Thu 24 Apr 2014 13:47:56 PDT
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How can I apply to the Customs authorities to seize goods which infringe my IP rights?

Unlike in many countries, in China, Customs examine both exports and imports (in most countries Customs examines only imports). However, Customs will generally not detain goods bound for other countries and notify the rights holder unless the rights holder registers its intellectual property rights with the General Administration of Customs (GAC).

There are two methods for applying to Customs for seizure of goods.

  • Customs can temporarily detain suspicious shipments (for 3 working days) and notify you of such detention provided that you have recorded your rights with the GAC.
  • If you become aware of potential shipments of infringing goods you can apply on an ad hoc basis to Customs for seizure.

Recording your intellectual property rights with Customs is optional but highly recommended.

Registration with Customs

To receive notifications from Customs of the detention of suspicious shipments you need to register your intellectual property rights with the GAC. As a foreign entity you will have to apply for registration through a local agent who will submit an application online (at http://202.127.48.151/applyrecord) or mail the application materials on your behalf to:

  • General Administration of Customs of China
  • Legal Affairs Department, Intellectual Property Division
  • 6 Jianguomen Nei Avenue, Beijing, 100730
  • People's Republic of China
  • A representative office can file a registration request on behalf of a European-based SME (the rights owner) if it obtains a Power of Attorney from the SME. The application is subject to the approval of the GAC. You need to submit the following documents with an application:
    • a copy of your business licence or legal documentation confirming the existence of the SME (e.g. certificate of incorporation) and a Chinese translation;
    • a copy of the Chinese registration certificate for the trademark, patents or copyright (if registered);
    • Proof of Power of Attorney. A standard form stating the power of attorney is available on the GAC website: http://202.127.48.151/applyrecord
    • a registration fee of RMB 800 (as of August 2008).

    You can also submit additional information to assist the Customs officials which will reduce the possibility of legitimate shipments being detained. These include:

    • Pictures of the relevant goods and their packaging
    • Copies of licence agreements related to the registered intellectual

    If you are aware of any known infringers you can also submit a so-called 'blacklist' which will assist Customs in determining which shipments are likely to contain suspicious goods.

    Once your application is submitted and registration approved by the GAC, information about your rights will be entered into the Customs database of registered rights. If Customs suspects infringing products are being shipped and your rights are registered with the GAC, Customs would temporarily detain the goods and notify you or your local agent. Once notified, you have 3 working days within which to apply for seizure of the goods and pay a bond.

    The bond amount depends on the declared value of the seized goods. The required bond payment is:

    • 100 per cent of the declared value if it less than RMB 20,000
    • 50% if between RMB 20,000 and 200,000
    • RMB 100,000 if the declared value is over RMB 200,000)

    Customs then seizes the suspicious goods and commences an investigation to confirm whether or not the goods are infringing. Registration with Customs lasts until the renewal date of the right in question (so in the case of trademarks it can last up to 10 years).

    Ad hoc application for seizures

    If you have not registered your intellectual property rights with Customs and you become aware of a potential shipment of infringing goods, you can apply directly to Customs for seizure of that particular shipment (this method is rare as Customs generally proceed only where a recordal of rights has been effected). To apply for an ad hoc seizure of a suspicious shipment, you need to submit the following materials to the Customs authorities where the suspicious goods are being either imported or exported:

    • application form;
    • evidence of your intellectual property rights in China;
    • information about the infringer (exporter's name, goods name, container number etc; the more detailed the better); and
    • a bond payment

    Once it receives the materials and payment, Customs will temporarily detain the goods and notify you and/or the consignor of the temporary detention. Once notified, you must apply to the court for a preliminary injunction or for property preservation measures (an order from the court requiring property to be seized for a particular purpose). If Customs receives a written notice from the court requesting assistance in executing its order within 20 working days from the date of the detention, Customs will provide the requested assistance. Otherwise, Customs is required to release the goods.

    Do the Customs authorities have an obligation to seize goods that they suspect are violating IP rights?

    Customs in China have the authority to seize goods without prior requests or notification from a rights holder. In practice however, Customs rarely exercises this ex officio authority. Generally, Customs will only detain goods where relevant rights have been registered with Customs.

    Why is IP protection through customs important and how can the Customs protection be incorporated into my IP protection strategy?

    Intellectual property protection through Customs is important because Customs gives you a filter and an idea of the level of infringing products leaving China. In addition it allows you to stop infringement at the geographic source (i.e. China). Once infringing products leave China to be sold to the world it becomes more difficult to track infringing goods. As in other countries, Customs in China is most effective for protection of trademarks and may also be effective for design patents. Generally Customs is less effective for copyright, patent and other technical rights.

    Customs protection should be incorporated early on into your intellectual property protection strategy. When you are developing your intellectual property rights filing strategy you should keep in mind that once rights have been acquired in China you should register your rights with Customs. Registering your rights with Customs should form part of your ‘checklist’ of things to do. In addition, the information on detentions or seizures (if any) you obtain from any customs (in China or overseas) should be fed back to China to help you trace the source of the infringement.

    Customs training can also be incorporated into your intellectual property strategy. To maximise the benefit of a registration with Customs, you should consider providing Customs with training on how to distinguish authentic from counterfeit products, who authorised exporters are and who known infringers are etc. Customs restricts the number of trainings they accept. You would not necessarily organise the trainings with Customs but rather engage a third party such as a consultancy that has developed a relationship with Customs to make all the necessary arrangements between you and Customs.

    How long does it take to resolve a customs related IP dispute case? How much will it cost?

    If your intellectual property rights are registered with Customs, they may initially detain the goods for 3 working days to allow you to respond to the Customs notification. If you have responded to the notification of detention confirming that the goods in question should be detained, and agreeing to deposit the requisite bond, Customs must initiate and conclude an investigation into the attempted export in question within 30 days. Within those 30 days Customs will issue an administrative decision confirming whether the goods are infringing, non-infringing or that it cannot make a determination (because it may be beyond Customs’ technical competence to make a formal decision on infringement – this can often be the case where the intellectual property rights concerned are technical rights, like invention patents). If it cannot make a determination, you will have to apply to the appropriate People’s Court for a ruling of infringement and/or property preservation. If you fail to make such an application (within 50 working days of the date of detention) Customs will be required to release the goods.

    Customs can take longer than 30 days to conclude its investigation, so in practice it may take 6 months to a year from the date of detention to the point when an administrative (punishment) decision is issued by the Customs authority.

     
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