Statutory provision within the General Administration of Customs of the People’s Republic of China framework which specifies the conditions for the temporary release of goods suspected of intellectual property infringement. This regulatory clause defines the procedural right of a consignee or consignor to request the release of goods that have been detained due to suspected patent infringement. It operates under the Regulations of the People’s Republic of China on Customs Protection of Intellectual Property Rights, specifically focusing on cases where the customs authority has not made a final determination on the infringement status.
Use of article 24 gacc regulations applies when the detention is based on an application by a patentee, and it allows the owner of the goods to regain possession by providing an equivalent security. The provision works to balance the interests of the right holder with the commercial necessity of the trader, preventing indefinite storage of goods during lengthy disputes. It specifically excludes cases involving trademarks or copyrights, where the customs authority holds broader powers to determine infringement directly.
The boundary of this article is reached once a court order for property preservation is served or the customs authority concludes its own investigation into the matter.
Administrative authorities must act upon a written request from the consignee when the underlying suspicion involves a patent rather than a trademark or copyright. Under article 24 gacc regulations, the resumption of the supply chain is permitted if the owner provides a deposit equal to the value of the goods. This ensures that the patent holder has a source of compensation if a future court ruling confirms the infringement.
Once the application is received, the customs office evaluates the security provided and issues a notice to the right holder. If the patentee fails to seek judicial intervention within the specified period, the goods are released into the market. Security must be provided in full before any movement of the cargo is permitted.
This mechanism prevents a patentee from using customs detention as a permanent block without a court case.
Calculation of the security amount relies on the declared value of the shipment at the port of entry or exit. Since article 24 gacc regulations stipulate that the deposit should fully cover potential damages and the value of the merchandise, the financial barrier is often high. This ensures that only parties with a legitimate claim to the goods and sufficient capital can utilize the release provision.
The customs house accepts various forms of security, although cash deposits are the most frequent requirement in rapid border clearances. If the goods are released, the security stays with the customs office until the resolution of the dispute or a final court judgement. This period can extend for many months, during which the capital is tied up in a government account.
The burden of providing this security falls entirely on the party seeking the release, who must also continue to pay any accrued storage or demurrage fees during the processing period. If the court later finds that no infringement occurred, the security is returned, but the costs of the delay and the security issuance are usually not recoverable from the administrative body. The precision of the valuation is critical because an under-valued security would fail to satisfy the regulatory requirements, leading to a rejection of the release request.
Procedural steps follow a strict chronology to ensure the fair treatment of both the exporter and the intellectual property owner. After the initial detention, the customs office notifies the right holder, who then has a window of three working days to confirm their desire for continued detention. If the right holder proceeds, the owner of the goods may invoke article 24 gacc regulations to request the release under security.
This request triggers a notification back to the right holder, giving them another window, typically twenty working days, to file a formal lawsuit and obtain a property preservation order from the court. During this interval, the goods remain in a bonded warehouse or a designated storage facility under the control of the customs office. If the twenty-day period elapses without the receipt of a court order, the customs office is legally obligated to release the goods to the consignee.
This strict timeline creates a sense of urgency for the right holder to move from administrative detention to judicial litigation. The limit of the customs authority’s power is reached when the court intervenes, as the judicial order overrides the administrative process. Failure to adhere to these timelines can result in the loss of the right to detain the goods, which would then be allowed to enter commerce regardless of the pending infringement claim.
This statutory structure ensures that customs does not become a de facto court for complex patent disputes which require judicial expertise. The process concludes when the goods either exit the customs area or are permanently seized following a court decision or customs finding.
Posting GACC Article 24 counter-bonds requires immediate cash or bank guarantees matching declared FOB value to clear patent-detained export cargo at coastal ports.
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