China to Combat Infringing Exports
China announced that its Customs Administration will undertake a special enforcement campaign aimed at protecting intellectual property (IP), from July 1 to Dec. 31, 2019. The special enforcement period will target key product sectors: consumer electronics, automotive accessories, personal care supplies, clothing, bags and footwear.
The Chinese announcement appears on the government’s IP website (www.chinaipr.gov.cn).
The announcement emphasizes China’s effort to focus on IP infringing goods that are intended for export markets. In addition, the campaign seeks to take enforcement actions regardless of the mode or method of transport to include efforts to stop goods flowing through its mail system or being shipped via express couriers.
China’s announcement underscores the problems that confront governments and IP owners globally. The targeted product sectors hint at the broad scope of goods affected by IP infringement. The various transport methods used by producers of infringing goods to distribute such goods underscores the challenges of detecting infringing goods. And the fact that China’s enforcement campaign will focus on infringing goods intended for export markets highlights a major deficiency in the current global standard as set out in the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
China’s export-focused enforcement campaign demonstrates a clear policy of IP border enforcement that exceeds the TRIPS minimum requirements. The WTO’s TRIPS agreement requires WTO members to have IP border measures only against imports of IP infringing goods, not goods intended for the export market.
According to IP seizure statistics by the customs administrations of the U.S., EU and Japan, China is the leading source of IP infringing goods seized. Absent efforts by China Customs to stop exports of IP infringing goods, the enforcement burdens on the customs administrations of the importing countries would be greater than they are already.
China’s announced campaign to combat exports of IP infringing goods is an opportunity to examine whether governments and IP owners should revisit the current global standards regarding IP border measures. In addition to China, numerous other countries have chosen to enact laws that permit enforcement actions to stop IP infringing goods intended for export or are moving in-transit to a third country. In some cases, governments also have chosen to allow enforcement against infringing goods into or from free trade zones.
In March 2019, an OECD-EUIPO report estimated that, based on 2016 data, the global trade in counterfeit and pirated products might be as high as US$509 billion. This estimate did not include infringing goods made and sold in the same country or the online environment, both of which would likely add significantly more to the estimate.
While China’s campaign to target infringing exports is admirable as this goes beyond the WTO’s minimum standards for border measures, it underscores the need for the global community to revisit the minimum standards of the WTO’s TRIPS border measures.
In view of the massive value of trade in counterfeit and pirated goods as reported by the OECD-EUIPO, and the many instances of seizures of goods that pose a public health and safety threat, it seems that the current global standards for IP border measures that went into effect over 20 years ago may no longer be sufficient to combat the global infringement trade.
For governments seeking to protect consumers from the threats posed by counterfeit and pirated goods and IP owners combating those who seek to deceive the public, raising international enforcement standards should be pursued. In the absence of efforts at the WTO to strengthen IP border measures, governments and IP owners are working to raise IP border enforcement standards in regional and bilateral agreements, with one example being the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The European Commission’s Regulation on Border Enforcement, the CPTPP, a regional agreement, and the U.S.-South Korea free trade agreement are examples of post-TRIPS agreements that obligate governments to provide IP border enforcement for infringing goods above the TRIPS minimum standards. These agreements and the regulation could be used as the bases for the international community to adopt a stronger global standard for IP border measures to combat the threat posed by the international trade in IP infringing goods.
This post was written by Timothy Trainer, a co-author of Customs Enforcement of Intellectual Property Rights, published by Thomson Reuters. Follow Trainer on Twitter @TTrainerglobal.