Counterfeiting in the Canadian Market - Manitoba Chambers of ...

Legitimate businesses dedicate time and resourcesto the fight against counterfeiting, educating theirconsumers, working with regulatory authorities,conducting their own investigations and engaging incostly litigation. In the absence of counterfeiting andpiracy, the money spent to fight this epidemic couldbe spent on research and development, infrastructureinvestment or additional staffing. It is crucial thatwe build a system of IPR protection in Canada thatallows companies like Canada Goose to rely on lawenforcement and the efficacy of the judicial system toprotect its brand.Case Study: Canada GooseCanada Goose is a proud Canadian company whichhas experienced first-hand the negative impacts ofcounterfeiting. While it has a comprehensive brandprotection program, its ability to protect its brandin Canada is limited by weak laws and a lack ofgovernment resources dedicated to the fight.Canada Goose is worried about the proliferation ofcounterfeit jackets, largely because they know thesegoods are a health risk and are dangerous to theconsumer. Kevin Spreekmeester, vice president ofglobal marketing, says that, unlike some who mayknowingly purchase counterfeit products, most of theconsumers buying counterfeit Canada Goose jacketsonline believe they are buying the real thing. Websitesselling the fake product provide genuine shoppingexperiences and charge high prices. Many onlinecustomers will simply click on one of the first sites theirInternet query returns, believing the online retailerto be a legitimate vendor. The product they receive isutterly substandard; the down in these jackets containunhealthy elements, including bacteria, mildew andchicken parts. Fake jackets have been trimmed witha variety of furs including German shepherd andrabbit, which do not protect the face from the cold. TheCanada Goose jackets are built to protect the wearerfrom the harshest extremes of the Canadian north,something counterfeits are unable to do.Canada Goose has taken a proactive approach to theproblem using a combination of consumer education,legal enforcement and markers of authenticityphysically present on the jackets. On its website, thecompany provides information for consumers aboutauthorized retailers, the problems associated withfake jackets and the identity of rogue websites that areknown to sell counterfeit product. The company hasdivided its enforcement practices between strategiesfor business-to-business (B2B) and business-toconsumer(B2C) platforms, both of which have beensuccessful. The company works with private firmsin North America and Europe to seize counterfeitversions of its product at borders and engage in civilenforcement measures against rogue websites.Counterfeiting Means Lost Revenue forthe GovernmentIllegitimate businesses that traffic in counterfeitgoods frequently do not comply with tax obligations,resulting in lost revenues for all levels of government.In April 2010, the CBSA and the RCMP in BritishColumbia seized a shipment containing over 50,000cartons of counterfeit cigarettes. 33 Based on the tax ratethen in effect in British Columbia, had these cigarettesbeen legitimate and sold through tax-paying channels,they would have generated over $1.8 million in taxrevenue. 34 This is a small but concrete example of theimpact that counterfeit goods have on tax revenues,and, ultimately, in this time of economic uncertainty,the level of service that governments are ableto provide.33 CBSA Press Release, “Largest counterfeit tobacco seizure in BC History” May 5, 2010. Available At: http://www.cbsa-asfc.gc.ca/media/prosecutions-poursuites/pac/2010-05-05-eng.html34 Tax rate obtained from Ministry of Finance Tax Bulleting TTA 005, Revised October 2010.12 Counterfeiting in the Canadian Market | The Canadian Intellectual Property Council