Artificial Intelligence 2024 Comparisons

Currently, no AI-related general background laws or regulations have been specifically promulgated.

The draft Basic Act for Developments of Artificial Intelligence was proposed to Taiwan’s Congress to set out fundamental principles for AI developments and for the government to promote the development of AI technologies (see 3.1 General Approach to AI-Specific Legislation). However, the draft has not been reviewed by the Congress, and whether this draft will be passed is uncertain. For liability arising from the use of AI technology, please see 10.1 Theories of Liability.

In recent years, the Executive Yuan of Taiwan has announced the Digital Nation and Innovative Economic Development Plan and the Taiwan AI Action Plan to express the stance of the Taiwan government in seeking to develop world-leading AI infrastructure for device solutions and to establish a sound ecosystem that creates a niche market.

As Taiwan is well-known for information and communications technology (ICT) and the semiconductor industry has established a good foundation for intelligent technology development, the government has been encouraging companies to become essential partners in the value chain of global AI technology and intelligence systems. It will leverage the advantages in hardware and software techniques to promote AI technology, whether it be generative or predictive AI, across industries with test fields, regulations, data-sharing environments, etc.

In August 2022, the Ministry of Digital Affairs (MODA) was formally established for matters in relation to facilitating Taiwan’s digital development of its telecommunications, information, cyber security, internet and communications industries, co-ordinating national digital policies, supervising national cyber security policies, managing communications and digital resources and assisting digital transformation. According to the Organization Act of the Administration for Digital Industries, Ministry of Digital Affairs, the Administration of Digital Industries is in charge of providing guidance and incentives for interdisciplinary digital innovation of AI, big data, platform economy, and other digital economy-related industries.

The Administration for Digital Industries (ADI) of the MODA in Taiwan has established the “AI Product and System Evaluation System” and “AI Product and System Evaluation Guidelines” to regulate AI products and systems and provide domestic AI product evaluation services. The goal is to protect the rights of product users and promote the positive development of the AI industry. The AI Evaluation Center will focus on developing evaluation tools and systems to meet domestic testing needs and will engage in cross-departmental co-operation to evaluate different types of AI systems, products, and services. By establishing a trusted AI environment, Taiwan aims to align with international standards, promote compliant AI products in the global market, and accelerate the expansion into the global markets. The AI Evaluation Center will continue to analyse industry needs and trends to build a safer and more reliable AI evaluation environment.

Currently, no AI-related general background laws or regulations have been specifically promulgated.

The draft Basic Act for Developments of Artificial Intelligence was proposed to Taiwan’s Congress to set out fundamental principles for AI developments and for the government to promote the development of AI technologies. According to the Taiwan AI Action Plan as unveiled by the Taiwan government, the following issues are still under evaluation to further determine whether related laws and regulations should be enacted or amended to address AI developments:

• the impact on employment and the labour market;
• the rights and obligations derived from the application of AI technologies, such as whether to consider AI as a “person” from a legal perspective, and whether there will be intellectual property rights in an AI-created work;
• AI applications in government;
• open data;
• consumer protection for AI applications;
• restrictions on AI applications;
• the regulatory sandbox framework;
• spectrum resource allocation;
• government procurement (eg, the outsourcing concerning AI issues); and
• industry regulatory challenges and approaches to AI.

In addition, the draft Basic Act for Developments of Artificial Intelligence was proposed by a private foundation to set out fundamental principles for AI developments and for the government to promote the development of AI technologies over the coming years. The following issues are addressed in the draft:

• legalisation of AI ethical principles;
• government-based industrial development strategy;
• emphasis on social justice and underprivileged protection;
• emphasis on privacy and personal data protection;
• establishing a complete AI regulatory sandbox; and
• risk-based regulation of AI products or services.

However, the draft has not been reviewed by Taiwan’s Congress.

None of the proposed legislation or regulations are from government authorities outside of Taiwan.

In early 2018, Taiwan’s Congress promulgated the Financial Technology Development and Innovative Experimentation Act (the “FinTech Sandbox Act”) for the fintech regulatory sandbox to promote fintech services and companies. The Act enables fintech businesses to test their financial technologies in a controlled regulatory environment. Although the FinTech Sandbox Act is not specifically designed for AI, machine learning or big data, the promoters of novel AI-related financial business models or big data technology may prove their theories and applications within the scope of the Act and enjoy exemptions from relevant laws and regulations.

In the same vein as the FinTech Sandbox Act, in late 2018, the Unmanned Vehicle Technology Innovation and Experiment Act (the “Unmanned Vehicle Sandbox Act”) was enacted, establishing a regulatory sandbox for autonomous/self-driving vehicles. The Act aims to provide a better environment for AI application testing and IoT technology in transportation. The term “vehicle” under the Unmanned Vehicle Sandbox Act includes not only cars but also aircraft and ships/boats.

The objectives of the aforementioned two regulatory sandbox laws are to enable the relevant businesses to test their innovative ideas and technologies within a permitted safe harbour or sandbox scope. In general, prior to entering the sandbox, applicants need to obtain approvals from the competent authorities. Once the experiment is executed, the experimental activities may enjoy exemptions from certain licensing requirements and legal liabilities.

After the approved experiments are completed, the relevant competent authorities will examine the results (see 2.2 Involvement of Governments in AI Innovation). If positive, the competent authority will review and amend current rules in order to legalise the tested business models or activities. However, the sandbox applicants might still need to obtain licences or approvals from the relevant competent authorities to conduct the tested business models or activities outside the sandbox.

The Executive Yuan has announced multiple guidelines and plans for AI developments, such as the Digital Nation and Innovative Economic Development Plan, the Taiwan AI Action Plan, the AI Technology R&D Guidelines and the 5+2 Plan (see 3.1 General Approach to AI-Specific Legislation for details).

However, considering AI still has the nature of “technology” and could be applied in various industries, there are no regulatory agencies that play a leading role in the actual enforcement and monitoring of AI technologies. The enforcement and supervisory tasks fall under the jurisdictions of the relevant competent authorities.

For example, the Ministry of Economic Affairs is assigned as the competent authority for the Unmanned Vehicle Sandbox Act, while the Financial Supervisory Commission is the competent authority for the FinTech Sandbox Act.

In addition, for AI-related healthcare matters, the Ministry of Health and Welfare is the competent authority responsible for supervising the related products and industries. The Food and Drug Administration (TFDA) is responsible for regulating the system for the safety and quality of food, drugs, medical devices, and cosmetics. The TFDA grants product registration and clinical trial approvals, monitors manufacturing and importation, and conducts safety surveillance activities on health-related products.

The matter is not applicable in this jurisdiction.

According to the letter dated 16 June 2023 issued by the Intellectual Property Office (TIPO) of the Ministry of Economic Affairs (MOEA), using copyrighted works to train AI models may infringe on the reproduction right of the copyright owner, unless it falls under the reasonable use exceptions specified in the Copyright Act. Whether content generated by AI is protected by the Copyright Act depends on the presence of human creative input. Content lacking human creative input is not protected by the Copyright Act. In addition, reproducing and representing a work using an AI model does not create new copyright. The TIPO has noted that whether a specific act constitutes copyright infringement still needs to be determined by the judicial authorities based on the specific facts of the case. It is worth noting that the Copyright Bureau is planning to issue guidelines to further clarify the reasonable use of training data, whether AI-generated works are entitled to copyright protection, and other important issues, which should be closely monitored.

For proposed AI-specific legislation and regulations, please see 3.1 General Approach to AI-Specific Legislation.

There have been no court decisions specifically addressing IP issues in relation to generative AI. However, according to relevant court decisions of the Intellectual Property Court of Taiwan concerning the results of computer software calculations based on input parameters, it is difficult to consider such results the subject of protection under the Copyright Act of Taiwan because they are obtained on the basis of mathematical calculations and are not created by any “human”.

In Taiwan, there is no specific definition of AI, whether generative or predictive AI, under current laws and regulations. AI is still an uncertain legal concept under Taiwan law. Under the Nationality Act, for example, Article 2 of the Standards for Defining High-Level Professionals for Naturalization explicitly recognises AI as one of the high-skill-level professions ─ that is, foreign nationals with unique talents or outstanding R&D capabilities in the area of AI may be exempted from submitting a Certificate of Loss of Original Nationality when applying for naturalisation. However, the definition of AI is not included in the aforementioned Standards. A clear definition of AI is yet to emerge.

Please refer to 2.2 Involvement of Governments in AI Innovation.

No judicial decisions were found in relation to this topic.

Currently, no AI-related laws or regulations have been specifically promulgated by each regulatory authority. Please refer to 3.1 General Approach to AI-Specific Legislation for details of proposed regulatory objectives.

In addition, it is worth noting that – owing to the rapid development of the use of network information technology and AI technology – computer synthesis (such as Deepfake AI, a type of AI used to create convincing image, audio and video hoaxes) can be used to produce false sexual images of others that are easy to spread. The use of such and other technological methods may make it difficult to distinguish between what is true and false.

Although it does not specifically feature the term “AI”, the Criminal Code of Taiwan provides that anyone making false sexual images of others by using computer synthesis, processing, editing or other technological methods (eg, using Deepfake AI to transpose the victim’s face onto other people’s sexual images) will be considered to have committed a crime. This is in order to protect individuals’ privacy and personality rights by preventing the spreading, broadcasting, delivering, publicly displaying or producing of fake images.

Given that no AI-related laws or regulations have been specifically promulgated (see 5.3 Regulatory Objectives), no enforcement actions have been taken with regard to any AI-related laws or regulations.

The Taiwan government is aware of AI developments and has published multiple guidelines and plans for AI developments in the past few years. In September 2019, the Ministry of Science and Technology under the Executive Yuan of Taiwan announced the AI Technology R&D Guidelines. As AI developments may bring revolutionary changes to various aspects of human existence, the Guidelines have set forth the following three core values to encourage AI technology participants to always be aware of when conducting relevant activities and endeavouring to build an AI-embedded society:

• human-centred values;
• sustainable developments; and
• diversity and inclusion.

From the aforementioned three core values, eight principles were given under the Guidelines to establish a solid AI R&D environment and society that follow the global AI trends, namely:

• common good and well-being;
• fairness and non-discrimination;
• autonomy and control;
• safety;
• privacy and data governance;
• transparency and traceability;
• explainability; and
• accountability and communication.

Also, on 28 March 2023, the National Science and Technology Council of Taiwan (NSTC) established the Taiwan AI Centre of Excellence (AICoE). According to Wu Zheng-zhong, the Minister of the NSTC, the AICoE will help streamline efforts by government agencies seeking to formulate rules governing AI applications and facilitate collaborations on international projects, assist in initiating international collaborations on strengthening core AI technologies and create an AI talent pool in the Asia-Pacific region.

As previously mentioned, even though no AI-related laws or regulations have been specifically promulgated in Taiwan yet, the Taiwan government has announced the AI Technology R&D Guidelines (see 6.1 National Standard-Setting Bodies).

The authors believe that the aforementioned AI Technology R&D Guidelines reflect many of the principles discussed internationally. As such, important standards from relevant international standard-setting bodies will be taken into account in the event of promulgation of any AI-related law or amendment to the Guidelines.

In the era of vigorous development of AI, it is not only industries that are actively promoting and introducing AI; government departments are also focusing on such technology. The Executive Yuan has announced three stages of governmental AI development – namely, the interface digitisation, internal business process digitisation, and field AI – to accelerate the incorporation of AI in government departments and improve administrative efficiency.

At present, AI is widely applied in government branches and the results have been fruitful. The following examples are among them.

• The Ministry of Finance’s Fiscal Information Agency found tax evasion with the assistance of an AI system.
• The Ministry of Justice co-operated with telecommunications operators to combine AI technology to improve prison management and turn Chiayi Detention Centre into a “smart prison”.
• The Judicial Yuan commenced the AI sentencing information system, which aims at fairer and more transparent sentencing by collecting decision-making data and updating data immediately so as to provide judges and citizen judges with the sentencing trend in similar cases (see 9.1 AI in the Legal Profession and Ethical Considerations for further details).
• The government also adopted AI technology in the pandemic tracking system in order to facilitate outbreak investigations and curb the infection rate of COVID-19.

It is also worth noting that, in 2019, the Railway Bureau conducted a trial “Smart Video Surveillance System Project” – combined with facial recognition AI – to monitor various situations on the metro and notify the station or police officers in case of special circumstances. However, the use of the facial recognition function immediately triggered privacy concerns and some controversy with regard to legality. The Taiwan Railway Bureau later expressed reluctance to use this function in future.

In addition to the above-mentioned privacy concerns, issues such as ethics, labour replacement and transformation, and lack of legal sources will inevitably be faced by government departments when introducing AI systems.

No judicial decisions were found in relation to government use of AI.

Please see 7.1 Government Use of AI.

Generative AI is an AI with the capability of producing sophisticated and creative content that resembles human work by learning patterns from existing data and using such knowledge to output novel works. As stated in 15.1 Applicability of Patent and Copyright Law, AI cannot be considered a natural or legal person, therefore it cannot be considered an author (or co-author) of a work. However, the existing data a generative AI uses may be subject to certain patent rights or copyrights of a natural or legal person, potentially giving rise to tort issues. As a generative AI is “self-taught” – in other words, neither the AI users nor its creators can fully understand its decision-making process – it may be difficult to determine who is liable. It remains to be seen whether judicial opinions will provide clarity on this matter in the future.

As stated in 15.1 Applicability of Patent and Copyright Law, AI cannot be considered a natural or legal person, therefore it cannot be considered an author (or co-author) of a work. Consequently, the assets in the AI process might not be eligible for IP protection. 

According to the Copyright Act, AI-generated works may still infringe upon the copyrights of others even if the user of such works is not involved in profit-making activities. In addition, the terms of use of the AI tool provider and the provisions of the media platform regarding public broadcasting and reprints shall also be taken into consideration. The assets generated through generative AI may be produced through dialogue and instructions, and due to the substantial amount of machine learning in generative AI systems, there are numerous impurities and variables between the creation and the user’s own personality. So long as the generative AI system itself does not align with the characteristics of the human spirit, the works of generative AI systems at this stage may not necessarily be eligible for copyright protection.

Although the terms and conditions of the AI tool provider may stipulate that “all content generated by the generative AI system is owned by the generative AI system”, due to the aforementioned legal issue regarding AI creation, it is worth observing whether any judicial opinions will establish that the generative AI system can claim copyright ownership over the user, and whether the aforementioned agreement is reasonable and in line with existing judicial opinions in the future.

Currently, no AI-related general background laws or regulations have been enacted. For applicable law dealing with potential rights of data subjects, please see 10.1 Theories of Liability.

According to reliable news reports, in Taiwan, a substantial amount of court decisions have been uploaded to the public e-platform. The Ministry of Science and Technology of Taiwan has commissioned private sector organisations to conduct research in relation to the use of legal data analysis as a tool for compiling information on court decision patterns, predicting future decision outcomes, and examining the appropriateness of court decisions. In addition, as the use of e-filing has become increasingly common in litigation practice, the Judicial Yuan has recently been contemplating establishing a "technology court" to facilitate the electronic exchange of documents and e-litigation. 

It is also worth noting that the Judicial Yuan launched a sentencing system using AI technologies on 6 February 2023. This system aims to organise past sentences to establish a fair and transparent sentencing trend, assisting future citizen judges (with the citizen judge system in Taiwan having been launched on 1 January 2023) in judging cases fairly. By analysing court decisions, the system could automatically generate the sentencing recommendation for the user. In addition to identifying sentencing conditions, the system could also provide similar cases for the judges’ and lawyers’ consideration. According to the Judicial Yuan, the system will be available to prosecutors, lawyers and the general public in the future. The system is aimed to rapidly identify relevant data from the vast amount of electronic data and significantly improve the accuracy and speed of the litigation process in the near future.

In addition, using generative AI for producing legal documentation may be subject to legal issues. Even if AI may not be considered an author (or co-author) of a work, the possibility that any content (such as a draft contract or legal memo) produced by the AI may still be subject to the IP right of any third party cannot be completely ruled out.

Civil Liability

As AI itself has not yet been recognised as a legal entity, it cannot be responsible for any civil liability under current Taiwan laws. For AI-related tort cases, the injured party would need to prove that the use of AI falls within the scope of tort liability stipulated under the Civil Code and/or the Consumer Protection Act, which includes – without limitation – the following.

• A manufacturer shall be liable for any damage caused by its products, unless it can prove that the products have complied with the applicable technical and professional standards of reasonably expected safety requirements before such products are released onto the market (Article 7 of the Consumer Protection Act).
• If an automobile, motorcycle or other motor vehicle that does not need to be driven on tracks while in use has caused injury to another person, the driver shall be liable for the damages arising therefrom unless they have exercised reasonable care to prevent the damages – (Article 191–2 of the Civil Code).
• A person who has wrongfully infringed the rights of another person – whether intentionally or negligently – should compensate such person for any damages arising therefrom. The prevailing view among the courts and scholars is that there should also be causation between the tortious conduct and the injury (Article 184 of the Civil Code).

By way of an example, if the AI embedded in the self-driving system (such as an autonomous vehicle) causes an injury, the injured person may wish to prove and convince the judge that the self-driving vehicle falls within the definition of “automobile” and the user should be considered the “driver” under Article 191–2 of the Civil Code. In addition, the injured person would also bear the burden of proving that the “user” was negligent when using the self-driving vehicle if such person wishes to establish a claim under Article 184 of the Civil Code. Further, the manufacturer of the self-driving vehicle may be held liable under Article 7 of the Consumer Protection Act if the court considers the vehicle fails to comply with the contemporary technical and professional standards of reasonably expected safety requirements before such vehicle was released onto the market.

Criminal Issues

In Taiwan, no criminal-related laws have been specifically promulgated or amended to address AI developments. As criminal liability under Taiwan law typically requires a person’s mental state to allow “intention” or “negligence”, AI itself would not be capable of acquiring the aforementioned “mental state” and therefore of committing a criminal offence. In addition, under the current Taiwan legal regime, only natural persons are deemed capable of committing crimes – apart from in certain exceptional circumstances where legal persons may be subject to criminal liability. Therefore, in order to determine whether an AI-related crime has been committed, the prosecutor would need to prove (inter alia) the intention/negligence and causation of the person “using” or “behind” the AI – in a similar manner as per the aforementioned civil liability section.

Using the above-mentioned self-driving vehicle case as an example, the prosecutor would need to prove the vehicle “user” causing the injury has acted negligently. If the user could prove the accusation was only the “behaviour” or “act” of the AI, the court may consider that there was neither negligence on the user’s part nor causation between any act of the user and the result.

Currently, no relevant regulations have been proposed.

No Taiwan court decisions have addressed the issues of discrimination and bias that may be caused by the use of AI algorithms and big data analytics. In addition, no specific laws or regulations have been promulgated or amended to address such issues. However, as “equality” and “fairness” are important factors when it comes to social life and economic activity, the authors are of the opinion that more and more discussions will emerge in legal fields such as labour/employment law (please refer to 13.1 Hiring and Termination Practices for details), privacy law, antitrust and other areas.

In Taiwan, personal information is protected by the Taiwan Personal Data Protection Act (PDPA). The collection, processing and use of any personal data are generally subject to notice and consent requirements under the PDPA. Pursuant to the PDPA, the term “personal data” includes characteristics, fingerprints, genetic information, and other biometric data and information that may directly or indirectly identify an individual.

Under the PDPA, unless otherwise specified under law, a company is generally required to give notice to and obtain consent from an individual before collecting, processing or using any of said individual’s personal information (subject to certain exemptions).

As a result, if a company wishes to collect, process and/or use any personal data for purposes concerning AI and/or big data, it will be subject to the obligations under the PDPA as outlined earlier.

In Taiwan, facial recognition and biometric information are classed as personal information and are protected by the PDPA. Please refer to 11.2 Data Protection and Privacy for details.

Please refer to 7.1 Government Use of AI for details.

Currently, no AI-related laws or regulations have been specifically promulgated with regard to transparency. However, according to the AI Technology R&D Guidelines announced by the Ministry of Science and Technology under the Executive Yuan of Taiwan in 2019 (see 3.2 Jurisdictional Law), transparency is a major topic.

The Guidelines explicitly state that, in order to ensure the fairness of the decision-making process, the development and application of AI systems, related software, and algorithms – including the provision and disclosure of information on modules, mechanisms, components, parameters, and calculations – must ensure that the public is informed of the elements of decisions generated by AI systems. In addition, AI development and application must comply with traceability requirements, keep adequate records of the decision-making process (including data collection, data labelling and algorithms used), and establish a record-keeping system to facilitate future remedy and clarification for affected parties in AI technology decisions.

Pursuant to Taiwan’s Fair Trade Act (FTA), a “concerted action” (ie, so-called cartels) means that competing enterprises at the same production and/or marketing stage jointly determine – by means of “contract, agreement or any other form of mutual understanding” – the price, technology, products, facilities, trading counterparts, or trading territory in respect of goods or services, or any other behaviour that restricts each other’s business activities, thereby resulting in an impact on the market function with regard to production, trade in goods or supply and demand of services. According to the FTA, the term “any other form of mutual understanding” means “a meeting of minds” – whether legally binding or not – that would in effect lead to joint actions.

If the competing enterprises’ actions are taken by the AI, then there may be an issue of whether these price-setting actions are indeed caused by “any other form of mutual understanding” among the enterprises if no explicit contract or agreement exists among the companies. Therefore, whether or not the firms have a “meeting of minds” could be an issue when debating in Taiwan court.

The use of AI technology comes with various risks that need to be reflected in transactional contracts between customers and AI suppliers. These risks include, but are not limited to, privacy and data security (see 11.2 Data Protection and Privacy), improper use (see 10.1 Theories of Liability), algorithmic bias (see 11.1 Algorithmic Bias) and technical failures. To minimise potential liabilities, businesses should establish clear requirements and expectations, prioritise adherence to compliance and ethical standards, and delineate responsibility within contracts to ensure the secure, compliant, and efficient use of AI technology. In addition, prior to implementing AI technology, it is also recommended that businesses establish robust business and legal frameworks and document the testing history of algorithms to record the due diligence as well as the rationale for not using alternative solutions. Given the boundless potential and unpredictable nature of AI development and the potential legal ramifications, businesses must exercise heightened caution to mitigate the risk of substantial fines or liability for damages.

It is understood that AI recruitment could greatly shorten the hiring process and make it more effective. AI could quickly select suitable candidates from applicants based on a series of indicators (including conditions such as work experience, education and technical skills) by using algorithms to analyse the videos, test scores, interview videos and other data submitted by the applicants. AI recruitment may also assist employers in screening applicants by analysing, for example, their facial muscle movement, vocal characteristics and other indicators.

However, the following legal issues need to be considered in terms of AI recruitment.

In order to evaluate and monitor employee performance, employers may use employee monitoring technology (such as electronic trackers, surveillance cameras, metabolism monitors, wearable biological measuring devices, and implantable technology) in the workplace to:

• predict and flag the employee’s performance;
• monitor biometric and health data of the employee to predict future healthcare costs; and
• conduct remote monitoring and time-tracking to measure the employee’s loyalty and discipline.

However, using AI to evaluate and monitor employees may lead to several issues. These include invading employees’ privacy, discouraging unionisation, and causing employment discrimination, thereby undermining worker protections. For more on privacy laws, please see 11.2 Data Protection and Privacy. As regards labour laws, please refer to 13.1 Hiring and Termination Practices for further details.

The demand for robots has been growing rapidly in recent years and unmanned intelligent logistics has become a future trend. On 1 March 2023, the Department of Technology of the Ministry of Economic Affairs – together with a leading chain store company in Taiwan – launched an autonomous mobile robot (AMR) delivery project (“Cubot ONE”) in Kaohsiung Software Park to operate an AMR delivery service. Customers may order food directly from within the mobile app and the AMR will deliver the orders directly to customers.

According to reliable news reports, the AMR is able to accurately receive orders, perform delivery tasks, avoid pedestrians or obstacles without damaging the order, cross terrain obstacles, and call and take elevators to complete cross-floor delivery. As a result of this trend, it is likely that the demand for delivery worker jobs is likely to decline drastically in the next few years.

Please refer to 3.2 Jurisdictional Law for more on the law regarding autonomous vehicles/self-driving vehicles. As regards labour laws, please refer to 13.1 Hiring and Termination Practices for further details.

In Taiwan, AI applications (eg, chatbot and robo-adviser services) in financial services involve correspondence with clients. The Operating Rules for Securities Investment Consulting Enterprises Using Automated Tools to Provide Consulting Service (as promulgated in 2017 and last amended in 2022 by the Securities Investment Trust and Consulting Association of Taiwan, the self-disciplinary organisation of the asset management industry) provide that securities investment consulting enterprises may provide robo-adviser services ─ ie, online securities investment consulting services using automation tools and algorithms. For applicable regulations for financial services companies, please refer to 3.2 Jurisdictional Law.

In Taiwan, the Ministry of Science and Technology is leading the AI for Health Plan, which has assisted major medical research institutions in Taiwan in developing AI algorithms to be used for diagnosing cancer lesions at an early stage, accelerating image recognition, etc. Furthermore, in accordance with the 2021 Medical Device Act, the TFDA has set up a project office that aims to:

• assist with matters regarding medical devices using AI technology; and
• review the regulations to explore the possibility of amending existing rules in order to establish a better regulatory environment for AI in healthcare.

Please see 10.1 Theories of Liability.

Please see 10.1 Theories of Liability.

Currently, no AI-related general background laws or regulations have been enacted. For liability and responsibility, please see 10.1 Theories of Liability; for data protection and privacy, please see 11.2 Data Protection and Privacy; for IP, please see 15 Intellectual Property, and for compliance, please see 17 AI Compliance.

Patent

In Taiwan, the question of whether or not AI can be considered an inventor on a Taiwan patent has been widely discussed in the legal profession in recent years. On this issue, according to the Taiwan Intellectual Property Office (TIPO)’s Intellectual Property and Commercial Court (IPCC), creation is a collective term for the fruits of human mental activity, which may be protected with different types of rights depending on the content and nature of the creation.

In respect of the right of attribution, the Enforcement Rules of the Patent Act also provide that the application form must specify the name and nationality of an inventor, a utility model creator or a designer when a patent application is filed. According to the provisions of the relevant laws and regulations in Taiwan, the inventor must not only be a person who has made substantial contributions to the technical features of the patent application, but also a natural person. Given that an AI system is still regarded as a “thing” under the laws of Taiwan, it is therefore not entitled to enjoy legal capacity and natural personality.

The Supreme Administrative Court (SAC) further pointed out that an inventor’s right of attribution is one of personality rights and therefore the inventor must be a natural person, which is in line with the legislative intent of the Patent Act and associated regulations. Where a thing, which is not a natural person, is specified as an inventor in the application documents, the application is not deemed to comply with the statutory forms and processes – yet is still allowed to make a correction in this respect. It is nonetheless worth observing whether judicial opinions will change in the future.

Copyright

In Taiwan, copyright is protected by the law without registration or filing requirements. However, certain features/components should be in place to qualify as a copyright, such as “originality” and “expression”. Despite the fact that a “computer program copyright” is a type of copyright as stipulated in the Copyright Act, only a natural person or a legal person can be classed as the author of a work to enjoy copyright upon completion of the work, according to the TIPO and recent IPCC court judgment (as stated in 4.1 Judicial Decisions). As AI is a research result shown by machines that are made by humans, AI cannot be classed as a natural person or a legal person, and therefore would not be an author (or co-author) of a work. However, it is still worth observing whether judicial opinions will change in the future.

As stated in 15.1 Applicability of Patent and Copyright Law, as AI is not classed as a natural person or a legal person, it would not be considered an author (or co-author) of a work. However, seeing as there have been no law amendments in relation to AI-generated trade secrets proposed by the competent authority, the issue of whether AI is able to create a method, technique, process, formula, program, design, or other information that may be used in the course of production, sales, or operations under the Trade Secrets Act in Taiwan is still under observation.

Such issues will be more important when AI has evolved to have the ability to think independently and create a “trade secret”. These issues might not be solved under the current trade secret regime in Taiwan and, in light of ongoing AI developments, are challenging for the government, legislators, representatives of the court system, and other legal practitioners.

As stated in 4.1 Judicial Decisions and 15.1 Applicability of Patent and Copyright Law, based on the current prevailing view, the scope of IP protection under relevant Taiwan laws and regulations does not include works of art and works of authorship generated by AI.

Please refer to 8 Generative AI for details.

The Taiwan Company Act has stipulated the director’s fiduciary duty and the obligation to act in good faith. A director of a company must be loyal and exercise the due care of a good administrator when conducting the business operations of the company or else the director will be liable for the loss or damage therefore sustained by the company. The standards of the aforementioned “loyalty” and “due care of a good administrator” when conducting the business operations of a company, in general, should be based on the actual circumstances according to objective and socially recognised criteria. For instance, the board may consider referencing and relying on experts’ views and opinions before making any decisions at the board level, thereby reducing the risk of potential breach of fiduciary duty claims.

The same principle applies in AI-related cases. At the time of writing (spring 2023), there is no explicit court precedent and ruling in this respect. However, if the directors are not experts in AI-related fields, the directors are advised to engage an AI expert for further advice when making AI-related decisions. Directors may fulfil their fiduciary duty by engaging outside AI experts and, at the same time, obtain a solid basis to support the legitimacy of their decisions.

In addition, companies that wish to use AI technologies for business prediction or risk assessment should carefully identify the relationship between the input and output of the AI data processing, including how the AI processes the data and its underlying logical relationships. Therefore, the board of directors will be able – with the assistance of external experts – to identify the underlying AI algorithms and preventive measures can be taken to avoid the possible failure and inaccuracy of the AI system.

It is crucial for the company to be aware of data protection laws, IP laws and labour laws when using AI technologies. For further details, please refer to 7.1 Government Use of AI, 11.2 Data Protection and Privacy, 13 AI in Employment and 15 Intellectual Property.