TAIPEI (TVBS News) — Taiwan has established a new defensive bulwark against predatory patent litigation with the official launch of the "LOT (License on Transfer) Industry Alliance" (LOT產業聯盟) on Tuesday (June 24). The collaborative initiative has already attracted interest from more than 20 Taiwanese technology firms, including Taiwan Semiconductor Manufacturing Company (TSMC, 台積電), the world's largest contract chipmaker. Wang Peng-yu (王鵬瑜), legal counsel at the Industrial Technology Research Institute (ITRI, 工研院), Taiwan's premier technology research organization, explained that the alliance was formed specifically to counter non-practicing entities (NPEs), commonly known as patent trolls, which he described as entities that manipulate the patent system by acquiring intellectual property rights solely to demand excessive royalty payments from legitimate manufacturers.
The alliance represents a significant shift in Taiwan's approach to intellectual property defense, according to Wang. He emphasized that the LOT framework will enable Taiwanese companies to mount coordinated challenges against what he characterized as unfair royalty demands from international patent assertion entities targeting the island's manufacturers. Wang cautioned that patent trolls now face heightened risks when pursuing Taiwanese firms, as the alliance's collective resources could lead to their patents being revoked or invalidated through legal challenges. Liao Cheng-wei (廖承威), who serves as director of the Intellectual Property Office at the Ministry of Economic Affairs (MOEA, 經濟部), Taiwan's government agency overseeing economic policy, welcomed the initiative as a mechanism that would foster greater collaboration among domestic companies while simultaneously promoting technological innovation.
The government official pointed to Taiwan's growing confidence in intellectual property matters, referencing a previous case that demonstrated the island's collective strength. Liao highlighted a significant precedent where Taiwanese companies had successfully united to resist royalty demands from Chinese telecommunications giant Huawei (華為), describing the outcome as a noteworthy victory for Taiwan's technology sector. He expressed confidence that the combination of Taiwan's increasingly sophisticated research and development capabilities and the newly formed LOT alliance would substantially strengthen intellectual property protections across the island's industrial landscape. The collaborative structure, according to Liao, would foster greater mutual support among participating firms while creating a more robust environment for defending against external intellectual property challenges.
The business community has rallied behind the initiative, viewing it as essential protection in an increasingly competitive global landscape. Hsu Chieh-li (許介立), who serves as executive director of the National Federation of Industries (中華民國全國工業總會), Taiwan's largest industrial association, emphasized the fundamental purpose of the patent system during the launch event. He stressed that patents were originally designed to encourage innovation and protect inventors, not to function as weapons for extracting payments from productive companies. Hsu warned that Taiwanese firms would likely face growing interference from patent assertion entities as they continue to gain market share in global industries. The alliance offers formidable collective protection, he noted, with the initial membership expected to bring together more than 150,000 valid patents spanning over 60 countries and numerous technological domains. ◼