Remarks by AIT Acting Deputy Director Christian Marchant at the Technology Licensing Expert Dialogue Thursday, March 30, 2017 AIT American Center

OT-1703E | Date: 03/30/2017 | (As Prepared for Delivery)

Vice Minister of Economic Affairs Wang Mei-hwa, Taiwan Intellectual Property Office Director General Sherry Hung, U.S. District Court Judge Sidney Stein, U.S. Patent and Trademark Office Senior Counsel Mark Cohen, AmCham Taipei President Andrea Wu, Taiwan-USA Industrial Cooperation Promotion Office Executive Secretary Steven Lin, ladies and gentlemen – good morning!

On behalf of the American Institute in Taiwan, it is my pleasure to welcome you to today’s Technology Licensing Expert Dialogue. First of all, a few words of gratitude. I would like to thank our partners at TUSA and AmCham for their tremendous support in making today’s event possible. I would also like to especially acknowledge the role that Mark, Larry, Mike, and the rest of the expert team at USPTO have played in focusing our attention on the key role that technology licensing plays in the U.S-Taiwan economic relationship. And last but not least, allow me to commend Vice Minister Wang and Director General Hung for their leadership in fostering cooperation and enhancing the effectiveness of Taiwan’s IPR system, to the benefit of innovative industries in both of our economies.

To set the stage for today’s discussions, I would like to first recall the origin of this event – it stems from the October 2016 Digital Economy Forum, when both sides affirmed the importance of intellectual property rights and licensing to expanding two-way technology trade and investment between our two economies, especially for startups.

Today, I plan to highlight three main points: First, how IP owners benefit from licensing; Second, how their partners can benefit from access to new technology; and Third, how these mutually beneficial exchanges signify the strength of the U.S.-Taiwan economic relationship.

IP Owners Benefit from Licensing

In its 2017 Trade Policy Agenda, the Trump Administration has stated as a key objective “ensuring that U.S. owners of intellectual property (IP) have a full and fair opportunity to use and profit from their IP.” Through licensing partnerships, U.S. IP owners create new revenue streams and gain access to new markets and production networks. Payments for U.S. technology, like software and industrial processes, generate roughly $85 billion in income for the U.S. economy annually, and play an important role in balancing our trade and creating jobs. Not surprisingly, Taiwan is one of our strongest partners in the licensing trade, ranking ninth worldwide. Together, we have developed business models that make our research and development and manufacturing competitive on a global scale. To take an example from the semiconductor world, licensing is what makes “fabless” fabulous.

Licensees Benefit from Licensing

The benefits of licensing partnerships extend both ways. In an intensely competitive global business climate, access to the latest technology can be a decisive factor in winning new customers. Through licensing-in, companies of all sizes – from the Taiwan Startup Stadium to the Taiwan Stock Exchange – can gain access to R&D resources and technical advances that enable them to create new and innovative products. And everyone benefits, be it in the form of the latest electronic device in your pocket, or the latest medical device in the operating room.

Signifying Partnership

Globally, most of the trade in IP assets takes place within multinationals – back and forth between parent companies and their subsidiaries. The U.S.-Taiwan licensing trade presents a remarkable contrast, with over 90 percent of the payments, around $4.9 billion, coming from unaffiliated companies. That’s more than from any other economy in the world! What that signifies is not only the remarkable partnerships between innovative U.S. and Taiwan companies, but also their mutual trust in the strong and fair protections our respective legal systems provide.

The partnerships we see between our private sectors are reflected in the cooperation between U.S. and Taiwan agencies, as well. I’m proud to note that just last week, when AIT Director Moy took the stage alongside President Tsai at the AmCham’s annual Hsieh Nien Fan dinner, we announced the signature of a new AIT-TECRO Memorandum of Understanding on IPR Enforcement. USPTO’s participation in today’s event, and their regular engagement with their TIPO counterparts through examiner exchanges and the Patent Prosecution Highway, further underscores the benefits of our collaboration to support innovation.

It is in that spirit that in the course of our discussions with Taiwan, be it in the Digital Economy Forum or through the Trade and Investment Framework Agreement process, that we have encouraged adoption of ever higher standards for intellectual property protection to spur investment in the most innovative sectors of our economies. In the United States, we have found that legal advances like pharmaceutical patent linkage, or extending the grace period for patent filing, have had a real upside in spurring new inventions. We believe these steps would hold the same benefits for Taiwan, and to that end, we look forward to seeing their early implementation here.

Conclusion – Benefits founded on Trust

Today we are going to learn a lot about the ins and outs of effective license agreements, but we should not lose sight what these agreements embody: a mutually beneficial partnership, founded on trust. My sincere thanks to all of today’s speakers and participants for taking time to explore this important topic. I wish you all a successful event!