Canada: Counterfeiters Face Stiff Penalties In Canada

Last Updated: February 14 2014
Article by Scott E. Foster

The Office of the United States Trade Representative ("USTR") publishes a report every few years called the Special 301 Report. In the report, the USTR reviews the global state of intellectual property rights ("IPR") protection and enforcement and ranks countries of the world depending on how effectively the USTR believes a country's laws allow for the protection and enforcement of IPRs. In 2011, the USTR put Canada on the "Priority Watch List" which is the lowest ranking and commented that "...The United States encourages Canada to provide for deterrent-level sentences to be imposed for IPR violations...".

After the passage of the Copyright Modernization Act in 2012 (which amended the Copyright Act) and the introduction of the first Combating Counterfeit Products Act Bill in the Spring of 2013 (Bill C-56), the USTR downgraded Canada to the "Watch List" in the 2013 301 Special Report and stated "The United States supports Canada's commitment to address the serious problem of pirated and counterfeit goods entering our highly integrated supply chains and urges Canada to expand the legislation to also provide authority for its customs officials to take action against goods in-transit...".

The recent jurisprudence summarized below is strongly suggestive that Canada currently provides an increasingly high level of deterrence for IPR violations. But is it enough? Coupled with legislative changes to the Copyright Act in 2012 and likely further legislative changes (discussed below) on the horizon, it will be interesting to see where Canada ranks in the next Special 301 Report.

Very recently, the Newfoundland Court of Appeal sentenced a counterfeiter to two months in prison for selling counterfeit products. And not long before that, the Federal Court of Canada awarded Twentieth Century Fox Film Corporation punitive damages of $10 million against a defendant offering entire episodes of The Simpsons and Family Guy for viewing on-line.

In the recent criminal case of R. v. Strowbridge 2014 NLCA 4, the Newfoundland and Labrador Court of Appeal sentenced Mr. Strowbridge to a two month custodial sentence for selling counterfeit brand name razor blades, sports apparel bearing counterfeit insignia and counterfeit hair styling flat irons. Mr. Strowbridge was observed selling the items from a vehicle situated on the side of the road in Paradise, Newfoundland, and $500 worth of items were seized. The sentencing judge noted that Mr. Strowbridge had been previously observed by police selling similar counterfeit items on several occasions and he was warned by the police to discontinue. As well, a representative of the authorized distributor of the flat irons had observed Mr. Strowbridge selling counterfeit flat irons in 2009 and warned him to stop.

Mr. Strowbridge was sentenced for seven offences including: (i) selling copyrighted products in violation of section 42(1)(b) of the Copyright Act for which he received a sentence of 180 days and a fine of $5,000; and (ii) selling trade-marked goods without authority in violation of section 408 of the Criminal Code, for which he received 180 days imprisonment concurrent to his sentence for the Copyright Act violation. Mr. Strowbridge was also sentenced for two counts of fraud (unrelated to the IPR infringements) and breaches of prior probation orders.

Mr. Strowbridge appealed the sentences arguing that the length of imprisonment and fine for his IP related offences were disproportionate to his activities.

The Court of Appeal agreed and quashed the $5,000 fine and reduced the six month sentence to two months. The Court of Appeal, in reducing the sentence to two months, noted that there were no reported decisions in the province of Newfoundland in respect of the trade-mark and copyright offences and went on to review decisions from other jurisdictions including Ontario, British Columbia and New Brunswick. After reviewing the jurisprudence, the Court of Appeal noted that the sentences in similar cases did not often impose a custodial sentence even when the sales of counterfeits were much higher than those seized from Mr. Strowbridge and that the typical sentences included conditional sentences and/or imposition of fines. In coming to its conclusion, the Court of Appeal also took notice of the fact that the value of the goods seized was approximately $500 and that Mr. Strowbridge's operation appeared to be "marginal and unsophisticated". The Court of Appeal distinguished between Mr. Strowbridge's operation and those of other offenders that import and/or manufacture counterfeit products in large quantities and which then sell the products in established commercial marketplaces rather than from the trunk of a car on the side of a highway.

The Court of Appeal reduced the sentence for the trade-mark and copyright offences to two months' incarceration to be served consecutively to the sentences for fraud and breach of the probation orders.

The Court of Appeal also allowed Mr. Strowbridge's appeal of the $5,000 fine on the basis that a fine is only appropriate if the offender can pay the fine (subsection 734(2) of the Criminal Code) and that Mr. Strowbridge did not have the resources to pay the fine. From the decision, it appears that if Mr. Strowbridge had the funds to pay the $5,000 fine, the fine would not have been quashed on appeal.

The decision is a useful reminder that criminal offences do exist for counterfeit activity and that Canadian courts are prepared to convict offenders. However, it appears that the majority of convictions result in a fine and/or conditional sentence, rather than a custodial sentence, which may reduce the overall level of deterrence for such offences. It is also unknown from the R. v. Strowbridge decision to what extent the sentences for fraud and the breach of probation orders influenced the sentencing judge and the Court of Appeal in imprisoning Mr. Strowbridge.

While the Court of Appeal in R. v. Strowbridge was prepared to impose a custodial sentence, it is clear that the rate of convictions in Canada is low and disproportionate to the extent of counterfeiting activity in Canada. In this respect, it is relevant and noteworthy that the current Combating Counterfeit Products Act (Bill C-8, which is almost identical to the earlier Bill C-56), which is currently at the Report Stage, includes provisions to amend the Trade-marks Act to introduce new criminal offences for dealing in or with counterfeit goods. The sanctions include fines of up to $1 million and custodial sentences of up to 5 years. The additional offences are likely to provide broader enforcement powers for law enforcement agencies. As a result, the criminal conviction rate may increase in the future. And the more severe punishments are likely to provide an extra level of deterrence.

Furthermore, the Combating Counterfeit Products Act as it currently stands will create a system to allow trade-mark and copyright owners to file a request to the Canadian Border Services Agency to detain commercial shipments suspected of containing counterfeit goods. The current absence of such a system in Canada was highlighted by the USTR in the 2013 301 Special Report.

It is also noteworthy to refer to the recent civil damages award from the Federal Court of Canada in the Twentieth Century Fox Film Corporation decision. In that case, Twentieth Century Fox Film Corporation asserted that the defendant, Mr. Hernandez, offered at least 700 entire episodes of The Simpsons and Family Guy for viewing on Mr. Hernandez's websites. The Federal Court awarded Twentieth Century Fox $10 million in statutory damages, $500,000 in punitive and exemplary damages and $78,575 in costs (as well as interest). In addition to the monetary award, the Court issued an injunction restraining Mr. Hernandez from further infringing Twentieth Century Fox' copyright in The Simpsons and Family Guy programs and ordered him to deliver up to Twentieth Century Fox all copies of the programs and related documents and materials in his possession. Further details regarding this case were reported in an earlier article.

In sum, these recent Court decisions and the efforts being made by the Canadian Federal Government to amend IPR legislation in Canada indicate that Canada is likely to become a more challenging jurisdiction for counterfeiting activities in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
14 Sep 2017, Seminar, Birmingham, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

18 Sep 2017, Seminar, London, UK

Our annual event as part of the London Design Festival is now in its fifth year. We would be delighted if you are able to join us again.

21 Sep 2017, Seminar, London, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.