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

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Improving Canada’s Response toOnline InfringementDistribution of counterfeit product is now regularlyconducted on the Internet. There is no mechanism inCanada to address online distribution of counterfeitproducts. Although enforcement on the Internet is stillrelatively new, it is essential that Canada develop aworking model that protects consumers and businessesin the digital age.Due to the limited remedies available to rightsholders, it becomes nearly impossible and incrediblycost prohibitive to use existing legal tools to respondto the increasing problem of counterfeit productsbeing delivered through the post in small shipments.Under the current law, rights holders are able to stopshipments at the border if they obtain a court orderinstructing the CBSA to do so. While it is challengingto gather the data necessary to obtain such an order inrespect of large shipments, it is virtually impossible fora rights holder to know if these small shipments arecoming in and it is entirely cost prohibitive to engagein the civil process required to stop the shipment whendealing with so many small shipments.Best practices seen in other countries have evolvedto include systems for recording rights. Underthese systems rights holders typically pay a fee toregister their rights for a specific period of time.This information gives customs officials identifyinginformation about goods that are at a high risk ofbeing counterfeited. Systems like this, that providefor increased cooperation and information sharingbetween border officials, law enforcement and rightsholders, are lacking in Canada. Other countries havealso instituted dedicated enforcement initiativesfocusing on the postal service. Canada has nottaken such an active step and continues to beseen as a transshipment point for commercialscale counterfeiters.Canada lacks programs that have been establishedin our major trading partners that dedicate specificresources to combating IP crime. Dedicated resourcesare essential to developing expertise in identifyingcounterfeit goods, prosecuting IP offences andbuilding international relationships. In order forsuch a program to be taken seriously, it needs to besupported at the very highest level of government. Inorder to determine the policy, level of funding andprogramming objectives of such a program, guidanceshould be taken from international best practices.Recommendation 4Canada needs to develop a tactical response tothe challenges of counterfeiting in the digital age.Specifically, the government should:1) Identify new remedies and approaches that canaddress the challenge of small shipments ofcounterfeit goods that do not require the rightsholder to obtain a court order to suspend each andevery shipment.2) Develop a system for recordation of rights. Sucha system will ensure that border officials have theinformation they need to effectively exercise exofficio powers.3) Develop a team of properly funded and dedicatedenforcement professionals in order to effectivelyface the challenges presented by counterfeiting inthe digital age. In the absence of such a team, it willbe impossible to respond to the challenges of smallshipments of counterfeit product delivered online,and Canada will not be effectively positioned topartner with our international counterparts intackling multinational operations.Building a Proactive Government ResponseIn addition to the increase in the tax base that wouldbe generated by driving more legitimate trade, thereare many other benefits that would be created in theCanadian economy by taking a proactive stance inrespect of counterfeiting and piracy. As has been seenin other jurisdictions, strong laws for the protection ofIPR lead to increased investment and result in moreservice offerings for consumers.To date, Canada has seen the spin-off benefit ofgovernment action in other jurisdictions. The Cityof London Police have driven proactive action bypayment processors; memoranda of understandingfacilitated by the European Commission havefacilitated cooperation between rights holders andonline service providers; and the U.S. government’scalls for increased cooperation have led toorganizations like Google taking proactive stepsto limit the advertising of counterfeit goods on itsservices. The Canadian government needs to havea mandate of engagement to encourage multistakeholdercooperation.Counterfeiting in the Canadian Market | The Canadian Intellectual Property Council 29
Coordinated action can, and has, taken place inCanada. The Canadian Anti-Fraud Centre workswith Canadian brand owners, including CanadaGoose, to liaise with payment processors in obtaininginformation to identify their consumers who are sellingcounterfeit products online. The goal of this project isto cut off the access of unauthorized websites sellingcounterfeit and pirated goods from their primarymethods of payment: credit cards, wire transfers anddirect account transfer. This program has enabledrights holders to provide tips to the Canadian Anti-Fraud Centre, and if a site is found to be infringing,a rights holder can then work with the financialinstitution, with the goal of terminating the illicitmerchant’s account. In this particular case, the Anti-Fraud Centre had indicated that it had suspendedor was in the process of suspending 157 accounts,predominantly in Asia. 115Such programs need to be formalized and rolled out ona larger scale.Recommendation 5The government of Canada needs to take a proactivestance in combatting counterfeiting and piracy. Itsleadership is essential to the development of aneffective enforcement regime and facilitation ofstakeholder partnerships in the country. Specificallythe government should:1) Create an interagency intellectual propertycouncil consisting of senior officials fromvarious government departments, including theDepartment of Justice and the RCMP, with themandate to develop public education programs,initiatives for law enforcement and policy.2) Establish a specialized IP crime task force toguide and lead anti-counterfeiting and anti-piracyenforcement efforts in Canada.3) Proactively engage in facilitating discussion,toward a memorandum of understanding, betweenrights holders and intermediaries in Canada, witha view to creating simple private remedies tocombat counterfeiting and piracy.115 Canada Goose Targets Counterfeit knock-offs. Available at: http://www.thespec.com/news/business/article/675951--canada-goosetargets-counterfeit-knockoffs30 Counterfeiting in the Canadian Market | The Canadian Intellectual Property Council
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