China Trademarks: China Customs Helps Those Who Help Themselves

China customs inspections

A few weeks back, China Customs released its IP protection statistics for 2015. The data revealed a number of interesting trends, many of which were summarized in Mark Cohen’s China IPR Blog. I’d like to focus on two in particular.

1. Trademark infringements made up 98% of the items seized, with copyright and patent infringements combined accounting for the remaining 2% of seizures.

A simplistic (and incorrect) interpretation of this statistic would suggest that trademark infringement is a far bigger problem than copyright and patent infringement. In fact, the reason for the disparity is that it’s relatively easy for a customs inspector to tell if a product is violating a trademark based on a quick visual inspection – and almost impossible to tell if a product is violating a copyright or trademark. This does not mean that copyright and patent holders should throw up their hands and give up; it just means they should pursue other avenues. For copyright holders (especially owners of movies, television programs, recorded music, and books), it largely means pursuing download sites and the service providers that host them. For patent holders, it means filing lawsuits in China and/or the US, and pursuing 337 actions in the US.

2. Of the items seized by Chinese Customs, the vast majority (98%) were seized based on a tip given to China Customs by the rightful IP rights-holder. In 2014, the percentage of goods seized due to such a tip was 65%.

Put together, these statistics strongly suggest one or both of the following: (1) IP rights-holders are actively engaged in pursuing infringers and (2) customs officials are kept busy enough with tips from IP rights-holders that they don’t have time to conduct many inspections on their own. (Chinese Customs inspects goods either on its own authority or based on a specific request from an IP right-sholder.) Either way, even if counterfeit product bearing your trademark is being regularly shipped from China, there’s only a minuscule chance it will be stopped at customs if you aren’t being proactive. What does it mean to be proactive? First, register your trademarks in China. Second, register those trademarks with Chinese Customs. Third, track the counterfeit product, which these days mostly leaves China via e-commerce. At the very least, you need to have a handle on what’s being sold on Alibaba, Taobao, JD.com, and other key Chinese e-commerce sites. Once you understand who is selling your goods and where the goods are coming from, you can start to engage customs.

For trademark owners, customs seizures can be a valuable part of an anti-infringement strategy. But don’t expect much help from the customs authorities if you can’t be bothered to help yourself.

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