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
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
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
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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