Regarding the issue that whether the assignment of the patents at issue violates Article 185 Paragraph 1 Subparagraph 2 (amended and promulgated on December 7, 1983) or Article 202 (amended and promulgated on November 12, 2001) of Company Act　 and therefore does not take effect to the appellee:

1.Article 185 Paragraph 1 Subparagraph 2 of the Company Act stipulates that “A company shall not transfer the whole or any essential part of its business or assets without a resolution adopted by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares.” Transferring essential part of the company’s business or assets means that transferring the particular part of business or assets can sufficiently influence the company and obstruct the business operations of the company. (See Supreme Court decision No. 1992-Tai-Shang- 2696 and No. 2011-Tai-Shang-717) In addition, Article 202 of Company Act stipulates that “Business operations of a company shall be executed pursuant to the resolutions to be adopted by the board of directors, except for the matters the execution of which shall be effected pursuant the resolutions of the shareholders' meeting as required by this Act or the Articles of Incorporation of the company.” Furthermore, Article 202 of Company Act stipulates that “Business operations of a company shall be executed pursuant to the resolutions to be adopted by the board of directors, except for the matters the execution of which shall be effected pursuant the resolutions of the shareholders' meeting as required by this Act or the Articles of Incorporation of the company.” Therefore, even though the trademark at issue is not essential part of the appellee’s assets, and the transfer of which does not require a resolution adopted by a majority of the shareholders under Article 185 Paragraph 1 Subparagraph 2 of the Company Act, it still requires a resolution adopted by the board of directors. (See Supreme Court decision No. 1997-Tai-Shang- 2996)

2.Appellant asserts that the assignment of patent is a common business for the company of appellee, and Article 185 Paragraph 1 Subparagraph 2 or Article 202 of Company Act are not applicable. However, among 40 items investigated from the business of appellee’s company, except for installation of computer facilities and service industry of information software, the remaining 38 items are crop cultivation, seedling industry, agricultural products processing industry, special crop cultivation, bacterial cultivation, all of which are related to agricultural products, which have close relationship to the four patents revealed on the contract of repayment. Moreover, Wau Yuan Property Appraisal Co., Ltd. which was entrusted by Civil Execution Department of Yunlin District Court appraised these four patents at 19,680,000 NTD in 2008. (See backside of the first trial, p. 66). However, China Credit Information Service Ltd. appraised the two patents at 2,830,000 NTD respectively, “method of chemical soy sauce manufacturing” at 784,000 NTD, “method of natural products separation and its separation device” at 1,857,000 NTD, and the total value is 8,301,000 NTD. Although the value appraised varies, the patents were related to registered business operations of the appellee’s company and the value of intangible assets indicated in the balance sheet attached to the appellee’s 2008 annual income tax return was 100 million. (See Volume 2 of Taiwan High Court Taichung Branch Court No. 2010-Shang-Yi-64 trial, p. 66). The appraised value of the patents was about 20% or 8% of the capital amount of the company. According to the meeting minutes of shareholders of the appellee’s company in 2006, the appellee's accumulated losses had been 106428746 NTD. in 2005, and the directors and supervisors had been authorized by shareholders to seek for outside financial support. If the four patents mentioned previously were to be transferred in the situation of continual losses, it would have obstructed the business operations of the company. Additionally, the patents were used as a security by the appellant for securing the appellee’s repayment of the 57,547,400 NTD, which demonstrates that the patents at issue are indeed appellee’s property. As mentioned previously, according to Article 185 Paragraph 1 Subparagraph 2 of Company Act, the patents shall be the essential part of the company’s business or assets. The repayment agreement provides that if the appellee could not perform the jointly liable payment of the 57,547,400 NTD., the patents should be transferred. It has not been shown that this clause was proposed in and adopted by the shareholders' meeting, and it therefore could not take effect for the appellee.

The Assignment of a Patent, Essential Part of the Company’s Business or Assets