IP Protection by China Customs in in China

According to Chinese laws, China Customs can protect China registered trademarks, patents and copyrights by monitoring and investigating on goods passing through the China border.

The Customs can detain the goods which they suspect to be infringing other’s IP rights, and may forfeit the goods or impose administrative penalties on the consignor or consignee of the infringing goods.

Where the Customs is not sure whether the IP infringement can be established, they may ask the IP owner to bring the case to the court and continue to detain the goods at the request of the court.

Statistics published by China Customs indicates that, protection provided by China Customs on IP rights are quite strong. Below is a table showing the quantities of goods detained on suspicion of IP infringement from Year 2012 to 2014.

Detained goods

Year 2012

Year 2013

Year 2014

Quantity (in batches)

15,690

20,464

23,860

Quantity (in pieces)

93,117,335

75,945,594

91,965,548

Statistics sourced from Annual Report published by China Customs for Year 2012, 2013 and 2014.

Further review on the details of the IP protection of China Customs for the recent three years shows the following characteristics:

(1) Most of China Customs actions are related to trademark infringement

From 2012 to 2014, more than 90% of the detained goods were relevant to trademark infringement.

Details on detainment of goods relating to each type of IP rights infringement are set out in the table below.

IP right

Detained goods

Year 2012

Year 2013

Year 2014

Trademark

Quantity (in pieces)

88,210,686

74,808,04

89,075,040

Percentage against all goods detained

94.73%

98.5%

96.86%

Patent

Quantity (in pieces)

4,557,264

532,315

1,786,551

Percentage against all goods detained

0.38%

0.8%

1.94%

Copyright

Quantity (in pieces)

349,385

604,788

1,100,857

Percentage against all goods detained

4.89%

0.8%

1.2%

Statistics sourced from Annual Report published by China Customs for Year 2012, 2013 and 2014.

The reason behind probably is this: it would be easier for the customs officials to determine whether the trademark infringement can be established, compared with the patent infringement and the copyright infringement.

For patent infringement and copyright infringement, the customs officials usually requests the IP owner to submit it to the court for a judgement.

(2) Most investigations taken by China Customs were initiated by ex officio.

From 2012 to 2014, more than 99% of the investigations were initiated by ex officio.

How Initiated

Investigation taken by China Customs

Year 2012

Year 2013

Year 2014

By ex officio

Quantity (in times)

15,646

20,426

23,817

Percentage against all investigations

99.72%

99.8%

99.82%

By application

Quantity (in times)

70

38

43

Percentage against all investigations

0.45%

0.2%

0.18%

Statistics sourced from Annual Report published by China Customs for Year 2012, 2013 and 2014.

In practice, it is very difficult for the IP owner to get information about the infringing goods and the consignor or consignee of the infringing goods. Without such information, they cannot get the China Customs to initiate the investigations.

That is why the recordal of the IP rights at the China Customs is very important. After they are recorded at China Customs, it will monitor the goods imported or exported, and can start investigation on the possible infringing goods by ex officio.

(3) Most of IP right infringements occurred in the export process.

From 2012 to 2014, more than 95% of the infringement activities identified by China Customs occurred in export process, and more than 99% of detained goods were for exportation.

Import or export

Identified infringement/Detained Goods

Year 2012

Year 2013

Year 2014

Import

Quantity (in times)

690

679

842

Percentage against all identified infringement

4.40%

3.3%

3.53%

Export

Quantity (in times)

15,000

19,787

23,019

Percentage against all identified infringement

95.60%

96.7%

96.48%

Import

Quantity (in pieces)

211,487

452,648

439,933

Percentage against all identified infringement

0.23%

0.6%

0.48%

Export

Quantity (in pieces)

92,905,848

75,492,946

91,525,615

Percentage against all identified infringement

99.77%

99.4%

99.52%

Statistics sourced from Annual Report published by China Customs for Year 2012, 2013 and 2014.

This means that for the foreign companies which use China as the production base, it is very important for them to register their IP rights in China even though they are not selling products in China.

Otherwise, if their IP rights were registered by others, their IP rights could be recorded at China Customs in others’ names, which can effectively interfere the export of the products manufactured in China.