Taiwan’s IP Management Needs To Be Strengthened Due to Disproportion between IP Input and Output.

E100602Y5・E100531Y5 Jul. 2010（E128）

According to Taiwan Control Yuan’s investigation, the science and technology budget of Taiwan amounts to almost NTD1 hundred billion each year, but the income accrued from the results of R&D projects conducted by relevant authorities under Taiwan Executive Yuan to be appropriated into the National Science and Technology Development Fund has stayed at a sum of around NTD7 hundred billion for the most recent five years. In addition, local industries had paid an astonishing amount of almost NTD1 hundred billion as royalty payments to other countries from 2006 to 2008; the outward remittance of royalty payments even exceeded NTD1 hundred billion in 2009, which is extremely disproportioned to royalty payments in the amount of NTD7 to 8 billion received from abroad.
　
The key points of the investigation are as follows.

1. The central government’s management mechanism with respect to the creation and utilization of intellectual properties in scientific and technological development policies.

The government has been convening national science and technology conference since 1978 to present the focuses of technological research and development of every phase. Also, the government has formulated a National Science and Technology Development Plan once every four years which serves as a basis for making scientific and technological policies and promoting scientific and technological research and development.

The Fundamental Science and Technology Act enacted in 1999 clearly stipulates the ownership and utilization of the intellectual property rights and results of the projects in scientific and technological research and development subsidized or funded by the government and also the use and appropriation of the National Science and Technology Development Fund. The sixth National Science and Technology Conference held in 2001 focused on four issues, creation, protection, utilization, and education of intellectual property rights, and formulated the important national measures of scientific and technological development by making every four years as a phase.

2. Statistics of local enterprises’ payments and incomes of royalties or license fees for patents, trademarks, copyrights, and technologies (intangible assets) in recent fives years

Table 1. Statistics of international incomes and payments in recent five years

Calculation Unit: Million (US Dollars)

Item Year	Incomes accrued from patent and trademark use	Payments for patent and trademark use
2005	234	1,796
2006	244	2,321
2007	220	2,575
2008	181	3,015
2009	242	3,424

3. Statistics of expenditures on IP-related R&D, output, management, and utilization of scientific and technological development in relevant government ministries and commissions.

Table 2. Statistics of R&D expenditures

Calculation Unit: Million (NT Dollars)

Item Year	2004	2005	2006	2007	2008
National R&D Expenditure	263,271	280,980	307,037	331,386	351,405
Percentage of National R&D Expenditure in GDP (%)	2.32%	2.39%	2.51%	2.57%	2.77%
National R&D Expenditure—By source of expenditure (%) Enterprise departments Governmental departments Other local departments	64.8% 33.6% 1.6%	66.9% 31.5% 1.5%	67.2% 31.4% 1.4%	68.8% 29.9% 1.3%	70.4% 28.2% 1.3%
National R&D Expenditure—By performing departments (%)Enterprises departments Governmental departments Higher education departments Private non-profiting departments	64.7% 23.2% 11.5% 0.6%	67.0% 21.0% 11.4% 0.5%	67.5% 19.9% 12.2% 0.4%	69.1% 18.3% 12.2% 0.4%	70.7% 16.8% 12.2% 0.3%
Percentage of fundamental R&D expenditure in national R&D expenditure (%)	11.3%	10.3%	10.2%	10.0%	10.2%
Percentage of expenditure of enterprise’s R&D performance in industrial added value (%)	1.91%	2.04%	2.16%	2.26%	2.51%

Table 3. Statistics of scientific and technological expenditures of relevant government ministries and commissions

Calculation Unit: Million (NT Dollars)

Item Year	2005	2006	2007	2008	2009
Total	70,421	77,604	81,853	86,146	91,022
Academia Sinica	7,402	8,531	8,938	9,293	9,858
Academia Historica	35	38	11	10	25
Executive Yuan	…	43	43	45	74
National Science Council	25,773	28,226	30,817	33,412	35,983
National science and technology development fund (interdepartmental scientific and technological budgets)	3,447	3,483	4,190	2,474	1,594
Ministry of Economic Affairs	23,318	25,883	25,509	27,515	29,364
Council of Agriculture, the Executive Yuan	3,707	3,995	4,264	4,033	4,142
Department of Health, the Executive Yuan	3,609	4,215	4,396	4,709	5,089
Ministry of Education	852	839	889	1,535	1,560
Atomic Energy Council, the Executive Yuan	936	827	992	1137	1292
Ministry of the Interior	232	270	373	456	363
Ministry of Justice	…	24	47	81	85
Ministry of Transportation and Communications	693	711	818	841	888
Overseas Compatriot Affairs Commission	…	…	…	…	13
Central Personnel Administration	…	…	…	20	19
Government Information Office	…	…	31	36	32
Environmental Protection Administration, the Executive Yuan	78	55	77	67	66
National Palace Museum	107	105	64	43	42
Council for Economic Planning and Development, the Executive Yuan	…	50	49	54	84
Research, Development and Evaluation Commission, the Executive Yuan	…	94	81	82	107
Council for Cultural Affairs, the Executive Yuan	23	…	20	5	13
Council of Labor Affairs, the Executive Yuan	171	184	217	221	241
Public Construction Commission, the Executive Yuan	35	31	25	20	20
Council of Indigenous People, the Executive Yuan	…	…	…	…	20
Council for Hakka Affairs, the Executive Yuan	…	…	…	56	50

Note: These figures do not include scientific and technological expenditures for national defense
　
Table 4-1. Statistics of income from R&D results appropriated by relevant subsidizing agencies

Calculation Unit: Thousand (NT Dollars)

Item Year	2005	2006	2007	2008	2009
Total	704,669	777,549	761,351	772,177	770,802
Academia Sinica	9,734	5,160	12,968	20,376	19,432
Ministry of Economic Affairs	630,056	680,989	642,442	631,663	614,607
National Science Council	35,599	38,036	38,520	41,673	50,215
Council of Agriculture	9,385	19,380	26,589	40,050	37,679
Department of Health	192	16	340	1,846	901
Ministry of Education	0	11	1	0	0
Atomic Energy Council	17,330	28,474	31,877	3,141	42,146
Council of Labor Affairs	1,653	2,082	3,056	32,476	2,412
National Palace Museum	15	2,896	5,197	377	2,884
Ministry of the Interior	705	505	361	576	527

Table 4-2. Statistics of income from R&D results appropriated by subsidizing agencies

Calculation Unit: Thousand (NT Dollars)

＊Remarks: According to the regulation concerning the ownership and utilization of the results of projects in scientific and technological research and development subsidized or funded by the government as provided by the Fundamental Science and Technology Act, the ownership of the results of scientific and technological research and development projects subsidized, commissioned, or funded by the subsidizing agencies goes to the unit that performs the projects, except for those determined by the subsidizing agencies to be belonging to the central government. The income arising from intellectual property rights and results of the foregoing projects that should belong to the central government shall be appropriated in accordance with the budgeting procedures of the subsidiary units to the National Science and Technology Development Fund for safekeeping and use. In addition, if the units performing research and development are public and private schools or public research institutes (organizations), they should appropriate 20% of the income deriving from R&D results to the subsidizing agencies. Units other than the above-mentioned public and private schools or public research institutes (organizations) should appropriate 50% of such income to the subsidizing agencies.

Table 5. Statistics of the amounts of subsidies received and output made by research institutes and their percentages

Calculation Unit: Thousand (NT Dollars)

According to the above-listed statistic figures, domestic industries had paid almost NTD1 hundred billion as IP royalties or license fees to foreign countries from 2006 to 2008, and even more than NTD1 hundred billion in 2009. There has been an increase in the central government’s scientific and technological budget from NTD70.4 billion to NTD91 billion from 2005 to 2009. However, the foregoing figures of national science and technology development fund show that relevant government ministries and commissions (subsidizing agencies) have made no progress in the amount of royalty incomes accrued from R&D results that have been appropriated into the national science and technology development fund in the most recent five years; they are NTD0.7 billion for year 2005, NTD0.76 billion for year 2007, and an average of NTD0.77 billion for 2006~2009. Moreover, the percentages of the actual sum of incomes appropriated into the national science and technology development fund by relevant ministries and commissions are rather small in average. National Palace Museum and Atomic Energy Council take up higher percentages of 27.77% and 16.78%, respectively. The Ministry of Economic Affairs, Council of Agriculture, and Council of Labor Affairs account for the percentages smaller than 10%. Academic Sinica, National Science Council, Department of Health, and the Ministry of the Interior make up even much lower percentages than 1% at 0.79%, 0.65%, 0.04%, and 0.67%, respectively. Apparently, the input and output of Taiwan’s intellectual properties are extremely disproportionate, and the mechanisms with respect to IP research and development, output, utilization, and management are inappropriate. (2010.06)