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Customs Broker Sentenced to Compensate RMB400, 000 for Exporting Infringing Watches
Case Brief:
On July 12, 2015, Dapeng Customs, subordinate body of Shenzhen Customs, discovered during regular inspection a batch of “CASIO” watches in a total amount of over 100,000, within the shipment sent by a Dongguan-based export and import company (hereinafter “Dongguan Company”) to United Arab Emirates. As verified by trademark right holder, the aforementioned goods were in essence counterfeits.
Casio Corporation, the trademark owner, issued C&D letter to the Dongguan Company, requesting it to disclose source of the goods involved, but the party made no response. Casio Corporation subsequently filed a lawsuit to require the Dongguan Company to stop the infringement and compensate economic loss of RMB 400,000 before People’s Court of Yantian District, Shenzhen City, the lower court with direct jurisdiction over seizure location of the infringing goods.
Judgment:
On February 24, 2017, Yantian District Court rendered first instance judgment, ruling that Dongguan Company, the defendant, should immediately cease the infringing act, together with economic compensation payable to Casio Corporation in the amount of RMB400, 000.
Case Review:
With the growth of international trade, the increasing prosperity of import-export trade gives rise to various problems. In course of importation and exportation, counterfeit and substandard goods flow to domestic and overseas market and cause bad influences, as a result of negligence and inaccurate checking on declaration entities’ part. General Administration of Customs and related administrative departments have strengthened the fight against counterfeit and substandard goods, and impose strong penalties, such as lowering credit rate, blacklisting and payment of fines, on declaration entities that export the counterfeit and substandard goods. Furthermore, declaration enterprises suspected of importing or exporting counterfeit / infringing products should assume civil liabilities to trademark owners.
Dongguan Company was an enterprise specializing in export declaration, of which business scope includes importation and exportation of goods. In judicial practice, declaration entities usually defend themselves by reason of ignorance of the infringing nature of the goods. However, according to Provisions on the Customs Administration of Declaration for the Import and Export of Goods and Trademark Law, declaration entities, as business operators, shall exercise due diligence as prescribed by law.
If declaration entities engaged in declaration of infringing products yet are not direct manufacturers or sellers of the said products, such behavior should fall within the ambit of trademark infringement, i.e. “provide convenience for infringing others’ exclusive trademark right, helping to infringe others’ exclusive trademark right” under Article 57-1-6 of Trademark Law. In this case, the Dongguan Company engaged in declaration of infringing goods should bear unfavorable consequences of its obstruction to the burden of proof, on account of the failure to perform obligation to examine and verify beforehand, of incapability to specify the source of the infringing products and to provide valid purchase documents and / or contracts. On such basis, Customs authority and the People’s Court deemed the Dongguan Company an infringer that used identical or similar mark on or in connection with the same or similar commodity. Therefore, the declaration entity will have to bear legal responsibilities in a more severe degree.