Canada: New Year, New Border Enforcement Measures In Effect

Last Updated: January 7 2015
Article by Keith D. Rose

Most Read Contributor in Canada, September 2018

On December 31, 2014, the Canada Gazette published an order proclaiming into force sections 2, 5 and 6, subsection 7(6) and sections 43, 44 and 60 of the Combating Counterfeit Products Act, c. 32, S.C. 2014, as of January 1, 2015.  The Act itself received Royal Assent on December 9, 2014.

The principal effect of this order is to bring into force new border enforcement measures intended to combat the importation or exportation of trade-mark or copyright-infringing goods.1  These measures involve three main features:

  • Prohibitions on importation and exportation of infringing copies or goods2 under the Copyright and Trade-Marks Acts, respectively, which provide a basis for detention of the goods in question by the Canadian Border Services Agency (CBSA) under s. 101 of the Customs Act;
  • A mechanism by which rights-holders can request the assistance of the CBSA to enforce their rights; and
  • A mechanism by which the CBSA can provide information to rights-holders about suspect shipments and, potentially, the identity of the parties involved; samples of the allegedly infringing goods; and access to inspect the goods.

This regime is intended to support civil enforcement by rights-holders.  (Separate criminal offences were among the provisions that came into force in December, when the Act received Royal Assent.)  The usual mode of operation for this enforcement regime will presumably be triggered by a rights-holder's Request for Assistance, although the Act does permit border officers to detain allegedly infringing goods at their own discretion.

Canadian rights-holders may complete a Request for Assistance form, which can be submitted to the CBSA by email or on paper.  Processing is anticipated to take four to six weeks, and the applicant may be required to provide a bond.  Rights-holders must describe the authentic goods, identify the applicable registration numbers for any trade-marks or registered copyrights, and identify both known authorized importers and any known illegitimate importers or exporters.  Further information is available from the CBSA.

If accepted, the Request will be valid for two years, after which it must be renewed.  Even if accepted, the Request is not in any sense binding on the CBSA.  Detention of any goods remains discretionary (unless the rights-holder obtains a court order).

The main legal effects of the Request are:

  • that it permits the CBSA to disclose personally identifying information to the rights-holder, in particular the names and addresses of the owner, importer, exporter, or consignee of the goods in question, or of the person who made them; and
  • that it permits the rights-holder to use that information, along with other information about the goods and the shipment, to initiate civil proceedings for infringement.

Once the CBSA provides information to the rights-holder, the rights-holder normally will have only ten working days (and only five for perishable goods) to initiate legal proceedings, although for non-perishable goods, this can potentially be extended for an additional ten working days.  If the rights-holder does so, the goods will be detained until the court proceedings are resolved, the court directs that they no longer need to be detained, or the rights-holder agrees to their release.  However, the rights-holder will responsible for the costs of storage and, if applicable, destruction of the goods.  (These costs may be recoverable from the owner, importer, or exporter if the goods are forfeited under subsection 39(1) of the Customs Act, or as damages if the goods are found to be infringing by a court.)

Rights-holders considering making use of this regime should take care not to do so frivolously.  Apart from the direct costs of the detention, rights-holders may also be liable for damages if the detained goods are ultimately determined not to infringe their rights.  The Act expressly provides that a court may award such damages to the owner, importer, exporter, or consignee who is a party to the infringement proceeding.  Moreover, while the Crown and the CBSA benefit from a general immunity from civil claims resulting from the detention (subject to a few, limited exceptions), rights-holders do not.  Accordingly, rights-holder may be liable to innocent bystanders in tort or other common law theories.

However, used appropriately, these measures should offer a powerful mechanism for rights-holders to obtain crucial information about the source or destination of infringing goods entering or leaving Canada, which will permit them to take steps to enforce their legal rights.

Footnotes

1. Such border measures are, among other things, an obligation under the Canada-Korea Free Trade Agreement, which also entered into force on January 1, 2015.

2. These prohibitions do not apply to goods imported or exported by individuals for personal use or to goods in transit or transhipment which are not destined for the Canadian market.

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