Canada: IP Monitor - Combatting Counterfeiting

Bill C-8, the Combatting Counterfeit Products Act received Royal Assent on December 9, 2014. All of the provisions criminalizing possession for sale and importation and exportation are now in force as well as certain additional civil law remedies as set out below. In addition a mishmash of certain other trade-mark provisions have now come into force, as set out below. The other significant border enforcement provisions are expected to come into force quickly in January of next year. It is rumoured that many of those measures will be implemented without regulations, thus accelerating the process but introducing a certain measure of uncertainty into the procedure. The other major changes to the Trade-Marks Act set out in Bill C-31 implementing the Madrid Protocol and the Nice and Singapore Treaties are unlikely to be proclaimed in force until late 2015 or early 2016 once regulations are in place.

In force now

As of December 9, the following provisions are now in force:

The Copyright Act has been amended:

1. To make it an infringement of copyright, to export or attempt to export a copy of a work, sound recording, fixation of a performer's performance or a fixation of a communication signal with knowledge that it was made without consent and which was not otherwise exempted under any of the fair use or user's rights provisions of the Copyright Act.

2. To make possession of infringing copies for sale, rental, or distribution and exporting for sale or rental a criminal offence if done knowingly.

3. To decriminalize parallel importation.

The Trade-Marks Act has been amended:

4. To make it trade-mark infringement under section 20 to manufacture, import, export or possess for the purpose of sale or distribution goods or services in association with a confusing trade-mark or trade-name.

5. To prohibit knowingly selling or distributing, manufacturing or possessing for purpose of sale any label or packaging bearing an infringing trade-mark

6. To make it a criminal offense to knowing sell or distribute on a commercial scale or manufacture, possess, import or export for the purpose of sale, goods, services, labels or packaging bearing an infringing trade-mark which is "identical to or which cannot be distinguished in its essential aspects" from a registered trade-mark. The penalties for such offense include a fine up to one million dollars and imprisonment up to five years.

7. To add the criminal offences set out in the Copyright Act and the Trade-marks Act to the list of offences in the Criminal Code for the investigation of which the police may seek a wiretap.

8. To change the definition of "wares" to the less archaic "goods" and similarly in the French version to change "marchandises" to "produits".

9. To remove section 7 (e), a provision held unconstitutional in prior case law.

10. To add a general exception to allow use of any "utilitarian feature" embodied in the trade-mark.

To be proclaimed at a later date:

1. The provisions providing new powers to Canadian Border Services Agency (CBSA) to seize and detain goods and to share information with rights holders.

2. These provisions will provide that the owner of a registered trade-mark may file a "Request for Assistance" (RFA) with the CBSA. The RFA will be valid for two years but may be renewed. The form of the RFA has not yet been provided but will at least include the rights holders name and information concerning the registered trade-mark and the goods for which it is registered. The CBSA will thus maintain a record of trade-mark owners and details of their trade-mark registrations. The CBSA can require security in respect of costs associated with administering the RFA but it is not yet known if this will happen.

3. CBSA will now also have the authority to provide to a rights holder a sample of suspected counterfeit goods and information about the goods which does not identify the counterfeiter. This is not dependent on the filing of an RFA.

4. If an RFA has been filed, the CBSA can, in addition to providing a sample, provide the rights holder with a description of the goods, the name and address of the owner, importer, exporter or consignee or manufacturer and details of the quantity and the country of origin.

5. However non-perishable goods detained under the RFA regime cannot be held for more than 20 days after a sample or information has been sent to the rights holder. After this, if the rights holder starts an action against the counterfeiter and notifies the CBSA, the CBSA must continue to hold the goods until the end of the court proceedings.

6. Goods which have been detained without an RFA, can apparently be detained without a time limit, but the CBSA has no power to seize or destroy, and is only empowered to send a sample, without identifying information to the rights holder. The rationale appears to be that a rights holder who files an RFA will get more information sufficient to start an action within the 20 day period and therefore must do so to cause the goods to be detained further. The rights holders will not have such information with respect to goods detained as suspected counterfeits for which no RFA has been filed.

7. Information received pursuant to an RFA can be used to start an action against the counterfeiter but information received from the CBSA outside of the RFA regime can only be used to advise CBSA whether the goods are counterfeit.

8. Under the RFA regime the CBSA may give the rights holder the right to inspect the goods.

9. A person who has sent an RFA is liable to the Crown for the storage and destruction costs and, of course, for the Court costs of proceeding against the counterfeiter. Those costs can be recovered against the counterfeiter in the unlikely event that the rights holder can find assets of the counterfeiter.

10. There is no provision for administrative destruction in the event that the counterfeiter does not contest the proceedings or abandons the goods.

11. The advantages of filing an RFA are clear. CBSA can provide more information sufficient to identify the counterfeiter, can allow inspection, and the rights holder can use the information against the counterfeiter. However the disadvantages include detention by the CBSA only within strict time lines (ten days extendible for ten more days on request), the necessity of a court action for further detention and liability for the costs of any storage and destruction.

12. Moreover It is anticipated that detentions and seizures will concentrate at least at first on those registered trade-marks where an RFA has been filed. Until we have more experience with the operation of the regime by the CBSA we cannot know what the CBSA will do with obvious counterfeits for which no RFA has been filed.

Norton Rose Fulbright Canada LLP

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