Counterfeit Goods Seized at Xiamen Customs, Export Company Pays Compensation
In May 2012, Xiamen Customs identified 1,332 pairs of suspected counterfeit shoes with a declared value of RMB 100,000. The goods were being shipped to the United States. We had previously assisted our client, a leading US based global manufacturer and retailer of outdoor wear, with recording their goods at China Customs. The goods were identified by the trademark owner as counterfeit and have been detained. Investigation of the factory that produced the shoes is still ongoing, but the export company was readily identifiable from the required documentation they filed at China Customs for exporting the counterfeit goods.
According to the Chinese trademark law an export company may be held liable for trademark infringement. Article 50(2) of the Implementing Regulations of the Trademark Law of the People's Republic of China states that any of the following acts shall constitute infringement: "intentionally providing storage, transportation, mailing, concealment, or other conditions that can facilitate the infringement of another's exclusive right to use a registered trademark."
Our firm sent the export company a Demand Letter informing them that their assistance to store and transport the counterfeit products constituted trademark infringement, requesting compensation for their infringing activity, and demanding assurances that they would more closely monitor for, and refuse to export infringing products in the future. After several rounds of discussion, an agreement was reached whereby the export company agreed to fully perform their duty of care in future operations and to pay RMB 20,000 to compensate for the legal expense our Client paid to stop the infringement.
In addition to preventing infringing goods from entering foreign markets, recordal of trademarks, patents, and copyrights at China Customs may allow for compensation in civil litigation and criminal liability for infringers, including the export company.