The following text is intended for general reference only. It is currently under review for accuracy and completeness, as well as formatting.








The Coordination Council for North American Affairs (CCNAA) and the American Institute in Taiwan (AIT) in order to promote extensive, close and friendly commercial, cultural, and other relations and desiring to facilitate the expansion of commerce on a non-discriminatory basis, have established this Understanding to ensure the adequate and effective protection of intellectual property rights in the territory represented by CCNAA without impairing any benefits or protection enjoyed by virtue of any prior agreements or other arrangements.

Article 1

The authorities represented by CCNAA prepared on April 15, 1992, an Action Plan, specifying in it various actions and measures for strengthening the protection of intellectual property rights. The authorities represented by CCNAA hereby affirm and undertake to implement fully the following provisions of the Action Plan, as amplified and clarified by this Understanding, and which are incorporated by reference into this Understanding;



Sections V.J.(ii)(B); V.I.(iii); V.2.(i); V.2.(iii);
V.2.(iv); V.2.(Vi)(B),(C) and (D); V.2;(viii); V.3.(i).;
V.3.(ii); V.3.(iii)(A)(B) and (D); V.3.(iv); V.3.(v);
V.4.(i); V.4.(ii); V.4.(iii) and V.4.(iv).

Article 2

1. The authorities represented by CCNAA agree to undertake the following further
commitments and to improve the protection and enforcement of intellectual property
rights in their territory.

2. The authorities represented by CCNAA will promptly promulgate the new Copyright Law
so that it will enter into force no later than thirty (30) days after its passage by the
Legislature Yuan (LY) and issue implementing rules for Article 5 of the Copyright Law
within thirty (30) days after the Law is effective. All other implementing rules for the
Copyright Law except for those relating to Organization Rules for Copyright Intermediary
Bodies and minimum compensation will be issued with ninety (90) days after the
Copyright Law is effective. The implementing rules for the Copyright Law shall not degogate
from the provisions of the Bilateral Copyright Agreement Between CCNAA and AIT.

3. The authorities represented by CCNAA commit to use best efforts to work with the LY
for the passage of the AIT-CCNAA Bilateral Copyright Agreement as early as possible, but
not later than the LY session ending January 31, 1993. CCNAA will sign the Agreement
immediately upon its approval by the LY.

4. a. The authorities represented by AIT take note of the passage of the new Copyright Law
by the LY, but have expressed concerns about several Articles. The authorities represented
by CCNA.A take note of these concerns and agree to consult with the authorities represented
by AIT with a view to determining whether further measures are necessary and if so, what
measures should be taken to resolve such concerns.

b. The authorities represented by AIT are also concerned about other Articles, including,
for example, Articles 4, 5, 17, 21, 36, 51, 74, 75, 82, 88, and 109, which, in the view of
the authorities represented by AIT, may raise questions about the effectiveness of protection
provided under the new Copyright Law. The authorities represented by CCNAA agree to
consult with the authorities represented by AIT about such concerns and to clarify, as may
be necessary, these Articles through implementing rules or letters of interpretation for
the Copyright Law.

5. a. The authorities represented by CCNAA commit to use best efforts to work with the
LY for the passage of the Cable TV Law, as early as possible, but not later than by the end
of the LY session ending January 31, 1993. The authorities represented by CCNAA take
note of the following amendments to the Cable TV Law proposed by persons signing a
petition as "Motion Picture Business People in Taiwan":

i. Amending Article 46 to provide the basis for punishment of violators
under the Cable TV Law;

ii. Amending Article 54 to provide for the award of damages against
infringers under this law;

iii. Adding a new Article 61-1 to make violation of Article 46 a public offense
punishable by a sentence of at least 6 months, a fine not to exceed NT$ 500
thousand, and suspension of the license to broadcast; and

iv. Amending Article 65 to criminalize the illegal operation of a cable TV
system with a sentence of not less than 6 months nor more than 5 years, and
a fine of no less than NT$ 300 thousand nor more than NT$ one million.

Should any of these amendment be proposed in the Legislature Yuan, the GIO's representative, upon enquiries from the lawmakers, would make a statement to the effect that the GIO would respect the lawmakers' view and their decision. In addition, GIO will use its best efforts, in appropriate circumstances, to support such amendments.

b. The EY will coordinate with the LY for a clause to the following effect to be added to
the bill on the Cable TV Law:

"When a cable TV station has in a period of twelve (12) consecutive months committed three (3) separate copyright infringements, the license to operate the cable TV station shall be revoked when the convictions in all three (3) infringement cases become final."



6. With regard to cable TV systems:
a. The GIO will immediately and systematically raid unlicensed cable TV systems and
will seize all equipment from such systems, including cables, video recorders, boosters,
transformers, satellite receivers and frequency mixers. GIO will continue these raids
following passage of the Cable TV Law and will seek imposition of the maximum penalties
under the law for unlicensed cable TV systems.

b. The GIO will file complaints with the Prosecutor's office regarding cable TV system
operators or channel operators which GIO has reason to suspect of infringing copyright
as part of their usual business for prosecution under Article 94 of the Copyright Law and
the Criminal Procedure Code. No additional complaint from the copyright owner whose
work is allegedly infringed will be required.

c. In response to copyright infringement complaints, the police will aggressively and
expeditiously investigate the cable TV stations specified in the complaints, and will seize
infringing products and all equipment for use to commit an offense.

d. Prosecutors will immediately commence criminal investigations under the law upon
being presented with evidence of criminal copyright infringement by cable TV stations
and, if the investigation confirms evidence of infringement, will aggressively prosecute
under the law all such cable systems and their owners.

7. Upon passage by the LY, the Cable TV Law shall take effect upon the lapse of three (3) days
after its promulgation. All cable TV operations shall thereupon be subject to and regulated
by the Cable TV Law. The GIO shall prepare and promulgate implementing rules for the
Law within three (3) months after the Cable TV Law takes effect and the licensing process
shall be completed within twelve (12) months after the expiry of such 3-month period.

8. The authorities represented by CCNAA will:

a. Submit amendments to the Patent and Trademark Laws to ensure that these laws fully
comply with the standards and requirements established in the December 20, 1991 draft text
on Trade-Related Aspects of Intellectual Property (TRIPS text) to the LY by December 31,
1992. The authorities represented by CCNAA commit to use best efforts to work with the
LY for the passage of the amendments to the Patent and Trademark Laws as early as possible,
but not later than the LY session ending July 1993.

b. Include in the official legislature explanatory notes to revised Patent Law, an explanation
that the two to five year experimental and testing extension period provided for in Article
51 shall be understood to include experimental and testing periods required for the purpose
of obtaining marketing approval by the competent authorities of the territory represented
by CCNAA and/or such other territories whose experiments and testing are accepted by
the competent authorities represented by CCNAA; and

c. Include amendments to the Patent Law so that impartation of the patented product or
the produat directly resulting from the use of a patented process, in each situation authorized
by the right holder, will satisfy any requirement in the law to work a patent in the territory
represented by CCNAA.

9. The authorities represented by AIT and the authorities represented by CCNAA agree to
consult on administrative protection for pharmaceuticals and agricultural chemicals no later
than August 31, 1992. CCNAA will examine seriously AIT's proposal to provide such
protection for products which:

a. were not subject to patent protection prior to the revision of the Patent Law to extend
such protection in the territory represented by CCNAA;

b. are subject to patent protection in their territory of origin; and

c. have not been marketed as of the effective date of this Understanding in the territory
represented by CCNAA.


10. The authorities represented by CCNAA will ensure that the industrial design, semiconductor
chip protection and trade secret laws meet the standards and requirements of the TRIPS
text. The authorities represented by CCNAA commit to use best efforts to work with the
LY for the passage of the industrial design law, the semiconductor chip protection law, and,
if necessary, the trade secret law, as early as possible, but not later than the LY session
ending July 1994.

11. The authorities represented by CCNAA will ensure that, in implementing the provisions of
the Action Plan applicable to MTVS, the police will seize all equipment for use to commit
an offense, including video recorders and televisions, in response to copyright infringement
complaints. In addition, GIO will cancel the operating license of any MTV which is found
by GIO for the third time in a twelve-month period to be in possession of audio-visual works
not authorized for public performance.

12. Effective immediately, when implementing the provisions of the Action Plan in respect of
licensing the export of Compact Discs (CDs):

a. Before the issuance of the "Written Consent to Export", the GIO shall require
production for GIO's review either the copyright owner's authorization or IFPI's
certification that the applicant is authorized to export the copyrighted work. In the
event that IFPI has not given such certification, the GIO shall insist on (1) the production
of the licensing agreement substantiating the authority to export the copyrighted work, or
(2) confirmation of the authorization from the copyright owner, or (3) production of other
pertinent documentation satisfactory to GIO.


b. If GIO has any doubt regarding the validity of the documentation submitted by
an applicant, the GIO shall notify the IFPI and inquire whether there is any further
information for GIO to consider in determining whether to grant the "Written Consent to
Export". If the GIO determines that the export-applicant has given false information or
forged documentation, the GIO shall refer the case to the prosecutor for appropriate
action.


c. The Public Prosecutor shall promptly investigate for prosecution under the law
individuals (including owners and other persons responsible under the law) who have
either submitted fraudulent documentation (including not properly identifying a shipment
of CDs as CDs), or attempted to export CDs without having obtained a proper license.

d. Customs shall:
i. Check 30 to 50 percent of all exports of CDs to any destination to determine
whether the CDs match the description in the export license and the "Written
Consent to Export" issued by the GIO.

ii. Check all exports to any destination from companies known to be or to hae been
engaged in the unauthorized reproduction or export of CDs, even if such shipment
are not labeled as CDs, in order to avoid circumvention of the export licensing
system. If, for a period of twelve (12) months, such companies have not been
found by the relevant authorities to have engaged in the unauthorized reproduction
or export of CDs, then the exports shall be subject to customs inspection procedures
provided in the preceding subparagraph d.i. upon the expiry of such twelve-month
period.

13. In implementing the export licensing systems for computer sof tware programs:

a. BOFT shall:

i. By public announcement invite copyright owners or their designees to deposit with
the BOFT that information regarding a copyrighted computer software program which
permits inspection of the computer software programs prior to exportation.


ii. Establish a computer data base for the storage of information submitted by a
copyright owner or his designee concerning copyrighted computer software programs.
When the information is provided, the data base shall maintain a list of authorized licensees
and manufacturers of copyrighted works as made available by the copyright owner or his
designee. The BOFT examiners shall check this data base before an export permit is issued
and BCIQ inspectors shall check this data base before pre-shipment inspection is completed.

iii. Promptly notify the copyright owner or his designee if there is any doubt as to
whether an applicant has the authorization to export the product stated in his application.

iv. Effective immediately, begin examining the export permit applications for computer
software programs to insure that the number, type, and other specifications of packaged
computer software programs stated in the export license application match the information
on the purchase order or.other documents required for exportation.

v. Issue export permits for computer software : programs installed, residing, or
incorporated in semiconductor chips which are assembled onto printed circuit boards
intended for computers, printers, or video games by November 1, 1992.

vi. Issue export permits for computer software programs installed, residing, or
incorporated in video games by November 1, 1992.

vii. Issue export permits for computer software programs installed, residing, or
incorporated in a computer or printer by December 1, 1992.

viii. Issue export permits for computer software programs installed, residing, or
incorporated in semiconductor chips (which are neither assembled onto printed circuit
boards nor assembled in a computer, printer or video game) but are intended for computers,
printers, or video games or printed circuit boards for such items, by January 1, 1993.

ix. Issue export permits for computer software programs installed, residing, or
incorporated in semiconductor chips (assembled or unassembled) intended for devices
not specified above as warranted by discovery of a material volume of infringement in
these devices.


x. Refer applications to the public prosecutor for investigation and appropriate legal
action if fraud is suspected.

b. BCIQ shall:

i. Establish methods and criteria for conducting pre-exportation computer software
program inspections. Pre-shipment inspection shall be conducted in accordance with the
Commodity Inspection Law.



ii. Have acquired sufficient equipment to conduct inspections required under this
paragraph and have trained sufficient personnel for the task of pre-export inspection and
examination (by way of comparison under paragraph b.iii.) of copyrighted computer
software programs by September 1, 1992.


iii. Inspect, by comparing computer software programs requiring export licences
deposited in the computer data base, provided by the owner or his designee, to
determine if there is infringement of :

a. computer software programs installed, residing, or incorporated in semiconductor
chips which are assembled onto printed circuit boards intended for computer, printers
or video games by November 1, 1992.

b. computer software programs installed residing or incorporated in video games
by November 1, 1992.

c. computer software programs installed, residing, or incorporated in a computer or
printer by December 1, 1992.

d. computer software programs installed residing or incorporated in semiconductor
chips (which are neithr assembled onto printed circuit board nor assembled in a computer
printer or video game) but which are intended for computers, printers, or video games
or printed circuit boards for such items, by January 1, 1993.

e. computer software programs installed residing, or incorporated in semiconductor
chips (assembled or unassembled) intended for devices not specified above as warranted
by discovery of a material volume of infringement in these devices.

iv. Prior to exportation BCIQ shall inspect at random thirty to fifty (30-50) percent
of percent of computer software programs to ensure that the products that have been
certified by BCIQ as having passed the pre-exportation inspection have since not been
improperly handled.

c. Customs shall:
i. Effective immediately begin examing computer software programs to insure
that the number, type, and other specifications of packaged computer software
programs match the information on the export permit, invoice, packing list or
other documents required for exportation.

ii. Check a thirty to fifty (30-50) percent random sample of all exports of software
to any destination to determine whether the software matches the description
in the export license and the export inspection certification issued by BCIQ.


iii. Check all exports to any destination from companies known to be or to have
been engaged in the unauthorized reproduction or export of computer software
programs, even if such shipments are not-labelled as computer software programs,
to avoid circumvention of the export licensing system. If for a period of twelve (12)
months, such companies have not been found by the relevant authorities to have engaged
in the unauthorized reproduction or export of any such product, then exports of such
products shall be subject to the customs inspection procedure provided in the preceding
subparagraph c.ii.

iv. Not permit the exportation of merchandise suspected of infringing a copyright,
unless the exporter presents to customs information which eliminates the suspicion
of infringement. If right owners have obtained a final judgment of a court confirming
the infringement of copyright, custom shall confiscate such products, if they are still
within customs' custody.

d. The Public Prosecutor shall promptly investigate for prosecution individuals
(including owners and other responsible persons under the law), who have either
submitted fraudulent documentation (including not properly identifying a shipment of
software as software), or attempted to export software without having obtained a proper
license.


14. The authorities represented by CCNAA commit to obtain, under the law, effective criminal
remedies sufficient to deter infringement of intellectual& property rights in their territory
and to this end:

a. The Ministry of Justice has given directions to the public prosecutors to the following
effect:


i. When prosecuting an IPR infringer, prosecutors should consider the adverse impact
of counterfeiting activities on the economy and international image of the territory
represented by CCNAA, and request a stiff penalty. If the crime committed is of a
serious nature, prosecutors should ask the court to impose the heaviest penalty.

ii. In cases where the sentence is deemed by the public prosecutor to be too lenient
the public prosecutor shall promptly consider appropriate appellate review of such
sentence.

iii. When prosecuting an IPR infringer, the public prosecutor shall take into
consideration the undue profit gained by the infringer, and ask the court for concurrent
imposition of a fine in addition to imprisonment, in accordance with Article 58 of the
Penal Code.

iv. When an order is issued by a judge to convert the jail sentence to a fine, the public
prosecutor should, in accordance with Article 41 of the Penal Code, closely scrutinize
the documentation of proof presented. Only when the physical, educational, occupation,
or family conditions of the offender will make the execution of the jail term impossible
should conversion to a fine be granted.

v. When the police apply for a search warrant, the public prosecutor shall act promptly
to issue the warrant, once all the legal requirements are met if the venue for conducting
the search falls within multiple jurisdictions, the original prosecutor may request the
prosecutor at the place where a search is to be conducted to issue such a warrant; or, in
case of emergency, he may issue the search warrant himself to preserve evidence.


b. Pursuant to the authority of the Chief Public Prosecutor of each District Prosecutor's
Office to conduct oversight of prosecutor's compliance with these directions, the Ministry
of Justice shall review compliance and implementation of these directions on a quarterly
basis and take appropriate administrative action at year-end reviews.


c. The authorities represented by CCNAA will issue further directions to public
prosecutors stating that:

i. the public prosecutor will aggressively prosecute intellectual property
right infringement cases under the law;

ii. when requesting that a certain penalty be imposed, the public prosecutor
shall consider all aspects of damage to the owner of the intellectual property right,
including the level of economic harm and damage to the intellectual property
owner's reputation and request sentence under the law commensurate with the serious-
ness of the offense and adequate to deter further infringements.

d. CCNAA agrees to provide quarterly statistics on final decisions in IPR infringement
cases detailing:

i. the past convictions of the defendant;

ii. the articles searched and seized;

iii. the sentence sought by the prosecutor;

iv. the facts of the offense as found by the court in its final judgement;

v. the final judgement of the courts, including the actual sentence imposed by the
court; and

vi. whether a conversion to a fine was granted.

e. CCNAA agree to provide monthly statistics on the overall level of enforcement of
intellectual property rights in the territory it represents. These statistics shall include:

i. the total number raids conducted;

ii. the number of searches and seizures of infringing articles and other evidence;

iii. the number of arrests;

iv. the number of convictions obtained; and

v. actual sentences imposed including any period of imprisonment and/ or fine.



15. The authorities represented by CCNAA commit to use best efforts to work with the LY for
passage of an amendment, as early as cossible, but not later than the end of the LY session
ending January 1993, to raise the current level at which each day's imprisonment may be
converted to a fine. Under this amendment each day's imprisonment shall be convertible
to a fine of NT$ 300, NT$ 60

Article 3

1. AIT agrees that the authorities that it represents will use their best efforts to cooperate in
the implementation of the export licensing system set forth in paragraph 13 of Article 2 of
this Understanding. To accomplish this objective, the authorities represented by AIT will
establish a contact point in the relevant agency to receive inquiries and to provide a
response, information or assistance subject to the limitations of U.S. law.

2. The authorities represented by AIT and the authorities represented by CCNAA agree to
consult on a quarterly basis or at the request of either Party. Such consultations will
cover, inter alia:

a. the interpretation, implementation, or operation of the Understanding; and

b. whether modification should be made to the measures in the Understanding

i. to improve the protection and enforecement of intellectual property rights; or

ii. to prevent such measures from becoming barriers to legitimate trade, i.e., the
licensing and inspection system provided for in paragraph 13 of Article 2 having
the effect of imposing unjustifiable delays or barriers to the exports of authorized
products from the territory represented by CCNAA.

Article 4

In consideration of the foregoing commitments and in the expectation that they will be fully implemented, the authorities represented by AIT agree to revoke the identification of the territory represented by CCNAA as a "priority foreign country" under the "special 301" provisions of U.S. trade law and terminate the investigation initiated pursuant to "special 301" These actions will be effective as of the date of signature of this Understanding.



Signed in Washington, D.C., this fifth day of June, one thousand nine hundred ninety-two.



______________________ __________________________
For The Coordination Council For The American Institute
For North American Affairs In Taiwan





_______________________ ____________________________
Chief Negotiator Chief Negotiator