More power at the Canadian border

15-04-2015

Ashley Dumouchel

Canada has long been criticised for its policies regarding the combating of counterfeit goods, especially regarding the border enforcement of intellectual property rights.

The implementation of certain provisions of the Combating Counterfeit Products Act, c.32, SC 2014 (CCPA) on January 1, 2015 has given trademark and copyright owners a relatively straightforward mechanism for requesting that the Canada Border Services Agency (CBSA) inform them or their designated agent of the inspection and detention of goods suspected of infringing their rights.

The system is new and untested, and is far from perfect, but it arguably brings Canada’s enforcement procedures on to the same playing field as other developed countries in terms of the enforcement of copyright and trademark rights at the border.

Before the CCPA provisions came into force, Canadian border enforcement procedures were extremely limited in scope and application. Copyright owners with advanced warning of a potentially infringing shipment of goods were limited to applying for a court order directing the CBSA to detect and retain the goods at the border. The necessary level of advanced knowledge of details of the shipment was such that there was very little meaningful use of the provisions.

In addition to amendments to the Trade-marks Act and the Copyright Act that provide a basis for the detention of suspected counterfeit goods by the CBSA—and which prohibit the import or export of goods, labels and packaging bearing a trademark without the consent of the registered trademark owner—the CCPA introduced a ‘request for assistance’ procedure that gives the CBSA the authority to provide information to right owners about suspect shipments and provide samples and access to inspect the goods.

A ‘request for assistance’ may be made to the CBSA by any owner of a Canadian copyright or registered trademark with the submission of a form that includes IP details, a description of the authentic goods, and a list of known authorised importers and known distributors of illegitimate goods, if applicable. The request is valid for a two-year period, if accepted, and is renewable thereafter.

"It has also been argued that the expense of detention is unfairly laid upon right owners that are the victims of counterfeiting."

Once the request is accepted, the CBSA may detain suspect goods and provide information and a sample of the goods to the right owner. Where no court order has been obtained by the right owner, however, the detention of any goods remains at the CBSA’s discretion.

Suspicious goods that are non-perishable will remain in detention for up to ten days, with the option to request additional time of up to another ten days, or five days if the goods are perishable, with the right owner being liable for detention costs in certain cases, beginning the day after it is notified of the detention. For goods to remain in detention beyond the specified periods, the right owner must commence legal proceedings for infringement.

While the provisions may assist large brand owners in their quest to combat counterfeit goods, the new legislation has been criticised. The CCPA was reintroduced into parliament in late 2013 only after having died on the order table when parliament prorogued earlier in 2013, and was pushed through to becoming legislation very quickly, despite submissions regarding its questionable efficacy and unfairness to right owners.

In particular, ‘grey’ goods, which are defined as goods made with the consent of the right owner in another country but subsequently exported to Canada without the Canadian right owner’s permission, as well as unregistered trademarks, are excluded from the ‘request for assistance’ procedure. Goods imported by an individual for ‘personal use’ are also excluded from the procedure.

It has also been argued that the expense of detention is unfairly laid upon right owners that are the victims of counterfeiting, and that it is unfair that right owners do not benefit from immunity from civil claims resulting from the detention, although perhaps this is just part of ‘the cost of doing business’.

In sum, the provisions provide a new tool for assisting in the enforcement of brand owners’ valuable rights. It remains to be seen, however, how the provisions will be implemented by the CBSA. The effectiveness of the measures depends in large part on the effectiveness of the CBSA in detecting and processing counterfeit goods and the timeliness with which the suspicious goods can be reported to right owners.

Ashley Dumouchel is an associate lawyer at Shapiro Cohen. She can be contacted at: adumouchel@shapirocohen.com

counterfeits, trademark, copyright, CBSA, CCPA

WIPR