2022-05-19

Businesses in Taiwan Encouraged To Obtain TIPS Certification

In recent years, many high profile enterprises in Taiwan were reported to obtain "TIPS" certification, which many believe to be a sign of excellence in a business's operation of its internal IP management as well as enhancing trade secret protection.
 
The "TIPS", or the "Taiwan Intellectual Property Management System", is a system of corporate management standards, established by Taiwan's Industrial Development Bureau ("IDB"), a governmental authority overseeing the development of various industries. In turn, the IDB has entrusted the Institute for Information Industry ("III") to review applications from Taiwanese enterprises who wish to obtain certification of their IP management policies and mechanisms as having satisfied the standards set forth in TIPS.
 
Most Taiwanese enterprises have emphasized effective corporate governance and IP management as core values for many years.  In particular, publicly traded companies, as well as companies in certain sectors that require a high degree of self-regulation, are expected to establish strengthened internal management of not only their tangible but also their intangible assets.  These companies are encouraged to obtain TIPS certification.  With TIPS certification from the III, certified companies can point to their certification as solid grounds for representing to their shareholders, business partners, and the public that they are reliable and trustworthy and that their future development plans are sustainable.
 
TIPS is a systematic infrastructure that corporations can use to manage and secure their IP portfolios including patents, copyrights, trademarks, trade secrets, and other intellectual property rights ("IPRs"). It includes three levels of certification: A, AA, and AAA. A is the least strict while AAA is the strictest. These certification levels are awarded to applicant businesses based on a review of their applications by examiners appointed by the III.  Any level of certification is considered to satisfy the TIPS standards.
 
To obtain TIPS certification, a company must prove its compliance to detailed standards required by the TIPS.  The requirements include establishing, implementing, maintaining, and continuously improving management policies and frameworks for IP rights.  In particular, a company shall:
 
  1. adopt appropriate management mechanisms for information and data regarding its IP rights;
 
  1. establish clear rules on staff responsibilities for managing and securing its IP rights;
 
  1. maintain proper records of the course of its R&D activities;
 
  1. implement proper procedures for access, protection, and maintenance of its IP rights;
 
  1. provide necessary educational training to staff, enhancing their knowledge and awareness of IP and information security; and
 
  1. regularly review, assess, and improve the efficacy of its management of IP rights.
 
It is particularly notable that companies with TIPS certifications will have advantages in securing and enforcing their trade secret rights.  For example, one of the three elements for trade secret protection is that the owner has taken reasonable measures to maintain the secrecy of the information. If the owner has obtained TIPS certification, the owner may be more likely to be able to show in court that such owner has taken reasonable measures to secure secret business and technical information.  Or, if a company is facing an allegation that the company's employees have misappropriated a third party's trade secrets, a defendant company with TIPS certification may be able to adduce its certification as persuasive evidence that the company has done its utmost to prevent its employees from unlawfully bringing to the company any information that may be someone else's trade secret.
 
According to the TIPS, in 2021, there were in total 66 corporations that have acquired TIPS certifications, including large public corporations.  More and more corporations are emphasizing the importance of effective IPR management systems. TIPS certification is one the most feasible and efficient ways to implement and be able to demonstrate IPRs management excellence in Taiwan.

Authors: Dr. Brian Hsieh, Partner of Formosa Transnational; Chia-Hsin Wu, Associate of Formosa Transnational.
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