D.

Exclusion and Prevention of Copyright Infringement

　　The appellant asserted that the label of the appellee’s drug “Glitos” copied the appellant’s copyrighted “Pioglitazone” drug label so that the appellee purposefully infringed its copyright.

1

The appellant’s “Pioglitazone” drug label is a literary work protected under the Copyright Act.

(1)

Works and copyright protection

a.

Our country joined the World Trade Organization (“WTO”) on January 1, 2002 (the date which the decision below mistakenly noted as January 1, 2003). Under Art. 9, Para. 1 of the TRIPS Agreement and Art. 3 of the Berne Convention, regarding the protection of intellectual property rights, a member state should treat the nationals of other member countries as its own nationals. Japan, joining the organization on January 1, 1995, is a member state. Thus, works owned by Japan nationals are protected by the Copyright Act, under Art. 4, Subpara. 2 of such Act.

b.

Regarding the issue of the subject matter protected by the Copyright Act, Art. 10bis provides, “Protection for copyright that has been obtained in accordance with this Act shall extend only to the expressions of the work in question, and shall not extend to the work's underlying ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries.” As a result, the scope of copyright protection covers only expressions and does not extend to thoughts and ideas. This is the doctrine of idea/expression dichotomy. The reason behind the doctrine is that thoughts and ideas are public assets, and if the copyright protection extends to thoughts and ideas, then other’s freedom to create a work would be invisibly curtailed. This will cause the purpose of the Copyright Act, vested in Art. 1 providing “protecting the rights and interests of authors with respect to their works, balancing different interests for the common good of society, and promoting the development of national culture,” to be abrogated.

c.

Second, “Work” means a creation that is within a literary, scientific, artistic, or other intellectual domain. (See Art. 3, Para. 1, Subpara. 1 of the Copyright Act.) “Creation” means a creation with “originality” by a human mind; the term “originality” includes the concepts of “independent creation” and “creativity.” “Independent creation” means that a writer does not copy others’ works but independently creates his or her work. (See Supreme Court Criminal Decision No. 2001- Tai-Shang-2945.) Also, “creativity” means that a work should at least have a modicum of creativity which sufficiently shows the character or particularity of the author. Additionally, “originality” required by the Copyright Act is an independent creation which is neither a reproduction nor adaptation of another’s work. Though the contents of the creation are the same as or similar to another’ work, the originality of the work will not be influenced, and such contents are protected by the Copyright Act, which is different from the novelty requirement under the Patent Act. (See the Supreme Court Decision No. 2000-Tai-Shang-2787.)

d.

Third, “literary works” defined in Art. 5, Para. 1, Subpara. 1 of the Copyright Act means literal works and oral works. Literal works include works composed of words, numbers, or symbols. On the contrary, under Art. 9, Para. 1, Subparas. 1, 3 and Para. 2 of the same act, government documents (e.g., proclamations, texts of speeches, news releases, and other documents prepared by government officials in the course of carrying out the duties), slogans and common symbols, terms, formulas, numerical charts, forms, notebooks, or almanacs are not copyrightable subject matters.

(2)

Pharmaceutical Laws and Regulations related to Drug Labels

a.

Pharmaceutical Affairs Act

(a)

Art. 7 provides, “The term ‘new drugs’ as used in this Act shall refer to drugs which are of the preparations having new compositions, new therapeutic compounds or new method of administration as verified and recognized by the central competent heath authority.”

(b)

Art. 26 provides, “The term ‘label’ as used in this Act shall refer to the instruction sheet accompanying a pharmaceutical or a medical device.”

(c)

Art. 39, Paras. 1 & 4 provide, “[(First Para.)] For the manufacturing and import of drugs, information concerning the ingredients, specifications, functions, summary of manufacturing process, and the specification and method of testing, as well as other related information and certificates, accompanied by labels and instructions in the original and Chinese languages, and samples, together with the fee paid, shall be filed with the central competent health authority for registration and market approval. No manufacturing or importation of such drugs shall be allowed until a drug permit license is approved and issued. [(Fourth Para.)] Application for change or transfer of registration of drug permit license obtained under the first paragraph for registration and market approval shall be conducted in accordance with the provisions under Article 46; the issuance of extension of registration, replacement, or new permit license shall be conducted in accordance with the provisions under Article 47. The application criteria, review procedure, approval criteria, and other matters to be complied with shall be established in the Criteria Governing the Review for Registration and Market Approval of Drugs by the central competent health authority.”

(d)

Art. 75 provides, “[(First Para.)] The labels, use instructions and packages of medicaments shall indicate the following particulars as approved: 1. Name and address of the manufacturer; 2. Name of the medicament and permit license number; 3. Lot number; 4. Date of manufacture and period of validity or shelf-life; 5. Major ingredients, dosage and method of administration; 6. Major medical efficacy, functions, and indications; 7.Reactions, counter-indications and other warnings; and 8. Other particulars as required by the relevant regulations. [(Second Para.)] The particulars in Subparagraph 4 or the preceding Paragraph may be omitted, if such omission has been publicly announced by the central competent health authority.”

b.

Guidelines on Drug Examination and Registration

(a)

Art. 4, Subpara. 1 provides, “The terms used in this chapter are defined as follows: “New drug” means “new drug” defined in Art. 7 of the Pharmaceutical Affairs Act.”

(b)

Art. 20, Para. 1, Subparas. 1, 7-9 provides, “The product labels, drug labels, packages used for drugs should follow Art. 75 of the [Pharmaceutical Affairs] Act, and the contents thereof should follow what is permitted by the health care administration of the central government. The drafts of the contents or the final contents and the publication styles should comport with the following requirements, while the word font used should be easily recognizable: 1. Drug labels should state use, packaging, storage or other necessary items. … 7. In principle, drug labels cannot overstate the major therapeutic effects and the pharmacology of main ingredients. 8. Drug labels should truthfully state restrictions, warnings, side effects and notifications, which should be marked in red, with a red border or in bold font. 9. The font size used for Chinese drug labels shall not be less than the number seven font.”

(c)

The content of a drug label shall follow the formats and items specified in the Pharmaceutical Affairs Act and its relevant regulations. Based on the properties of a drug, the content includes pharmacological actions, drug interactions, pharmacokinetics research, intended uses for certain syndromes, dosage, therapeutic effects, associated restrictions or warnings, notifications for cautious uses, side effects and the results of over dosage. Though, the above-mentioned information is created through a complex research procedure. A new-drug company must invest a lot of money in research, go through many failures, use a significant number of research personnel, and conduct uncountable experiments. Consequently, the final research outcome would be expressed in a literary work. Nonetheless, copyright protection disregards the author’s industrious efforts or “sweat of the brow.” That is, copyright protection focuses on the originality of a work, disregard the amount of money, time or effort spent by the author. As a result, whether a drug label is a subject matter protected by the Copyright Act depends on whether the expression of such drug label possesses originality. The experiments, experiences and costs required by drug manufacturers for drug research and drug label creation do not guarantee that such drug label fulfill originality so as to be protected by the Copyright Act. These principles should be declared first.

(d)

Although the content of a drug label follows the regulatory format required by the Pharmaceutical Affairs Act, the specific contents, such as data, words and tables used at each item, are not restrained by the Act. Thus, drug manufacturers can be free to express specific information. The originality of such expression may still be found.

(e)

It is true that a drug label contains a significant amount of data and professional jargon. However, the expression’s degree of complexity, the phrases and words used, and the arrangement of words vary with the authors who have different educational backgrounds and experiences. The authors have different styles of writing. As a result, a drug label, even if preventing the data and professional vocabularies related to the drug, can still be protected by the Copyright Act, if the style of expression is original.

(f)

The appellee asserted that because drug labels were created in accordance with the Guidelines on Drug Examination and Registration, lack the characteristics or uniqueness of the author, and thus are not original. The appellee also asserted that the nature of drug labels is a kind of official document and thus not protectable under the Copyright Act.

i.

Under Art. 9, [Para. 1,] Subpara. 1 and Para. 2 of the Copyright Act, government documents, including proclamations, texts of speeches, news releases, and other documents prepared by government officials in the course of carrying out their official duties, are not a subject matter of copyright. And, Article 1 of the Government Document Format Act also states that a government document is a “document used for handling government affairs.”

ii.

To insure that people can use drugs safely, the Department of Health (DOH) does not approve a drug label simply by relying on what is provided by a drug manufacturer in the process of applying for drug examination and registration. In fact, the DOH has to examine and often revise a drug label before approving it. Additionally, once a drug is sold in the market, a drug label may be revised or added with warnings, after some safety evaluation of such drug. But, this is merely an administrative procedure for pharmaceutical regulation. Its purpose is to make the ordinary people understand the content of a drug label easily. Thus, the content of a drug label is still an expression of drug properties and R&D results provided by a drug manufacturer. The nature of such content is a private document. Such private document is not transformed into an government document simply by the involvement of a governmental agency or officials. Such a private document is not the same as a government document that an official produces in carrying out the duty of pharmaceutical administration.

(g)

A work is a creation of an author for expressing his or her thoughts, characteristics or emotions. Thoughts and expressions are, without a doubt, closely related. However, in order to prevent the unlimited extension of copyright protection that could restrain other’s freedom of creation, Article 10bis of the Copyright Act establishes the doctrine of idea-expression dichotomy to draw a line between ideas and expressions. (The court below cited a wrong article, Article 11, in page 20 of its decision.) A drug label summarizes the testing results learned from the R&D process, and provides the drug information written in accordance with the nature of a drug. While drug information is written in accordance with the properties of the drug, there are various ways to express such drug information. The originality of a drug label is based on that, so it is not a case where “the drug knowledge and its expression have been indistinguishable and inseparable” (referring to a situation where the idea and the expression merge). Here is an example of how to express the results of drug testing differently: “Figure 1 shows that among fifty patients, ten patients would have a headache during the testing period of one year;” an alternative way for that statement would be “From Jan. 1, to Dec. 31, 2008, fifty patients participated in the experiment, and only twenty percent of these patients would have a headache. (See Fig. 1.)” Therefore, for one experimental result, there could be at least two ways of expression. The statement that a drug label has merged with the idea expressed behind such drug label so that such drug label is not copyrightable cannot be accepted.

(h)

The whole content of the appellant’s “Pioglitazone” drug label shows many words, chemical equations, and figures, which describe the details of the drug, such as physical or chemical properties, composition, syndromes, clinic pharmacology, clinic trials, indications, restrictions, warnings, special considerations, side effects, over dosage, the way of use, amounts of dosage, and packaging. Such a drug label well illustrates the originality of the appellant, and it should be a work which the Copyright Act should protects.

2.

The appellee’s “Glitos” drug label does not infringe the copyright of the appellant’s “Pioglitazone” drug label.

(1)

An affirmative defenses should be established to relieve the liability of copyright infringement.

a.

To prove an infringement of rights, a plaintiff must establish that the defendnan’s act meets all elements of required by law: an infringement of someone’s right, damage, and causation, as well as illegality and intent or negligence. Some elements are known as “the objective elements of culpability,” while others are subjective elements. There are two theories about illegality--the doctrine of an illegal outcome and the doctrine of an illegal act. The prevailing theory is the doctrine of an illegal outcome, due to the idea that rights should be infringed. (See e.g., Wang, Ze-jian, The Law of Torts, vol. 1, p. 263; Supreme Court decisions No. 1983-Tai-Shang-1469 and No. 2004-Tai-Shang-851.) Therefore, when one infringes the rights of another, if the victim can prove that the fact of his injury, the infringer should be presumed to have violated the law. The exception to this rule is that if the actor can prove the facts for an affirmative defense, the illegality is outweighed by such a defense, and the act is thus not illegal.

b.

Except the differences listed in the attached, the rest of the appellee’s “Glitos” drug label is the same as the appellant’s “Pioglitazone” drug label. Thus these two drug labels are substantially similar. Because “Glitos” is a generic drug and its drug label follows the drug label of “Pioglitazone,” the fact of “access” must have existed. It is evident that the appellee did copy the literary work of the appellant’s “Pioglitazone” drug label. If the appellee wants to relieve itself from the liability of copyright infringement, it has to prove the existence of a defense to the illegality. Here, the appellee contendes that its act was following the law and also raises the fair use defense.

(2)

“Fair use” is recognized by the Copyright Act as a restraint of copyrights. It is a general legal interest which is created by the Copyright Act, and can be used by a defendant as a defense in litigation. If the requirements of fair use are met, the defendant could be relieved from the liability of copyright infringement. Thus the fair use defense has the nature of an affirmative defense.

(3)

Under Art. 52 of the Copyright Act, “[w]ithin a reasonable scope, works that have been publicly released may be quoted if necessary for reports, comment, teaching, research, or other legitimate purposes.” Art. 65, Para. 1 provides, “Fair use of a work shall not constitute an infringement of the economic rights of a work.” Art. 65, Para. 2 provides, “In determining whether the exploitation of a work complies with the provisions of Articles 44 through 63, or other conditions of fair use, all circumstances shall be taken into account, and in particular the following facts shall be noted as the basis of determination: 1. The purposes and nature of the use, including whether such use is of commercial nature or for nonprofit educational purposes. 2. The nature of the copyrighted work. 3. The amount and substantiality of the portion used in relation to the work as a whole. 4. The impact of the use on the work's existing and potential markets.”

(4)

In applying the review standard vested in Art. 65, Para. 2, Subpara. 1 of the Copyright Act, the Supreme Court Criminal Decision No. 2005-Tai-Shang-7127 held, “Art. 65, Para. 2, Subpara. 1 of the Copyright Act provides, ‘The purposes and nature of the use [include] whether such use is of a commercial nature or is for nonprofit educational purposes.’ The analysis of the purposes of use should rely on the legislative intent vested in Article 1 of the Copyright Act, rather than maing a simple dichotomous division of commercial or non-profit uses. In other words, if the purposes and nature of the use are to benefit the public interests of the society or of national cultural development, this Court should evalute it positively, even though its purposes are not for education. On the contrary, if the purposes and nature of the exploitation do not benefit the public interests of the society or of national cultural development, though the user does not profit from such an exploitation, this Court should evaluate it negatively, because the act of reproduction does not contribute to other more important social interests in order to justify the sacrifice of the legal interest of the copyright owner.” This decision clearly abandoned the dichotomy of commercial or non-commercial uses, and adopted a standard based on whether the exploitation benefits the public interests of the society or of national cultural development.

(5)

The regulatory purposes of copyright and fair use are to encourage the delivery, exchange and share of knowledge and information in order to make the knowledge and cultural heritage of human beings sustainable, enriched, and refined. Thus, Art. 65, Para. 2 of the Copyright Act provides the standard for determining fair use and focuses on the evaluation of the situations of the use. The determination of fair use should not rely on any single factor within the test. It should focus on the public interests in knowledge and cultural heritage of human beings, on the type of work, and on the overall evaltion of the form and content of the use.

(6)

The Guidelines on Drug Examination and Registration are an executive order authorized by the law.

a.

Because a statutory law has limited room and is not able to regulate administrative matters in a very detailed way, it, as a parent law, will give specific authorization to create executive orders, as a child law, to specify the rules of the parent law. The child law, however, cannot be contrary to the parent law, and cannot limit the scope of the application of the parent law or go beyond the limit authorized by the parent law. (See Judicial Yuan Interpretation No. 612; Supreme Administrative Court No. 2005-Pan-1691, 2003-Pan-1672). Thus, the relation between a parent law and a child law are is that of the source of law and authorization. The parent law is the fundamental norm of such authorization, while the child law is the outcome of specification.

b.

The appellant asserts that the purpose, content, and scope of authorization by the Pharmaceutical Affairs Act has nothing to do with the “restraint on the right to make copies” and the Guidelines on Drug Examination and Registration obviously have gone beyond the limit authorized by the parent law, creating a limitation that cannot be found in the law itself. Thus, the appellant asserts that the Guidelines should not be applied here.

c.

Article 1 of the Guidelines on Drug Examination and Registration makes it clear that the Guidelines are based on the authorization by Art. 39, Para. 4 of the Pharmaceutical Affairs Act. According to Art. 39, Para. 4 of the Pharmaceutical Affairs Act, “[a]pplication for drug examination and registration under Para. 1, for registration of change or transfer of drug permit under Article 46, or for the extension, replacement, or reissuing of the permit under Article 47 shall be conducted in accordance with the Guidelines on Drug Examination and Registration issued by the central competent health authorities. The conditions for application, review procedure, approval criteria, and other matters to be complied with shall be established in the Guidelines on Drug Examination and Registration issued by the central competent health authorities.” The purposes, contents and scope of such authorization are specific and clear, and consistent with the doctrine of clear authorization. (See Judicial Yuan Interpretation Nos. 313, 432, 491, and 522.) As to whether the appellee could rely on the Guidelines on Drug Examination and Registration as a defense against a charge of copyright infringement, this issue is determined under the norm of the Copyright Act. Otherwise, if as the Appellant’s assertion that all laws must have a clause concerning the restraint of copyrights in order to limit the enforcement of copyrights, the legal system will be in a state of chaos, and the Copyright Act will have not real effects. This Court cannot agree with the appellant’s assertion that whether the Guidelines on Drug Examination and Registration satisfy the doctrine of clear authorization depends on whether a clause restricting copyright exists. The appellant apparently misinterpreted this doctrine.

(7)

Characteristics of a generic drug and its drug label

a.

Developing a new drug needs a long-term, huge investment. Once the development has succeeded, the developer could acquire a patent right as protection, and bars other competitors from entering into the market of such new drug so as to recap the cost of R&D by raising the drug price. After the term of the patent right of the developer ends, other drug manufacturers could start to rely on the public information provided by the developer when it was filing a patent application. Then, they could manufacture a drug of the same composition, type, dosage and therapeutic effects, where such drug is also known as a generic drug. Because the following manufacturers can save the cost of developing a new drug, the price of a generic drug could be lower than that of the drug manufactured by the first manufacturer. As a result, considering several factors, such as the safety concerns for people’s drug uses, the governmental budget spent on health insurance policies, and efficient utilization of social resources, many countries are encouraging the development of generic drugs. Previously, the developer had gone through the complete test for drug safety and efficacy when it applied for the examination and registration for its new drug. And, since such new drug was sold in the market, its use on human bodies has lasted for a period of time so as to become a reference. Hence, considering the efficient utilization of social resources, the authorities simplify the procedure of the drug application for a generic drug. That is, the required technical documents are simpler, and the drug label of a generic drug is required to be the same as the drug label provided by the first manufacturer.

b.

Art. 4, Subpara. 2 of the Guidelines on Drug Examination and Registration provides, “The terms used in this Chapter are defined as follows: … 2. ‘Generic drug’ means a drug which has the same composition, type, dosage, and therapeutic effect as an approved drug in this Nation.” Art. 20, Para. 1, Subpara. 3 provides, “The product labels, drug labels, packages used for drugs should follow Art. 75 of the [Pharmaceutical Affairs] Act, and the contents thereof should follow the items approved by the health care administration of the central government. The drafted contents or the final contents and the printing style should comport with the following requirements, while the word font used should be easily recognizable: … 3. The drug label of a generic drug under pharmacovigilance should follow the approved content of the first drug label. The drug label of a generic drug not under pharmacovigilance should use the exact translation of the drug label used by the original manufacturer.” This is the “doctrine of consistency of a generic drug and a brand name drug.”

c.

Regarding the contents of the drug label for a generic drug, besides the above-mentioned Guidelines, the DOH once issued an interpretation note which is a reference here. In the second paragraph of the description section of the DOH’s June 15, 2007 note of No. Wei-Shu-Yao-0960025229, the DOH stated, “According to Art. 20, Para. 1, Subpara. 3 of the Guidelines on Drug Examination and Registration, the drug label of a generic drug under pharmacovigilance should follow the approved contents of the first drug label, where such approval means that a drug label should meet the format required by Art. 75 of the Pharmaceutical Affairs Act.” (See the decision of the court below, vol. 1, p. 239.)

d.

In conclusion, taking drug safety and drug administration into considerations, the DOH will require the drug label of a generic drug to be the same as the approved contents of the first drug label for the same drug. The format of such labels shall also follow the format required by Art. 75 of the Pharmaceutical Affairs Act.

(8)

The appellee’s fair-use defense is established.

a.

Article 11 of the Constitution provides, “The people shall have the freedom of speech, teaching, writing and publication.” Such a right to write (copyright) is listed as a fundamental right of the people. However, copyright is not absolute. The Copyright Act has fair-use clauses to provide a best measure to balance the private interests of copyright owners and the public interests of the society and the public and to place a reasonable limit on the scope of the rights of copyright owners. And, this Court should refer to the concurring opinion of the Judicial Yuan Interpretation No. 509, consider in each case the legal interest which the law intends to protect and the corresponding limit on the fundamental rights, and pursue an optimal harmonization.

b.

The appellee’s “Glitos” drug label, except the differences shown in the attached tables and a few paragraphs (e.g., Table Nos. 10, 22, 23) which is considered adaptations, is the same as the appellant’s “Pioglitazone” drug label. It is a simple copying, which does not contain either productive or transformative contents. In addition, its expressions--uses words, figures, and tables-- are the same as the appellant’s label (a literary work), in terms of the purpose as to show the drugs’ characteristics. The percentage of the appellant’s label content used reaches more than 95%.

c.

Nonetheless, the appellee’s “Glitos” drug is a generic drug of the monitored drug, that is, the appellant’s “Pioglitazone” drug. To comply with Article 20, Paragraph 1, Subparagraph 3, Sentence 1 of the Regulations on Drug Inspection, Registration & Review, the appellee’s label shall followed the first label (that is, the “Pioglitazone” drug label). Additionally, on September 6, 2007 the appellee filed a request to change the “Glitos” drug label with the Department of Health. However, on September 20, 2007 the Department of Health replied in the Wei-Shu-Yao-Chu-Zi No. 9613209 Letter that the “Glitos” drug label should follow the first label to record the same information and that the appellee could not change it without a permit. (See Vol. 2, P. 470 of the trial court’s record.) As a result, the appellee is not free to draft the contents of the “Glitos” drug label.)

d.

Because a drug label is distributed in a drug market together with the drug and there is no indepdent “drug label work market”, it is hard to recognize any independent market value of the appellant’s “Pioglitazone” drug label. Also, the copyright issues of label works can possibly to be used as a competing measure in a drug market or as another way to extend the term of patent protection. Besides, the policy on generic drug labeling has to consider drug safety, drug administration, and efficiency in using resource. The principle of consistency between the generic drug label and the brand name drug label is adopted to promote social interests and public policies. To accommodate social and public interests, the Court should allow the appellee to raise a fair-use defense when the interests of the brand drug company and those of the generic drug company are in conflict.

(9)

In conclusion, although the appellee reproduced the appellant’s “Pioglitazone” drug label and created a derivative work of such drug label, the appellee’s act was not liable under the fair-use doctrine. The appellee has an affirmative defense against the illegality of copyright infringement, and thus the copyright infringement of the appellant’s drug label is not established. The appellant requests this Court to enjoin the appellee from directly or indirectly reproducing, distributing, or using other methods to produce the “Glitos” drug label by the appellee itself or by commissioning others to do so and to recall all drug labels having been distributed in order to destroy them. Such a request is not consistent with the law.