Bill C-56 Remedies: Rights Holders Can All Feel a Little Safer

Bill C-56, the “Combating Counterfeit Products Act”, went through its first reading on March 1^st 2013. The primary goal of the bill, from the perspective of the government, is to modernize our infringement legislation in order to better protect consumers and businesses from counterfeit goods.

Christian Paradis, Minister of Industry, also noted that the legislation is well in keeping with public concerns about family safety and the safety of the community at large. But the extent to which this legislation’s remedies truly protect the public is somewhat misstated.

One of the biggest changes to help combat counterfeit products are sections of the bill which relate to the seizure of imported or exported items that are potentially infringing on copyright or trade-mark rights.  (See Ryan Heighton’s article to read more about some of the proposed revisions to the Copyright Act and Trade-marks Act contained within the bill).  A customs officer may now detain items (for a set period of time) which they believe infringe on these rights. In addition, the rights holders themselves can apply for assistance from customs to enforce their rights in relation to items which they believe infringe upon their intellectual property rights. Rights holders will also have access to information from officers relating to any detained or suspect items. During the time of detention, neither the officer nor the government will be liable for any damages done to the detained items.

Additional criminal sections have also been proposed for the Trade-marks Act. The new provisions would capture anyone involved in an infringing scheme that had knowledge of the infringement. Punishment for intentional infringement is up to $ 1,000,000 in fines, up to 5 years in prison, or both. This section clearly increases the courts ability to punish infringers from the broad and understated relief provisions in section 53.2 of the current Trade-marks Act.

Some see this legislation as an attempt by the Canadian government to further comply with the Anti-Counterfeiting Trade Agreement (ACTA). ACTA had recently taken a great deal of public opposition in the EU resulting in a lack of support for the act by EU government officials.

It is important, however, to take account of why the EU opposed ACTA in the first place. Opposition to ACTA, at least from the EU public’s perspective, seems to have been based primarily on ACTA’s privacy and fair-dealing provisions. Therefore, it is doubtful, in my mind, that even if the Canadian public was more aware of the effects of bill C-56, there would be widespread opposition. The new bill clearly increases the protections that copyright or trade-mark owners enjoy, but not in a way that directly concerns the general public. On an individual level, I doubt whether the average Canadian would ever notice that these new protections exist. The protections target commercial behaviour, specifically the importation or exportation of goods, and therefore it may only affect Canadians on a business level.

That said, there are clear concerns, on a commercial level, with the bill as it has been proposed. The most obvious of which is that customs officers are now put in a position to make legal judgments as to whether imported goods violate IP rights or not. The rights holders themselves will be in a position to direct the attentions of customs officers to further their own goals. In my most cynical imagination, I envision rival businesses reporting copyright/trade-mark infringement to customs officials in relation each other’s imported goods rather than going to court. Without the need for any court direction, the customs officer is now put in a position to detain the impugned goods, potentially interrupting business for a period of time. The possibility of abuse of these new remedy provisions is clear.

Aside from the issues with implementing these new provisions, I also have concerns over the way that this bill was marketed. When the Minister of Public Safety, Mr. Toews makes statements like the following:

“Counterfeiting poses health and safety risks to Canadians. Goods made using inferior or dangerous materials may lead to injury and even death. Proceeds from the sale of counterfeit goods may be used to support organized crime groups,”

It makes it seem as though this bill is targeting public safety. While I have no doubt that some infringement is the result of counterfeit products which are of an inferior and perhaps dangerous quality, infringement might also be purely accidental. Just because products or services happen to infringe copyright or trade-mark rights that does not necessarily make them a public danger. What this act clearly does is allow greater protection for right’s holders through increased enforcement mechanisms. Therefore, in my opinion, this act has primarily business purposes. Any increase in public safety is, at best, a secondary concern. I think that portraying the bill as addressing public safety unnecessarily clouds the bill’s true purpose and damages it credibility.

Adam Stevenson is a JD Candidate of Western University, Faculty of Law.