Summary of Case

One day in August 2015, our client Company A consulted us anxiously about their goods which were impounded by Customs for suspected infringement of intellectual property rights that are filed for record. The client’s goods were consolidated shipment. Therefore, when the Customs seized the whole container, the client may face with liquidated damages if the issue could not be solved in time. Under the circumstances, our client entrusted us to initiate a timely negotiation with the Customs.

On receiving the consultation, our colleagues took prompt action to collect the related information and make an analysis of the situation. We believe our client’s products did not constitute infringement and the reasons are as follows:

  1. The suspected infringing packing paper is the packing filler of the products instead of the packing;
  2. Our client’s products are different from the trademark owner’s products;
  3. The suspected infringing filler is the production auxiliary materials, whose legitimate source could be traced.

According to the analysis, we consider the best and quickest way to fulfill custom clearance was to contact the trademark owner in order to avoid liquidation damages caused by shipment delay. Then we asked Suspension of Release by Customs Authorities to provide us with the contact information of the trademark owner. After we got in touch with the owner, we expressed our opinion upon the suspected products and forwarded relevant evidence of the sourcing auxiliary materials (including invoice and contract). After having checked with the Customs, the owner finally issued a statement of non-infringement, so our client dispatched his products smoothly before the shipping date.

Comments

Our advice: both IP right owners and suspected infringers should pay attention to the time limit of the execution stage while dealing with customs protection of IP rights. Once the execution time is past, needless loss may incur.

Legal Basis

Regulations of the Peoples Republic of China on the Customs Protection of Intellectual Property Rights

Article 70 Where customs discovers import or export goods that are suspected of infringing upon Intellectual Property Rights that are filed for record, it shall notify the owner of the Intellectual Property Rights immediately in writing. Where, within three working days of the date of delivery of the notification, the owner of the Intellectual Property Rights submits an application according to Article 13 hereof and provides a guarantee according to Article 14 hereof, customs shall impound the goods suspected of infringing upon rights, notify the owner of the Intellectual Property Rights in writing, and deliver a certificate of impoundment by customs to the consignee or consignor. Where the owner of the Intellectual Property Rights fails to submit an application or provide a guarantee within the time limit, customs may not impound the goods.

Article 18 Where the consignee or consignor considers that his goods  have  not infringed upon the Intellectual Property Rights of the owner of Intellectual Property Rights, he shall submit a written explanation to customs and attach the relevant evidence.

Article 20 If, after customs has discovered import or export goods suspected  of infringing upon Intellectual Property Rights that are filed for record and has notified the owner of the Intellectual Property Rights, the owner of the Intellectual Property Rights requests customs to impound the goods suspected of infringing upon rights, customs shall, within 30 working days of the date of impoundment, investigate and confirm whether the impounded goods suspected of infringing upon rights have infringed upon Intellectual Property Rights. If it cannot confirm an infringement, it shall notify the owner of the Intellectual Property Rights immediately in writing.