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.

1. 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

2. Competent authorities
WCO
TAXUD
GACC

3. 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

4. 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

5.  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

6. 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

7. Dire straits and clever pirates
Trans-shipment
Concealed parcels
Small and mailed parcels
Passenger luggage

8. 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

9. 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

10. GACC’s land, river and sea ports

11. 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

12. 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)

13. 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

14. 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

15. 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

16. 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 releasedOrder is not
granted in time

17. 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.

18. 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

19. 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

20. 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?

21. 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

22. 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

23. 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

24. 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

25. Criminal investigation and sanctions
 Public Security Bureau
 GACC promptly notifies local PSB
 Thresholds
 Low # of cases transferred
 GACC / PSB cooperation is increasing

26. 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

27. 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.

28. R I C C A R D O B E N U S S I
RICCARDO.BENUSSI@GMAIL.COM
thank you!
grazie!

29. 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.

30. structure
 Founded 1952
 177 members
Council
Policy
making
Secretariat
130
officials
Experts
Specialized
staff

31. Fake meat.
Some health hazards from
counterfeits to bare in mind

32. Fake eggs.
Some health hazards from
counterfeits to bare in mind

33. Questo potrebbe essere
l’autista di un’auto in cui e’
installato un airbag falso.

34. GACC’s structure
GACC
National IPR division,
dept.of policy &
legal affairs
Coordination for
Enforcement
International
Cooperation
Regional Customs
IPR division
Applications,
detentions,
investigationsPort Customs
Clearance and
examination officers
Control and detention Disposal of goods

35. 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.