Although pharmaceutical counterfeiting has not, historically, been a problem of significant magnitude in Canada, with counterfeit health products on the rise globally, fraudulent drugs are increasingly showing up in Canada's supply chain, not only through unregulated Internet sites, but also through legitimate licensed pharmacies. For example, in August of 2015, US government prosecutors indicted online Canadian pharmacy Canada Drugs Ltd. on an array of charges, including the sale of counterfeit versions of the cancer drug Avastin to doctors across the United States.
Until recently, Canada did not have an effective regime for enforcement against counterfeit pharmaceuticals and other counterfeit goods. However, Canada's anti-counterfeit regime recently received a significant overhaul with the coming into force of Bill C-8, the Combatting Counterfeit Products Act (the CCPA). The CCPA, which was part of a broader set of significant amendments to Canadian copyright and trade mark laws, introduced a number of sweeping changes aimed at providing trade mark and copyright owners with new ammunition to challenge counterfeit goods.
New Civil Causes of Action and Criminal Sanctions
Among the changes introduced to the Trade Marks Act by the CCPA is an expanded definition of infringement, as well as an express statutory prohibition against the unauthorized importation and exportation of goods bearing a trade mark that is "identical to, or...cannot be distinguished in its essential aspects from" a registered trade mark. New criminal sanctions relating to registered marks were also added, making the sale, distribution, possession, importation or exportation of counterfeit goods a criminal offence subject to substantial fines and/or possible jail time.
New Border Provisions
As a corollary to the express prohibitions against importation and exportation of counterfeit goods, Canadian customs officers have been granted expanded powers of search, seizure and detention. An IP rights holder – that is, a registered copyright or trade mark owner – may obtain targeted assistance from the Canada Border Services Agency (CBSA) by filing a "Request for Assistance" which sets out its trade mark rights (and/or copyrights) and requests border officials to detain commercial shipments suspected of containing counterfeit goods. If suspected counterfeit goods are discovered, customs officers are permitted to temporarily detain the goods for a period of five days, in the case of perishable items, and ten working days for non-perishable items, and to exchange information about the items detained with the IP rights holder. To extend the detention period, the rights holder will need to bring a court action to enforce Bill C-8's prohibitions on counterfeit goods bearing a registered trade mark (and/or pirated works that infringe copyright), and provide notice of the court action to the Minister before the detention period expires.
Border officers also have the ability to provide registered copyright and trade mark owners with samples of the detained goods for inspection, as well as other identifying information about the goods to assist the registered owner in deciding whether to initiate legal proceedings against the importer or source.
Best Practices for Brand Owners
Since most of the new enforcement mechanisms apply exclusively to registered trade marks, brand owners, particularly brand owners whose goods are subject to counterfeiting, such as pharmaceuticals, should carefully review their trade mark portfolios to ensure that they have the necessary trade mark registrations in place to enable them to take advantage of the new regime, both in terms of the marks protected, as well as the scope of the goods protected. Brand owners should also give consideration to proactively filing RFA forms with the CBSA, particularly given that there is no cost to do so (although the cost of storage of any goods seized or detained will eventually be borne by the registered owner). Finally, since a registered owner is only provided a short window of time in which to consider the detention and whether to initiate legal proceedings, any rights holder who files an RFA should have established procedures in place for reviewing detained goods quickly and deciding what, if any, action to take.
Previously published in Law, Lore & Practice - December 2015
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