Meaning
Expedited release for detained goods occurs when an importer provides a financial instrument specifically to offset a seizure based on patent claims. The article 24 counter bond is a unique provision within the Chinese customs system that allows shipments held for suspected patent infringement to be cleared for transit before a final verdict. It applies only to design or utility model patents rather than trademarks, as trademark infringements are deemed too high a risk to the consumer public to permit early release.
The bond value must match the total assessed value of the shipment as stated on the commercial invoice or determined by official appraisal.
Financial Limit
Capital liquidity determines the feasibility of this instrument for small to medium logistics operations. An article 24 counter bond requires the applicant to lock substantial funds in a designated account until the resolution of the entire case. Most practitioners choose bank guarantees instead of cash to maintain active working cash flow during extended legal disputes.
Release Prerequisite
Formal approval requires a demonstrating that the suspect goods do not pose an immediate danger or a clear violation of public standard. An applicant for an article 24 counter bond must prove the technical complexity of the patent makes a summary detention by customs officers inappropriate.
Protection Mechanism
Right holders receive compensation through the bonded amount if the court eventually finds that an infringement happened. The presence of the article 24 counter bond ensures that a successful litigant does not find themselves with an empty judgment against a foreign shell company with no assets. High deposits encourage settlements between parties to avoid long term capital immobilization.
