Counterfeiting remains a serious global problem. In Canada, the government estimates that the retail value of seized counterfeits increased approximately five-fold between 2005 and 2012.1 Efforts to curb counterfeit activities here have been hampered by a relatively weak legal regime, which has led to Canada being criticized in various USTR s. 301 Reports. On June 13, 2013, Bill C-56, the short title of which is the Combating Counterfeit Products Act (the "Bill"), progressed to second reading. The Bill is designed to introduce new civil and criminal options for dealing with pirated and counterfeit goods.

The Creation of a Comprehensive Border Regime

The Bill proposes a new border enforcement regime, wherein rights holders can submit a "request for assistance" to the Canadian Border Services Agency. Under this new recordal system, rights holders would be able to record their registered trade-marks or copyrighted material with Customs, as can be done in other jurisdictions such as the US and the EU. The new regime would allow border officers to detain, for a short period of time (5-10 days, depending on whether the goods in question are perishable), suspected counterfeit/pirated goods while the authenticity of these goods is being determined. If the goods are assessed as counterfeit/pirated, the rights holder will need to start a civil action to prevent the release of the goods. Rights holders would be responsible for storage and handling costs, as well as the cost of destruction, if applicable.

Proposed Criminal Offences

The Bill proposes new criminal offences under the Trade-marks Act analogous to existing offences under the Copyright Act. With respect to the Copyright Act, the Bill introduces provisions prohibiting the possession of an infringing copy for sale, rental or distribution for the purpose of trade or exhibition in public by way of trade. Under the proposed amendments it would also be an offence to export infringing copies for the purpose of sale or rental. The prohibitions against import/export under both the Copyright Act and the Trade-marks Act are subject to exceptions. Notably, an exception exists for parallel imports.

Expansion of Infringing Acts

The Bill also introduces a provision prohibiting persons from manufacturing, causing to be manufactured, possessing, importing, exporting or attempting to export infringing goods for the purpose of sale or distribution. Under the "causing to be manufactured" head, the architect behind an infringing operation may now be liable, as will someone who simply possesses infringing goods. It will also be interesting to see how broadly the "attempting to export" provision will be interpreted.

Amendments to the Definition of a "Trade-Mark"

If the Bill passes, the definition of "trade-mark" will be defined by reference to the internationally recognized "sign" rather than "mark". A "sign" is defined as "a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign". The amended definition of a trade-mark would be: "a sign or combination of signs that is proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others".

To accommodate this new definition of "trade-mark", provisions relating to "distinguishing guise" would be repealed; however, the Bill would introduce a provision that restricts the registrability of trade-marks with a utilitarian function.

Conclusion

If passed, the Bill will bolster Canada's intellectual property regime vis-à-vis counterfeit goods, which would be long-awaited progress for rights holders.