Corporate Governance

Intellectual Property Management Plan

The Company already had a set of "Intellectual Property Management Policy" created as part of the internal control system at the time it was listed on TPEX. This policy serves as a means to ensure the integrity, security, and proper use and custody of intellectual properties, which therefore protects the Company's rightful interests.

The purpose of the intellectual property management plan is to enhance and maintain the Company's hard-earned creative outcome in puppetry arts. The plan has been devised based on and in alignment with the Company's operational goals, available R&D resources, and intellectual property strategies, and addresses everything from acquisition, protection, maintenance, to use of IP for value creation.

The plan applies not only to the Company's Pili series, but also characters created for the show. Ideas including the original script, puppet head design, costume, production set, weapon, character setting, narrative, soundtrack, footage, character drawing, dialog, filming technique, and post-production effects all make up the core IP, as they are essential to perfecting the puppetry art. Intellectual property management not only supports the Company's operations, but also helps secure competitive advantage in the culture and creativity industry in a way that can be reflected in corporate profits.

1. Copyright management：

• Pili has a Legal Affairs Department established under the Management Center that encompasses a Legal Affairs Team, an IP Team, and an IP Maintenance Team. Together, they collectively file, maintain, and manage intellectual properties in a systematic manner either by episode or by project nature. Uses of intellectual property are controlled rigorously for the best protection of property rights and the interest of franchise and merchant partners.
• Scripts, intellectual properties, and creative contents are checked and counted randomly each year, whereas employees are encouraged and trained to develop business-related skills and apply them for improved practices.

2. Trademark management：

To ensure effective management over trademark licensing and the production and sale of branded merchandise, all merchandises that make use of the Company's trademarks shall have product design, labeling, and IP text reviewed by the Legal Affairs Department. Uses of the Company's trademark must be licensed through official contracts with product labeling and IP text design maintained on file. All IP licensing contracts and related documents are maintained by the Legal Affairs Department in a systematic manner.

3. Management of business secrets and intellectual property ownership: Employment contracts are drafted with the following terms：

• Ownership of intellectual property: Any work-related intellectual property rights developed by employees over the duration of employment shall be owned by the Company. Employees have the responsibilities to assist the Company in the registration of intellectual properties, and shall properly maintain creations and hand them over upon resignation. The Company is entitled to terminate employment contract and claim against employees for any damages suffered as a result of their violation against contract terms.
• Employees are obligated to maintain confidentiality of any work-related secrets gained while performing duties.
• Employees are also prohibited from revealing or making use of business secrets of their former employers.
• The Company is entitled under the employment contract to dismiss employees who violate their duty of confidentiality over business secrets, and has the right to pursue legal actions to claim compensations for the losses suffered.

The Company reports to the board of directors on intellectual property right-related affairs at least once a year; key progress is summarized below:

Date of report to the board	Execution of intellectual property management
2022.11.10
2021.11.08
2020.11.13