Lee International

Recently, due to the COVID-19 pandemic, contactless transactions have become more prevalent, resulting in a significant surge in online distribution. According to Statistics Korea, the domestic e-commerce market grew from 137 trillion KRW in 2019 to 227 trillion KRW in 2023. In particular, the volume of overseas direct purchases (cross-border e-commerce) nearly doubled, rising from 3.6 trillion KRW in 2019 to 6.8 trillion KRW in 2023. With the rapid expansion of overseas direct purchase platforms, there has also been a marked increase in the influx of counterfeit goods into the country. The number of seized goods infringing on intellectual property rights surged by 290%, from 29,000 cases in 2021 to 85,000 cases in 2023.

In response, the Korea Customs Service (“KCS”) conducted an intensive crackdown on intellectual property-infringing goods imported through maritime express shipments over an 8-week period from April 22 to June 13.  During this operation, a total of 49,487 items infringing on intellectual property rights were seized, marking an approximately 30% increase compared to the same period last year. The major seized items included 11,375 miscellaneous goods such as keychains, 11,221 items of stationery and toys, 4,319 tumblers and tableware, and 3,060 perfumes and diffusers. Among these, 10,890 counterfeit items bearing globally well-known trademarks such as Louis Vuitton, CHANEL, and DIOR were also included.

The KCS anticipates that the importation of counterfeit goods through overseas direct purchases will continue to rise and has committed to strengthen its enforcement efforts accordingly. Furthermore, the KCS plans to share relevant information with its branches, such as Incheon Airport, Pyeongtaek, and Gunsan, which are primary entry points for express shipments from China.  This collaborative effort aims to proactively address potential diversion of shipments, a common issue resulting from intensified crackdowns, and prevent the “balloon effect.”

To protect intellectual property rights, rights holders can register their trademarks, designs, and other intellectual property with the KCS. If goods suspected of infringing on registered intellectual property are imported, the KCS will detain the goods, notify the rights holder, and request an appraisal of the potential infringing items. If the rights holder submits an appraisal report confirming that the goods are counterfeit, the importer must prove that the goods are not counterfeit for customs clearance or the goods will be seized and disposed of.

In light of the ongoing rise in importation of intellectual property-infringing goods, the KCS is actively working to detect and address such violations. Therefore, it is highly recommended for intellectual property holders to register their trademarks, design rights, and other intellectual property with the KCS.  This proactive step will help effectively prevent the distribution of infringing goods in Korea and ensure effective protection of their intellectual property rights.