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      Mind the Gap - The IP Protection law vs. customs recordal in Hong Kong

      Published on 28 Jan 2021 | 3 min read
      IP enforcement in key global markets is increasingly complex. What's the legal theory? What's the reality in practice?

      The Enforcement Gap refers to the difference between legal theory on anti-counterfeiting; that is how the laws purport to prevent such illegal activities and the practical outcomes. This is the last leg of the series of articles which examines the Enforcement Gap. Our last eight pieces explored the the Enforcement Gap in Thailand, Russia, China, Philippines, Indonesia, Cambodia, UAE and Vietnam.

       

      The Enforcement Gap in Hong Kong

      Customs recordal is one of the most effective and efficient ways of protecting a brand owner’s intellectual property rights. It is often overlooked as IPR owners do not want to get entangled in bureaucratic processes and red tape. Yet it offers a unique and valuable method for combating infringements since it is primarily used to cut off the entry and exit of infringing goods in certain jurisdictions.

       

      Customs recordals

      The Customs recording process in jurisdictions such as Mainland China and the European Union (“EU”) is relatively easy. It can be done online by simply filling in the necessary details and submitting the relevant documents through an online platform. Whereas no official fees are charged for Customs recordal in both Hong Kong and the EU, China Customs imposes a fee of RMB 800 (~USD 115) per trade mark recordal.

      Once the General Administration of Customs (‘GAC’), which is the customs authority in the Mainland, has approved the recordation, it becomes effective from the approval date and will be valid for a period of 10 years. For EU, the Customs recordal, which is termed as an Application for Action (“AFA”), has a validity not exceeding one year which can be extended upon request. 

      The ease of the recordal process, however, comes with a downside as the IPR owner needs to be prepared for the correlative bonds, fees and damages which may be incurred for the actions taken by these Customs authorities. For China, whenever the GAC detains suspected infringing goods either through an application by the IPR owner or ex-officio action by the customs authorities, a bond needs to be provided that will cover the potential losses of the consignee or consignor and/or costs incurred by Customs for warehousing, storage and destruction of the infringing goods. The same holds true for the AFA as the IPR owner is required to submit an undertaking where it will pay all costs and liabilities incurred from the moment of detention or suspension for the release of goods.

       

      Hong Kong Customs Recordal

      In contrast, the Customs & Excise Department (‘HKC&E’), which is the only department in Hong Kong responsible for taking criminal sanctions against copyright and trademark infringements, employs one of the most stringent and cumbersome Customs recordation processes compared with the jurisdictions mentioned above. Notwithstanding, once the rigorous recordation process is completed, IPR owners immediately realise the benefits since there is no bond or guarantee required to detain infringing goods.

      The two integral requirements in Hong Kong Customs recordal are as follows:

      1. The IPR owner needs to locate a competent examiner to examine the seizure; and
      2. There is a current case of trademark or copyright infringement happening in Hong Kong.

      Upon the submission and approval of the required documents, the HKC&E will arrange a meeting with the nominated examiner to assess his competency.

      Upon the submission and approval of the required documents, the HKC&E will arrange a meeting with the nominated examiner to assess his competency.

      As simple as it may seem, Customs recordation in Hong Kong involves expending a lot of time and effort not just in preparing the required documents, but also in facilitating and coordinating with both the intellectual property rights owner and the HKC&E. Even if an examiner has been successfully recorded, more work needs to be done in liaising and aiding the HKC&E in its enforcement actions against infringing products.

      Yet, a little sacrifice goes a long way as the support given to the HKC&E will undoubtedly translate to responsive and effective enforcement actions that will, in turn, cleanse the market of infringing goods. 

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