On January 1, 2015, the Government of Canada declared into force new border controls designed to prevent counterfeit and copyright infringing goods from entering and exiting Canada. The new border controls empower officers of the Canada Border Services Agency (CBSA) to detain suspected counterfeit and copyright infringing goods to facilitate a rights-holder’s pursuit of civil remedies. These new amendments provide a powerful tool for rights-holders to prevent the importation and exportation of counterfeit and copyright infringing goods.

What Prompted the Amendments?

The Government declared into force certain provisions in the Combating Counterfeit Products Act(CCPA) amending to the Copyright Act and Trade-Marks Act on December 31, 2015, to implement intellectual property obligations under Chapter 16 of the CKFTA. That these amendments were not part of the CKFTA implementing legislation (Canada-Korea Economic Growth and Prosperity Act and related regulations) should come as no surprise to those familiar with the long-standing concerns expressed by many of Canada’s trading partners over its intellectual property rights protection regime, or more precisely, lack thereof. The CCPA represents a package of reforms to the Copyright Act and Trade-Marks Act that have been on the legislative agenda for years.

A New IP Enforcement Regime at the Border

Previously under the Copyright Act, a rights-holder had to obtain a court order to prevent the importation of copyright infringing goods. The CBSA had no authority to detain goods suspected of infringing copyright. Prior to the amendments in the CCPA, the Trade-Marks Act did not contain a remedy to block importations of trademark infringing goods.

The amendments introduce prohibitions on the importation and exportation of counterfeit and copyright infringing goods and provide a potentially more effective enforcement mechanism to rights-holders as compared to the previous regime. The new enforcement process has two principal features: (i) CBSA officers now have discretion to detain goods destined for import or export that are suspected of being counterfeit or infringing copyright; and (ii) the establishment of a “request for assistance” (RFA) scheme to allow the CBSA to communicate information and samples of detained goods to a rights-holder. This detention and communication by the CBSA enables the rights-holder to pursue court remedies under the Copyright Act and Trade-Marks Act. To participate in this scheme, a rights-holder must apply for and obtain an RFA from the CBSA prior to the importation or exportation of potentially counterfeit or copyright infringing goods. The RFA identifies the registered trademarks or copyrights held by the applicant and must be renewed every two years.

Request for Assistance

Under the RFA scheme, the CBSA may detain suspected counterfeit or copyright infringing goods for 10 days (five in the case of perishable goods) from the date the rights-holder is notified of the detention, unless the rights-holder provides the CBSA with a court document evidencing the commencement of proceedings to obtain relief under either the Copyright Act or the Trade-Marks Act. Once the rights-holder initiates enforcement proceedings the goods are detained pending the Federal Court’s determination of the rights-holder’s claim for relief. The detention period for non-perishable goods may be extended once by 10 days.

Rights-holders participating in the RFA scheme are liable to the CBSA for fees for the storage and handling of detained goods from the date the CBSA notifies the rights-holder of the detention. If the goods are found to infringe a registered trademark or subsisting copyright, the rights-holder must pay for their destruction as well. Safeguards in the form of security for costs and damages awards are included in the amendments to prevent abuse of the RFA scheme by rights-holders.

Timing and Resources

The Government of Canada has not granted the CBSA any additional resources or budget to implement its newest business line. Rights-holders will partially fund the regime, but their liability to the CBSA is limited to storage and handling fees incurred by the CBSA from the date the rights-holder is given notice of a detention, as well as destruction of goods seized. Given the CBSA’s lack of additional resources, rights-holders will have to be vigilant to ensure the effectiveness of the regime. For a rights-holder this means applying for an RFA, renewing the RFA every two years, taking action within the 10-day notification window and actively gathering intelligence on importers, exporters and consignees of suspect goods to share with the CBSA.

The RFA rollout appears to be exclusively import-oriented. The current version of the RFA application form available on the CBSA website states the RFA assists: “right owners in protecting their rights against the prohibited importation of counterfeit, trademark and pirated copyright goods into Canada.” The RFA as drafted does not cover exports. Hopefully is this is an oversight that will not prevent an RFA holder from requesting the CBSA’s assistance to prevent exportation of copyright infringing or counterfeit goods. Time will tell.