The Customs Regulations for the Protection of Intellectual Property Rights in China were promulgated on July 5, 1995 and went into effect on October 1, 1995. The Regulations provide for special measures to bar the import/export of infringing goods and enable the owner of a granted patent, trademark registration or copyright to file an application to record such right with the General Administration of Customs. The application must include full particulars of the intellectual property right and its owner as well as pertinent information concerning the infringement. The recordal will remain in effect for 7 years and will be renewable indefinitely for additional 7-year terms. Customs will be permitted to charge fees for the recordal, but no information on such charges is available yet.

When the owner of the recorded intellectual property right learns about the import/export of infringing goods, he may petition Customs to take measures for the protection of such right, including the temporary detention or confiscation of the goods. If Customs ascertains, through its own sources, that infringing goods are about to enter or leave the country, they may detain them and notify the owner of the recorded intellectual property right to enable him to apply to Customs for protection. The importer/exporter of the infringing goods may submit a written statement in reply to Customs within 7 days of receipt of notification of the detention of the goods. If Customs determine that the goods infringe a recorded intellectual property right the goods may be confiscated. Should Customs conclude that there is no infringement, or if no legal action is taken in court by the party or parties concerned within the prescribed term, or if the owner of the recorded intellectual property right does not respond to the notification issued by Customs, the goods will be allowed to be imported/exported. In the event that it is shown that the exporter/importer of the goods was aware that they infringed the intellectual property rights of a third party, or if he reported falsely on the status of such rights to Customs, he will be subject to a fine in an amount equal to the CIF or FOB price of the goods. An initial decision issued by Customs at the administrative level is subject to an appeal for reconsideration at a higher level within Customs and the decision at the higher level is appealable to the court.

These regulations serve to demonstrate China's efforts to increase protection for intellectual property rights and our clients are urged to take advantage of them in appropriate cases.