China Customs seizures of IPR infringing goods skyrocket in 2014 demonstrating the importance of Customs IPR recordation

China Customs agency has released a summary of its IP enforcement efforts in the year 2014, which contains some useful data on the overall shape and scale of customs seizures. The report was released on May 8, 2015. The numbers are analyzed and demonstrated below. It reveals the importance of registering your IPR, particularly trademark and copyright, with the customs authorities in China.

According to the report, China Customs through its local authorities suspended clearance of over 27,008 shipments in 2014, and detailed almost 23,860 of those on suspicion of IP infringement. Most notably, 99.5% of the number of goods seized were to be exported. This represents a 17% increase from 2013. And those shipments were bigger on average in terms of volume, with the number of detained goods rising by 21.09% to nearly 92 million pieces.

Nearly 99.9% of actions were carried out on an ex officio basis, which means that the Customs take proactive roles. To achieve this end, most importantly, those IPR holders have already registered their IPR with the China Customs so that it has the basis for checking whether a particular shipment of goods infringes the IPR. In addition, education efforts targeted at customs officers, so that they can identify suspect goods, also remain a top priority for IPR owners. The report specifically mentions that local Customs bureaus such as Shanghai, Ningbo, and Nanjing invited representatives from Quality Brands Protection Committee member companies to conduct training sessions, which clearly shows that China customs are willing to welcome input from IPR holders.

As for types of IPR, seizures based on a trademark rights accounted for the vast majority of Customs actions – 96.86%. Surprisingly, patents come next, at 1.94%, while copyright infringing goods made up 1.20%. This is a shift from a previous situation where copyright came in second place. In 2012, the copyright was taking up almost 4% while patent was only 0.38%. A possible explanation is that design patent is becoming an increasingly popular way to enforce IPR. Another reason is that copyright holder may find it a bit difficult to register copyright in the first place let alone recording copyright at the China Customs.

In terms of breakdown based on types of goods, tobacco tops the chart with 44.03% in terms of the number of goods detained. The second place was taken by some unidentified goods. Other goods in the top list include cosmetic products, clothes, metal hardware, shoes, and auto parts. In short, most of the infringing goods are consumer goods.

Dripping down to nationality of IPR holders with the largest number of enforced IPRs, US comes in the first place. US companies are also topping the list of case values of the detained infringing goods. You may get a sense of what are the top IPR holders whose IPRs were enforced in China Customs from the chart below.

In summary, China Customs has become a powerful vehicle for enforcing IPR in China, which can easily stop infringing goods from exporting out of China. You may read a copy of Chinese version of the whole report here.