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

The standards for remedies for infringement of IPRare provided in international treaties. The TRIPSagreement provides that ratifying countries “shallprovide for criminal procedures and penalties tobe applied at least in cases of wilful trade-markcounterfeiting of copyright piracy on a commercialscale.” 76 In order to clarify the application of thisobligation, the signatories to the ACTA have indicatedthat commercial scale activities include those “carriedout as commercial activities for direct or indirecteconomic or commercial advantage.” 77 The ACTAalso makes clear that the civil and criminal remediesthat are available in respect of tangible IPR shouldalso be available in the “digital environment” andfor infringement which takes place “over digitalnetworks.” 78 This essentially means that a criminalorganization that commits an online infringementshould be treated the same way as a group thatcommits an infringement across borders. 79The necessity of criminal remedies applying toonline infringements has been demonstrated in theMegaupload case commenced by the U.S. JusticeDepartment. In this case, the Justice Department hascharged two corporations and their owners/operatorswith racketeering, conspiracy, conspiracy to commitcopyright infringement, conspiracy to commit moneylaundering and criminal copyright infringement. Theactions, which are the substance of the case, took placein the online environment. 80 The Justice Departmenthas alleged that Megaupload generated over 175million USD in profits and caused over a half billionUSD in harm to copyright owners. 81 Use of proceedsof crime legislation has empowered the JusticeDepartment to seize and freeze many of the assets ofthe corporations and the individual defendants duringthe proceeding.Additionally, contributory liability systems have beenused in the United States to go after key suppliers ofmaterials who actively induce or aid in the distributionof counterfeit goods. The Supreme Court in the UnitedStates has held:[if a person] continues to supply its product to onewhom it knows or has reason to know is engagingin trade-mark infringement, the manufacturer ordistributor is contributorally responsible for any harmdone as a result of the deceit. 82International regimes that allow action involvingintermediaries have also provided innovative solutionsfor rights holders. Under these regimes intermediariesare not liable for infringement; rather they are subjectto injunctions, or blocking orders, that preventconsumers from accessing sites that offer infringingcontent. These provisions have been used in the EU toblock access to sites like The Pirate Bay, underminingthe illicit service’s access to its customers. Injunctionremedies involving third parties have now beenrecognized as an international standard. The ACTAcalls on signatories to provide civil remedies thatenable a court to order a third-party to the proceeding“to prevent goods that involve the infringement ofan intellectual property right from entering into thechannels of commerce.” 83Both legislative and non-legislative projects view theISPs as crucial players for their ability to block websitesfrom the users or simply not “resolve” or completethe search query. In some jurisdictions, ISPs musttake action in order to prevent access to infringingcopyright material in order to avoid secondary liabilityfor infringement. 84 Though such regimes do not extendto action respecting sites offering trade-mark infringing76 TRIPS Agreement, Article 61.77 ACTA, Article 23(1)78 ACTA, Article 27(1) and (2)79 ACTA in the European Union – A Practical Analysis, February 2012 BASCAP/INTA.80 Justice Department Press Release, Justice Department Charges Leaders of Mega Upload with Widespread Online Copyright Infringement, January19, 2012. Available at: www.stopfraud.gov/opa/pr/2012/january/12-crm-074.html81 Ibid.82 Inwood Labratories, Inc. v. Ives Labratories, Inc. (1982) 456 U.S. 844 at 85483 ACTA, Article 8.120 Counterfeiting in the Canadian Market | The Canadian Intellectual Property Council