Legal

Updates On Border Measures of China and Taiwan

Mainland China amended Regulations on Customs Protection of Intellectual Property Rights (hereinafter “the amended Regulations”), and the amended Regulations became effective as of April 1st, 2010. Coincidently, in July 2010 Taiwan Customs also underwent a change by abolishing the Trademark Export Monitoring System (TEMS), which was replaced by Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Patents, Trademarks, and Copyrights (hereinafter “Directions”). For the convenience of IPR proprietors and practitioners, we compare the border inspection of these two regions below:

China urges IP proprietors to timely update their IPR recordal with the Customs General Administration (CGA) –
The IPR recordal system functions to enhance the efficiency of the Customs inspection of export/import goods in order to stop IPR violations at the border. While it is not a compulsory or preliminary requirement for IP proprietors to seek the Customs’ protective measure, an IPR recordal with the CGA can automatically alert the Customs when inspection is carried out, and the IP proprietors on record will be immediately notified before the suspect goods are released. The CGA recordation system allows IP rights with a registration number including trademark, patent and copyright to be recorded.

However, some incorrect or out-dated recordal has caused CGA a great waste of resources on the inspection and detention of suspect goods. The newly amended Regulations therefore added a provision to urge IP proprietors to carry out amendment or cancellation procedures within 30 working days from the date on which changes to IPR occur. In the event that CGA’s wrongful detention is due to IP proprietors’ failure to maintain a correct recordal, the CGA may revoke the recordal ex officio or at an interested party’s request.

Taiwan Directorate General of Customs (Taiwan Customs) no longer accept applications for recordal of trademark rights since abolishing the TEMS:
 

Similar to the IPR recordal system, the TEMS used to alert the Taiwan Customs authorities of suspect trademark infringements. However, unlike China where all registered IP rights can be recorded with the CGA and the recordal gives alerts to both import and export inspection, the TEMS only recorded trademark rights for export monitoring purposes. Therefore, the abolishment of TEMS does not affect the Customs import monitoring and subsequent measures taken against patent infringements. While most of the Customs’ monitoring measures remain unchanged, the “Directions” which replaced the TEMS, highlights the following:

 For trademark rights and copyrights, it adopts a “complaint-based protection” principle, but additionally allows the Customs authorities to act on IPR proprietors’ advice, or inspect, ex officio, on suspicion of trademark/copyright infringements. 
 For patent rights, the Customs can only detain goods based on a court judgment or preliminary injunction issued by the court.
 In addition to the above-mentioned complaints/court judgment/preliminary injunction, the proprietor also needs to provide detailed information, such as name of the suspect importer/exporter, port of import/export and date thereof, flight/vessel/container number, and/or place of storage, in order to request the detention at Customs.
 

It is worth noting that China’s CGA issued a notice in June, in which it warned IP proprietors who have recordal with the CGA but fail to respond to CGA reports of suspect shipments or fail to properly update information of their authorized suppliers, thereby creating difficulties for the CGA in performing their duties, that the CGA may cancel their IP recordal and no longer assist these IP proprietors.  The notice aims at resolving the problem of wasting Customs officials’ efforts, especially when IP proprietors tend to selectively respond to CGA reports. 

While Taiwan Customs has not resorted to the same means, they no longer disclose the volume of the suspect goods they stopped at the border when reporting to the IP proprietors.