In January 2015, portions of the Canadian Combating Counterfeit Products Act (“CCPA”) came into force enabling IP rights holders to record their copyright and registered trademark rights with the Canada Border Services Agency (“CBSA”) in an effort to stop counterfeit goods before they enter the Canadian market.
Amendments to the Canadian Trade-marks Act,which stem from the CCPA, create a new statutory prohibition against the import or export of goods whose labels or packaging bear, without the consent of the owner of a registered trademark for such goods, a trademark that is identical to, or that cannot be distinguished in its essential aspects from, that registered trademark (i.e. counterfeit goods). Similar amendments to the Copyright Act create a statutory prohibition against importing or exporting infringing copies of a work.
A new border regime has been adopted by the CBSA to assist rights holders in enforcing the new statutory prohibition against the importation of counterfeit goods. Under the new regime, owners of copyright protected works (registered or unregistered) and/or a registered Canadian trademark (“rights holders”) can record these rights with the CBSA by filing a Request for Assistance (“RFA”).
If suspected counterfeit goods are discovered during examination at the border, the CBSA can use the information contained in the RFA to contact the appropriate rights holders and inform them of details regarding the goods. Such details may include a sample of the goods, the name and address of their owner, importer, exporter or consignee, the quantity of goods, the country in which they were made and the day on which they were imported into Canada. With this information the rights holder can make a determination as to whether the goods are counterfeit and whether to pursue civil remedies in relation to the goods. The information provided under the RFA regime may only be used by the rights holder to pursue remedies under the Copyright Act and/or the Trade-marks Act. Notably, specific allowance is made for the use of the information for the purpose of reaching an out-of-court settlement.
Goods detained pursuant to a RFA will remain in detention for 10 days (5 days for perishable goods) and the rights holder can request that the goods be held for an additional 10 days. If the rights holder initiates court proceedings in relation to the goods, and provides the CBSA with notice of such proceedings, the goods will remain in detention until the proceedings are disposed of, the court orders the release of the goods, or the rights holder consents to the release of the goods.
In order to file a RFA, the designated form must be completed with the following information:
- the rights holder’s name, address and the name and contact information for a Canadian representative for service;
- the Canadian trademark and/or copyright registration numbers;
- details of the rights holder’s authentic goods (i.e. product features, packaging and trademark location);
- the World Customs Organization Harmonized System Code for the goods covered in the registration(s);
- list of known authorized importers of legitimate goods; and
- any known distributors of counterfeit goods.
There is no government fee for filing the RFA and there is no limit on the number of registered trademarks or copyrighted works that can be included in a single RFA. Once recorded, the RFA is valid for two years and may be extended in two year increments thereafter upon request of the rights holder.
While there is currently no fee for filing a RFA, the Minister of Public Safety and Emergency Preparedness does have the discretion to require that the RFA applicant furnish security by way of a bond to cover any costs associated with storage, handling and if applicable, the destruction of the detained goods.
Although the specific details have yet to emerge, the storage, handling and destruction costs may be determined on a case-by-case basis depending on the nature and quantity of the goods, and their entry point into Canada. These costs may not be insignificant. For instance, storage costs for a shipping container in a Canadian port or bonded warehouse can be $300 (CDN) per day. Handling costs (i.e. if the goods are required to be moved) can be in the range of $700 (CDN) and the costs for the destruction of the goods under supervision can be in the range of $1,700 per event. It is expected that CBSA will provide more guidance and clarity on the potential costs associated with detained goods as the regime matures.
Rights holders should be certain of the counterfeit nature of the goods prior to commencing proceedings since a Court can require the rights holder to pay any damages suffered by the owner/importer of the goods as a result of their detention if the proceedings are dismissed or discontinued. In this regard, rights holders should be aware that the import prohibitions do not apply to parallel imports, goods in transit through Canada, or goods imported by an individual for personal use. Accordingly, proceedings should not be commenced in relation to goods which were manufactured outside of Canada with consent of the rights holder.
While CBSA will now accept compliant RFA applications, it remains to be seen the extent to which CBSA will take action in its border enforcement activities in response to such applications. However, despite some uncertainty the new border and RFA regime is a significant new tool for rights holders in the fight against counterfeit goods in Canada. The regime has the potential to stop counterfeit goods before they are distributed in the marketplace and is a major improvement over the former situation in Canada in which rights holders had a very limited ability to intercept and halt counterfeit goods coming into Canada.
While unregistered copyright rights can be recorded as part of an RFA, it is recommended that these rights be registered in Canada in order to provide more concrete information to CBSA. The implementation of the new regime also presents a good opportunity for rights holders to review their Canadian trademark portfolios to ensure that their registered Canadian rights are sufficient to take full advantage of the new provisions.