A review of IP Protection by Chinese Customs in 2014

A review of IP Protection by Chinese Customs in 2014

[HFG Translation of Report Released by Chinese Customs 2014 5.8.2015 Reference http://www.customs.gov.cn/publish/portal0/tab2559/module5491/info739906.htm]

Download a PDF of this article here.

9/7/2015

In 2014, Chinese customs carried out strong IP protection, cracking down on IP infringement activities to safeguard a fair foreign trade order.

China Customs enforced IP protection measures 27,000 times, and seized 24,000 shipments of goods, involving 92million pieces of goods, rising by 14.03%, 16.59% and 21.09% respectively year-on-year.

1.  Seizure on suspected infringing goods in 2014

Following are the main characters of detained goods on suspicion of IP infringement:

1.1 Goods detained by customs. The customs actively detained 23,000 shipments involving 90million goods items, accounting for 99.9% and 98% of the years’ total shipments and pieces. (See chart 1)

1.2 Goods detained on suspicion of trademark infringement. Goods were detained on suspicion of infringement on trademark rights, copyrights, patent rights, etc. Those detained based on trademark rights number 89 million pieces, accounting for 96.9％ of the total seizures (See chart 2).

1.3 Goods for export. More than 23,000 detained shipments were intended for export, occupying 96.5% of the year’s total with a 16.33% increase year-on-year. Those shipments involved 91 million pieces, occupying 99.6% of the year’s total with a 21.24% increase year-on-year (See chart 3).

1.4 Consumer goods. The detained goods were mainly tobacco, light industrial goods, cosmetics, clothes, hardware, machines, shoes, etc. Compared with 2013, the amount of medical machines, tobacco, jewelry, etc. we have seen a large increase, while the amount of hardware, medicines, hats, communication equipment, toys, foods, drinks, bags, etc. we have seen a large decrease (See chart 4).

1.5 Mail and sea transportation being the main channel of seizure. Goods detained through checks on mail, numbered 20,000 shipments, taking up 80.2% of the year total, with a 33% increase year-on-year. Those detained through check on sea transportation numbered 89 million pieces, taking up 96.3% of the year total (See chart 5).

1.6 Expanded geological range. The detained goods involve 153 countries and regions. The geological range expanded, with significant rise in exports to Middle East, Africa and South America (see chart 6).

2.    IP protection measures taken by Chinese customs in 2014

2.1 Chinese customs actively perform enforcements by focusing on identifying and inspection (see chart 7). Of the 42 customs regions directly under China Customs, 33 regions have seized goods (see chart 8). Due to the rise of e-commerce, customs authorities have attached greater importance to checking mail. For example, Nanjing customs seized 7,860 shipments of exports on suspicion of IP infringement, taking up 33% of the nation’s total. As for sea transportation, port customs have paid greater efforts to ship routes to Africa, America and Europe. Shenzhen customs, Hangzhou customs, Shanghai customs and Ningbo customs detained 20 million pieces of goods on suspicion of IP infringement, accounting for a quarter of the nation’s total.

2.2 Using risk tools. China customs carried out risk analyzing and forecasting by integrating information acquired through analyzing the parameters of infringing goods, through reports on offenses, through to cooperation with other authorities and foreign customs. By implementing risk analyzing and forecasting, China Customs seized 59 million pieces of goods, occupying 66% of seized goods through duty performance. By implementing risk analyzing and forecasting, Shanghai customs, Shenzhen customs and Guangzhou customs respectively discovered 206, 136 and 55 cases. Gongbei customs seized 1201 pieces of air conditioners infringing on the trademark “TOSOT” owned by Zhuhai GE LI Electric Appliances Co., Ltd, with a value of RMB 2.1 million.

2.3 Launching special campaigns. From June 1, 2014, an IP protection campaign focused on mail was launched. In the campaign period lasting for 6 months, 8757 shipments involving 222,000 pieces of goods were seized through checks on mail and delivery. Before the 2014 FIFA World Cup, a 4-month campaign on protecting World Cup IP was carried out. 1500 shipments involving 1.5 million pieces of footballs, clothing, shoes, caps, etc. were seized. This effort was acknowledged by FIFA.

2.4 Developing Information disclosure system. Customs authorities have set case disclosure columns on their websites and improved the transparency on law enforcement. China Customs disclosed 1105 cases of administrative punishment for IP infringement.

2.5 Using technology methods. From March 1, 2014, an online registration system was established, where the public could handle customs procedures for IP. The system is China’s first government platform for IP. From March 1, 2014 to December 31, 2014, customs received 5,546 online registration applications, rising by 20% year-on-year. In 2014, the customs received 7727 applications for IP online registration, rising by 20% year-on-year.

2.6 Promoting cross-region law enforcement cooperation. Law enforcement cooperation mechanisms are most comprehensive and effective in the following 3 regions: Yangzi River Delta, regions around Beijing and Zhejiang Province. Mechanisms for case sharing, unified analysis, coordinated training, discussion on complex cases was established among different customs authorities.

2.7 Promoting cooperation with PSB.

200 leads on IP infringement were reported to PSB by the customs in 2014, and some cases were filed for investigation by PSB, such as:

• Shanghai Customs signed Memorandum on Cooperation on IP Protection with Shanghai PSB and reported 40 leads to Shanghai PSB in 2014. One case was mailing counterfeit “Ray.Ban” and “CHANEL” logos to Britain, with a value of RMB 30 million. The Chinese and British police force carried out a joint action, arresting 4 suspects and cracking a serious cross-border case.
• Qingdao Customs reported 5 leads on serious IP infringement to the PSB. One case, involving the export of 14,170 baseball caps infringing on FIFA World Cup logos (valued at USD 360,000) received a criminal judgment by the court.
• Shenzhen Customs reported 30 leads involving 40 million pieces of goods (valued at RMB 28million) to the PSB. Now six serious cases are under investigation by PSB.

2.8 Cooperation with IP owners.

• Encouraging enterprises to collect information on infringing goods and to report to the customs. Guangzhou Customs performed 6 targeting actions with information from IP owners; Huangpu Customs performed 57 targeting actions with information from IP owners and seized 27 containers of infringing goods.
• Inviting IP owners to train Customs officers in identifying counterfeit products. Customs in Shanghai, Ningbo, Fuzhou, Nanjing, Qingdao, etc. have invited IP owners to give such trainings, so as to improve the customs’ IP protection abilities and to make enterprises learn about customs’ law enforcement.

2.9 Protecting native brands and helping enterprises in “going global”

• Strengthening protection on China’s independent IP. In 2014, Chinese customs in 2014 seized 514 shipments of goods (12million pieces, at a value of RMB 74 million) infringing on China’s independent IP. Shanghai customs alone cracked 60 cases (3.53 pieces of goods detained, at a value of RMB 16 million) of infringement on independent IP of domestic enterprises. (see chart 9)
• Establishing assisting mechanism for enterprises with IP. Since many domestic enterprises lack knowledge on IP protection, customs authorities target local enterprises having famous brands as main objects for assistance, actively helping them to improve IP protection awareness and capabilities. For example, Shanghai Customs helped Suzhou RI BAO Co., Ltd in taking back its trademark “RIBAO TECHNOLOGY” used on money-counting machines which was maliciously registered in America, therefore helping the company remove obstacles in overseas market.
• Reinforcing cooperation with industry associations. Chinese customs work with industry associations to control the source of infringement. For example, Gongbei Customs have formed partnerships with Clothing Association in Zhongshan City, Store Materials Association in Zhongshan City and Lighting Products Association in Zhongshan City.

2.10 Deepening cross-border cooperation and safeguarding international trade.

Following are some of the cross-border agreements on IP protection signed by China’s customs:

• Plan on IP Protection Cooperation between Customs of China and Europe from 2014-2017 was signed between China’s General Administration of Customs and European Commission, and a road map for 2015 was formulated.
• Joint Action on Protection on IP of National Football League was signed between China’s General Administration of Customs and US Immigration and Customs Enforcement.

2.11 Deepening publicity campaigns and improving the public’s legal awareness.

• Focused publicity. China’s General Administration of Customs and local customs authorities educates the public through “April. 26^th IP protection week”, “August. 8^th Law Publicity Day”, etc.
• Daily publicity. Chinese customs educate the public through various medium on a daily base.

In conclusion Chinese customs will continue to make greater contributions in protecting IP and in implementing our country’s IP strategy.

This translation by HFG professionals is based on the China Customs Report 2014 http://www.customs.gov.cn/publish/portal0/tab2559/module5491/info739906.htm   

WTR Magazine also released a helpful visualization of this report in their blog which can be viewed here http://www.worldtrademarkreview.com/blog/Detail.aspx?g=ad665df3-9a29-475d-99b0-8f9917ed79fa