Counterfeit UNO card games and other China-made toys seized overseas

18 January 2021

Worth near US$1.3 million, a total of 141,112 UNO card games, 9,600 LOL Surprise! Under Wraps balls, and 1,980 LOL Surprise! Under Wraps capsule toys have been seized at the Port of New York/Newark.

The Customs and Border Protection officers inspected the shipment in late November after it arrived from China. They then submitted digital images of the toys to the CBP’s Consumer Products and Mass Merchandising Center for Excellence and Expertise, the agency’s trade experts. They worked with the trademark holders and determined the toys to be counterfeit.

The CBP completed the seizure on December 9, 2020 and Homeland Security Investigations agents in Newark, continue to investigate.

According to published statistics of the General Administration of Customs, for the first 11 months of 2020, the total value of import and export of China had reached a value of ¥29 trillion, and among which about ¥400 billion of export and import was traded with the US. For the same period, as reported by the GAC, a total of about 49,000 batches of suspected infringing goods were detained, involving 45.57 million units of suspected infringing goods, which represent an increase of 40 percent and 11 percent respectively from the same period last year, says Ian Liu, a partner at Deacons in Hong Kong. “It can be seen that the sheer volume of goods passing through the ports of China is enormous, and although a significant quantity of counterfeits has been intercepted by Chinese Customs, it is a small portion of the import and export.”

China is one the world’s major manufacturing powerhouses, Liu says. “To protect IP and promote foreign trade relations, Chinese Customs are empowered by relevant laws to take active steps to stop suspected counterfeiting goods from being imported into as well as exported outside of China.”

Under the Regulation on Customs Protection of Intellectual Property Rights, in addition to taking enforcement actions upon receiving IP holder’s complaints, Chinese Customs also carry out ex officio inspection of imported and exported goods and would detain suspected counterfeit goods at border, he says. “The types of IP protected under the Regulation are trademark, copyright, patent and design, which is a type of patent in China, and the Regulation has provided a customs recordal system for IP holders to record their registered IPRs.”

In practice, the ex officio inspection is carried out based on the IPRs recorded with Customs, he adds. “According to our experience, the inspection mechanism has worked more effectively in identifying trademark counterfeit goods because counterfeit trademark goods can be more readily identified based on the customs recordals filed with the GAC. On the other hand, determination of infringement for patented goods requires a high level of expertise, and Customs usually would only take action upon receiving a complaint of the applicant with proofs of patent infringement.”

“We view that China already has a border control system to combat counterfeit exports, and the system is readily accessible to owners of registered IPRs of China,” he mentions. “In recent years, Customs have also focused on tackling counterfeit exports through e-commerce sales and postal delivery in addition to traditional export channels.”

“However, due to the sheer volume of international trade, Customs would require advanced technology and a high level of automation in order to identify suspected counterfeit products more efficiently without causing delays and disruptions to genuine exports,” he emphasizes. “Also, although Chinese Customs are the last gatekeeper before the goods leaving the country, we view that the problem of counterfeiting in China should be tackled at a countrywide scale, and counterfeit products should be stopped at the manufacturing source. The cost of IP infringement should be increased in order to deter infringing activities.”

Johnny Chan

Law firms