Teresa Huang and Albert Yen
The Ministry of Health and Welfare (hereinafter, the “MOHW”) pre-announced the Amendments (hereinafter, the “Amendments”) to the MOHW’s Scientific and Technological Research and Development Results Ownership and Utilization Regulations (hereinafter, the “Regulations”) via the Wei-Bu-Ke-1104060511 Directive of January 11, 2022 to solicit public opinions until March 14, 2022 with an aim to enhance the management and utilization efficacy of relevant scientific and technological research and development results. The Amendments are highlighted below:
1. To clarify the original controversy concerning the application of the Regulations, the Amendments add a definition of “scientific and technological projects” to make it clear that the Regulations apply to projects funded in whole or in part by the budget for scientific and technological research and development. In addition, the MOHW is differentiated from its affiliated agencies with the addition of the definition of the “funding agency,” which refers to the MOHW per se or any of its affiliated agencies that actually fund scientific and technological projects (Articles 2 and 3 of the Amendments). In addition, since the definition of the original “national research and development results” or “non-national research and development results” in the Regulations is likely to cause confusions, the ownership of rights is instead determined by the “funding unit” or “implementation unit” (Articles 5 and 34 of the Amendments).
2. The Amendments remove the provision that “re-transfer or sub-license shall be approved by the Ministry of Health and Welfare” and include re-transfer or sub-license in the items of management mechanism of the implementation unit. However, a provision is added to stipulate that an implementation unit shall specifically stipulate in the transfer or licensing agreement on the research and development results that “the transferee or licensee shall not engage in any re-transfer or sublicense to areas or targets in mainland China, Hong Kong, or Macao without the prior consent of the funding agency.” (Articles 8, 19, 23, 29 of the Amendments) In addition, a provision is added to stipulate that whenever scientific and technological research and development results are licensed to foreign licensees, an approval should be obtained from the funding agency, regardless of whether production or manufacturing will take place in Taiwan (Article 23 of the Amendments). For an implementation unit with comprehensive mechanisms as determined by the MOHW according to its investigation, the MOHW may agree that such implementation unit may grant a license to foreign licensees within a period of time (by way of ex-post reporting). However, for a license granted to Mainland China, Hong Kong, or Macao or any licensees in such areas, an approval of the funding agency shall still be obtained in advance. (Article 28 of the Amendments)
3. Moreover, considering the different technical cycles of different research and development results, the Amendments also shorten the required period for soliciting licensees but failing in commercialization or actual application before the implementation unit may announce the compensated transfer of the research and development results from “five years” to “three years” to increase the flexibility of practical operation. (Article 33 of this amendment)
For the aforementioned highlights of the Amendments, enterprises, juristic persons, or organizations that receive full or partial funding from the MOHW or its affiliated agencies to carry out scientific and technological projects are advised to pay attention to this. Especially for research and development results expected to be sublicensed or re-transferred to Mainland China, Hong Kong, or Macao or to licensees in such areas, it is more necessary to schedule the timelines in advance and follow the relevant approval application procedures after the Amendments.