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Enforcement of Intellectual Property Rights

A unique feature of China's intellectual property right enforcement mechanism is the so-called "double track" system. That is to say, one may bring an action against the infringer directly in a court, i.e. using judicial way, or request the competent administrative authority to handle the disputes, i.e. using administrative way. It is important to note that administrative resolution is not necessarily a procedure prior to the judicial resolution.

Judicial System

The Chinese judicial system consists of the following courts at four levels:

1.      Supreme People's Court;

2.      High People's Court (each province, autonomous region as well as the municipality directly under the authority of the central government has one High People's Court);

3.      Intermediate People's Court (each major city has one or two Intermediate People's Court);

4. Intellectual Property Court, currently only Beijing, Shanghai and Guangzhou have Intellectual Property Court. The level of Intellectual Property Court is equivalent to the level of Intermediate People’s Court.

5.      Basic People's Court (each county and each district of major cities has one Basic People's Court).

The Chinese judicial system adopts "two-instance" system. In most cases, the first instance courts hearing the intellectual property related cases are intermediate courts or the Intellectual Property Court.

Administrative Authority for Patent Affairs

It is a distinct feature of the Chinese patent system that administrative authorities for patent affairs are established under the local governments in all provinces, autonomous regions, municipalities and certain cities. The function of the authorities is to administer patent affairs and handle patent disputes within their jurisdiction. The authorities are not branches of the State Intellectual Property Office and do not accept patent applications.

Administrative Authority for Industry and Commerce

Administrative authority for industry and commerce is a governmental agency in charge of corporation registration, market supervision, etc. Its branches extend nationwide and reach the township level. Administrative authority for industry and commerce plays an important role in cracking down on trademark infringement.

The China Trademark Office and the Trademark Review and Adjudication Board are under the administration of the State Administration for Industry and Commerce.

Copyright Administrative Authority

The National Copyright Administration is a governmental agency responsible for copyright administration and enforcement nationwide. In local governments in all provinces, autonomous regions, municipalities and certain cities, copyright administrative authority are established to administer local copyright affairs including copyright enforcement.

Patent Enforcement

Infringement

After the grant of the patent right for an invention or utility model, a person will be liable for patent infringement and actions can be brought against him if he commits, for business purposes, any of the following acts:

-         making, using, offering to sell, selling or importing the patented product;
-         using the patented process; or
-         using, offering to sell, selling or importing the product directly obtained by the patented process.

After the grant of the patent right for a design, a person will be liable for patent infringement and actions can be brought against him if he commits, for business purposes, any of the following acts:

-         making, offering to sell, selling or importing the product incorporating patented design.

Preliminary Injunction

Where any patentee or interested party has evidence to prove that another person is infringing or will soon infringe his patent right and that if such an infringing act is not stopped or prevented from occurring in time, it is likely to cause irreparable damages to his right, he may, before any legal proceedings are instituted, request the court to issue an injunction order to stop the alleged infringing act or to prevent such act from occurring, and take measures for the preservation of property.

Pre-trial Evidence Preservation

In order to stop the patent infringement, the patentee or interested party may, under circumstances where there is a likely-hood that evidence may be destroyed, lost or too difficult to obtain later on, request the court to preserve evidence before any legal proceedings are instituted.

Damages

Damages for patent infringement should be calculated based on the actual losses suffered by the patentee. Where the actual losses are difficult to be determined, damages should may be assessed on the basis of the profits gained by the infringer through the infringement.

Where it is difficult to determine either the losses suffered by the patentee or the profits gained by the infringer through the infringement, the damages should be calculated with reference to the appropriate multiple of the amount of the royalty of a patent license, if there is any. Where it is difficult to calculate the losses of the patentee, the profits gained by the infringer, and the amount of the royalty of a patent license, the court may, on the basis of such factors as the type of the patent, nature and circumstances of the infringement, determine the amount of the damages from RMB 10,000 yuan to RMB one million yuan (about USD 1,200 to USD 120,000).

The court may, upon the request of the patentee, incorporate reasonable expenses disbursed in investigating and stopping the infringement into the damages rewarded.

Any person who, for business purposes, uses or sells a patented product or a product that is directly obtained using a patented process, without knowing that it is made and sold without the authorization of the patentee, shall not be liable to compensate the damages the patentee suffers if he can prove that he obtains the product from a legitimate source.

Criminal Sanction

Where any person passes off a patent, he shall, in addition to bearing civil liability, be subject to an administrative penalty. If a crime is constituted, he shall be prosecuted for criminal liability of up to three year’s imprisonment.

Judicial or Administrative Action

A patentee or an interested party may bring an action against an infringer in a court having jurisdiction or seek to solve the dispute through administrative way by submitting a request to the competent administrative authority for patent affairs. The administrative authority for patent affairs is empowered to order the infringer to stop infringement and, upon request of the parties, mediate the amount of the damages.

In case of passing off, the administrative authority for patent affairs is empowered to make inquiries of the relevant persons, investigate into the matters pertinent to the act suspected of violation of laws; conduct on-spot inspection of the place where the act of the relevant persons is suspected of violation of laws; examine and make copy of the contract, invoices, accounting books and other materials relating to the act suspected of violation of laws; inspect the product relating to the act suspected of violation of laws; seal and detain the products as proved by evidence to pass off patent. In addition, The administrative authority for patent affairs may confiscate the illegal gains of the infringer, and impose on the infringer a penalty of up to not more than four times his illegal earnings and, if there is no illegal earnings, a fine of not more than RMB 200,000 yuan (about USD 32,000).

Jurisdiction

The principle of jurisdiction over patent infringement cases is that such cases shall be under the jurisdiction of the court in the place where the infringer has his domicile or where the infringement takes place. The place where the infringement takes place not only includes the place where the infringing act, such as making, selling, using or importing infringing products, actually takes place but also includes the place where the damage result caused by the infringing act occurs.

The courts of first instance hearing the patent infringement cases are selected intermediate courts or high courts. For patent infringement cases in Beijing, Shanghai and Guangdong province (Shenzhen is excluded), the courts of first instance are Bejing Intellectual Property Court, Shanghai Intellectual Property Court and Guangzhou Intellectual Property Court repectively.

For administrative resolution, the request should be filed with the administrative authority for patent affairs in the place where the infringer has his domicile or where the infringement takes place.

Prescription of Action

Court actions against patent infringer must be initiated within two years from the date on which the patentee or any interested party obtains or should have obtained the knowledge of the infringing act.

Where the patentee or any interested party initiates a lawsuit against patent infringer after the expiration of the prescription of action, i.e. two years counted from the date on which the patentee obtains or should have obtained the knowledge of the infringing act, and when the legal proceedings are initiated, the infringing act is continuously taking place and the patent right is still valid, the court shall make a judgment to order the infringer to stop the infringing act. However, in determining the damages, only the losses suffered by the patentee or the profits gained by the infringer through the infringement within the last two years, counted from the date on which the patentee initiates the lawsuit, can be taken into consideration.

Burden of Proof

The plaintiff has to submit evidence to prove his claim against infringer and to support his claim for damages.

The burden of proof will be born by the defendant if the litigation concerns a process patent filed after January 1, 1993 for the manufacture of a new product. Therefore, in the case where a charge against a person for the infringement of a process patent for the manufacture of a new product is raised, the defendant denying the charge should present evidence to prove that his product is not manufactured using the patented process. However, for a process patent filed before January 1, 1993, the burden of proof will be born by the defendant no matter whether the process is for the manufacture of a new product or not.

Where the infringement relates to a patent for utility model filed before Oct. 1, 2009, the court or the administrative authority for patent affairs may ask the patentee to furnish a search report made by the State Intellectual Property Office.

Where the dispute of patent infringement relates to a patent for utility model or design filed after Oct. 1, 2009, the people's court or the administrative authority for patent affairs may ask the patentee or interested party to furnish an appraisal report of the patent right made by the State Intellectual Property Office as an evidence for trial and handling of the patent infringement disputes.

Doctrine of Equivalents

The extent of protection of the patent right shall be determined by the scope defined by the indispensable technical features explicitly recorded in the claims, and also by the scope defined by the technical features equivalent to said indispensable technical features (referred to as "equivalent features"). An equivalent feature means a technical feature, which can be easily conceived by a person skilled in the art without creative work, and which performs substantially the same function in substantially the same way and achieves substantially the same result as the feature recorded in the claims.

Stay of Legal Proceedings

For patent infringement cases wherein patent for utility model or patent for design is involved, the court shall, in principle, stay the legal proceedings if the defendant files a request to the Patent Re-examination Board to declare the patent right invalid within the prescribed time limit for the defendant to submit a defense. The said prescribed time limit is 15 days counted from the date on which a copy of the complaint is served if the defendant has domicile in China. The time limit is 30 days if the defendant has no domicile in China.

However, the legal proceedings may not be stayed under the following circumstances:
 

-         the search report made by the State Intellectual Property Office upon request of the patentee of a patent for utility model shows that there is no prior art document destroying novelty or inventiveness of the patent;

-         the evidence provided by the defendant is sufficient to prove that the technology used is publicly known; or

-         the evidence and the reason used by the defendant to file the invalidation request is obviously insufficient.

For the patent infringement cases wherein patent for invention is involved, the court may not stay the legal proceedings even if the defendant files a request to the Patent Re-examination Board to declare the patent right invalid within the prescribed time limit for the defendant to submit a defense.

Where the court decides to stay the legal proceedings, the court may issue an injunction order to stop the alleged infringing act or take other measures to prevent further damages to the interests of the patentee, if such a request is submitted and the plaintiff provides appropriate deposits.

Appeal

The decision of the court of first instance can be appealed to the court at higher level which makes final judgment. The statutory time limit for an appeal is 15 days counted from the date on which a written judgment is served for domestic parties, or 30 days for foreign parties having no residence in China.

The decision of the administrative authority for patent affairs can be appealed to the court having jurisdiction within 15 days from receipt of the notification, if any party is not satisfied with the decision. The judgment of the court can be appealed again to the court at higher level.

Trademark Enforcement

Infringement

A person shall be liable for trademark infringement if he commits any of the following acts:

-  to use a trademark that is identical with a registered trademark in relation to identical goods without the consent of the owner of the registered trademark;

  - to use a trademark that is similar to a registered trademark in relation to identical goods, or use a trademark that is identical with or similar to a registered trademark in relation to similar goods, without the consent of the owner of the registered trademark, and liable to create confusion.

  - to sell goods that violate the exclusive rights of a registered trademark

-     to counterfeit or make, without authorization, representations of a registered trademark of another person, or sell such representations;
-    to change a registered trademark and put goods bearing the changed trademark on market without authorization of the owner of the registered trademark;

 -   to help any others infringe the exclusive right of a registered trademark with intention to provide convenience for infringing the exclusive right of the registered trademark;
-    to use a trademark which constitutes a reproduction, an imitation, or a translation of a well-known trademark of another person not registered in China and is likely to create confusion, in respect of goods which are identical with or similar to the goods to which the well-known trademark applies; 
-    to use a trademark which constitutes a reproduction, an imitation, or a translation of a well-known trademark of another person already registered in China and is likely to mislead the public and damage the interests of the owner of the registered well-known trademark, in respect of goods which are not identical with or similar to the goods to which the well-known trademark applies;

-    to offer for sale goods that are in infringement of the exclusive right to use a registered trademark;
-    to cause, in other respects, prejudice to the exclusive right of another person to use a registered trademark.

Preliminary Injunction

Where the owner of a registered trademark or interested party has evidence to prove that another person is infringing or will soon infringe his exclusive right to use his registered trademark and that if such an infringing act is not stopped or prevented from occurring in time, it is likely to cause irreparable damages to his right, he may, before any legal proceedings are instituted, request the court to issue an injunction order to stop the alleged infringing act or to prevent such act from occurring, and take measures for the preservation of property.

Preservation of Evidence

To stop an act of infringement, where evidence may be destroyed or lost or become difficult to obtain in the future, the owner of a registered trademark or an interested party may, before instituting legal proceedings, apply to the court to have the evidence preserved.

The court shall make a decision within 48 hours from receipt of the application. Where the court decides to preserve the evidence, the decision shall be executed immediately.

Where the applicant fails to institute legal proceedings within 15 days counted from the date on which the court undertakes the preservative measures, the court shall revoke the measures.

Damages

The amount of damages for infringing the exclusive right to use a trademark shall be actual losses that the right owner has suffered as a result of the infringement during the period of the infringement; where the losses suffered by the right owner cannot be determined, the amount of damages for trademark infringement shall be the profits that the infringer has earned as a result of the infringement during the period of the infringement; where the losses suffered by the right owner, or the profits earned by the infringer, cannot be determined, the amount of damages shall be determined based on a reasonable amount that would be paid for a licensing royalty for the trademark right.

Where it is difficult to determine either the profits gained by the infringer through the infringement or the losses suffered by the owner of a registered trademark, the damages should be assessed not exceeding RMB 3,000,000 (about USD 500,000), depending on the seriousness of the infringing act.

The court may, upon the request of the owner of a registered trademark, incorporate reasonable expenses disbursed in investigating and stopping the infringement into the damages rewarded.

Any person unknowingly sells goods that infringing the exclusive right of another person to use a registered trademark shall not be liable to compensate the damages the owner of a registered trademark suffers if he can prove that he obtains the goods lawfully and can identify the supplier.

Criminal Sanction

Any person who, without the consent of the owner of a registered trademark, uses a trademark that is identical with the registered trademark with respect to identical goods, in case a crime is constituted, shall be prosecuted for his criminal liabilities in addition to compensating the damages that the owner of a registered trademark suffers.

Any person who counterfeits or makes, without authorization, representations of a registered trademark of another person, or sells such representations, in case a crime is constituted, shall be prosecuted for his criminal liabilities in addition to compensating the damages that the owner of a registered trademark suffers.

Any person who knowingly sells goods that bear a counterfeited registered trademark, in case a crime is constituted, shall be prosecuted for his criminal liabilities in addition to compensating the damages that the owner of a registered trademark suffers.

The infringer may be subject to a maximum of seven years' imprisonment.

Judicial or Administrative Action

In trademark infringement cases, administrative action through administrative authority for industry and commerce is the most effective and most frequently chosen approach. The administrative authority for industry and commerce may, upon determining that the infringement takes place, order the infringer to immediately stop the infringing act, confiscate and destroy the infringing goods and any implements specifically used to manufacture the infringing goods and counterfeiting representations of a registered trademark, and may impose a penalty. The administrative authority for industry and commerce may mediate the amount of damages upon request of the parties.

In comparison with court proceedings, the administrative proceedings are more efficient and cost-effective. If damages are sought, however, judicial proceedings are highly recommended.

The said penalty is calculated on the illegal turnover of the infringer. Where the volume of the illegal business is more than RMB 50,000 yuan, a fine of less than five times of the volume of illegal business may be imposed. Where there is no volume of illegal business or the volume of illegal business is less than RMB 50,000 yuan, a fine of less than RMB 250,000 yuan may be imposed. Any person who commits trademark infringement acts more than two times within five years or has other serious circumstances shall be given heavier punishment.

Jurisdiction

The trademark infringement cases should be under the jurisdiction of the court in the place where the infringing act is conducted; where the infringing products are stored; where the infringing products are confiscated or seized; or where the infringer has his domicile.

The courts of first instance hearing the trademark infringement cases are intermediate courts or courts at higher level and selected basic courts.

For administrative resolution, the request should be filed with the administrative authority for industry and commerce in the place where the infringement takes place.

Prescription of Action

Court actions against trademark infringer must be initiated within two years from the date on which the owner of a registered trademark or any interested party obtains or should have obtained the knowledge of the infringing act.

Where the owner of a registered trademark or any interested party initiates a lawsuit against infringer after the expiration of the prescription of action, i.e. two years counted from the date on which the owner of a registered trademark obtains or should have obtained the knowledge of the infringing act, and when the legal proceedings are initiated, the infringing act is continuously taking place and the trademark right is still valid, the court shall make a judgment to order the infringer to stop the infringing act. However, in determining the damages, only the profits gained by the infringer through the infringement or the losses suffered by the owner of a registered trademark within the last two years, counted from the date on which the owner of a registered trademark initiates the lawsuit, can be taken into consideration.

Appeal

The decision of the court of first instance can be appealed to the court at higher level whose decision is final. The statutory time limit for an appeal is 15 days counted from the date on which a written judgment is served for domestic parties, or 30 days for foreign parties having no residence in China.

The decision of the administrative authority for industry and commerce can be appealed to the court having jurisdiction within 15 days from receipt of the notification, if any party is not satisfied with the decision. The judgment of the court can be appealed again to the court at higher level.

Copyright Enforcement

Legal Basis

The Chinese Copyright Law was issued on September 7, 1990 and entered into effect on June 1, 1991. It was amended for the first time on October 27, 2001 and amended for the second time on February 26, 2010. The Implementing Regulations of the Chinese Copyright Law was enforced on September 15, 2002. It was amended for the first time on January 8, 2011 and amended for the second time on January 30, 2013.

China became a member of the World Intellectual Property Organization (WIPO) on June 3, 1980. On March 19, 1985, China acceded to the Paris Convention for the Protection of Industrial Property (Stockholm Act). China became a party to Universal Copyright Convention on October 30, 1992, Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) on October 15, 1992, and Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms on April 30, 1993.

Infringement

Anyone who commits any of the following acts of infringement shall bear such civil liability as ceasing the infringing act, eliminating the effects of the act, making an apology or paying compensation for the damages, depending on the circumstances:

      1.      publishing a work without the permission of the copyright owner;
2.      publishing a work of joint authorship as a work created solely by oneself, without the permission of the other co-authors;
3.      having one's name mentioned in connection with a work created by another, in order to seek personal fame and gain, where one has not taken part in the creation of the work;
4.      distorting or mutilating a work created by another;
5.      plagiarizing a work of another person;
6.      exploiting by exhibition, film production or any analogous method of film production, or by adaptation, translation, annotation, or by other means, without the permission of the copyright owner, unless otherwise provided in the Copyright Law;
7.      exploiting a work created by another person without paying remuneration as prescribed by regulations;
8.      rending a work, sound recording or video recording, without the permission of the copyright owner of a cinematographic work, a work created by virtue of an analogous method of film production, computer software, sound recording or video recording or the owner of a copyright-related right, unless otherwise provided in the Copyright Law;
9.      exploiting the typographic arrangement of a book or periodical without the permission of the publisher;
10. broadcasting live a performance or communicating the live performance to the public, or recording his performance without the permission of the performer; or
11. committing any other act of infringement of copyright and of other rights and interests relating to copyright.

Anyone who commits any of the following acts of infringement shall bear such civil liability as ceasing the infringing act, eliminating the effects of the act, making an apology or paying damages, depending on the circumstances and may, in addition, be subjected by a copyright administrative authority to such administrative penalties as ceasing the infringing act, confiscating gains obtained from the infringement, confiscating and destroying infringing reproductions and imposing a fine; where the circumstances are serious, the copyright administrative authority may also confiscate the materials, tools, and equipment mainly used for making the infringing reproductions; and if the act constitutes a crime, the infringer shall be prosecuted for his criminal liability:

1.      reproducing, distributing performing, showing, broadcasting, compiling or communicating to the public on an information network a work created by another person, without the permission of the copyright owner, unless otherwise provided in the Copyright Law;
2.      publishing a book where the exclusive right of publication belongs to another person;
3.      reproducing and distributing a sound recording to video recording of a performance, or communicating to the public his performance on an information network without the permission of the performer, unless otherwise provided in the Copyright Law;
4.      reproducing and distributing or communicating to the public on an information network a sound recording or video recording produced by another person, without the permission of the producer, unless otherwise provided in the Copyright Law;
5.      broadcasting and reproducing a radio or television program produced by a radio station or television station without the permission of the radio station or television station, unless otherwise provided in the Copyright Law;
6.      intentionally circumventing or destroying the technological measures taken by a right holder for protecting the copyright or copyright-related rights in his work, sound recording or video recording, without the permission of the copyright owner, or the owner of the copyright-related rights, unless otherwise provided in laws or administrative regulations;
7.      intentionally deleting or altering the electronic right management information of a work, sound recording or video recording, without the permission of the copyright owner or the owner of a copyright-related right, unless otherwise provided in laws or administrative regulations; or
8.      producing or selling a work where the signature of another is counterfeited.

Preliminary Injunction

Where any copyright owner or owner of a copyright-related right has evidence to prove that another person is infringing or will soon infringe his copyright right and that if such an infringing act is not stopped or prevented from occurring in time, it is likely to cause irreparable damages to his right, he may, before any legal proceedings are instituted, request the court to issue an injunction order to stop the alleged infringing act or to prevent such act from occurring, and take measures for the preservation of property.

Preservation of Evidence

To stop an act of infringement, where evidence may be destroyed or lost or become difficult to obtain in the future, the copyright owner or the owner of a copyright-related right may, before instituting legal proceedings, apply to the court to have the evidence preserved.

The court shall make a decision within 48 hours from receipt of the application. Where the court decides to preserve the evidence, the decision shall be executed immediately.

The court may order the applicant to provide security. If no security is provided, the court shall reject the application.

Where the applicant fails to institute legal proceedings within 15 days counted from the date on which the court undertakes the preservation measures, the court shall revoke the measures.

Damages

Damages for copyright infringement may be calculated based on the losses suffered by the owner of copyright or a copyright-related right. If the actual losses are difficult to calculate, the damages shall be paid on the basis of the unlawful profits gained by the infringer.

When it is difficult to determine either the losses suffered by the owner of copyright or a copyright-related right or the profits gained by the infringer through the infringement, the damages should be assessed not exceeding RMB 500,000 (about USD60, 000), depending on the seriousness of the infringing act.

The court may, upon the request of the owner of copyright or a copyright-related right, incorporate reasonable expenses disbursed in investigating and stopping the infringement into the damages rewarded.

Criminal Sanction

Reproducing and distributing, without the authorization of the copyright owner, works for profit-gaining purposes shall constitute a criminal offense if the circumstances are serious.

When the amount of the illicit income is huge or when there are other particularly serious circumstances, the infringer shall be subject to a maximum of seven years' imprisonment and a fine.

Judicial or Administrative Action

The owner of copyright or a copyright-related right may bring a legal action against copyright infringer directly in court. Where the copyright infringement damages the public interests, in addition to the interests of the owner of copyright or a copyright-related right, the copyright administrative authority may handle the dispute.

Where the copyright infringement damages the public interests, and the illegal proceeds are more than 50,000 yuan, the copyright administrative authority may impose a fine of more than one time but less than five times of the illegal turnover of the infringer; if there are no illegal proceeds or the illegal proceeds are less than 50,000 yuan, a fine of not more than 250,000 yuan may be imposed by the copyright administrative authority according to the seriousness of circumstances.

Jurisdiction

The copyright infringement cases should be under the jurisdiction of the court in the place where the infringing act is conducted; where the infringing products are stored; where the infringing products are confiscated or seized; or where the infringer has his domicile.

The courts of first instance hearing the copyright infringement cases are intermediate courts or courts at higher level and selected basic courts.

For administrative resolution, the request should be filed with the copyright administrative authority in the place where the infringement takes place.

Prescription of Action

Court actions against copyright infringer must be initiated within two years from the date on which the owner of copyright or a copyright-related right obtains or should have obtained the knowledge of the infringing act.

Where the owner of copyright or a copyright-related right initiates a lawsuit against infringer after the expiration of the prescription of action, i.e. two years counted from the date on which the owner of copyright or a copyright-related right obtains or should have obtained the knowledge of the infringing act, and when the legal proceedings are initiated, the infringing act is continuously taking place and the copyright is within the period of copyright protection, the court shall make a judgment to order the infringer to stop the infringing act. However, in determining the damages, only the losses incurred to the owner of copyright or a copyright-related right or the profits gained by the infringer through the infringement within the last two years, counted from the date on which the owner of copyright or a copyright-related right initiates the lawsuit, can be taken into consideration.

Burden of Proof

The plaintiff has to submit evidence to prove his claim against infringer and to support his claim for damages.

Where publishers or producers of duplicated can not prove the legal authorization of their publication or production, or where issuers of duplicates or lessors of duplicates of cinematographic works or works created in ways similar to the making of cinematographic works, computer software, audio recording or video recording can not prove the legal source of the duplicates they have issued or leased, they shall bear legal responsibility.

Appeal

The decision of the court of first instance can be appealed to the court at higher level whose decision is final. The statutory time limit for an appeal is 15 days counted from the date on which a written judgment is served for domestic parties, or 30 days for foreign parties having no residence in China.

The decision of the copyright administrative authority can be appealed to the court having jurisdiction within 15 days from receipt of the notification, if any party is not satisfied with the decision. The judgment of the court can be appealed again to the court at higher level.

Customs Protection of Intellectual Property Rights

Legal Basis

The Customs Law of the People's Republic of China was promulgated on January 22, 1987 and entered into effect on July 1, 1987.

The Regulations of the People's Republic of China on Customs Protection of Intellectual Property Rights were promulgated by the State Council on July 5, 1995 and revised on December 26, 2003. The revised Regulations entered into force on March 1, 2004.

Scope of Protection

The Customs Law forbids the import or export of goods infringing the intellectual property rights protected by the Chinese laws. The intellectual property rights refer to patent rights, trademark rights, or copyrights and copyright related rights.

Recordation of Intellectual Property Rights

An intellectual property right owner may record his right with the Customs General Administration. To record the intellectual property right, the owner shall submit to the Customs General Administration a written application containing the following information:

1. the copy of Certification of Corporation or Identity Card of intellectual property right owner,
2. the copy of certificate of the intellectual property right,
3. the List of the licensee granted by the intellectual property right owner,
4. the Power of Attorney signed by intellectual property right owner

A recordal is valid for ten years, counted from the date on which the recordal is admitted, and can be renewed subject to the validity of the intellectual property right.

Seizure of Suspected Goods

If an owner of intellectual property right finds that suspected goods are to be imported or exported, no matter if his right has been recorded or not, he may request the local Customs to seize the goods. When such a request is filed, evidence proving the infringement, and a bond that does not exceed the value of the goods, should be provided.

When Customs officials find that suspected goods are to be imported or exported, they should notify the recorded owner of the intellectual property right promptly. If the owner of the intellectual property right duly files a request with the Customs to seize the goods, the Customs should seize the goods and notify all the parties concerned. Otherwise, they should release the goods.

If the consignee or consignor denies the infringement, he may provide with the Customs a written explanation together with evidences. If the Customs consider that the evidences are sufficient, it shall release the detained goods.

On the condition that the seized goods are suspected of infringing a patent right, the consignee or consignor may ask the Customs to release the goods by providing a counter-bond.

Actions Following the Seizure

In case that an owner of intellectual property right finds the suspected goods and requests the Customs to seize the goods, the right owner has to request a court to issue a preliminary injunction order against the suspected goods. The Customs shall release the seized goods if it fails to receive a preliminary injunction order within twenty days from the date of seizure.

In case that an owner of the intellectual property right requests the Customs to seize the suspected goods after being notified by the Customs, the Customs shall investigate if the goods are counterfeit and complete the investigation within thirty days from the date of seizure. If no infringement is found, the Customs shall notify the owner of the intellectual property right. The Customs shall release the seized goods if it fails to receive a preliminary injunction order issued by a court within fifty days from the date of seizure.

Disposal of Counterfeit Goods

If the seized goods are found to be counterfeit, the Customs shall confiscate the goods and dispose the goods in the following ways:

1. to transfer the goods to a charity organization, if the goods can be used for the charitable purpose, 
2. to sell the goods to the intellectual property right owner, if the owner is willing to purchase the goods,
3. to auction off the goods after removing the infringing features, or
4. to destroy the goods, if the infringing features could not be removed.