China’s system of border protection for IPRs was established in 1995 with the adoption of the Regulation on Customs Protection of IPRs by the Chinese State Council. Since China is one of the main sources of counterfeit items globally, more and more IPR holders have over the last few years started using the mechanism of border protection in China as a first line of defense in order to stop the flow of counterfeits into the global market.
Since the establishment of the system of customs recordation on IP until now (May 7, 2014), the General Administration of Customs (GAC) examined and approved a total of 32,313 customs IP recordation applications, including 25,654 for trademarks, and 25,654 for copyrights and 1,674 for patents, until October, 2016.
The General Administration of Customs of China (GACC) has reported that customs officials across China made 27,000 border detentions of suspecting IP-infringing shipments in 2014. 97% of the shipments were being exported from mainland China. Compared with the year before, the number of seizures conducted has greatly increased.
These statistics show that China customs is becoming more active in IPR protection and local customs offices are even establishing specialized departments for IPR issues. IPR holders in China should take advantage of this trend of strengthening border protection. However, it could also lead to potential risks, if the IPR holder does not cooperate with customs in a correct manner or fails to respond in due time.
How to use Customs Recordal to protect IP more effectively?
Customs Recordal
• Under the Regulations Governing IP Right Customs Protection of China, the trademark owner can record its registered marks with the GAC. Trademark owners are highly recommended to record their trademarks with Customs since whether the mark is recorded makes a big difference.
• When making the recordal, it is better to inform Customs of the names of the granted licensees or distributors of the trademark owners, as well as the potential infringers.
Customs Training
• For those who suffer frequent infringements, it may be effective to send people to educate customs officers about their goods and how to spot infringing goods.
Customs Seizure
• If suspected infringing products are found during routine inspections of the goods for export and import, Customs will inform the trademark owner (or its agents) to verify that the products are infringing. The trademark owner may have to put up a bond if it applies for a temporary seizure against the suspected goods.
• After Customs detains the suspected infringing goods at the request of the trademark owner, the trademark owner is recommended to file a lawsuit.
• It is also important for the trademark owner to respond quickly to the requests of customs officers to encourage them to help find the counterfeits.
• If the infringing products are verified and confirmed to be counterfeit (and assuming that the owner of the goods does not institute a challenge), Customs will issue a penalty decision against the exporter.