Canada has long been criticised for its policies regarding combating counterfeit goods, and especially regarding the border enforcement of intellectual property. The recent proclamation into force of certain provisions of the Combating Counterfeit Products Act (CCPA) on 1 January, however, gives trademark and copyright owners a relatively straightforward mechanism for combating infringing goods at the border.
Under the provisions, rights holders can request that the Canada Border Services Agency (CBSA) inform them, or their designated agent, of the inspection and detention of goods that are suspected to infringe their rights. While the system is new and untested, and is far from perfect (even in theory), it arguably brings Canada’s border enforcement procedures in line with other developed countries in terms of the enforcement of copyright and trademark rights by the CCPA.
Before the CCPA provisions came into force, Canadian border enforcement procedures were extremely limited in scope and application. Copyright holders with advanced warning of a potentially infringing shipment of goods were limited to applying for a court order directing the CBSA to detect and retain the goods.
The level of advanced knowledge necessary was such that there was very little meaningful use of the provisions. In addition to a description of the goods, the rights holder was generally required to provide the CBSA with: the identities of the importer, exporter and vendor; the country of export; the country of origin; the place of importation or release; the approximate date of arrival; and the mode of transportation, before the CBSA would take any preventative action.
In addition to amendments to the Trademarks Act and the Copyright Act that provide a basis for the detention of suspected counterfeit goods by the CBSA and prohibit the import or export of goods, labels and packaging bearing a trademark that is “identical to or that cannot be distinguished in its essential elements from the registered trademark” without the consent of the registered trademark owner, the CCPA introduced a ‘request for assistance’ procedure, which gives the CBSA authority to provide information to rights holders about suspect shipments, and provide samples and access to inspect the goods.
A request for assistance may be made to the CBSA by any owner of Canadian copyright or registered trademark with the submission of a simple one-page form that includes IP details, a description of the authentic goods, and a list of known authorised importers, and known distributors of illegitimate goods, if applicable.
While the legislation allows for the furnishing of security as a condition for acceptance of the request to cover potential detention costs, the posting of a security is not currently required.
Processing of the request is stated by the CBSA to take approximately four to six weeks, although this may increase if a significant number of requests are made. The request is valid for two-year periods, if accepted, and is renewable thereafter.
Once the request is accepted, the CBSA may detain suspect goods and provide information such as a description of the goods, contact information for the maker, owner, importer, exporter or consignee, quantity, country of origin and shipping, and day of importation, as well as a sample of the goods.
Where no court order has been obtained by the rights holder, however, the detention of any goods remains at the CBSA’s discretion. The rights holder is permitted to use the information provided by the CBSA (only) to initiate civil infringement proceedings.
Suspect goods that are non-perishable will remain in detention for up to 10 days, with the option to request additional time of up to 10 days, or five days if the goods are perishable, with the rights holder being liable for detention costs in certain cases beginning the day after being notified of their detention. For goods to remain in detention beyond the specified periods, the rights holder must commence legal proceedings for infringement.
While the provisions may assist large brand owners in their quest to combat counterfeit goods, the new legislation has been criticised on several levels.
The CCPA was only reintroduced into parliament in late 2013, after having died on the order table when parliament prorogued earlier in 2013, and was pushed through to legislation very quickly, despite submissions regarding its questionable efficacy and unfairness to rights holders.
In particular, ‘grey goods’, which are defined as goods made with the consent of the rights holder in another country that are subsequently exported to Canada without the Canadian rights holder’s permission, as well as unregistered trademarks, are excluded from the request for assistance procedure. Goods imported by an individual for ‘personal use’ are also excluded.
It has also been argued that the expense of detention is unfairly laid upon rights holders, which are the victims of counterfeiting, and that it is unfair that rights holders do not benefit from immunity from civil claims resulting from the detention—but perhaps this is just part of ‘the cost of doing business’.
In sum, the provisions provide a new tool for assisting in the enforcement of brand owners’ valuable rights—a tool that was notably absent before. It remains to be seen, however, how the provisions will be implemented by the CBSA.
The effectiveness of the measures depends, in large part, on the effectiveness of the CBSA in detecting and processing counterfeit goods, and the timeliness with which the suspect goods can be reported to rights holders.