As with previous years, Canada has been placed on the U.S. 2011 Priority Watch List of countries for which there are concerns regarding the protection and enforcement of intellectual property rights[1]. Canada has been perceived by the U.S. government as being weak on IP enforcement, particularly regarding anti-piracy and anti-counterfeiting measures. However, a number of developments over the past year demonstrate that Canada is challenging these perceptions and that its continued presence on the Priority Watch List should become a thing of the past."

Anti-Counterfeiting and Anti-Piracy

In an anti-counterfeiting decision released by the Federal Court of Canada on June 27, 2011, the plaintiffs (Louis Vuitton and Burberry) were awarded damages totalling almost CAD$2.5 Million. This is believed to be the largest damages award in a Canadian anti-counterfeiting case.[2] Notably, in its decision, the Court acknowledged the "…egregious and outrageous nature of activities involving counterfeit goods" and supported the view that intellectual property infringement "…constitutes a very serious offence, more serious than a theft of some other material or property because it strikes at the heart of what differentiates a progressive, creative society from one that is not." It will be interesting to observe whether this decision signals a shift by Canadian courts towards higher damage awards in anti-counterfeiting actions going forward.

More recently, Canada signed the Anti-Counterfeiting Trade Agreement ("ACTA") on September 30th, 2011.[3] The objectives of ACTA are to standardize the rules of IP enforcement in order to combat counterfeiting and piracy.

Patentability of Business Method Patents

While the Canadian Intellectual Property Office ("CIPO") tried to exclude business method patents from patentability in 2009, the Federal Court found that any such exclusion was contrary to the Canadian Patent Act.[4] According to the Court, there is no exclusion for "business methods" which are otherwise patentable. The Federal Court, in very strong language, went on to say that "… the questionable interpretation of legal authorities in support of the Commissioner's approach to assessing subject matters underline the policy driven nature of her decision." While CIPO appealed the Federal Court's decision, it was thought that the appointment of a new Commissioner of Patents, Sylvain Laporte[5], was an indication of a shift in CIPO policy, such as its approach to restricting patentable subject matter. Notably, however, the Commissioner released a revised examination guidance document to examiners on August 1, 2011 that appears to restate CIPO's initial position.[6] While the Federal Court of Appeal has not yet released its ruling, the appeal decision may clarify whether business method patents are patentable in Canada.

Fourth Time Lucky?

On September 29, 2011, the Copyright Modernization Act (Bill C-11) was introduced by the Canadian government.[7] Bill C-11 is Canada's fourth attempt since 2005 to amend the Copyright Act.  It has been suggested that Bill C-11 could pass before Christmas.

Among the amendments, Bill C-11 will (a) provide protection for technological protection measures that companies use to secure content; (b) establish new exclusive rights including the right to make sound recordings available on the internet; (c) create new "personal use" exceptions, including the movement of content across formats; and (d) clarify the role of Internet Service Providers ("ISPs") with respect to copyright infringement by limiting their liability and requiring them to forward notices of alleged copyright infringement to subscribers and to retain the records necessary to determine the subscribers' identity.

The election of a stable majority federal government in May 2011 should help address some of the concerns regarding Canada's IP enforcement regime. In the past, minority governments have been unable to pass IP reforms as elections were called before any proposed IP amendments could be finalized. The current majority government has indicated that addressing IP issues will be one of its legislative priorities.[8] To that end, amendment of the Copyright Act by way of Bill C-11 is finally expected to come to fruition.