Weekly China Brand Protection News

October 12, 2024

The application for customs protection measures based on intellectual property does not constitute unfair competition

Aidacheng Footwear Co., Ltd. (“Aidacheng”) owns the “” mark with reg. no. 51764426 and the “” mark with reg. no. 65218736, and several other registrations. It has obtained customs recordation for several of its trademarks. On May 25, 2022, Xiamen Jialianheng Import and Export Co., Ltd. (“Jialianheng”) declared the export of baby clothing and other goods to Mexico at Beilun Customs. After inspection, Beilun Customs believed that the goods were suspected of infringing Aidacheng’s related trademarks filed with customs and issued a “Notice of Confirmation of Intellectual Property Status” to Aidacheng. Subsequently, Aidacheng requested Beilun Customs to detain the goods. However, after investigation, Beilun Customs determined that it could not confirm whether the goods infringed Aidacheng’s registered trademarks recorded with the General Administration of Customs.

Following this, Aidacheng proactively contacted Jialianheng, asking them to pay licensing fees and then notify customs to release the detained goods. The two parties failed to reach an agreement, and Aidacheng subsequently filed a trademark infringement lawsuit in court. Upon trial, the court determined that Jialianheng’s processing and export of original equipment manufacturer goods did not constitute trademark infringement. Jialianheng then sued Aidacheng for unfair competition, alleging that Aidacheng’s abuse of customs protection for intellectual property rights amounted to unfair competition.

Upon trial, the court found the following:

Firstly, Aidacheng lawfully obtained the disputed trademarks, which are still within their protection period and are legally protected. Although Jialianheng submitted foreign registration information for trademarks that were somewhat similar to the disputed trademarks, not all of the foreign trademarks were registered earlier than Aidacheng’s trademarks. This evidence alone was insufficient to prove that Aidacheng maliciously registered the trademarks.

Second, the rights holder is entitled to protect its legal rights through lawful means. As the intellectual property rights holder, Aidacheng had the right to apply for intellectual property customs recordation of its trademarks with the General Administration of Customs, and the subsequent handling was decided by customs, not Aidacheng’s market behavior.

Last, Aidacheng’s application to detain the goods based on the customs notification and its participation in subsequent litigation were lawful exercises of its rights as the trademarks right holder, with a legitimate legal basis. Throughout the process, Aidacheng exercised caution in exercising its rights, and there was no intention to abuse the customs protection measures for intellectual property rights. Objectively, there was no fabrication of information or dissemination of false or misleading information. After customs determined that it could not confirm whether the goods infringed the trademarks, Aidacheng did not apply for measures such as stopping the infringement or property preservation, and Jialianheng eventually retrieved the goods on its own. Subsequently, Aidacheng promptly filed a trademark infringement lawsuit in court, and after the trademarks were invalidated, it timely applied to cancel the customs recordation.

In summary, Aidacheng’s application for intellectual property customs recordation was lawful, and its request for customs detention had a legitimate legal basis. Aidacheng exercised due diligence and caution during the process, and there was no abuse of the customs protection measures for intellectual property. Therefore, its actions did not constitute unfair competition.

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