Beating infringement at the border – catching counterfeiters in China

China is one of the largest importers and exporters in the world and is consistently identified as the primary source of counterfeit goods. Therefore, when a company is considering its global anti-counterfeiting strategy, protection at Chinese ports is critical.

Step one – register, then record

It goes without saying that registering a company’s marks is the single most important step in protecting its brand. Chinese customs officials search for IP infringement on imports and exports. Therefore, as China exports a large amount of counterfeit goods, registration with the China National IP Administration (CNIPA) is crucial.

Early filing and broad coverage will help to avoid issues further down the line. China is a first-to-file jurisdiction, so filing early is vital for:

• brand owners already doing – or planning to do – business in China;
• those manufacturing in China (be aware of the changing trends in original equipment manufacturer exceptions); and
• those concerned about counterfeits in their home country or with known competitors in China.

Further, early filing means that companies can avoid taking action against trademark squatters and other bad-faith parties and dodge the potential barriers created by similar marks. While IP protection is improving in China with new regulations and court trends, trademark squatters and bad-faith filings remain a concern. Moreover, as the CNIPA is the busiest trademark office in the world, prior legitimate trademarks create more traffic to navigate and may block a brand owner’s way to registration.

After a mark has been registered at the CNIPA, the registration should then be recorded with China’s General Administration of Customs (GAC). This is referred to as a customs recordal. Patents and copyright may also be recorded with the GAC.

A customs recordal notifies customs officials of the registered IP right and its associated goods. Once this information has been entered in the customs database, it is easier for the authorities to spot and investigate suspected infringing shipments in their standard daily inspections. Although other proactive steps can aid in stopping suspect shipments, the authorities regularly find infringing goods on their own. Therefore, customs recordals are extremely useful.

To apply for a customs recordal, the trademark owner must submit several documents including a copy of its trademark registration certificate (for international trademarks, owners must request a certified copy of the certificate as this is not automatically issued). It usually takes about 30 days to complete the recordal. This, along with the subsequent surveillance, has a validity period of 10 years from the date of approval, with renewals available.