Chapter V Disposal of Goods and Expenses Thereof

Article 33 The Customs shall dispose of the confiscated infringing goods according to the following provisions:

(1) If the relevant goods may be directly used for public welfare undertakings or the IPR holder intends to purchase them, the goods shall be transferred to the relevant public welfare institutions for public welfare undertakings or to the IPR holder with compensation;

(2) If the relevant goods cannot be handled according to the preceding paragraph and their infringement features may be removed, they shall be auctioned according to law after the elimination of the infringing features. Proceeds from auctioning such goods shall be submitted to the treasury; or

(3) If the relevant goods cannot be handled according to the preceding two paragraphs, they shall be destroyed.

The Customs shall solicit opinions from the relevant IPR holder before auctioning the infringing goods. The IPR holder shall give necessary assistance to the Customs in destroying the infringing goods. Where relevant public welfare institutions use the goods confiscated by the Customs for public welfare undertakings or the IPR holder receives the entrustment of the Customs to destroy the infringing goods, the Customs shall exercise necessary supervision.

Article 34 Where the Customs assists the People's Court in detaining the suspected infringing goods or releases the detained goods, the IPR holder shall pay the expenses for warehousing, safekeeping and disposal of the goods during their detainment at the Customs.

Where the Customs confiscates the infringing goods, the IPR holder shall pay the expenses for warehousing, safekeeping and disposal of the goods according to the actual storage time of the said goods after their detainment by the Customs. If the Customs fails to dispose the infringing goods within three months upon sending its decision on confiscation the goods to the consignees or consignors, and such failure is not due to the application of administrative reconsideration or filing of administrative proceedings by the consignees or consignors, or other special reasons related to the disposal of goods, the IPR holder is not required to pay the relevant expenses incurred after the three months.

Where the Customs auctions the infringing goods in accordance with Item (2) in Paragraph 1 of Article 33 herein, the expenses for auction shall be handled according to relevant provisions.

Article 35 Where an IPR holder fails to pay the relevant expenses in accordance with Article 34 herein, the Customs may deduct the relevant expenses from the deposit provided by the IPR holder or require the guarantor to perform its/his liability of guarantee.

If the Customs confiscates the infringing goods, it shall return the deposit to the IPR holder or release the guarantee liability of the guarantor after disposal of goods and settlement of relevant expenses.

Where the Customs assists the People's Court in detaining the suspected infringing goods, or releases the detained goods in accordance with Items (1), (2) and (4) of Article 24 of the Regulations, the consignees or consignors may apply to the People's Court for property preservation against the guarantee provided by the IPR. Where the Customs fails to receive the notice from the People's Court on assisting with property preservation against the guarantee provided by the IPR holder within 20 working days after the Customs assisted the People's Court in detaining the suspected infringing goods or released the goods, the Customs shall return the deposit to the IPR holder or release the guarantee liability of the guarantor. When receiving the execution assistance notice of the People's Court, the Customs shall give assistance.

Article 36 Where the IPR holder submits the copy of the case acceptance notice from the People's Court to the Customs in accordance with Paragraph 3 of Article 20 after the Customs has released the detained goods that are suspected of infringing any patent right in accordance with the provisions of Article 19 of the Regulations, the Customs shall dispose of the deposit submitted by the consignees or consignors in accordance with the decision of the People's Court. If the IPR holder fails to provide the copy of the case acceptance notice of the People's Court, the Customs shall return the deposit submitted by the consignees or consignors. With respect to the guarantee provided by the IPR holder to the Customs, the consignees or consignors may apply to the People's Court for property preservation. If the Customs fails to receive the notice from the People's Court on assisting with property preservation against the guarantee provided by the IPR holder, it shall, after 20 working days since the disposal of the deposit submitted by the consignees and consignors, return the deposit to the IPR holder or release the guarantee liability of the guarantor. If the Customs receives the said notice, it shall give assistance.