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The pain of parallel imports from China

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Most of us know that we can arrange for customs to seize counterfeit goods before they enter the market. Under Part 13 of the Trade Marks Act for example, the owner of a registered trade mark may notify customs that they the own the trade mark and the type of goods that may be illegally imported. Australian Customs will then seize the goods. Notices last up to four years. The owner of the mark then has 10 days to commence legal proceedings for infringement of the trade mark, after which the goods are released to the importer. There is no up front fee for this service. Note this does not grant the same rights to an unregistered common law trade mark owner. The owner must however indemnify customs for costs incurred of up to $10,000. Trade mark owners should also consider registering their trade mark in China where it is possible to arrange for the seizure of counterfeit goods at the factory or elsewhere, on a similar basis as in Australia. Again this only applies if the trade mark is registered in China and remember, it is the first to register the trade mark in China that is entitled to enforce the trade mark. A registered trade mark in Australia will not solve the problem at source. It's also worth noting that from July 1, 2009 Australian exporters may be able to partially recover the cost of their IP protection including the cost of granting, registering or extending rights under foreign laws as well as insurance costs relating to the rights under Austrade’s Export Market Development Grant Program (EMDG), so the costs of obtaining IP protection in China is now partly helped by the Australian government.

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