On March 1, 2013, the Minister of Industry and Minister of State (Agriculture) tabled for first reading Bill C-56, the short title of which is the Combating Counterfeit Products Act. The Bill would amend the Copyright Act and the Trade-marks Act by adding "new civil and criminal remedies and new border measures"[1]. The introduction of Bill C-56 by the government seems to be part of an effort to meet Canada's international commitments as a signatory of the Anti-Counterfeiting Trade Agreement (more often known under the acronym "ACTA") in October 1, 2011.

New criminal offences, prohibitions and remedies

Bill C-56 enacts new remedies, criminal offences and prohibitions to help copyright and trade-mark owners who are trying to prevent the circulation of counterfeit goods. 

A new category of copyright infringement is added to the Copyright Act, namely the exportation or attempted exportation of copies (the current version of the Act only mentions importation). Also, the exportation and attempted exportation of copies would become criminal offences since they are added to section 42 of the Copyright Act.  The possession of a copy for sale, rental or distribution for the purpose of trade or exhibition in public by way of trade would also become a criminal offence if the Bill is passed.

Section 19.1 is added to the Trade-Marks Act to create new, more specific prohibitions to protect the owner of a trade-mark. It provides that a person shall not import, export or attempt to export any goods if (i) the goods bear a trade-mark that is identical to or confusing with a trade-mark registered for such goods, (ii) the owner of the trade-mark has not given his consent and (iii) the sale or distribution of the goods would be contrary to the Trade-Marks Act. A similar prohibition is provided for packaging and labels.

It is important to note that the Bill creates new criminal offences for trade-mark infringement similar to those found in section 42 of the Copyright Act. An offender under new section 51.01 would be liable to the same penalties as for copyright, i.e. a maximum fine of one million dollars and up to five years imprisonment. These provisions only apply to trade-marks registered in Canada.

Increased powers for customs officers

Bill C-56 would also give Canadian customs officers a much greater role in implementing the protection of copyright and registered trade-marks. A customs officer will have the power to detain goods that have been imported or are about to be exported if he or she believes they are infringing copies. However, a customs officer's power to detain goods he or she suspects are copies would be limited to 10 days (or 5 days in the case of perishable goods), unless the owner of the copyright or registered trade-mark takes proceedings before a court for a final determination regarding the goods. Note also that this provision would therefore not apply to goods bearing unregistered trade-mark.

In both cases, these prohibitions do not cover infringing copies imported or exported by an individual in their possession or baggage if it appears that they are intended only for their personal use, or goods that are only in Canada in transit. They also would not cover parallel importation since "a copy of a work or other subject-matter is not infringing if the copy was made with the consent of the owner of the copyright in the country where the copy was made"[2].

Request for assistance mechanism

The Bill is also designed to create a new mechanism for persons wishing to be pro-active in protecting their rights, namely the request for assistance "in pursuing remedies"[3]. A person who makes a request for assistance will benefit from increased cooperation by customs officers. An officer who suspects that the importation or exportation of goods he or she detains is prohibited may, at his or her discretion, provide the owner of rights who has made a request for assistance with a sample of the copies and with information about the copies that could be useful pursuing his civil remedies.   

A customs seizure, followed by a civil remedy by the owner of the rights, would therefore have the practical effect of a seizure before judgement, provided the civil remedy is instituted within 10 days of the date the goods are detained by customs. It could therefore be a valuable tool for owners of intellectual property rights. 

Although the procedure for requesting assistance could potentially be of great benefit to the owner of copyright or a registered trade-mark, the person who makes such a request will generally have to pay the costs relating to the detaining of the goods for a certain amount of time. However, the Bill expressly provides that the damages awarded to the owner of copyright or a trade-mark in proceedings before the court could include these charges[4].

The Bill also provides that customs officers could require that a person making a request for assistance furnish security.

In both the Copyright Act and the Trade-Marks Act, a specific provision is introduced which provides that if the proceedings are dismissed or discontinued, the importer, exporter or owner of the detained goods may claim the costs or prejudice suffered as a result of the action from the owner of the copyright or registered trade-mark.

Moreover, the Bill provides immunity for the Crown and customs officers with respect to damage and losses relating to the application of the new importation and exportation prohibitions.

At this time, details about the assistance mechanism have not been provided but they will no doubt be worked out as part of the adoption of regulations once the statute is enacted.

Conclusion

Bill C-56 finally settles a fundamental problem involving the battle against counterfeiting in Canada and gives increased powers to customs officers, who play such a crucial role in this regard. The new powers will allow customs officers to stop the trafficking in counterfeit goods even before they reach the Canadian market. This measure is welcome since "knock-offs" are becoming increasingly common. In this regard, Canada had no choice but to bring itself up to the standard of other industrialized countries.