China's rise as a global manufacturing hub has been accompanied by concerns over IP rights violation and protection. As businesses increasingly engage with the Chinese market, especially with the fast development of e-commerce in recent years, understanding the intricacies of China's Customs IP protection becomes paramount.

In this article, we will shed some lights on the system, the features and trends of this topic.

I. The Evolution of Customs IP Protection in China

Over the past decades, Customs IP protection has become a crucial component in the combat against counterfeiting and other IP infringement in China.

One important thing to notice is that China Customs checks and seizes not only imported goods, but also products for export. In fact, as one of the largest sources of counterfeits in the world, seizing goods for export at the Chinese ports can be more efficient than seizing counterfeit for import at other ports worldwide.

China has specific regulations governing customs IP protection. The General Administration of Customs (GAC) is responsible for enforcing these regulations and has established dedicated IP protection units at major ports. In addition to trademarks, the Customs also protects other IP rights including patents and copyrights.

II. Key Features of China's Customs IP Protection System

1. Recordation

China's Customs operates a recordation system, which allows rights holders to voluntarily register their IP rights with Customs authorities and enables the officials to proactively identify and seize suspected infringing goods during regular inspections. IP rights holders are strongly recommended to record their IP rights on this system. Once the rights are recorded, Customs can take various measures, such as detainment, seizure, and investigation to enforce against infringements.

2. Proceeding

A typical customs seizure proceeding consists of 4 steps: notification to a right holder– the right holder applies for detention and pays the bond – investigation – punishment decision (if the goods are confirmed to be infringing).

Once a case is closed, the infringing goods are confiscated and destroyed. The Customs can impose a fine up to 30% of the declared value of the seized goods, and cases of significant values can also be transferred to police for criminal enforcement, which may act as an effective deterrent to other potential infringers.

3. Information exchange

Chinese Customs authorities have taken proactive measures to enhance enforcement and collaboration with right holders. Hence, establishing close cooperation and communication channels with the authorities is vital. Right holders are also encouraged to provide intelligences on potential infringers to the Customs so that the potential infringing products can be intercepted effectively.

China Customs regularly conducts training programs for the officers to enhance their knowledge and skills in identifying infringing goods. These programs normally cover topics including product identification and detection techniques, which require support from the right holders.

4. What's important

For right holders, it is crucial to regularly update and maintain the records as well as the authorized suppliers' whitelist on the GAC system. Sharing necessary identification information with the Customs officials can help them to have a better understanding of your brands and products. It is also extremely important to respond to the Customs' notification in a clear and timely manner.

III. Recent Trends

  1. E-commerce Focus: The rapid growth of e-commerce has posed new challenges for Customs IP protection. Small shipments, which are of low values and shipped via many different ports, have become increasingly common the recent years. Accordingly, China Customs has been allocating extra resources to take actions against small parcels shipped via postal and courier channels.
  2. Special operation: GAC continues to carry out special campaigns, targeting new methods and channels of infringement in import and export goods. Targeted crackdowns are also conducted against illegal activities during Customs' activities.
  3. China Customs aims to strengthen IP policy advocacy and cooperation with right holders. It also strives to provide guidance for local small/medium-sized enterprises for their IP protection when doing business overseas.
  4. Advanced technologies, such as big data analytics and artificial intelligence, are more and more utilized by the Customs to efficiently screen and identify suspicious shipments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.