Protecting your IPR in China: New regulations take effect July 1
May 20, 2009
By Zhaokang Jiang, World Trade\Interactive
Effective July 1, China Customs is revising its border enforcement regulations to improve protections of intellectual property rights. The updated rules will strengthen China Customs’ IPR enforcement efforts and require the agency to seek advice from rights holders when infringing goods are auctioned for public interest. A summary of the new provisions follows.
Customs Recordation of IPR. IPR owners (including copyright owners, trademark owners and patentees, as well as their licensees) or their agents may request that China Customs protect their IPR with respect to imports and exports. Although Customs will accept detention requests from rights holders before the rights are recorded with Customs, IPR owners still should record their rights with Customs by submitting the following information.
• IPR owner’s name, place of registration or nationality, address, legal representative and principal place of business
• for registered trademarks, the registration number, details and validity period
• for patents, the patent number, details and validity period
• for copyrights, the copyright details
• name of the product relating to the IPR and its place of origin
• licensee(s) or person(s) authorized to use the IPR
• port of entry/exit, importer/exporter, major characteristics and price of the product relating to the IPR
• manufacturer, importer/exporter, port of entry/exit, major characteristics and price of the infringing product
• other information as required by Customs
Detention of Suspected Infringing Goods. IPR holders who discover suspected infringing goods prior to importation or exportation may request that Customs at the port of entry or exit detain such goods. Such requests should include as much of the following information as possible.
• name of the IPR and place and nation of registration
• name and content of the IPR and relevant information
• names of the shipper and consignee of the suspected shipment
• description and specification of the suspected goods
• port, date of entry or exit and vessel and flight numbers
• container numbers, if applicable
When Customs discovers while conducting supervision and control over imported or exported goods a shipment suspected of infringing an intellectual property right recorded with Customs, it may suspend customs clearance, notify the right owner that it may request further actions such as detention, and initiate an investigation.
Guarantee for Customs Detention. While Customs requires petitioners seeking detention to provide a guarantee to cover the warehousing and other costs associated with the detention, annual multiple detention insurance is acceptable and can be used to facilitate the detention process and reduce the cost of the process.
How You Can Protect IPR for Your Global Business
The updated regulations continue the trend of making it easier to enforce intellectual property rights in China. Yet the need for cooperation between governments, as well as public-private partnerships and measures by the private sectors, is still great. China remains on the U.S. Trade Representative’s “priority watch list” due to ongoing concerns about IPR enforcement. China Customs reported recently that in 2008 it seized 11,135 shipments of IPR infringing articles, but only 63 seizures (0.6%) were based on requests from rights holders, with the rest coming from ex officio inspections.
Rights holders should therefore work with knowledgeable attorneys to take the following steps, which combined can strengthen IPR enforcement and minimize infringement.
• register your IPR in China
• record your IPR with China Customs
• establish a good working relationship with China Customs
• provide genuine product training to Customs officials
• collect more and accurate intelligence
• request targeted detentions
• mobilize your internal team and respond quickly to Customs actions
• work with customs attachés at embassies in China, who often play a significant role in border enforcement of IPR
Background
China’s Customs IPR enforcement efforts began early in 1994 with the authorization of an ordinance from the State Council, the executive branch of the government. In October 1995, China promulgated and implemented its first-ever regulations on Customs’ protection of IPR and formally began to establish a system of IPR border enforcement in accordance with WTO rules.
In 2000, the National People’s Congress Standing Committee amended the customs law to define Customs’ IPR protection functions from the legal perspective. In December 2003, the regulations on Customs’ protection of IPR were revised to strengthen Customs’ authority in investigating and dealing with infringing goods and reduce the burden on IPR owners in seeking Customs protection. China Customs then issued its own measures for implemeneting the revised regulations, which included provisions on maintaining confidentiality of business information, filing international registered trademarks, collecting and returning security deposits, and payment of relevant fees by IPR owners.
In September 2004, the Chinese government promulgated regulations that clearly provided administrative penalties for IPR infringements in imports and exports. In addition, to facilitate trade flows, China Customs has adopted a new program under which it confirms IPR compliance with the exporter before the exportation report is filed in order to avoid delays caused by border inspections.
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