The Intellectual Property Customs Protection Regulation of China was amended on March 24 2010 by the State Council. The new Regulation came into effect on April 1 2010.
The Regulation has proved to be very effective in tackling IP infringement. Over the years, the Chinese Customs has been known to be very pro-active and numerous infringing goods have been detained at the borders. However, inadequacies in the old Regulation have been found and the objective of the amendments is to deal with the loopholes.
Under the old Regulations, whilst the rights owners were obligated to update any changes to the IP rights recorded with Customs within a certain time period, failure to do so did not attract any sanctions. Now, upon the request of the importer/exporter of the detained goods, the customs authorities are empowered to remove the record in the event serious consequences are caused to Customs or to the importer/exporter.
Under the old Regulation where Customs were not prepared to detain the suspected goods about to be shipped in or out of China, the only recourse the rights owner had to impound the goods was to apply to the court for an injunction or property preservation, followed by a commencement of legal proceedings against the importer/exporter. Under the new Regulations, the rights owner may apply to the court either before or after the commencement of legal proceedings.
There are no provisions in the old Regulations for the rights owner to withdraw the border protection application it made to Customs. As a result, it was not possible for Customs to release the detained goods, even though the rights owner and the importer/exporter had reached agreement to the contrary. This has caused considerable difficulties. The new Regulation allows Customs to release the detained goods once the application has been withdrawn.
Under the old Regulations, as a means to dispose of confiscated goods, Customs could auction them off – if these goods could not be used for charitable purposes or sold to the rights owner – provided that the infringing features have been removed from the goods. Under the new Regulations, where the goods are imported counterfeit, there is no general right to auction them off – this can only be done under special circumstances. What these circumstances are has not been exemplified.
The sanctions against individuals carrying or posting an unreasonable quantity of infringing goods are increased under the new Regulation. In addition to the goods being confiscated under the old Regulations, the Customs may now impose a fine.
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| Howard Tsang |
Wilkinson & Grist
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Central, Hong Kong
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iprop@wilgrist.com
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