In 2004, the Intellectual Property Office gave a Taiwanese manufacturer of recordable compact discs compulsory licensing of a patent owned by Dutch company Philips. This brought a protest from the EU, which commissioned a trade barrier probe -- the results of which were made public on Feb. 1.
The report criticized Taiwan's compulsory licensing regulations under the Patent Act as a violation of obligations stipulated by the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) and indicated that the EU Commission would seek WTO dispute settlement if Taiwan failed to rectify the situation, including amending the Patent Act within two months.
In response, the Ministry of Economic Affairs said that the granting of compulsory licensing of Philips' patent was conducted in accordance with legal procedures and that the associated laws did not conflict with the nation's obligations outlined in TRIPS. If the ministry insists on its stance and the issue is not resolved with the EU, this case could become Taiwan's first full-on WTO dispute since joining the organization in 2002.
The protection of intellectual property rights (IPR) has become internationalized in an age when patents have global reach. International IPR litigation is common and Taiwanese businesses are becoming accustomed to legal action in the courts of various countries.
The adoption of intellectual property rights into WTO regulations was a new phase in the globalization of IPR protection and TRIPS set a minimal international standard. If a WTO member is accused of having violated obligations stipulated under TRIPS, interested parties can seek dispute settlement at the WTO.
Hence, instead of seeking resolution through domestic law, patent owners such as Philips go through the EU. If the case is brought to WTO dispute resolution, the EU will be the plaintiff and Taiwan will have to defend its legislation allowing compulsory licensing.
Because Taiwan is not a member of many world bodies like the UN, legislation mostly reflects the will of domestic legislators. But after joining the WTO, trade-related laws must comply with TRIPS obligations. If the WTO were to decide the compulsory licensing case is in violation of TRIPS, then Taiwan would have to abide by its decision, which normally means amending domestic laws or measures. Not doing so means being subjected to trade sanctions.
Taiwan should actively reinforce its domestic capability to conform to the standards of international IPR protection. With the establishment of TRIPS, IPR legislation has become increasingly important. As Western nations created TRIPS, they are naturally more mature in using the system and their experience has produced rich results.
Taiwan has been in the WTO for six years and has only been a part of the international IPR body for a short time. It must strive to improve its vision of international IPR law.
For instance, the country's understanding of international bodies and their associated regulations, as well as training in international negotiation and litigation skills, should be improved.
To respond to the globalization of IPR, Taiwan needs to train more interdisciplinary professionals, especially lawyers with knowledge of IPR, human rights and environmental law.
Taiwan should also construct a mechanism for sharing experiences between businesses, government, and academia to obtain more rights and benefits for Taiwan, as well as to fulfill our obligations in the international community.
Ni Kuei-jung is an associate professor of law at the Institute of Technology Law at National Chiao Tung University.
Translated by Angela Hong
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