Yes, I'll begin. Thank you.
Good afternoon. My name is David Lipkus, and I am a lawyer at Kestenberg Siegal Lipkus LLP.
I am appearing today on behalf of the International Trademark Association as chairman of the Canada subcommittee of INTA's anti-counterfeiting committee.
I am joined by Peter Giddens, partner at McMillan LLP, chair of the Canada subcommittee of INTA's trademark office practices committee.
We are honoured to appear today before this committee to share INTA's views on the Combating Counterfeit Products Act.
INTA supports the bill as a major step in improving protection against counterfeiting in Canada, but our members believe that Bill C-8 can better protect the Canadian public by including tougher deterrents against counterfeiting and developing stronger measures at the border to keep counterfeits out of our country.
INTA is a not-for-profit membership association, with 6,300 member organizations in over 190 countries. We have 179 member organizations across Canada. INTA's membership spans all industry lines and sectors and is united in the support of trademarks and related intellectual property in order to protect consumers and promote fair and effective commerce.
Our message is simple, and as you have heard from other witnesses, counterfeiting is a crime. Counterfeiting endangers the public health. Counterfeiting steals from Canadian businesses. Counterfeiting drains revenue from our government. And counterfeiting and the counterfeiting problem are growing in our country.
We believe that including our suggestions to Bill C-8 could make a huge and significant impact on this growing problem
INTA members have seen counterfeits in product categories such as food, medicines, automotive parts, electronics, appliances, cosmetics, and luxury goods. These counterfeits can be bought anywhere, from basements to shopping malls, and increasingly on the Internet. These products are bought and used by Canadians and found in Canadian homes, Canadian schools, Canadian businesses, and Canadian hospitals. We need effective laws to address this crime that harms the public and steals from our businesses.
Also, because counterfeiting is a global issue, Canada's actions on this issue will have international consequences. Canada must address counterfeit products with the same high bar as its trading partners. Bill C-8 is an essential step towards this objective. As we express support for Bill C-8, we recommend priority amendments that are important improvements to the bill.
With respect to statutory damages, INTA is recommending additional provisions to the Trade-marks Act, giving courts the power to award significant statutory or pre-established damages against counterfeiters in recognition of situations where it is difficult, or even impossible, for the trademark owners to prove the measurable monetary loss or damage. Often counterfeiters don't keep any records of the business they do and transact only in cash. The minimal compensatory damage awards currently ordered by our courts make breaking the law and selling counterfeit in our country simply the small and insignificant cost of doing business in our country.
While the bill does allow for punitive damages, they are discretionary and therefore rarely awarded by our courts. Thus, there is a need to deter the sale of counterfeits in our country against businesses, both large and small business, in order to protect the public from this crime. Statutory damages can help to accomplish this.
INTA applauds the addition of sale and distribution of counterfeits as a criminal offence in Bill C-8. These provisions align with the criminalization of counterfeiting globally, including places like the EU, United States, and China. However, after a counterfeiter is charged, the government must prove several elements of the counterfeiter's knowledge, which will make it very difficult for the government to prosecute criminal cases. More importantly, it misses the fundamental nature of mens rea, which makes these offences criminal.
As the bill is drafted today, a counterfeiter could easily deny knowing that the trademark was registered, that the mark on the goods is identical to or indistinguishable from a registered mark, and that the sale or distribution is an infringement as defined in the relevant sections of the Trade-marks Act. I'm not sure how many counterfeiters go to the CIPO database or review the Trade-marks Act on a regular basis, as I do in my practice.
The criminal offences should be written in a manner that they will be enforceable to truly act as a deterrent to counterfeiters and keep these criminals from hurting the public.
With regard to goods in transit, INTA recommends that the section of the Trade-marks Act that explicitly prohibits the Canada Border Services Agency from intercepting and seizing counterfeit goods in transit be removed from Bill C-8. Counterfeits must be stopped at any point in transit or destination. Allowing counterfeit goods in transit to pass through Canada encourages the use of our country as a convenient transit destination by organized crime. Counterfeiters rely on transit through third countries as a covert way of getting their illegal products to designated markets. Countries must therefore be vigilant about stopping counterfeits in transit, even when the products are destined for a third country.
Ensuring that national laws allow customs inspectors to seize counterfeit goods in transit is an important tool in the global fight against counterfeiting. For example, counterfeit car parts shipped to the United States could easily be installed into cars that travel to our border in Canada. Given the integration in North American manufacturing, it makes sense to intercept counterfeit goods when and where they are discovered. It is not in any country's best interest to support counterfeiting. Allowing counterfeits in transit to pass through Canada has the unfortunate effect of supporting the global trade of counterfeit goods.
An administrative regime at Canada's border to efficiently destroy counterfeits can significantly reduce the costs and resources devoted to counterfeit goods seized at the border. The alternative is litigation, which, as you know, is time-consuming. The costs associated with the request for assistance and the storage of counterfeit merchandise will undoubtedly be onerous on the rights holder and taxpayers because court actions will be issued after every seizure done by customs. Many INTA member organizations will not have the budgets to participate in this request for assistance program.
An administrative regime will eliminate many unnecessary costs, especially in cases where the importer does not even respond to a seizure notice and the goods are confirmed to be counterfeit. Many countries already have an administrative regime in place to quickly destroy counterfeit goods seized at the border. That is working. The customs officials in the European Union, Australia, and the U.K. dispose a large percentage of counterfeits seized at the border by some form of administrative regime. The inclusion of an administrative regime in Bill C-8 would be beneficial for not only brand owners but also the government.
Peter Giddens is now going to address the additional important trademark issues.