10 August 2021
On July 14, 2021, the Customs and Border Protection officers in Philadelphia seized a counterfeit Chinese cache of vehicle parts that were destined to an address in Feasterville-Trevose, Pennsylvania.
According to the CBP’s press release, the shipment arrived on June 4 and consisted of 5,657 pieces that included vehicle door locks, hinges, powered mirrors, steering wheel switches, headlights and taillights, grilles, rear bumpers and paint kits. Officers suspected the auto parts to be counterfeit and detained them.
Officers consulted with the automotive experts at the agency’s Centres of Excellence and Expertise who worked with trademark holders and confirmed on July 7 that the automotive parts were counterfeit. The manufacturer’s suggested retail price of the automotive parts is US$295,052.
“Based on the CBP’s statistics, automotive/aerospace parts made up around one percent of all seizures in 2019 (the most recent year for which there are statistics available), with 287 seizures having an estimated total value of around US$12 million. This seizure was thus about five times the amount of the average seizure of automotive/aerospace parts in 2019. Those statistics represent a slightly higher percentage of seizures compared to 2018, but a slightly lower value of seized goods. The product category having the largest number of seizures in 2019 was watches and jewelry, with 4,242 seizures of products having an approximate value of US$687 million. The average value of each of the watch/jewelry seizures was about four times greater than the average value of a seizure of automotive/aerospace parts,” says Christopher Rourk, a partner at Jackson Walker in Dallas. “Since the total amount of counterfeit goods is unknown, it is not possible to conclude whether there is more trade in counterfeit watches/jewelry compared to automotive/aerospace parts, if CBP is more effective at seizing watches/jewelry compared to automotive/aerospace parts, if CBP focuses more enforcement resources on watches/jewelry than automotive/aerospace parts because the buyers of watches/jewelry are less sophisticated than the buyers of automotive/aerospace parts or because the value is higher, or if some other factor or set of factors is at work.”
Besides foreign jurisdictions, Catherine Zheng, a partner at Deacons in Hong Kong, acknowledges that there is indeed a large number of counterfeit auto parts produced and circulated inside the Chinese domestic automobile market.
“The government has devoted significant and sustained effort to combating counterfeit auto parts in recent years. We have seen increasing enforcement actions by relevant local authorities in the forms of raids and anti-counterfeit campaigns as well as strengthened inspections from the Customs to try seizing illegal productions within the border,” Zheng says. “In addition, the fourth amendment to the Patent Law has come into effect since June 1, 2021. The amendment, for the first time, introduces partial design protection. Previously, a design patent could only protect the appearance of an entire product that could be sold or used separately. The new law loosens the ‘independent use or sale’ requirement and allows designers to protect their innovative partial designs. We anticipate that the new law will stimulate more robust enforcement actions and further assist the current anti-counterfeit movement in the domestic market.”
Johnny Chan
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