CANADA’S NEW TRADEMARK LEGISLATION

Lorne Lipkus
Partner, Kestenberg, Siegal Lipkus LLP, Toronto, Canada

On January 1, 2015, Canada commenced the steps necessary to implement new border enforcement provisions designed to stop the entry of counterfeit-trademark and copyright-infringing goods through the Combating Counterfeit Products Act royal assented on December 9, 2014, through the issuance of a new form requesting assistance (SEE FORM). Although the Combating Counterfeit Products Act does not provide for authority for Canada Border Services Agency (CBSA) to seize these products, the legislation has given “Canadian Customs” officers the ability to detain them. It also facilitates the pursuit of civil remedies sought by those intellectual property rights holders who have effectively “recorded” their registered trademarks or registered/unregistered copyrights under the new legislation. 

Although the legislation doesn’t allow for an expedited process through ex officio actions, which has been effective in other countries, these new amendments provide remedies in situations where none previously existed.

Brand owners can now take additional steps to prevent both the import and export of counterfeit and copyright-infringing goods.

These are several positive aspects to the new legislation, including it

• Creates an import/export prohibition expressly for counterfeit goods/pirated works
  
• Provides authority for brand owners to file a Request for Assistance (RFA) to “seek assistance” from Customs, for detention of counterfeit goods.
• Allows brand owners to file on the RFA form a list of known authorized importers and known or suspected importers of counterfeit products (helping Customs target violators), and to update these lists as needed.
• Permits brand owners to file on the RFA form information on differentiating between authentic and counterfeit products (many of the brands have also filed “cheat sheets” or product identification manuals).
• Offers brand owners three (3) days after being informed of the existence of suspected counterfeit goods to decide whether they wish to take steps required to protect their interest (this will normally involve proceeding with a settlement negotiation/agreement with the importer or commencing litigation in an appropriate Canadian Court within the time limits set out in the legislation – usually 10 days).
• Requires no financial commitment on the part of the brand owners until they decide that they wish to take the steps required to protect their interests. Customs can share information with the brand owners. This can take the form of providing samples and/or information to brand owners.

Brand owners can file their registered Canadian trademarks and copyrights with Customs as a no-cost first step toward protecting their business against the importation of counterfeit goods bearing the brands registered Canadian trademarks and registered or unregistered copyrights.

It is, however, important to understand what the new legislation does not do. Specifically, it does not

• Give CBSA ex officio power to seize and destroy counterfeit goods.
• Provide an administrative or simplified procedure for rights enforcement as available in the United States and many European countries.
• Authorize seizing or detaining in-transit shipments.
• Provide for seizure or detention of gray-market goods.
• Require CBSA contact brand owners regarding the importation of suspected counterfeit goods unless the owners have filed an RFA.

With this new legislation brands could be better off than before if they are trying to protect their trademarks and copyrights. Even if brand owners believe that the legislation should have been more robust and covered more areas, it still represents an improvement for brand protection. In fact, although many individuals and organizations involved in anti-counterfeiting, including the author, testified before government committees, made submissions in writing and verbally to the government and otherwise recorded their strong desire for more robust legislation, the government has provided a framework that will allow brand owners to more cost-effectively deal with the importation of counterfeit and pirated items.

If, as they say, the “proof is in the pudding” the fact that the first two test cases were a resounding success could be seen as a harbinger for good things to come. In the first, according to CBSA communication, over 75,000 pill bottles were detained. These had no child-proof safety measures yet had a counterfeit CSA mark. CSA served a cease and desist letter within the time required and the importer immediately began negotiating a resolution. In the settlement the importer agreed to pay the cost of storage and destruction and to conduct a recall of previously imported identical product. They also provided important supplier information for further enforcement. In the second case, CBSA advised the brand and counsel of over 7,473 counterfeit Calvin Klein T-shirts. Calvin Klein instituted legal action within the mandated 10 day time period. Very soon after the importer agreed to pay the cost of storage and destruction, as well as legal fees and provided supplier information. Unfortunately the CBSA was unable to contact any of the other brands in this shipment because Calvin Klein was the only brand that filed an RFA and this detention resulted in Calvin Klein’s largest seizure in this current decade. Both cases were resolved quickly and at minimal cost to the brands. On the other hand, CBSA representatives have advised some brand representatives that in the first 16 months since the legislation was put into effect there have been only approximately 11 detentions for brands that filed RFAs. 

The more brands that file RFAs, provide information to CBSA about suspected importations of illegal products bearing their trademarks or copyrights, and impress upon the government the need to train Customs officers to effectively identify and detain counterfeit items, the greater the likelihood that what Canada has put on paper will translate into success.