China: China's Court-customs IPR Linkage Mechanism - Border Measures In IP Enforcement And Beyond

The official statistics published by China Customs indicated that, in 2022, it had detained more than 60,000 batches of suspected infringing goods with a total of nearly 80 million pieces of items nationwide. From this, one can see that border measures have always been a powerful tool for rights holders to combat IPR (intellectual property rights) infringement in import and export actives.

In addition to conventional customs enforcement measures, rights holders can also utilise the customs border measures to seek civil remedies and request the relevant authorities to take criminal action against infringers.

This article will focus on some features of the often overlooked but significant IPR linkage mechanism between courts and customs in China.

The court-customs IPR linkage mechanism

The court-customs linkage mechanism is not a statutory operational mechanism, but in recent years, we have observed its establishment in various regions across the country, particularly in coastal areas.

The mechanism typically focuses on the sharing of information about goods that infringe on intellectual property rights during customs clearance. This involves regular communication between courts and customs on the sharing of information and cases of IPR infringement, as well as co-operation on procedural co-ordination in administrative actions and litigation cases. This model represents a novel approach to establish a synergistic administrative and judicial IPR protection system at the entry and exit points of goods, as supported by the national IPR protection policy.

Mediation mechanism

Many customs and courts have established joint mediation mechanisms for IP infringement cases so that disputes can be resolved in a quick and amicable way. Through this collaboration mechanism, potential IPR infringement disputes can be resolved at an early stage, saving time and resources for both parties.

Preliminary injunction

There are also cases where courts have granted preliminary injunctions against goods seized at customs after the seizure period has expired. These injunctions prevent the release and circulation of the goods in the market while the lawsuit is ongoing. By granting such injunctions, courts ensure that the seized goods remain under custody until a final judgment is reached. This measure effectively prevents further infringement and minimises the economic losses suffered by the rights holders.

Evidence collection

Rights holders can fully leverage the evidence obtained through customs to substantiate their claims. As the competent authority for IPR border protection, the customs has the power to gather and investigate information about the origin and quantity of infringing goods. In addition, customs-collected evidence and information are generally accepted by courts (and other administrative authorities). By presenting evidence collected by the customs, rights holders are thus able to put forth more solid arguments, particularly with regard to the source of the infringing products and the calculation of damages.

Criminal action

In accordance with Chinese law, when the court, in the course of hearing a civil case, discovers important facts that may constitute a crime, the court shall transfer the case to the police for further investigation. In practice, the customs can also transfer the case when conditions are met. However, in the event that the customs is unwilling to take the initiative to transfer the case for further criminal investigation, an alternative approach for the rights holders is to request the court to transfer the case to the Public Security Bureau (PSB), so that a criminal investigation can be initiated in a timely manner, and the criminal liability of the infringers can be pursued.

The features mentioned above provide us with valuable insights on how rights holders can effectively leverage the said linkage mechanism to fully harness the combined advantages of court procedures and border measures. This should help to maximise the effectiveness of preventing the inflow and outflow of infringing goods into and out of the Chinese market, thereby safeguarding the market interests of the rights holders, both domestically and internationally.

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