Header Image: Ultraman © 2021 Creative Expo Taiwan

There is a commonly held misconception that Jiufen, an old gold mining town in the north of Taiwan, was the inspiration for Hayao Miyazaki’s Spirited Away. Studio Ghibli fans flock there for a photo on Jiufen Old Street. Although the myth has been debunked by Miyazaki himself, the truth is that much of Taiwan bears a striking resemblance to the Japan depicted in his films.

Just like in Japan, anime is everywhere in Taiwan. Pasted on the sides of high speed trains and beverage cups, anime calls out to generations of Taiwanese who grew up surrounded by comic books, cartoons and Hello Kitty lunch boxes. Brands see anime as a key to Taiwanese consumers’ hearts.

Why is it then that anime is so prolific in Taiwan, yet no one has heard of Taiwanese anime?

To unravel such a mystery, we need to understand Taiwan’s history. Daniel Chen, cofounder of licensing agency Fandora, believes that Taiwanese anime development was stunted by artistic suppression and censorship during the post-World War II martial law era. Indeed, from 1949 to 1987, Taiwanese comic artists would be called to security headquarters for drawing illicit subjects, such as the five stars of the People’s Republic of China flag.

Around the same time in Japan, the 1947 Japanese Constitution abolished all forms of censorship, resulting in a boom in artistic creativity. Meanwhile, on the other side of the world, in 1950s America, Disney’s Mickey Mouse already had a theme park and a hit television variety show.

Interestingly, US-European animation studios, Hanna-Barbera, Disney Television Animation, Warner Bros. Animation and others, all outsourced illustration work to Wang Film Productions (also known as Hong Guang Animation and Cuckoos’ Nest Studio) in Taiwan during the late-1970s and ‘80s, proving that illustration was practicable, but not as a form of expression.

When Taiwan’s martial law was finally lifted in 1987, many local artists had already given up on their own work, making way for popular US cartoons and Japanese manga series to take over the nation’s pop culture landscape. Their dominion continues to this day.

A man poses by a yellow mascot character, in front of an audience of onlookers.

Shaogao © 2021 Creative Expo Taiwan

Shaogao, a Taiwan-based illustrator, says Taiwanese fans still favor IP characters from North America and Japan, but his own work is slowly growing in popularity–Shaogao has over 190,000 Instagram followers and over 290,000 subscribers on his YouTube channel. At the 2021 Creative Expo Taiwan licensing exhibition in April, he exhibited alongside a number of Japanese and American marquee characters, from Hello Kitty to Pingu and Doraemon, benefiting from exposure to their fanbase in Taiwan.

Professor Su-Hua Lee, an expert in Intellectual Property law at National Taiwan University Law School, tells Anime Herald, “Compared to America, Korea, and Japan, Taiwan’s licensing industry, especially within the ACG industry (anime, comic, games), isn’t highly valued at present, even though an increasing number of scholars and lawyers have started to recognize its importance.”

Indeed, Taiwan has yet to recreate the global IP influence of countries like Japan and the US, which have taken over retail and e-commerce shelves worldwide. But Shaogao believes this is simply because Taiwan started later than its counterparts.

Anime Licensing 101

What exactly is licensing then? Licensing is the practice of leasing a legally protected property, such as a trademarked name, logo, likeness, character, or design to another party in conjunction with a product, service, or promotion. The licensor, usually the original artist, reaps the benefits of increased revenues and a larger presence at retail outlets with little or no managerial involvement. The licensee, usually a manufacturer or retailer, gains a competitive edge by transferring customer favor from the IP onto the licensed product, thus attracting new market demographics.

This explains how Pikachu finds its way onto a face mask, or how Nezuko Kamado (from Demon Slayer: Kimetsu no Yaiba) ends up being on a phone case. “Licensing is the best income,” chuckles Shaogao, “because you only have to do the work once, but get enough income to support the future creation process.”

A mascot character of a yellow-and-white cat wearing a red hat stands amid a crowd of people

Fumeancats © 2021 Creative Expo Taiwan

Apart from helping artists diversify their revenue streams, licensing also provides legal security. Fumeancats is another Taiwan-based artist who exhibited at the 2021 Creative Expo Taiwan licensing exhibition. He has over one million Instagram followers and 1.53 million YouTube subscribers. His media empire believes that, “Image is the product of creativity. It is the process of transforming one’s cognition and thinking into images.” But the problem for artists like Fumeancats is that images are more susceptible to piracy and illegal sharing than an idea, which can only be accessed through intellect.

Both Shaogao and Fumeancats have confronted people who used their illustrations without licensing permission on big social media platforms like Weibo and Facebook. Shaogao reported to Weibo many times, but Weibo was passive. “I sometimes console myself by thinking of piracy as free publicity,” Shaogao sighs helplessly. “They (Weibo) are big, and Shaogao is small.”

Unlike giant corporations, such as Microsoft or TSMC (the world’s most valuable semiconductor company), it’s often the case that independent artists don’t have the legal resources to protect their IP. That is why Professor Su-Hua Lee believes more people from a legal background should consider pivoting to the IP licensing industry. Independent artists, like Shaogao and Fumeancats, need their help.

Chiaying Lin, a Taiwan-based lawyer with 18 years of experience in trademark, copyright, patent, and IP lawsuits, explains the process of negotiating an IP licensing agreement. A licensee, usually a manufacturer, will first assess the commercial value of a property. “If you can sell a plain mug for one hundred dollars NTD, you can probably sell the same mug for one thousand dollars NTD or more if you slap a great IP on it.” laughs Lin. After the commercial value assessment is complete, negotiations with the licensor (artist) begin. Either side can propose a licensing agreement. Respective lawyers will review details including property definition, termination, royalty disputes, governing law, right to audit and so on. This negotiation process can be as short as a few days, or as long as a few months. The established legal framework will kickstart the product manufacturing process. The licensor will pay close attention to the quality of product, as it will ultimately affect customers’ support for the property’s values.

Taiwan’s Prophecy

Having a single agreement with a manufacturer doesn’t guarantee an IP’s long-term influence and scalability. “Taiwan’s market is small, so you have to come up with creative ways to license your IP to attract more potential licensees.” says Sara Peng, the Secretary General of TCBLA, the Taiwan Character Brand Licensing Association. “Many industries have yet to wake up to the emerging collaboration opportunities with the licensing industry.” Peng argues. That’s why she campaigns for independent Taiwanese artists at international licensing exhibitions, such as Creative Expo Taiwan and similar events around the world.

Opportunities are available for those who can travel and participate in such events. Much like the US organization, Licensing International, TCBLA was founded for this very reason, to help independent artists and to advance the Taiwanese licensing industry as a whole.

Looking into the future, experts agree that Taiwan’s licensing industry has the potential to become a major growth industry. Professor Su-Hua Lee concludes, “It is an industry with low pollution, high profit, high added value, and it creates job opportunities. It doesn’t require infrastructure, or rely heavily on natural resources, but on soft skills like creativity. Taiwan is small, but in a transnational competition of brains, we have a handle on this!”