BORDER MEASURES
China also quenches much of the world’s thirst for counterfeit goods. Te country’s black market in counterfeit goods is difficult to quantify, but its border seizure figures help. Between 2008 and 2010, China customs seized more than a billion counterfeit goods with a value of RMB 1.02 billion ($162 million), according to China’s General Administration of Customs (GAC).
Brand owners are well aware that the country’s black market in counterfeit goods is big business. Tey are also aware that stemming the flow of counterfeit goods coming out of China is one of the most effective anti-counterfeiting actions they can take.
Identifying the most common goods to be counterfeited and exported from China, as well as the routes that counterfeiters choose to get them out of the country, can help brand owners to understand if they are threatened by this problem and allow them to focus their efforts.
Customs tend to seize counterfeit tobacco, cosmetic care products, hardware, machinery, clothing, pharmaceuticals, automobiles and motorcycles (and accessories), communications equipment, footwear, bags and watches, says Xiang Gao, a partner at Peksung Intellectual Property.
“Judging from the counterfeits seized, we would say the most common route [for export] is by sea,” adds Yue Zheng, a trademark attorney at CCPIT Patent and Trademark Law Office. “It is understandable considering the volume and transportation fare involved. Sometimes the counterfeiters would pack the goods without trademarks and the packaging boxes with trademarks separately or sometimes, they would only print the trademarks on the packaging boxes while there are no trademarks on the goods inside.”
Brand owners that are looking to use customs as a means of stopping counterfeit goods from leaving China should be aware of the Regulation of the People’s Republic of China on the Customs’
“SOME COUNTERFEITERS DO NOT CLEARLY INDICATE THE TRADEMARKS FOR THE GOODS THAT ARE DECLARED FOR EXPORT/IMPORT. THEY EVEN HIDE COUNTERFEIT GOODS AMONG LEGITIMATE GOODS.”
In theory, China customs will generally check whether the marks of the goods, which are declared for export/import, are identical with or similar to the registered trademarks that are recorded with the GAC, says Haiying Fu, a partner at King & Wood Malleson.
Protection of Intellectual Property Rights, as well as the GAC’s implementing measure concerning that regulation.
Under this regulation and customs implementing measure, there are two types of border measures in China that brand owners can use in their anti- counterfeiting efforts, says Gao. “[Tese are] IP recordation measures and customs ex-officio action; and direct application measures without prior IP recordation.”
Gao says: “According to the first measure, brand owners or their agents record the IP rights in the GAC in advance, so local port customs can take enforcement actions against suspect goods at the border on their own initiatives. Te brand owners are encouraged to have their IP rights such as registered trademarks in China, registered patents in China, and copyright recorded before the GAC so that the local port customs may take ex-officio actions if they suspect that a shipment contains goods of infringement on the recorded IP rights. Tey can temporarily suspend the import or export of the goods and notify the brand owners or their agents who must reply within three working days from the date of service of the notification.”
He adds: “Under the second measure, the brand owners apply for detention of suspect goods at the port customs when they find suspected goods which are going to be exported or imported, the port customs can detain the goods but do not conduct investigation on the goods, therefore, the brand owners shall then initiate lawsuits [in court]”
24 World Intellectual Property Review May/June 2012
He says: “Aſterwards, customs will request the consignor and/or consignee to provide relevant evidence proving that they have been authorised by brand owners. If consignors and/ or consignees could not provide such evidence, customs would temporarily detain the goods and inform the brand owners (or their contacts, attorneys) requesting to affirm whether those are counterfeit goods.”
However, in practice, counterfeiters are getting better at concealing fake goods, making it harder for them to be identified and seized.
Fu says: “Some counterfeiters do not clearly indicate the trademarks for the goods that are declared for export/import. Tey even hide counterfeit goods among legitimate goods. In practice, it is not possible for customs to check all goods that are declared for export/import, and they generally check such goods randomly. In other words, it is not possible for customs to stop all counterfeit goods that are declared for export/import.”
“To our knowledge and in our opinion, customs protection is very effective,” adds Zheng. “But of course, considering the volume of export/ import through China’s borders and the effectiveness of declaration, customs would not and could not inspect every export. It is a selective examination based on their evaluation system and experience.”
If brand owners are going to successfully fight counterfeiting in China using customs and border enforcement measures, it is important that they maintain a good relationship with the GAC and local customs. Gao says that it is difficult to evaluate the relationship between brand owners and China customs.
www.worldipreview.com
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