Legal analysis on infringement of intellectual property rights of export products

Recently, American customers bought Chinese lamps and entrusted the agents to find a lamp factory by looking up Alibaba website. At last, the designs of lamps produced by the lamp factory have been approved by the buyer. Then, the U.S. buyer pays for the order. Order multiple containers. When the goods are exported, the customs of China found that the design of the export lamps infringed rights, and seized the goods. What should we do at this time?

The infringing goods detained by customs involve various types of intellectual property rights, such as the exclusive right of trademark, the right related to copyright, patent right, Olympic mark and World Exposition mark. Among them, because the trademark infringement products are intuitive and easy to identify, the goods infringing the exclusive right of trademarks occupy the vast majority of the detained infringing goods. Because the patent right (mainly refers to invention patent and utility model) is relatively complex in technology and difficult to identify, it is difficult for customs to find goods infringing patent rights in the daily supervision. Therefore, in terms of the Customs Protection of intellectual property related to invention patents and utility models, it is suggested that the patentee should investigate the information of entry and exit according to the infringement clues and apply to the Customs for detaining the suspected goods of infringement at the same time as the General Administration of Customs for the intellectual property right filing, so that the special rights can be effectively protected.

The main purpose of the Customs Protection of intellectual property is to protect the intellectual property rights which have been filed in the field of import and export effectively, and to help to combat the infringement. However, some domestic enterprises or individuals in China rush to mark other people’s prior trademarks and record them at the customs, which often cause troubles to the normal import and export of foreign enterprises.

The protection of intellectual property customs refers to the measures taken by the customs to stop the import and export of goods that infringe intellectual property rights protected by national laws or administrative regulations at the border according to the authorization of the state law. According to the provisions of Article 2 of the regulations of the people’s Republic of China on the protection of intellectual property customs (hereinafter referred to as the regulations on the protection of intellectual property customs), the protection of intellectual property customs refers to the protection of the exclusive right of trademarks, copyrights and rights and patent rights related to copyright which are related to import and export goods and protected by the laws and administrative regulations of the people’s Republic of China.
In practice, there are two main ways of protection.

A. Article 16 of the regulations on the protection of intellectual property rights stipulates that “if the customs finds that the import and export goods are suspected of infringing the intellectual property rights on record, the customs shall immediately notify the intellectual property right holder in writing. If the intellectual property right holder applies in accordance with the provisions of Article 13 of these regulations within 3 working days from the date of service of the notice and provides security in accordance with Article 14 of these regulations, the customs shall detain the suspected goods infringing, notify the intellectual property right holder in writing, and deliver the customs detention voucher to the consignee or consignor. If the intellectual property right holder fails to apply for the application or fails to provide security within the time limit, the customs shall not detain the goods. ”

If the customs discovers that the import and export goods involve the intellectual property rights for record during the customs clearance, the consignee or consignor may request the consignee or consignor to declare the intellectual property rights of the goods within the specified period and submit relevant supporting documents; If the Customs has reason to believe that the goods are suspected of infringing the intellectual property rights filed with the General Administration of customs, the customs shall have the right to suspend the issuance of the goods.

The customs will determine whether the infringement is based on the proof materials submitted by the detainee. Generally, in some more complex cases, the customs will make a conclusion that it will not be recognized, and inform the applicant to apply to the people’s court for measures to stop infringement or property preservation within a certain period of time, and send the notice of assistance to the implementation of the people’s court. If the notice of assistance to the implementation of the people’s court is not received within the time limit, the customs will release the goods concerned.

B. Article 12 of the regulations on the protection of the customs of intellectual property rights stipulates that “if the intellectual property right holder finds that the infringing goods are about to be exported, he may apply to the Customs at the place where the goods enter and exit to detain the suspected goods of infringement.”

Whether the intellectual property right holder has filed with the General Administration of customs, as long as it is found that the suspected goods are about to be imported and exported, they can apply to the Customs at the place where the goods enter and exit to detain the suspected goods. If the intellectual property right holder requests the customs to detain the suspected goods infringing, he shall submit an application and relevant supporting documents, and provide evidence sufficient to prove the fact of infringement. If the intellectual property right holder requests the customs to detain the suspected goods infringing, he shall provide the customs with a guarantee not exceeding the equivalent of the goods, which shall be used to compensate for the losses that may be caused to the consignee or consignor due to the improper application, and to pay the storage, custody and disposal expenses of the goods after the detention by the customs; If the intellectual property right holder directly pays the warehousing and storage expenses to the warehouse provider, it shall be deducted from the guarantee.

A. How to deal by the import and export business
If the importer considers that the goods have not infringed the intellectual property rights of the intellectual property owner C, he shall submit a written explanation to the customs and attach relevant evidence. It is necessary to note that if the importer fails to declare the status of the intellectual property rights of the goods and submit the supporting documents in accordance with the provisions, the Customs has the right to suspend the release of the goods.
If the consignee or consignor considers that the import and export goods have not infringed the patent right, they may, after providing the customs with the security deposit of the goods equivalent to the goods, request the customs to release the goods. Generally speaking, because the judgment of patent infringement is more complex, the customs will release the detained suspected goods of infringement after receiving the security deposit provided by the consignee or consignor. The customs will notify the intellectual property right holder in writing when it decides to release the goods. The intellectual property right holder shall bring a suit in a people’s court within a reasonable period of time. If the intellectual property right holder fails to bring a suit in the people’s court within a reasonable period of time, the customs will return the security deposit to the party providing the security.

B. intellectual property owner court take action
After applying for customs detention of suspected goods infringing, the intellectual property right holder may bring a suit in a people’s court within a reasonable period of time. The court with jurisdiction may include the court where the customs seal up the place of seizure, the court where the accused infringer is located, etc. If the people’s court decides that the suspected goods infringe on the intellectual property rights of the intellectual property right holders, the intellectual property right holders shall bear the liability for compensation according to law.

If the party who has seized the import and export goods considers that it does not infringe the intellectual property rights, it may provide a written explanation to the customs and attach relevant evidence to prove that the party does not infringe. In addition, in order to speed up the release of goods, if the consignee or consignor of the goods suspected of infringing the patent rights thinks that the import and export goods have not infringed the patent right, they may, after providing the customs with the security deposit of the goods equivalent to the goods, request the customs to release the goods.

As a party of intellectual property rights, the customs protection system of intellectual property rights can be used to protect their intellectual property rights. However, it is also necessary to apply for customs to detain the goods suspected of infringement in the case of definite evidence, or they will bear corresponding responsibilities. For example, if the intellectual property right holder requests the customs to detain the suspected goods of infringement, the customs cannot determine that the detained suspected goods infringe the intellectual property rights of the intellectual property right holder, or the people’s court decides that the intellectual property rights of the intellectual property rights holders are not infringed, the intellectual property right holder shall bear the liability for compensation according to law.

This case also involves foreign-related licensing processing, namely OEM production. The judicial decisions of various courts are different, and the mainstream view is that the products produced by OEM are not sold in China, which is regarded as non infringement. The reason is that all the products processed and exported by foreign-related licensing are sold to a foreign market, and the trademarks marked on the products and packaging are the legal trademarks of the OEM client in the foreign countries. Therefore, the relevant consumers in the foreign market distinguish the source of the goods by trademark marks from the foreign companies. However, because all the products involved are exported and not actually sold in the Chinese market, there is no possibility that the domestic consumers may confuse and misidentify the source of the goods.
In terms of whether OEM production belongs to “trademark use”, the Supreme People’s court also provides clear legal opinions in the administrative judgment of the company’s good product plan and the Trademark Review Committee of the State Administration for Industry and Commerce of the people’s Republic of China. In the judgment, the Supreme People’s court held that: trademarks only play their functions in the circulation of goods. Therefore, in this case, although the company’s good products plan entrusts Chinese enterprises to produce related goods for export, the products printed with the logo are neither sold in the Chinese market, but the publicity and reports are overseas, and are not “trademark use behavior”. According to this legal opinion, we can infer that the behavior of labeling foreign trademarks on OEM products is not a “trademark use behavior”, so it does not constitute infringement of the trademark rights of others.