Written by Rosita Li (Partner) and Lawrence Wong (Solicitor)

Summary

The new regulations on Customs Protection of Intellectual Property Rights of the PRC (the "new regulations) became effective on 1 March 2004.  This update summarises the changes introduced by the new regulations.

Full Update

1. Term Of Recordal

The term of recordal of intellectual property rights with the Customs has been extended from 7 years to 10 years. The term can be renewed within 6 months prior to the expiry of the original term.

A rights owner will now have 30 working days to record any change to its rights as opposed to 10 days under the old regulations.

2. Customs' Discretion To Determine Amount Of Bond 

Under the old regulations, complainants were bound to pay a bond equal to the value of the suspected infringing goods. This onerous requirement proved to be obstructive to intellectual property right owners in their effort to prevent import and/or export of infringing goods. The new regulations empower the PRC Customs to require the complainant to pay a bond only up to the value of the suspected infringing goods. This new measure may alleviate the complainants' burden of paying substantial bonds in order to invoke the Customs' jurisdiction over the suspected infringement.

3. Interaction With Pre-emptive Remedies 

Upon seizure of the suspected infringing goods by the Customs, complainants may now file applications for (i) preliminary injunctions and/or (ii) property preservation orders with the relevant People's Courts before filing civil proceedings against suspected infringers. 

Under the new regulations, the Customs shall provide assistance in executing preliminary injunctions and property preservation orders granted by the People's Courts relating to the suspected infringing goods. The new regulations enable intellectual property right owners to pursue civil remedies against infringers while Customs seizure proceedings are in progress.

4. Release Of Suspected Infringements

The new regulations clarified the circumstances under which the seized goods should be released.

5. Disposal Of Infringements

Infringements seized by the Customs should be disposed in the following manner:

(i)  the Customs may transfer the infringing goods to charitable organisations if the infringing goods can be used for charitable purposes;

(ii)  in the event the complainant wishes to purchase the infringing goods, the Customs may sell the infringing goods to the complainant;

(iii)  if the infringing goods cannot be used for charitable purposes and the complainant does not intend to purchase the infringing goods, the Customs shall sell the infringing goods by way of an auction after removing the infringing features from the goods; and

(iv)  if it is not feasible to remove the infringing features, the Customs shall destroy the infringing goods.

Intellectual property right owners are advised to record their rights (including trade marks and/or patents registered in the PRC and/or copyright) with the General Administration of Customs in Beijing to ensure that swift actions can be taken to seize infringements to be exported or imported through various ports throughout the PRC.

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