The General Administration for Customs recently issued its No. 16 Announcement, which strictly standardizes the auction of IP-infringed goods by the Customs and stressed that the Customs should consult relevant IP right-holders before any auction of IP-infringed goods.

 
Regulations on auction of confiscated goods infringing an IPR by the Customs have been set forth in an effort to increase the transparency in enforcement by the Customs and protect the right to know of the IP right-holders. This Announcement requires that Article 27 of the Regulation of the People's Republic of China on the Customs Protection of Intellectual Property Rights should be followed in auction of confiscated goods infringing an IPR by the Customs such that the infringement features in relevant goods and their packages have been eliminated, including features infringing trademarks, copyrights, patent rights and other IPR. In cases where the infringement features cannot be eliminated, the Customs shall destroy such goods. The Customs shall consult relevant IP right holders before any auction of such IP-infringed goods.

It is reported that this regulation by the General Administration of Customs is a supplement to the stipulation in the Regulation of the People's Republic of China on the Customs Protection of Intellectual Property Rights, which set forth that the Customs may lawfully auction IP-infringed goods after the infringement features have been eliminated in cases where the confiscated goods infringing and IPR cannot be used for the commonweal undertaking and the IP right holder has no intent of purchase.