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LEGAL PROTECTING YOUR TRADE MARK IN CHINA A guide to looking after your intellectual property in China and saving your brand from dangerous counterfeiters and the damaging consequences of infringements. IBy Gladwin Legal Partner Rosalyn Gladwin. nternational trade is a significant part of many businesses, as goods are often required to be imported or exported. In particular, China is a prominent destination for international business, with many retailers regularly dealing with Chinese manufacturers, distributors and customers. When engaging in overseas business, it’s critical that retailers understand how to protect their brand according to international law. While registering your trade mark is a good start, extra precautions should be taken to protect against overseas infringements. Early detection of trade mark infringement or misuse is crucial for timely enforcement of your intellectual property rights. Moreover, taking steps to protect your trade mark can prevent trade mark dilution, which occurs where others use a mark similar to yours and for similar goods or services. This dilutes the value of your mark. Don’t let complacency devalue your brand. Recording your intellectual property in China Businesses with a registered trade mark in China may lodge an application to record the mark with the Chinese customs authority for a relatively small fee. Once your right is recorded, Chinese customs officers are empowered to seize goods coming into or being exported from China that are in breach of your intellectual property rights. What happens when there is a suspected infringement? In circumstances where the Chinese customs authority finds goods it suspects of infringing on your recorded intellectual property right, they will notify you or your legal representative. Following notification, you have three working days to: • Verify the authenticity of the goods You’re required to contact the Chinese customs authority and check whether or not the goods are authentic. • Apply to have the goods seized If you determine that the goods do infringe your rights, you can apply for official detention of the goods by Chinese customs officers. You must include all evidence of the infringement in your application. • Pay a security deposit This amount will cover any charges that the Chinese authorities may incur while detaining the goods, and any losses if there is wrongful confiscation. The amount of the deposit is: • Where the declared value of the goods is under RMB20,000, 100 per cent of the value of the goods. • Where the declared value of the goods is between RMB20,000 and RMB200,000, 50 per cent of the declared value, with a minimum of RMB20,000. • Where the declared value of the goods is more than RMB200,000, RMB100,000. After these steps have been completed, the Chinese authorities have 30 working days to determine whether the detained goods infringe an intellectual property right. What happens if the goods are found to be unlawful? If the goods (are) found to infringe your intellectual property right, the goods may be: • Destroyed. • Bought by the rightful owner. • Debranded and auctioned or donated to charity. The importer or exporter (infringing party) will also be fined about 30 per cent of the declared value of the goods. Final thoughts Protecting your trade marks and other intellectual property overseas is crucial for the maintenance and success of your business. To protect your brand in China, retailers should lodge an application of recordation with the Chinese customs authority and ensure they have detailed processes in place to deal with suspected infringements of their intellectual property rights. About Rosalyn Gladwin Rosalyn is the principal of Gladwin Legal, being an expert in all facets of retail law, including commercial and corporate law and retail leasing. She has extensive legal experience in the retail industry, having worked in a national ASX listed retailer for seven years as well as in highly regarded national and international law firms. About Gladwin Legal Gladwin Legal is the law firm for retailers. As experts in retail law, the firm understands the legal matters that challenge retailers daily. Its areas of expertise include retail and commercial leasing, supply and distribution agreements, intellectual property, e-commerce and IT agreements, sale of business and competitions and trade promotions. Get in touch at gladwinlegal.com.au. 66 RETAIL WORLD JUN, 2021