Jacob Schindler

According to a report from Xinhua news agency, a special IP enforcement campaign is being undertaken by customs authorities at a national level in China. One particular initiative, in the high-tech hub of Shenzhen, is of particular interest given what kinds of goods are apparently being targeted and on whose behalf.

A short item in English from last week notes that the special campaign, which China Daily calls Longteng but is more colourfully translated as “Soaring Dragon”, has resulted in customs agents around the country seizing more than one million IP-infringing products in 46 shipments bound for export since 1st September. Those who follow the trademark side of things will know that authorities in China are fond of using these types of special campaigns to highlight points of emphasis in their enforcement efforts. This one will run until the end of the month.

Xinhua’s coverage of the special action zeroes in on Shenzhen, where the local customs administration says, as the result of 73 investigations, it has seized 260,000 export-bound products that infringe patents held by local companies. The report doesn’t give any further detail . While it’s a fairly large number, it could be that many of the seizures stem from design patents, infringement of which would be more straightforward for customs officers to spot.

While many past customs enforcement campaigns have focused on foreign rights owners (often big international brands), this one was carried out on behalf of domestic tech companies. China Daily explains that it is part of the government’s plan to “nurture Chinese companies with IP advantages in their exported goods”. In planning the “Soaring Dragon” operation, the Shenzhen authorities selected patent owners that were deemed “capable of independent innovation” – Huawei and ZTE chief among them.

The ability to stop infringing goods from export at the border is one of the key pieces of the puzzle when it comes to China’s utility as a patent enforcement jurisdiction. The country's General Administration of Customs (GACC) says that the number of goods it seized on suspicion of patent infringement rose by 82% between 2015 and 2016.

If the intent is to gather evidence for a potential suit, patent owners generally need to post a bond and provide customs with the details for each shipment, including the container number – information that could require extensive effort to obtain. With a court judgment in hand, blocking goods from export is more straightforward, and the Chinese authorities have years of experience enforcing such orders in the trademark sphere, so the system is fairly well-developed.

Some patent owners have been able to deploy much more proactive programmes in the past as well. IAM has reported that by engaging directly with the GACC, at least one group of SEP rights holders have persuaded authorities to automatically block shipments of standards-compliant goods which are not on a “white list” of licensees provided by the rights owners.

Whatever the details behind the numbers GACC is publicly promoting, the message is clear: if you’re an innovative Chinese company and your patents are being infringed, the customs services is one of the tools at your disposal. The more proactive they become, the more potent a remedy this will be, especially for the likes of Huawei and ZTE.