Crouching Taiwan, Hidden Dragon

30 June 2020

Crouching Taiwan, Hidden Dragon

While the rest of world suffered from Covid-19, Taiwan was on the other end of the spectrum, seeing low numbers of infections and deaths – but still suffering from the same economic damage as the rest of the world. Johnny Chan reports.

Taiwan has weathered the novel coronavirus Covid-19 pandemic well, all things considered, particularly in comparison to countries like Italy, Spain, Brazil and the United States. With a population of nearly 24 million people, Taiwan had had only 451 confirmed cases of Covid-19 by mid-July 2020, with only seven deaths, resulting in an astonishing 0.03 deaths per 100,000 of population. 

But with the intertwined nature of national economies these days, Taiwan hasn’t managed to completely escape the pandemic. And lawyers are feeling the economic pinch.

“The ability to make profits and to keep the IP budget in line may deteriorate,” says CF Tsai, founding partner at Deep & Far in Taipei. “They can only be dealt with by profitable innovations, or seeing recovery when the worldwide economy is back on track.”

While cross-border travels are suspended, any forms of in-person exchange and update of information has become impossible. “Without professional conferences, the efficiency in public exposure and opportunities to explore business reduces,” says Kevin Feng, an associate at Tsai, Lee & Chen in Taipei. “[Poorly-established] firms or smaller practicing groups may be impacted more significantly.”

For the IP industry, Covid-19 has highlighted the importance of managing and connecting work virtually in a seamless way, not only among law firms, in-house clients and service providers, but also within the said parties, says Steven Liu, IP director at MediaTek, a global fabless semiconductor company headquartered in Hsinchu. “This could accelerate the trend toward teams converging on platforms (such as Anaqua), which are designed with such integration in mind.”

Taiwan has been applauded for maintaining a functioning economy by successfully containing Covid-19. The world has witnessed major economies going into lockdown, and IP entities throughout the world closing their physical locations. But while life inside Taiwan remains almost the same now as it did before the pandemic, some Taiwanese industries are still facing severe challenges.

 

“We are in an economic turmoil, and have seen a bipolar approach in IP applications. There is a significant increase in trademark and design applications. TIPO estimated a seven percent increment in local trademark applications. On the other hand, many companies become more cost-sensitive and are adopting a cost-cutting approach this year. We have witnessed many companies filing applications only in a few countries. It looks like they are aiming to re-shape their IP profiles for the current year. If the recession and business downturn continue for a prolonged period, we, especially jurisdictions like Taiwan, would face a severe challenge to handle IP prosecution,” says Arpita Dutta, legal consultant at Louis International Patent Office in Taipei. “Also, the pandemic has created a crisis in M&A, which makes IP transfer and acquisition drop moderately during the first quarter. Apart from the above-mentioned challenges, INTA has recently expressed its concern over a significant number of bad faith trademark applications related to the coronavirus mark. They suspect that the applicants are planning to sell the mark at a higher price to the genuine trademark users.”

In this critical time, our main aim is to encourage companies to maintain their innovation scope, apply for IP protection, and protect them from unfair competition, Dutta says. “All courts and IP offices around the globe are trying to provide more benefits to keep their IP alive by extending deadlines for submitting documents and fees. For example, the World Intellectual Property Organization is encouraging measures aimed at spurring innovation and technology during the pandemic, lots of platforms have been introduced by the IP offices worldwide to track Covid-19 related IP policy changes, and the US Patent and Trademark Office has waived several fees to encourage applicants to continue and strengthen their IP portfolios.”

 

Versatility

In spite of these difficult times, law firms and companies must remain IP-agile because the pandemic acts as a catalyst to push for a betterment of IP management and services.

 

Even before Covid-19, smarter and more comprehensive IP analytics were already an emerging force in the industry, Liu says. “Law firms and companies must now make the best use of different analytics tools to find the insights, trends and changes that are happening, often in real time.”

“Those wanting to remain IP-agile must be the law firms that provide relevant services as well as the companies which hold profitable innovations,” says Tsai.

“With the outbreak of Covid-19, we have immediately developed a relevant company policy and searched for digital workplace resources which can be used to support business continuity through the crisis and beyond,” says Marilou Hsieh, general manager at Giant Group in Taipei. “We have also set up a response team to monitor and respond to daily pandemic developments which will be integral to our business and educate employees to take precautionary measures. All of the policies are to keep the pipeline moving in every aspect and to keep our customer relationship strong as usual.”

Tsai, Lee & Chen quickly adopted responsive measures primarily for distance-working programmes, Feng says. “Some divisions of the firm are able to work remotely with each individual equipped with a firm-supplied notebook computer. Once they connect to the office server from home, they are ensured to perform daily duties as if showing up in the office. By having an uninterrupted IT environment, we can keep all deadlines not past due. In some situations, clients need to personally visit us in our physical offices. We strictly adopt anti-transmission policy including wearing masks at all times, sanitizing both hands, measuring temperatures, signing health declarations, etc. All are to assure the premises are Covid-free.”

Some of the firm’s domestic clients have adopted measures to physically separate staff members. “For example, a department which generally works in the same physical section of a building, divides into several groups, and those different groups are now relocated to different buildings in order to ensure normal functioning of the department would not be interrupted, if in the worst-case people need to quarantine due to infection,” he says. “In addition to compartmentalization by space, some of our clients divide working time as well, meaning that the entire staff work takes shifts to work in different hours.” 
 

As to the overall IP workload, Feng says the firm has seen some decrease in the past few months due to the global recession, he adds. “International clients tend to re-evaluate their filing and litigation strategy by tightening their budget.” 

Interestingly, however, the IP filing volume for domestic companies was not much adversely affected by Covid-19, he says. “Some companies even increase their R&D investments, which result in filing for more IPs or budgeting more to maintain their owned IPs.”

 

Always look on the bright side of life

When asked how long they will see the disruption lasting, many lawyers are not optimistic.

Neither law firms nor technology companies know whether this disturbance would come to an end even temporarily, Feng says. “Some pessimistically predict Covid-19 could become a seasonal wave hitting under an annual basis without a permanent eradication.” 

“For current industries, going back may be impossible,” Tsai says. “For those dealing with profitable innovations in the new era, they will prosper.”

Millions of people have already lost their jobs and some are expecting a more intense recession than in 2009. “The United Nations’ International Labour Organization has predicted 1.6 billion informal workers and 305 million full time jobs are under uncertainty. ‘How and when will this disruption end?’” asks Dutta. “The world is now looking for an answer. Many jurisdictions have partially reopened their businesses, like Germany and New Zealand. Looking into the progress rate, sometimes we think it may take only a few months, but sometimes we think it might take a year or even longer, because in this globalization era, no one is safe unless all are. A proper vaccine or medicine is yet in our hands and businesses will be different from the pre-coronavirus age. We later might see a great shift in the buying habits for everything from entertainment to daily needs, which will take many industries longer to recover or adjust to new consumer behaviour.”

Some say that Covid-19 will be in our ecosystem forever and, if so, we don’t know how many more lockdowns will occur, but it is a fact that we have already learned a new way of living, she says. “We have started a wider use of digital learning and e-commerce. And this proclaims that we will continue to fight but will not allow anything to destroy our livelihood.”

 

Judgment Day

Even though many of us are already accustomed to working from home and having limited contact with coworkers, clients and friends, are we ready to brace for another impact? 

“The surviving rule is to chase, follow and grasp profitable innovations,” says Tsai.

Taking advantage of all technologies and communication methods, business entities should stay alert in order to quickly swift to remote working modes confronting all possible next waves, says Feng. 

We have entered into a problematic era, Dutta says. “It is said that pollution, wildlife exploitation, biodiversity crisis and deforestation may lead us to more pandemics in the coming days. They will not only disrupt our social norms but also devastate us economically.”

With lessons learned from SARS in 2002, Taiwan has applied relevant knowledge to handle Covid-19. “Likewise, Covid-19 will make us prepared for future disasters. However, if the next disaster appears this year, it would reshape the world economy and work culture,” she says. “We took several years to recover from the 2007 recession and the current pandemic has already put us into a financial turmoil. If we don’t have significant time before the next disaster, it would be the worst scenario in human history.”

 

While Taiwan has not experienced a lockdown, it is well-prepared for it. “We have been exploring digital learning, communication and working from home during the pandemic. By the end of the year, worldwide IT and AI will be even more efficient, and business communication can rely fully on IT. E-commerce may no longer be optional but would lead us to a new pattern of buying habits. If any unavoidable consequences appear again in 2020, we must start preparing our rigorous contingency plans with employee arrangement, remote work, absenteeism, etc.,” she adds. “Also, we have advised our clients to carefully look through force majeure and all necessary clauses in contracts, and make amendments if needed. We need not only to take care of our offices and work environment but also to remind our clients of foreseeable impacts on their businesses.”


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