Evidence of meeting #2 for Industry, Science and Technology in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was goods.
A video is available from Parliament.
4:55 p.m.
Conservative
The Chair Conservative David Sweet
Thank you very much, Madam Charlton.
Now we go to the Conservative Party and Mr. McColeman for five minutes.
4:55 p.m.
Conservative
Phil McColeman Conservative Brant, ON
Thank you, Chair.
Mr. Halucha, at the end of Mr. Lake's questioning I think you had a comment to make, and you didn't get a chance to make it. Do you recall that, and is there something you wanted to add to that discussion?
4:55 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Thank you, sir.
The point I was going to make was about how powerful the new system will be in terms of getting information to Canadian rights holders who otherwise wouldn't have it.
There was discussion about the current process involved in getting a border agent to take action when a counterfeit good comes in. Right now the rights holder has to have information on the location in advance. They need to know where it's coming into the country; they need to know what it is, and they need to know when it's coming in.
They can get action from CBSA only if it receives a court order. That's all CBSA is permitted to do, so it's extremely limited. In fact the ability of CBSA agents to share information when they have suspicious goods will be extremely powerful in enabling Canadian companies to protect their IP.
5 p.m.
Conservative
Phil McColeman Conservative Brant, ON
That's exactly the kind of questioning I wanted to go down, about the infringement of their IP and their brand identities.
From the witnesses we had—and Canada Goose is set out there as the kind of iconic brand that is being infringed upon—the expense right now to significant brands is large in their business models. I'm wondering if you could give us a sense, from your discussions and consultations with them throughout this, of not only the cooperation you're receiving but also the kinds of investments they're needing to make in order to ferret out the counterfeiters all along the line: the manufacturers, the distributors, whether or not it involves organized crime. This is a very large financial cost to doing business, is it not?
5 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
It absolutely is. Intellectual property is one of the most valued intangible assets of many companies. You can lose a factory if something negative happens in terms of a natural disaster. Having damage to your brand is something that's very difficult to withstand, so they're extremely supportive of the measures the government is bringing forward. In fact, they will actually be paying in. It's a system that actually balances the government playing a role, establishing a framework, and —as the gentleman from the CBSA noted—rights holders will be paying to participate in that system and be part of it. That's an indication of just how valuable it is.
One statistic that always strikes me is that there are over a million trademarks registered in Canada. That really tells you how valuable they are to the companies that register them.
5 p.m.
Conservative
Phil McColeman Conservative Brant, ON
That's exactly what we heard throughout the hearings we had with the different manufacturers and the different associations representing manufacturers. I appreciate that question.
I'm going to pass the rest of my time to my colleague Madam Gallant.
5 p.m.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Thank you, Mr. Chairman.
This bill grants extra powers to the CBSA agents as well as the trademark owners. What measures or restrictions are in place to ensure these new powers are not abused?
5 p.m.
Conservative
James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC
Again, these are powers that are principally for rights holders. Of course, by engaging CBSA in trying to protect their rights, the CBSA operates within the context of the rule of law, of which these new powers will be enforced.
I'm not sure if you want to say something more to your power.
5 p.m.
Vice-President, Operations Branch, Canada Border Services Agency
We're guided by the Customs Act.
In this particular case, the detention is for 10 days. There's a possibility to get an extension. But if within the first 10 business days nothing happens, then the goods are released from CBSA detention.
We're guided by the Customs Act, which guides everything we do. We're also guided by section 107 of the act, in information-sharing with rights holders. So we feel we have the proper framework to make this happen.
5 p.m.
Conservative
The Chair Conservative David Sweet
Thank you very much, Mr. Bolduc.
Now on to Madam Sgro for five minutes.
5 p.m.
Liberal
Judy Sgro Liberal York West, ON
Thank you very much, Mr. Chair.
Perhaps I could just finish the question I didn't have enough time on, on the issue of distinctiveness. Will the case law that's currently there be preserved? You indicated that “distinctiveness” was just a modernization of a word. Will that have any implications on the current laws or any new subsections that would be produced?
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
You're asking me to predict what the courts will do, which is always very difficult to do. We can only look backwards at what jurisprudence has told us.
5:05 p.m.
Liberal
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Not in our view. Because we're basically replacing one phrase with a synonym that's more modern, the view is that it's not going to make any changes.
The concern that generics have raised is around the size, shape, or colour of a pill or a medicine being trademarked. In fact, in the jurisprudence the courts have been quite clear that what is of value.... Drugs aren't prescribed because of the shape, size, or colour of a pill. They're prescribed because of a medicinal ingredient. The medicinal ingredient is the basis for the distinctiveness of the product, not the dress of the product, which is its colour, its shape, or its size.
5:05 p.m.
Liberal
Judy Sgro Liberal York West, ON
The generic industry is a multi-billion dollar business. It's an important industry to our country, and in dealing with the many health challenges, it's an important industry. You say “in your opinion...”, but have you actually examined the bill and made sure that it is not going to have negative implications on that important industry?
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Absolutely. We would not have brought it forward as part of the bill had there been concerns that we were going to be changing outcomes in how the courts view trademarks.
5:05 p.m.
Liberal
Judy Sgro Liberal York West, ON
You're confident that we're not going to end up in court arguing over this word “distinctiveness” and its impact on the industry?
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
The pharmaceutical industry is well known to be one of the more litigious industries in Canada, and I would not want to put a number to the percentage of chance that there could be suits as a result of this. But that's not the same thing as having the law changed. The law is always tested.
In any case, when you move forward with new legislation, the chance of having a law tested increases.
5:05 p.m.
Deputy Minister, Department of Industry
Simply put, though, we believe that this is truly just modernization of the language. The legal risks are low.
5:05 p.m.
Liberal
Judy Sgro Liberal York West, ON
I would hope that.
But on that issue, when we talk about counterfeit clothing and other things, a major concern for all of us is the whole issue of counterfeiting drugs, taking a generic and making it look like a non-generic. We have people's health clearly in mind there.
How well is Bill C-8 going to be able to make sure that's not happening and that consumers are protected? We're talking about a health issue.
5:05 p.m.
Deputy Minister, Department of Industry
This act is designed to put in place a new framework that addresses gaps currently in the system. In the health and safety area, as in the other areas, it's a huge opportunity to learn more about what is actually happening on the ground with respect to this illicit activity.
Clearly, Mr. Chair, health and safety are key issues, and the act is designed to try to do a better and more efficient job of addressing the issues here.
5:05 p.m.
Liberal
Judy Sgro Liberal York West, ON
Regarding the ACTA, has the United States ratified that agreement, or any other country that you're aware of?
5:05 p.m.
Conservative
James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC
This is not related to that. This is about domestic pressures, but it does bring our status quo in line with what other jurisdictions in the world are doing.
5:05 p.m.
Liberal
5:05 p.m.
Deputy Minister, Department of Industry
Mr. Chair, I understand the main agreement is what's called ACTA, the Anti-Counterfeiting Trade Agreement. It was signed in October 2011 by Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea, and the U.S.
As the minister has said, while this legislation is domestically focused, it brings us in line with that particular international agreement.