 of FTL, Article 32(1) of FTL shall not be applied against the one who violates Article 20(1)(1) or 20(1)(2), so as not to have a prejudicial balance on justice;
b. Administrative Punishment: Disregarding whether an act violating FTL is restrictive competition or unfair competition, under Article 41 of FTL, the Fair Trade Commission usually requires the act be stopped or rectified. Nevertheless, the preclusion or prevention of an unfair competition is suggested to be made or pursued by a business through the civil proceedings which are far more straightforward and effective than the administrative punishment normally being just fines;
c. Criminal Liability: If the administrative punishment for counterfeiting a famous unregistered trademark of symbol in the preceding paragraph is abolished, the criminal liability corresponding thereto under Article 35 of FTL shall also be decriminalized. As to the offender against a registered trademark, Article 81 of the Trademark Law has provided the criminal penalty.
2. For a famous foreign unregistered trademark under Article 20(1)(3) of FTL:
A. As a matter of fact, this provision was copied from the then Article 62(1) of Trademark Law upon enactment of FTL. Except there is a dispute about whether the judgment for the “famous” status should be judged domestically, even if there is a situation conforming to the requirements of this provision, the resulting protection is much less than that available under the preceding Articles 20(1)(1) and 20(1)(2) having largely covered or absorbed what Article 20(1)(3) is intended to provide. This provision has been considered to be unnecessary and could be deleted.
B. Even if there are countries offering remedies for unregistered famous trademark owner under the trademark law system, there is still the prerequisite that the trademark has been registered or protected in other countries. Which trademark accordingly still belongs to a pattern of various unfair competitions stipulated in Articles 20(1)(1) and 20(1)(2). Accordingly, even if the Trademark Law is to protect the unregistered trademark, it is hard to conclude that the supplemental provisions in Articles 20(1)(1) and 20(1)(2) should be deleted.
In sum, the cons assert that the mechanism of FTL for supplementing the trademark law will be lost if its Articles 20(1)(1) and 20(1)(2) were deleted so that there will be leakage and omission in achieving the purposes for maintenance of fair competition in the market so that these provisions shall be retained subject to the adjustments discussed in Paragraph 1.F. while Article 20(1)(3) could be deleted as reasoned in Paragraph 2.A..
Proposed Amendments to Article 37 of Copyright Law
The current Article 37(6) of the Copyright Law provides “The provisions of Chapter VII shall not apply where musical works are licensed for reproduction on computer karaoke machines and an exploiter uses such a karaoke machine to publicly perform the works; provided, this shall not apply in the case of musical works managed by a copyright intermediary organization,” which is proposed by the TIPO to be amended as “The provisions of Chapter VII shall not apply in the following circumstances except for works subject to management of a copyright collective management organization:
It is to be noted that what Chapter VII provides are penal provisions of infringement on copyright, such as imprisonment, detention or fine.
We would like to summarize arguments from the pros for the proposed amendments first in the following:
1. As to the proposed Article 37(6)(4), the case of advertisement music is similar to the case of secondary public broadcasting, that is, the exploited music in such broadcasting can not be predetermined, controlled or chosen definitely by the exploiter, neither can the advertisement music be decided by the TV station broadcaster but by the upstream producers instead. In as much as the decision maker of using a broadcasting contents and the exploiter requiring to be licensed are different, it is easily subject to the issue of information asymmetries to result in the phenomenon of licensing market failure, since the advertisement producing procedure is quite lengthy. As such, it is preferable to enable the advertisement producer to obtain the rights of public broadcasting or transmission upon obtaining the rights of reproduction from the copyright owner and to exempt itself from criminal prosecution.
2. The secondary exploitation of public broadcasting is a common event in modern society, such as the case of the TV or broadcasting program happening in hotel, hospital, restaurant, coffee shop, department store, shopping mall, convenient store, bus, etc.. The main reason why the consumers are willing to go said places is their professional or occupational services but not the broadcastings, that is, the income or economic value of the secondary exploitation of public broadcasting is very limited. Therefore, the exemption from criminal liability of the proposed amended Article 37(6) gives a brilliant idea.
3. It is well known that the criminal liability is totally excluded from Taiwan Patent Law without impairing the claiming ground of the patentee’s rights. Only decriminalization makes it possible for a reasonable licensing condition, since it is almost impossible to negotiate a fair licence which follows the market mechanism under the risk of criminal liability.
We would like to summarize arguments from the cons in the following.
1. The secondary exploitation of public broadcasting is extensively popular, but anyone shall not make profits at the cost of the copyright owner’s intellectual property. Therefore, the criminal prosecution is a necessary means to protect the legal rights of the copyright owner.
2. Till now, it has been known that it is difficult to or even cannot get any remedy from the lengthy proceedings of civil actions; this is the reason why there are so many exploiters of secondary public broadcasting but the remuneration for the right owner is so minimal. The exemption from criminal prosecution, which is often more effective and immediate in rights protection, provided by the proposed Article 37(6) substantially sacrifices the right owner.
3. The proposed Article 37(6) specifically provides protections only for works subject to management of a copyright collective management organization, which may give rise to international disputes because the foreign copyright owners are forced to join the collective management organization first if they want to effectively exercise their rights in this country.
It appears that, in all kinds of secondary exploitations of public broadcasting, it is not easy for the exploiters to know in advance and control the contents of exploited works and obtain the licenses of the works one by one, and thus they face the risk of criminal prosecution at all times. In addition, the economic value of the secondary exploitation of public broadcasting is relatively limited, so a civil remedy should be sufficient to protect the copyright in such circumstance and there should not be a necessity of criminal punishments. It is very likely that the proposed amendments to Article 37 of Copyright Law might be enacted. It is to be noted that the protection prerequisite for a work subject to a Copyright Collective Management Organization under Article 37(6) of Copyright Law will be dealt with in another proposed amendments to “Copyright Intermediary Organization Act.”
Finding and Calculating Damages for Trademark Infringement
Claiming damages through the civil remedy procedure for a trademark infringement is an important means to protect the rights and interests of a trademark owner. It, however, has been an academically and practically essential issue to find and calculate the damages while claiming. There are some calculating methods given in Article 63 of the Taiwan Trademark Law, which provides “When claiming for damages, a trademark right holder may choose one of the following methods to estimate the amount thereof:
A court may, at its discretion, reduce the amount of compensation in the case where the amount of compensation for damages assessed under the preceding paragraph is apparently unreasonable.
A trademark right holder may claim for additional compensation in a reasonable amount in the case where whose business reputation has suffered any damage on account of such infringement.”
There is a fundamental question on the relation between the trademark infringement and the civil tort, which not only involves the subjective requirements and causality but also the findings of wrongs and damages. In addition, there are issues having key influences on the judgment results and worthy of intensive studies, e.g. how to prove the suffered damages, lost profits, normally available profits, gained profits from trademark infringement, unit retail price, etc. when applying Article 63 of Trademark Law.
In a 2008 Intellectual Property Court case, the defendant imported four counterfeit HERMÈS Birkin bags for selling to the old clients, and was found guilty of fraud by the court. In the case, the court granted according to Article 63(1)(3) for 500 times damages based on the averaged NT$510,000 per unit retail price of the HERMÈS Birkin bags. The defendant contended that the number of the bags was only a couple of dozens in Taiwan, so 500 bags would be equivalent to the sales volume of 8~9 years. Nevertheless, the court finally justified the damages of 500 times of unit retail price. In addition, the court has decided that the defendant should advertise the judgment on newspapers under Article 64 of the same law, which provides “A trademark right holder may request for publication on a newspaper, at the expense of the infringer, of the contents, in full or in part, of the judicial decision in relation to a trademark infringement”. There are also decisions ruling damages based on the net profits of the defendants. For these issues, we would like to summarize opinions on the applications of Articles 63 and 64 from scholars, practitioners, and officials in the following:
1. Under Article 63(1)(3), the damages for trademark infringement shall recover the actual losses of the trademark owner rather than punish the infringer. On the other hand, the ratio legis of Article 63(1)(3) shall be applied only when there is a difficulty to prove profits or losses of the infringer or the trademark owner. In the Birkin bags case, the decided amount apparently far excees the damages. Furthermore, the court also did not reduce the amount of compensation according to Article 63(2), so it should have misapplied Article 63(1)(3). In addition, with such amount of damages decided, the infringer will be permanently deprived of economic ability so that its human rights are endangered. Furthermore, with such a huge amount of damages, the infringer might not be able to afford the court fees in the appeal stage, which again vacuumizes its litigation rights under the constitution.
Regarding the order of publishing the judgment on the newspapers, the decision may be improper. What is the property or nature of this compensation? Is it property or non-property? If it is property, such publication seems not associated with the recovery of property damages; if it is non-property, how can a company which is a legal person for the purpose of making profits have spiritual damages?
2. The ratio legis of Article 63(1)(3) states “Even though the Anglo-American law empowers a court, at its discretion, to set an up to 3 times damages compensation over the actual damages, it is neither to make the infringed be people of unjust enrichment nor to exempt its burden of proving the actual damages for calculating purpose. As such, it must be most preferred to have specifical provisions of the statutory compensation…” On this ground, the damages compensation is not punitive but an estimating means for damages in view of the difficulty in finding damages in the opaque market. Accordingly, it had been proposed not only that this provision shall be applied only when the amount of the infringing goods cannot be determined, but also it was to be deleted since it will leave the room for misunderstanding by the court, just like the above-captioned case, that the damages shall be set between 500 to 1,500 times of the losses from which the trademark owner has suffered. Nevertheless, the majority of practitioners advocated the reservation of this provision. Further, in practice, Article 63(2) is usually applied to reduce the amount of damages. Nevertheless, the courts divide in holding whether the application of Article 63(2) is a matter of law or just a discretion of the judge.
3. The current advertisement provision of Article 64 has been proposed to be deleted, since this is not to restore the reputation of the trademark registrant but to impose additional monetary burden on the defendant. In addition, Article 63(3) is also proposed to be deleted because the business reputation claim is nothing more than the property damages. By 1993, the trademark and the business can not be assigned separately; however, after amendments in that year, the transfer of trademark right is not restricted to be made with the business. Therefore, it no longer needs to give the trademark right owner the claims of non-property damages compensation concerning the reputation damages.
4. The latter sentence of Article 63(1)(2) is also unreasonable since there should always be methods for calculating the costs. It has been generally recognized that a legal person can not have spiritual pain; however, the court has developed intangible damages for the business reputation and still classified as non-property damages. As such, some hold that the amount of infringement on business reputation needs to be judged by appraisal, which is somthing similar to the calculation of property damages. Accordingly, it raises doubts that such calculation may overlap with that under Article 63(1) and whether it is proper.
5. The three subparagraphs in Article 63(1) are parallel to each other, so the calculated results of Article 63(1)(3) and Article 63(1)(1) or Article 63(1)(2) should not mutually differ too much.
6. TIPO has started to amend the Trademark Law and add a new Article 63(3)(4), which will provide a calculating method of taking the potentially available royalty in a license as damages. Regarding the latter provision “in accordance with the profits gained from trademark rights infringement”, in respect of “the total amount of sales from selling the infringing goods shall be regarded as the amount of profits” of Article 63(1)(2), TIPO will review and discuss whether it is proper to delete it or amend it as “reasonable profits” just like what the Patent Law is proposed to be amended, in order to be distinguished from the punitive damages. In addition, for the business reputation of the 3rd paragraph, the court has usually taken it as non-property damages where the amount of the compensation totally depends on the free evaluation through inner conviction; however, as above-mentioned, since TIPO holds that the business reputation still belongs to property damages under the nature of the current trademark right and should be incorporated for calculation with the preceding paragraphs. Further, since the abatement of reputation or distinctiveness of a well-known trademark in the proposed amendments, there is not provided with a claim of damages but with only a claim to petition for exclusion and prevention from the infringement. In consequence, there will be no more de jure problem on claiming non-property damages for trademark infringement in the future.
7. The core principle of Article 63 is to compensate damages rather than to establish punitive damages. The opinion that the business reputation is kind of property seems better than to regard it non-property one. In addition, nowadays, there are many developed or developing theories on the calculation of intangible assets which may give a lot of helps on the issues of finding and calculating the damages. Thus, the deletions of Article 63(1)(3) and Article 64 seem preferable and expectable.
Preferential Examination On Trademark Application
If there is no revision or objection, a trademark application could be allowed in around 7 months, whose time period is longer than 3 months for the first office action in the US or 5 months in Japan. Since a survey reveals that a preferential examination on the trademark application is desired, the IPO held an internal discussion in this regard to conclude as follows:
1. There are options of collecting a fee or not for such preferential examination. Specifically, if a fee is required and paid, an application shall be preferentially examined; if not, there must be a substantive examination as to whether there exists a necessity for such preferential examination (PE);
2. It might be not necessary for adoption of such PE since such need originates from the ignorance from the applicant to file the application at an early stage;
3. If the preferential examination system (PES) is to be adopted, on the one hand, it shall be made available for convenience of the applicant who gets involved in a dispute, while on the other hand, the user must pay the fee. In addition, the following considerations must be taken care of:
A. The examination for the general case should not be delayed simply because of the PES;
B. Care needs be taken for cases whose registrabilities are interfered by PES. For example, if applications under PES are examined within two months, a later filed application having an earlier priority needs resort to the dispute proceedings for protection. Is this fair to the later applicant? How could PES cope with this consideration, especially where the PES applicant tries to enforce its rights against the later applicant?
4. If a fee is required, it might be considerable to introduce in PES a procedural examination ascertaining whether requirements for PE are met and the fee is collected only after an affirmative ascertainment;
5. Is it appropriate to allow PE simply because the applicant has paid the required fee? Is it possible that the purpose of PE cannot be obtained because there is a complicated scenario? Is it feasible that the applicant could retreat from PE if the case is decided to be complicated by IPO? Is it proper not to allow PE if the applicant has competent reasons therefor, substantially completed the preparation for trademark use? Is it considerable that PES allows in parallel the petition without reasons by paying fee and the petition with fee by submitting competent reasons?
6. IPO notes that PES is comparable to AEP (accelerated examination process) for the patent application. Since AEP does not require any fee, its petitioner is always a foreign or domestic applicant who has financial power to acquire a foreign counterpart to serve as a base for such petition. In order to allow a local applicant who has no financial power to file foreign patent applications to avail of the AEP when there is an emergent case, the commercial practice has become a condition for AEP requiring no fee. Nevertheless, there is a basic difference between backgrounds for PES and AEP. That is, the normal trademark examination period is 7 months while the current examination period or the first office action for patent applications exceeds 2 or 3 years from petition of the substantive examination. Although there is a significant difference between 7 months and intended two months for PES, the fee, if to be collected, cannot be a big amount, in order that the system is not made for the rich sector.
Trademark Filing Fees for Designating Service Class
Current fees for service classes are not collected based on the item number as practiced for goods so that there might be abusive designation therefor. IPO proposes to collect fees based on the number of the 4-code subgroups. Specifically, if the designated subgroups in the same class are less than 3, each class will cost NT$3,000; for each additional subgroup, another NT$1,000 will be collected. The reasons why Subgroup 3519 for retailing service of specific goods has a special fee requirement include that the applicant would list specific goods one by one and that the examiner needs be bothered to cross-search the specific goods. In this regard, there are the following discussions:
1. Since it is often found the applicant does not know to which subgroup the services it desires to apply belong, not to mention the possibility for it to correctly calculate the required fees, it might be suggestible to collect the fees as in the case for goods which allows a fixed fee for item number under 10;
2. Some mention that since the practices of subgroups are only applicable in Taiwan and Mainland China, not only it is hard to calculate the fees, but also it is troublesome to explain for a foreign client, especially in view of the fact, e.g. that goods or services accepted in a specific Nice classification in a foreign country are not likewise locally accepted. The opponents, however, assert that since goods and services have different natures, it is proper to collect fees for services based on subgroups, or 6-code sub-subgroups under a specific 4-code subgroup, if any. If so, Subgroup 3519 needs no more special treatment and one needs not be troubled to strenuously judge the use of a full stop, a comma or a semicolon in separating services;
3. IPO opines that the service mark applicant normally uses numerous descriptive words to describe the service it intends to provide, e.g. consulting services for enterprises providing in respect of manufacture, engineering, design, CAD, computer aided manufacture, computer aided engineering, product lifecycle and geometrical modeling for others. It would thus be time-consuming, troublesome and subjective to try to identify the number of services, which is the main reason why IPO considers it proper to collect fees based on the subgroup since not only the subgroup is a mature concept, but also IPO bases on the subgroup to allocate the service code unit for examination efficiency;
4. According to the evaluation of IPO, 3 subgroups are enough for a regular company. So far as the fee proposal made by IPO is concerned, the most majority of applicants in sampled 50 cases in each class are not affected. As to Class 35, however, up to 7% of applications will have fee increases of more than 1000%, which shows how the applicants designate the service items.
Copyright Protection Requirements and Infringement Finding
In the copyright lawsuits, the often seen question is whether the work in issue satisfies the protection requirements of copyright? Because it is the prerequisite of finding a copyright infringement, the defendant normally alleges that the works of the plaintiff do not satisfy the protection requirements of copyright as a plea. After the Copyright Law was changed to automatic protection upon creation, whether the protection requirements are satisfied or not is to be decided by the court. Although it is mainly the criminal court judgments involving originality of a work in the past, the various courts had accumulated lots of cases. After the establishment of Intellectual Property Court (IP Court hereinafter), there have now been considerable civil judgments appeared. It is to be determined if the judgments of IP Court have followed the past judging standards of courts? In addition, regarding the determination of, especially the reasonable use of, infringement and the calculations of damages, there also exist the similar issues to which we need to pay attention.
We would like to summarize arguments on these issues from the scholars, practitioners, and officials in the following:
1. In a 2008 IP Court case, the work concerning on radicals in a Chinese dictionary, although the appraisal results showed the work in issue has originality to qualify as a compilation work, the IP Court could not find in favor of the appellant since it has not been shown whether the appellant independently completed the work. The court seems to hold if a work can not be proved to be completed independently; the originality thereof could not be shown even though one possesses a manuscript of the work. If this is really the case, it will be very difficult to demonstrate the originality or meet the copyright protection requirements.
2. There may be a judgment procedure in a copyright case for the court. Firstly, the court should decide whether the subject matter can be a work under the copyright law. If not, it is unnecessary to consider the originality of the subject matter. The computer program work, in particular, is required to be a series of instructions, so that it should be considered in advance whether the computer program satisfies the definition thereof under the copyright law. Secondly, the court should decide whether the subject matter has originality. Thirdly, only if the former two conditions are satisfied, the subject matter at issue can be a work having objective entitlement of copyright; the court should then further investigate whose subjective rights a copyright work belongs to. Thereafter, the court can finally consider the issue of infringement.
3. It may be a point to be discussed whether the judges’ judging standards for substantial similarity in copyright differ in civil and criminal cases. While, one judge may sometimes deal with both civil and criminal cases at the same time, we might be curious to know whether the judge has duplex standards for evidence in them. Take the case of “contact work” as an example, for finding a copyright infringement, the requirement under the US law is “having a chance to contact” and the civil courts of Taiwan also hold that once the work is available for contact by the defendant, it could be found. Could we apply this rule in the criminal courts? Should there be any difference between the contact-finding standards in civil and criminal cases?
Another issue is the question on “presumption”. Article 13 of Taiwan Copyright Law provides that a person can be presumed to be the copyright owner of a work simply because the real name of the author is shown on a reproduction of a work. In a civil case, there is generally no dispute on the presumption in this article; however, in a criminal case (since there are still criminal liabilities for the copyright infringements), if a defendant argues with the genuineness of the copyright owner, whether the complainant or prosecutor could take the advantage of such presumption under Article 13 and ask the defendant to bear the burden of proof. It is know that the defendant in a criminal case shall enjoy the protection of presumption of innocence and have no burden of proof under the law, but the presumption provided in Article 13 appears to impose an obligation on the defendant for rebuttal. Nevertheless, whether there is really such an obligation deserves more discussions.
4. Regarding the first case in paragraph 1, the court’s conventional definition for “originality” merely requires an author’s independent creation which is not plagiarized from others. In the same case, the IP Court, however, made a conclusion of requiring the work at issue to be an independent creation. However, the IP court failed to make it clear in the judgment whether an independent creation merely means the work at issue is not plagiarized but instead required the author to prove it has an independent “creating procedure”. The same opinion had been rendered by the IP Court in another case in 2008 by the Intellectual Property Court. Wherein, the main issue is whether the author’s design drawing of an electricity meter box has originality, but the IP court required the author to demonstrate the independent procedure of creating the design drawing of said electricity meter box rather than just judged the simpler issue of whether the work is plagiarized. This practice somehow increases the burden of the author and may cause it so difficult to prove the “originality” of a work.
5. According to opinions of the Supreme Court, there are two basic concepts for the entitlement of copyright, which are “creativity” and “originality”. The “creativity” is herein defined as having a minimal of creative idea and being sufficient to express the author’s personality and distinctiveness. Once a creation is identified to bear such minimal “creativity”, it generally constitutes a legitimate work. The “originality” is defined the same as given in paragraph 4, where the Supreme Court derives two requirements to find the “plagiarism”, i.e. “probability of contact” and “substantial similarity”. The “probability of contact”, as revealed in paragraph 3, means a reasonable probability to know the plagiarized work according to ordinary social circumstance. The finding of “substantial similarity” is mainly investigated in respect of the quality or quantity of both plagiarized work and plagiarizing work at issue, subject to the court’s discretion. If the court holds that the two works have high similarity, then it may satisfy the “substantial similarity” requirement。
6. In a third case in 2008 in the Intellectual Property Court, concerning to a compilation work “List of words confusing radicals” the judge finding that 940 out of 3,300 words in the plaintiff’s work are also collected by the defendant held that the expression way for the confusing radicals is very limited, so the 940 collected words identical to the plaintiff’s are the inevitable results to have no infringement. Since we can make different expressions from the identical concept, how could 940 out of 3,300 words not tell apart a concept from its expression just because the judge held the ways of expression are limited?
7. In a 2009 case in the Intellectual Property Court, the work at issue is an “aboriginal doll”. An official from TIPO takes that the court failed to judge whether the “aboriginal doll” is a legitimate work or just an industrial product, and if it is a work, what is its category? He believes it is improper for a court to directly judge whether the protection of copyright is justified, and the court should instead first identify whether the work at issue is legitimate and then indicate which articles in Copyright Law specifically provide the protection of said work, by looking into Article 3 for definitions of a work or Article 5 for categories of works.
8. In a fourth case in 2008 in Intellectual Property Court, the defendant argued that the photographs published on the magazine were not taken by the plaintiff although the plaintiff provided 8 slides, 3 of which include figures in addition to the natural landscape, since the landscape and figures in the slides are similar or identical to those in the photographs at issue. The court held if those photographs were not taken by the plaintiff himself, how could he provide the 8 slides? According to the court, a reasonable presumption of independent creation may be made for photographic work if there are identical people appearing both in the photographs to be appraised and the evidences provided by a plaintiff. However, we should be careful about that if there are source files of the photographs, the photographs or other derivative matters may be available through modification from the source files. Who should bear the burden of proof for the availability? At this situation, because of the presumption for the plaintiff, the burden of proof should rest on the defendant; however, one may rationally think of the problem of “proving an independent creating procedure” as mentioned in paragraph 4, wherein, the court did hold the plaintiff has burden of such proof. This is really an issue worthy of further deliberation.
9. A case arises from selling a work a number of times through the internet. The Supreme Court had remanded the judgment made by IP court for the “collective offense” and held that if the selling behavior was judged to be a collective offense, it will constitute only one crime. We would like to make some comments on the Supreme Court’s opinions. First of all, there are three confusing similar offenses as listed in the following:
A. “Continuous offense”: The continuous offense could be found if it is based on not only a general mens rea in the subjective aspects, but also a succession of several acts which are conducted in series with continuity and offend several legal interests of identical nature, wherein, a specific act and a preceding or succeeding act can be separate in time under the social ordinary concepts and each has its own independence under evaluation of the criminal law so that every act can be found guilty independently to constitute the identical crime.
B. “Successive offense”: If several acts are conducted at the same place with the same time or at close time and places to offend identical legal interests, where, the mutual independence among acts is extremely low and it is difficult to force them apart in time, then it is more reasonable under evaluation of the criminal law to deem the several acts conducted successively as one act to inclusively offend a single crime.
C. “Collective offense”: It is a “type of constitutive elements”, i.e., the legislators have assumed thereafter the multiple acts through sustaining performance, featured to be repetitious and continuous for the constitutive elements of specific criminal norm to be generalized or constructed as a single constitutive element of a “collective offense”. This crime has nature of offending identical legal interests and behavioral singleton of a constitutive element under evaluation of the criminal law to be an inclusive single crime is included.
From the forgoing discussions, one may find that the act of internet selling is so close to the “collective offense” due to its repetitious and continuous nature. Therefore, a probable reason that the Supreme Court remanded the case would be that the court intends to limit the applicable scope of the “collective offense” and to curb the abuse by incautious judgments.
10. In determining whether the exploitation of a work complies with the conditions of fair use, Article 65(2) of Taiwan Copyright Law has provided four points to be considered :
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 essentiality and the proportion of the portion exploited in the entire work.
4. Effects of the exploitation on the work's current value and potential market.
The provision 65(2)(3) has indefinitely provided whether the exploited proportion is weighed in respect of the cited work itself or the citing work. Some IP decisions have adopted the practices of weighing the exploited portion to determine the occupying proportion in the citing work. For example, in cases where one piece of photograph was used in the article of a blog, the courts held that the proportion of the exploited photograph is small upon considering articles in blog, so it should not violate the requirements of “fair use”. However, is it also a “fair use” if the photograph is the primary portion of a cited work and therefore nearly all ideas of the original author are exploited? On this ground, a reasonable way is to consider both the cited and citing works while making a decision.
11. Regarding Article 88(3) of Taiwan Copyright Law, which provides “If it is difficult for the injured party to prove actual damages in accordance with the provisions of the preceding paragraph, it may request that the court, based on the seriousness of the matter, sets compensation at an amount of not less than ten thousand and not more than one million New Taiwan Dollars. If the damaging activity was intentional and the matter serious, the compensation may be increased to five million New Taiwan Dollars”, one court in a copyright infringement case had required the infringed party to prove the difficulty of proving the actual damages but the infringed party finally failed to prove the difficulty and had been rejected the claim of the statutory damages but awarded another kind of damages by the court. However, according to general rules of intellectual property damages, the infringed party may choose the way of the compensation at its discretion based on (1) injury actually suffered and the interests which have been lost (see Article 88(2)(1)), (2) the difference between the amount of expected interests from the exercise of such rights under normal circumstances and the amount of interests from the exercise of the same rights after infringement, (see proviso of Article 88(2)(1)), (3) the amount of interests obtained by the infringer (see Article 88(2)(2)), or (4) the statutory damages as provided in Article 88(3). The decision of said court is tantamount to deprive the party of the optional freedom for the way of damages compensation.
Revisiting Copyright Protection Requirements and Infringement Finding
Pursuing a criminal offense on intellectual property rights is not unusual in R.O.C since the right owners often acquire a favorable position through the criminal prosecution. It is therefore concerned whether criminal norms of copyright may be abused. After the establishment of the Intellectual Property Court (IP Court hereinafter), this phenomenon has been observed with a little change because the IP court appears to have adopted a stricter recognizing standards for criminal punishments of copyright infringements, the satisfaction of protection requirements and the ownership of rights. It cannot easily tell whether this is advantageous or disadvantageous. We would like to pay more attention here on criminal cases and summarize arguments on relevant issues from the scholars, practitioners, and officials in the following:
1. Before finding guilty, there must be “intent” or “negligence”, involved in the behavior of the copyright infringement. Because there is generally not criminal liability for “negligence” according to the general principles of Criminal Law, many a decisions of IP Court dismiss copyright infringement because of “negligence” to avoid the abuse of criminal punishments. The IP Court, often finds guilty in respect of “CD” cases, since the factual evidences are always obvious and seldom give rise to disputes.
2. Regarding CD reproductions and distributions, in a 2009 case, the Supreme Court reversed and remanded the decision of the second instance IP court holding the behaviors of transmission via internet, continuous sale and production of pirated CDs are several predetermined and similar behaviors to be conducted repeatedly and continuously based on a general mens rea (i.e., for reproductions and distributions) and therefore should be categorized as a “collective offense”.
Before the abolishment of “repeated offense” and “successive offense” from the Criminal Law, in a copyright offense, the courts had never mentioned the viewpoint of “collective offense”; however, through the abolishment, the legislators originally intend to respectively categorize the two offenses under two different legal principles of “single punishment for one crime” and “joinder punishments for plural crimes” (where the former is in relation to the collective offense, but the latter is in relation to several crimes). Thus, there are still applicable legal norms other than “collective offense.” Although the Supreme Court did not specifically state in this case how to decide the criminal liabilities of the infringing party, it at least proposed: (1) the constituent elements of reproduction crime and distribution crime are not required for establishing the collective or repeated conduct, (2) if one time reproduction and distribution and several times of reproductions and distributions are inflicted with the same crime without any difference, it seems to encourage the continuous infringements of economic rights, and (3) whether the infringer can be found as conducting the same behavior repeatedly should be judged based on a generalized mens rea.
3. Another DVD/VCD case decided in 2008 by IP Court relates to reproduction of the work (under Article 91(2) of Copyright Law), public broadcast and public presentation (under Article 92 of Copyright Law), and distribution of infringing articles, or public display or possession of such articles for distribution (under Article 87(2) of Copyright Law), without authorization. At last, the court merely convicted the defendant of a “repeated offense”, though abolished, because the court considered that it may punish too much the defendant if it applied the rule, “joinder punishments for plural crimes”, to all punishable crimes while the “repeated offense” punishment is much more favorable for the defendant. Note that the “repeated offense” is a special kind of “collective offense” in jurisprudence, so the main point herein would be, again, whether the illegal repeated reproduction, public broadcast and public presentation, and distribution should constitute single “repeated offense” or three independent “repeated offenses”.
4. Another relevant but abolished crime is “implicated offense”, which means while committing a crime, the means or results thereof constitute another crime. Accordingly, if a behavioral pattern of copyright infringement has an association or a nature of implication between the preceding and succeeding constituent behaviors, e.g., means and objects, or causes and results, an eventual “implicated offense” is not impossible. For example, the implication between reproduction and distribution, or the implication between reproduction or public broadcast and public presentation could normally be seen from behaviors of the same infringer. As know, the legal effect of an “implicated offense” is that only the most severe punishment shall be imposed even though several offenses could be found.
5. Under Articles 91(3) and 91bis(3) of Copyright Law, the punishment of unauthorized optical disk reproduction with the intent to sell is “imprisoned not less than six months and not more than five years, or in addition thereto a fine not less than five hundred thousand and not more than five million New Taiwan Dollars”, and the punishment of unauthorized reproduced optical disk distribution is “imprisoned not less than six months and not more than three years, or in addition thereto a fine not less than two hundred thousand and not more than two million New Taiwan Dollars”.
In the past criminal case of copyright infringement, the courts usually adopted “absorption theory”, that is, on the evaluation of punishments, the higher level behavior of reproducing the work without authorization with the intent to sell is severer than the lower level behavior of distributing the reproduced work without authorization. Since the heavier reproducing behavior absorbs the distributing behavior, only the reproducing behavior would be punished. These “absorption theory” statements seem to be a feasible way to solve a large part of the coexistence problem of plural crimes; however, there are still some questions remaining. As an example, how could we correctly define the level of a behavior upon criminal evaluation or why must the lower level behavior be absorbed by higher level behavior?
As well-known, the “absorption theory” originates from “statute concurrence”, which means that an actor’s singular behavior realizes or plural behaviors realize constituent elements of several criminal provisions under a general assumed behavior, but the illegal content and criminal contents of the “primary behavior” can cover those of all other “secondary behaviors”, produce the exclusive effect, and therefore become the sufficient constituent elements of a punishment. In particular, if the “primary behavior” is a successive behavior, “stage absorption” might apply and only the last behavior should be punished with all the preceding behaviors being absorbed thereby. On this basis, whether the reproduction behavior should be absorbed by distribution behavior could be solved since this “stage absorption” theory can avoid the difficult problems arising from lower and high level behaviors.
In sum, the adoption of “absorption theory” is a good choice to solve the problems of concurrence of plural statutory behaviors; however, we should carefully deal with the absorption of behaviors in the specific case so as to realize the specific justice.
6. If the infringement behaviors are a combination of adaptation and distribution rather than reproduction and distribution, how does this differ? The main point is whether the distribution of an adapted work is a distribution of original work or derivative work. In current secondhand transaction of audiovisual works, such as the sale of secondhand DVD movies in a video rental shop, there are musical works in the movies and there comes the issue: if the shop master should obtain the license on the musical works? The lawful songs in general have the application of the “first sale doctrine.” That is, after the original or reproduced work has been once lawfully sold, the copyright owner can no more restrict the buyer from further rental, lease or resale, but the pirated work of songs has not. The problem arises from the transaction of secondhand movies, or audiovisual works, since there are musical works, sound recordings, oral and literary works, and photographic works in the movies at the same under with the licensed rental right or distribution right from the copyright owner of the audiovisual works. If so, is it necessary to acquire the license of the other works exploited in the movies? In current market practices, the operator of the video rental shop does not acquire the license from copyright owners of the other works.
7. The copyright owners of computer programs or sound recordings, under the provision of WTO/TRIPS Article 11, enjoy the rights for licensing or prohibiting the rental of the work, which is inapplicable to audiovisual works unless such rental has led to widespread copying of such works which is materially impairing the exclusive right of reproduction conferred on the owners.
In Taiwan, the copyright owner can enjoy rental right under Article 29(1) of Copyright Law stipulating “Except as otherwise provided in this Act, authors of works have the exclusive right to rent their works.”, To protect the property of lawful reproduction owner, it further provides in Article 60(1) “Owners of originals of works and lawful copies of works may rent such original works or copies; provided, this shall not apply to sound recordings and computer programs.” These provisions basically obey the gist of TRIPS Article 11 and therefore the rental right of original books or DVD only exists on the unsold originals or lawful reproductions of works and exhausts after first sale.
8. It is to be noted that unlike criminal law, there is no concept of “statute concurrence” in civil law and it naturally has no necessity to discriminate between infringement of reproduction and distribution. Thus, in a civil case, the damages claims merely depend on what amount of infringing goods can be found and then the damages are calculated accordingly.
9. In certain criminal judgments, the un-contracted rental shop was reluctant to approach the supplier due to the expensive royalty and just bought the DVDs from a contracted rental shop. In addition, the contracted rental shop desires to sell the DVDs due to bare profits from entering into the contract. As to the legitimacy of the DVDs of the un-contracted rental shop, it is to be noted the contents of the contact are usually that the supplier only rents rather than sells to the contracted rental shop DVDs to sublet, so the buying behaviors of un-contracted rental shops are on purpose and they would be assignees in bad faith. Accordingly, it will lead to inapplicability of “first sale doctrine”.
10. Regarding the Article 59bis providing “A person who has obtained ownership of the original of a work or a lawful copy thereof within the territory under the jurisdiction of the Republic of China may distribute it by means of transfer of ownership” and Article 60(1) providing “the owner of a work original or its lawful work reproduction may rent the original or reproduction”, there are two subtle ways of interpretations on both articles:
A. As long as the copy at issue is lawful, its owner can not only distribute it by means of transfer of ownership but also rent it out. The people who stand for this view hold that the contract cannot be used to restrict the application of “exhaustion doctrine”. In addition, this interpretation is closer to the gist of TRIPS Article 11.
B. What should be “lawful”? In the contracted rental shop case, the supplier (A) and the contracted rental shop (B) have reached an agreement of not redistributing the DVDs; however, B still assigned the DVDs to un-contracted rental shop (C) with both B and C knowing the breach of contract between A and B. At this connection, the DVD did not enter the market in a “lawful” way and the rights of A would not exhaust regardless of the C’s good or bad faith for the assignment. On this ground, the people who stand for this view hold that the “lawful copy” must be interpreted to embody lawful reproduction and lawful entrance in respect of transaction order.
11. As to public performance, the courts’ views have been varying. Board of Copyright, Ministry of the Interior made an interpretation that only the business units that provide performance equipments and places are responsible for criminal liability on the public performance; however, the courts did not adopt the opinion of Board of Copyright but made use of the “joint offender” or “accessory offender” to convict crimination. On the contrary, some judges held that if we want to use “joint offender” or “accessory offender” to criminate the KTV operators, then the performing consumers and the operators who provide performance equipments and places must have communications of mens rea between them. If the consumers have no criminal intents, then there is not any mens rea communications there between and therefore it is difficult to say that the operators have infringed the public performance right. At this time, the better way is to use concept of the “indirect principal offender”, i.e., the operators do exploit the consumers to achieve the results of infringing the public performance right. Recently, the courts even hold there is no person performing publicly on the scene and made innocent decisions for the operators. In other words, the copyright owner should produce the evidence for public performance.
12. As to public display, Article 27 of Copyright Law provides “Authors of unpublished fine arts or photographic works have the exclusive right to publicly display the original and copies of their works”, the ratio legis of this article is that if arts or photographic works have been published, it may also have been extensively reproduced or distributed and therefore it is not necessary to grant the right of public display. For the display of the copyright owner’s photographic works which are acquired from internet or the product catalogue, even though we cannot prove whether the photographic works have been published, we can still conclude the display does not infringe the right of public display because it is reasonable to presume that the photographic works have been extensively reproduced or distributed.