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A comparison between the EU and China's Customs agencies and laws, concerning enforcement of trademark, patent and copyright protection at borders. Can serve as a guide to small and medium enterprises to choose adequate and timely strategies in Intellectual Property rights protection.
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R I C C A R D O 李 茶 B E N U S S I
北 京 2 0 1 2 B E I J I N G – 2 0 1 3 R O M A 罗 马
Tutela doganale dei diritti di proprietà intellettuale in Cina
Customs enforcement of IP rights in China
© 2013 Riccardo Benussi
Competent authorities
WCO
TAXUD
GACC
Reg. 1383/2003 (EC) Reg. 1891/2004 (EC)
Repealing Reg. 3295/94 (EC)
Sets requirements for intervention and
Sets out measures for Customs
Implementing rules Simplifies the submission
of information
The EU’s legal framework
2010 amendments to: Other relevant laws of PRC
Regulation on Customs Protection of IPRs Into force April 1, 2010 Repeals Regulations of 1995
Customs Law Criminal Law Regulations on Protection
of Olympic Symbols Customs Penalty
Regulations Implementing Rules on
Customs Protection
The Chinese legal framework
Centrally organized = independence and control Several prizes for outstanding performance
Rewarded by WCO and QBPC (Quality Brand Protection Committee)
Public Security Bureaus still not 100% collaborative
Less infringers are caught outside Customs area of competence
General Authority for Customs of China
Chinese Customs’ backstage
Both import and export inspection by GACC
But lack of personnel
Increase of identification-check
Low disclosure of investigation details to IP right holders
GACC affords efficient action if there is collaboration
Dire straits and clever pirates
Trans-shipment
Concealed parcels
Small and mailed parcels
Passenger luggage
How to link your IPRs to Customs
By pre-emptive recordal of your IPR Patent Trademark Copyrighted work Design Plant varieties Geographical indications Certifications of origin
By direct recordal
When the IPR holder is aware of suspicious shipments but has not recorded its IPR with GACC yet.
OR
Features of IPRs recordal at Chinese Customs
Fee = 800 RMB (100.25 Euro) + Chinese firm/agent’s bill (~2500/3500 RMB = 313/439 Euro)
Lasts 10 yrs or the lesser period of the IPR Takes 2 to 3 months for recordal Bond payment
GACC’s land, river and sea ports
The Bond
Why If the detention and the
inspection of a suspected shipment proves useless, the consignor and consignee will be indemnified through the bond.
Currency No overseas remittance is
allowed: only in RMB and within Mainland China to GACC
Requirements Letter of guarantee Checklist of receipts of fees
paid at Customs
The Bond
Declared value of seized goods Required bond
< 20,000 RMB (2,510€) 100% of the declared value of shipment
> 20,000 and < 200,000 RMB (25’110 Euro)
50% of the declared value of shipment but not less than 20,000 RMB
> 200,000 RMB (25’110 Euro) 100,000 RMB (12’556 Euro)
Online application Additional certified mail application
General ID of IPR holder Licensee(s) Authorized manufacturer(s)
Copy of registered IPR IPR’s image + TM Bank account details Blacklist of known
infringers
Copy of business license or else Registered IPR in China Licensing agreement(s) Photographs of goods and
packaging Blacklist of known infringers Power of Attorney if IPR
holder from outside China Payment slip
The recordal
After information has been submitted -->
Data will be entered Customs will notify IPR holder when
suspect consignment reaches (air- land- sea-) port
IPR holder has 3 days to show up and give feed-back to Customs on what action to take
Detention: Customs has 30 days to inspect the goods
Direct application
Should not be regarded as the standard procedure Requirements
Submittal of all documents as for ‘ordinary recordal’ Intelligence about suspect shipment (container #...)
Features Bond is higher than when preemptively recording the IPR When detention occurs, goods are stored for 20 days before release
Direct application - 2
As of the 1st day of temporary detention, the IPR holder shall seek: Preliminary injunction or Property preservation orders
from the relevant court.
• Goods are officially seized • Goods come in Court’s custody
Order is granted in time
• Goods are released Order is not granted in time
20 days are often not enough!
20 days are not enough to authenticate and legalize evidence originating from abroad relocate personnel and a Chinese law firm
Best practices say that… as many documents as possible shall be readily available for the
local agent of the IPR holder in order to save as much time as possible
menacing law suits could play in favor and usually does.
Other features linked to IP recordal
Storage and disposal What if goods are infringing? What if goods cannot be determined
as infringing Opposition to seizure Amicable settlement Updating Customs Criminal investigation Training Customs Deterrents
storage disposal
In a 3rd person’s warehouse contracted by Customs and at IPR holder’s expense
1) Donation to charity 1) IPR holder may purchase the
goods
2) Auction 1) IPR holder’s opinion is sought
first
3) Proceeds go to Customs to indemnify costs
4) Destruction at IPR holder’s expense if removal of features make goods unfit for use
Handling the goods
Goods are infringing Goods are not infringing
Consignor is served with A fine of not more than 30%
of the good’s value A formal notification of
seizure
Consignor may proceed and receive the bond
Goods are released
The goods are either infringing or not: what next?
Infringement cannot be determined
Why? Mainly because most of the staff in Customs is not technically
educated enough on recognizing and scrutinizing either Patented technology or Copyrighted material That is why training Customs
is so important
How the consignor opposes GACC’s decision
He appeals the decision before the Intermediate People’s Court
He delivers a written explanation in his favor He remits a bond in equal amount to the value of the
goods, to release them But Customs is not obliged to release them at this point in time,
yielding the IPR holder with a favorable presumption
Amicable settlement
When During inspection, the IPR holder may request GACC to release the
goods, proving there is an ongoing private settlement with the Consignor/Consignee
How By submitting a copy of the relevant agreement between them
Why updating GACC is more than just a good idea
It avoids being blacklisted for being unresponsive to Custom’s notifications Even if value of suspected goods is very low
It feeds a constructive relationship is beneficial It trains officials on specific topics with
Study material explaining the authentic goods in detail
Criminal investigation and sanctions
Public Security Bureau GACC promptly notifies local PSB Thresholds Low # of cases transferred GACC / PSB cooperation is increasing
Digital tools against counterfeiters
IPM Interface Public-Members tool (by WCO)
IPRM Intellectual Property Recordation System
FALSTAFF (Fully Automated SysTem Against Forgery and Fraud)
Software designed by Italian Customs
Final remark
There is no reason for enterprises to neglect Customs in China especially in light of the low cost, the efficiency of officials, the deterrence against counterfeiters and the simplicity of the process.
EU-China Action Plan 2009-2012
The current Action Plan concerning EU-China Customs cooperation on IPR: Exchange of statistics Exchange of case information Cooperate between Customs officials Cooperate with IP right holders Active participation from IPR holders is highly recommended.
structure
Founded 1952 177 members
Council
Policy making
Secretariat
130 officials Experts
Specialized staff
Fake meat.
Some health hazards from counterfeits to bare in mind
Fake eggs.
Some health hazards from counterfeits to bare in mind
Questo potrebbe essere l’autista di un’auto in cui e’ installato un airbag falso.
GACC’s structure
GACC
National IPR division, dept.of policy &
legal affairs
Coordination for Enforcement
International Cooperation
Regional Customs
IPR division
Applications, detentions,
investigations Port Customs
Clearance and examination officers
Control and detention Disposal of goods
Revocation of recordal
If within 30 days from a formal change to any piece of information linked to the IP right Customs is not adequately notified, the latter may consider revoking recordal: zero tolerance.
