The Importance of Registering IP With China Customs

According to the Regulations of the P. R. China on Customs Protection of Intellectual Property Rights, an IPR holder may request the Customs to take protective measures for their IPRs in two modes of “Protection Ex Officio” or “Protection on Request”. At present, the IPRs protected by China Customs refer to the exclusive right to use trademark, copyright and copyright-associated rights, patent right, and exclusive right of Olympic symbols and that of World Expo symbols that are involved in import or export goods and protected by the laws and administrative regulations of the P. R. China.

 

Article 2 Customs protection of intellectual property rights in these Regulations means the protection provided by the Customs for the exclusive rights to use a trademark, copyrights and their related rights, and patent rights (hereinafter referred to as intellectual property rights) related to import or export goods and protected under the laws and administrative regulations of the People’s Republic of China.

 

Essential information for registering IP, trademark, copyright and/or patent with China customs

>> A copy of your business license or certificate of incorporation (or other legal document confirming the existence your company). These documents must be in Chinese or translated into Chinese.

>> A copy of the Chinese registration certificate for your trademark, patent or copyright.

>> A Power of Attorney.

>> Pictures of the goods for which you are seeking protection and their packaging.

 

How to Record Trademarks with Customs in China

>> After all documents have been submitted, approval takes approximately 30 days.

>> Recordal lasts 10 years or the duration of the IP (whichever is shorter). During this time, we recommend you to maintain contact with key ports.

>> You must inform GACC of any changes to the recordal such as assignment to another party (i.e. change of owner), licensing, cancellation of the right etc.

>> Each individual trademark recordal costs RMB800. This can cover several products.

>> Companies registered in China can apply to GACC directly or entrust a domestic attorney to handle the registration. Companies without a registered China office must use an authorized domestic attorney.

 

If you register your IP with China Customs, they will contact you any time they discover a shipment of possibly infringing goods. At that point you have three working days to request seizure of the goods. Assuming you request seizure (and post a bond), Customs will inspect the goods. If Customs subsequently concludes the goods are infringing, they typically either donate the goods to charity (if the infringing mark can be removed) or destroy them entirely.

Depending on the different entities initiating the procedure, customs IP right protection can be divided into two types. One is ex-officio customs action or active protection. The other is passive protection where the IP right holder applies for detainment of the infringing products once finding any infringing products have been imported or exported.

Unlike European customs authorities which only focus on imported goods, the Chinese customs also examines goods leaving China and has the authority to protect intellectual property rights (IPR) by seizing infringing goods. Per the annual report published by the General Administration of Customs in China (GACC), Chinese customs detained thousands of consignments each year of suspected infringing products preventing them from being sold in external markets.

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How Businesses can Avoid Getting Booked by China Custom

The Chinese government has taken few stern steps promulgated a series of new regulations affecting companies that import and export taxable goods and services in China. The regulation is formulated for the purpose of safeguarding State sovereignty and national interests, strengthening supervision and control by the Customs, promoting exchanges with foreign countries in economic affairs, trade, science, technology and culture, and ensuring socialist modernization.

Customs offices are set up by the State at ports open to foreign trade and at places where concentrated Customs operations are required for supervision and control. The subordination of one Customs office to another shall not be restricted by administrative divisions.

The Customs offices exercise their functions and powers independently in accordance with law and are accountable to the General Customs Administration. Companies importing products from, or exporting products to, China will generally come into contact with the following three types of taxes:

  • Value-added tax
  • Consumption tax
  • Customs duties

The Chinese government has clarified the import items into three categories: First- Prohibited (toxics, wastes), Second- Restricted (selected products that require quotas or licenses), Third- Permitted (most goods fall under permitted categories).

Over the years it has been noted that many US and European companies face immense problem by the Chinese custom department. Legal hassles are quite common incidents that foreign businesses face and come quite often to the China lawyers for possible remedies. Here are few tips shared by the professional China lawyers to avoid custom related problems.

  • The very first thing you need to do is stop trying to dupe China customs by under-reporting the amount of good you are exporting here. If your website says you sell your widgets for USD$2000 and you declare their value with China customs at USD$500, you will get caught. The only thing that can save you if you are able to prove the product just looks the same as the one on your website, but it isn’t. Otherwise, if you are going to furnish the excuse that just because everyone does it, you did it, then you are in massive problem.
  • When China customs coming after you, it is certain that they have ample evidence against you on the basis of which they are going to criminally prosecute you. The best defense against this situation is to stay calm and hire a good China lawyer.
  • In the case you have really broken custom related laws of China, the best option is to confess the act and restrain from claiming innocence. The reason of admitting the fault is generally China goes much easier on those who confess.

While doing business in China, be sure you are not taking any unethical approach. If you unwittingly caught for any wrongdoing in China, take help from the experts.

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