Bill C-56 (Historical)

Combating Counterfeit Products Act

An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts

This enactment amends the Copyright Act and the Trade-marks Act to add new civil and criminal remedies and new border measures in both Acts, in order to strengthen the enforcement of copyright and trade-mark rights and to curtail commercial activity involving infringing copies and counterfeit trade-marked goods. More specifically, the enactment
(a) creates new civil causes of action with respect to activities that sustain commercial activity in infringing copies and counterfeit trade-marked goods;
(b) creates new criminal offences for trade-mark counterfeiting that are analogous to existing offences in the Copyright Act;
(c) creates new criminal offences prohibiting the possession or export of infringing copies or counterfeit trade-marked goods, packaging or labels;
(d) enacts new border enforcement measures enabling customs officers to detain goods that they suspect infringe copyright or trade-mark rights and allowing them to share information relating to the detained goods with rights owners who have filed a request for assistance, in order to give the rights owners a reasonable opportunity to pursue a remedy in court;
(e) exempts the importation and exportation of copies and goods by an individual for their personal use from the application of the border measures; and
(f) adds the offences set out in the Copyright Act and the Trade-marks Act to the list of offences set out in the Criminal Code for the investigation of which police may seek judicial authorization to use a wiretap.
The enactment also amends the Trade-marks Act to, among other things, expand the scope of what can be registered as a trade-mark, allow the Registrar of Trade-marks to correct errors that appear in the trade-mark register, and streamline and modernize the trade-mark application and opposition process.

Combating Counterfeit Products Act

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I would like to sincerely congratulate my colleague on his speech. It is nice to hear from a pragmatic individual who can clarify many of these issues thanks to his professional history.

Since he is relatively new to Parliament, he can be forgiven for being somewhat naive about the government's consulting process. Everyone knows that the government is disinclined to consult people who have opinions about its regulations.

Nonetheless, I would like to ask him a question about a hot topic. Does he find it terribly unfortunate that what looks good in theory will be difficult to put into practice given that, as recently as yesterday, the Minister of Canadian Heritage decided it would be a good idea to stick his nose into labour negotiations at the Canada Border Services Agency?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank the hon. member for his very kind comments in welcoming me. While I physically sit on his side of the House, I am not from his side of the House, but I also appreciate my colleagues in all the seats in this place.

The root of the member's question highlights the reason there was such inaction by the previous Liberal government on these important issues and in trademarks specifically. The transition in some parts of the bill, including modernizing trademarks law and empowering intellectual property register at the border, will be substantial changes.

The hon. member is correct in that regard, but the challenge in modernizing does not excuse us from acting. The previous Liberal government spent 12 years, with Canada being named each year as a special trade country to watch, alongside other countries like China and Saudi Arabia, just because it was difficult.

Our government has looked at this seriously in the last few years, and Bill C-56 is an important step to update our laws.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it is indeed a treat to have someone speak to a bill for which he advocated before political life.

I am curious about some aspects of the bill and I wish we had more time to deal with it. I agree it is important legislation and the goals of the bill are laudatory, but the bill would give customs officers powers that we really only would see in the hands of judges. Customs officers will have to make quick determinations at the border about what is counterfeit, what is legitimate and what might be a parallel import. They will have to do it on the spot and they will have to get it right.

What are the recourses available to an honest importer whose goods are seized by a customs officer with the increasingly large and quite complex and difficult responsibilities?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I find that when I am speaking late at night in the House, the hon. member from Saanich—Gulf Islands is always joining me with intelligent comments. However, as leader of her party, she should really speak to her House leader about her House duty hours. It is potentially that, or else she works very hard. It could be the latter.

She raised a very good issue. This will be a new series of powers, but we are also not dealing with human crossing of the border. These are esoteric rights in intellectual property. However, they are important rights and the determination at the border can be made by trained officials using a registry that allows intellectual property rights holders to register their marks. It would also put a new burden of seriousness on importers to get their bill of lading and their importation documents correct.

I think sloppiness could lead to a slowdown in goods coming in. However, this being intellectual property and a border issue, there would always be recourse through our federal courts.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I am very happy to rise and thank the member for Durham for his very informative and interesting speech. Speeches like his make me sad that the Leader of the Government in the House of Commons imposed time allocation on this very interesting debate.

In his remarks on this bill, he mentioned that it is very important, and I agree with him on that. He also described the work he used to do. I would like to know how Procter & Gamble, the company he used to work for, estimated that it has lost $1 billion because of counterfeiting. How was that figure calculated? Is that the figure for Procter & Gamble internationally or just in Canada? That is a pretty significant detail.

He mentioned repeatedly that Bill C-56 is an “attempt” to solve this problem, as though there were some uncertainty. Does that mean there is room for improvement?

I would like him to comment further on that.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank the member for LaSalle—Émard for her questions and for carefully listening to my remarks tonight.

She asked a few things, and I would be happy to address the first one quickly. The debate has been had, in fact, in many ways. She mildly heckled when I said 2006 or 2007 was some time ago, but industry has been asking for these intellectual property updates for that long a time. Our government has consulted broadly. We followed a balanced approach that addresses border issues and the intellectual property rights regime, and we have acted.

Her question about Procter & Gamble is interesting. All of these things are estimated, because counterfeiting really is like an iceberg. We will only see one-quarter of that iceberg above the water, and the rest is below. Estimates were made by the amount of counterfeit goods seized and an approximation that we are not going to catch everything.

I am saying this is a balanced start because now that we are providing powers and criminalizing some of this conduct, law enforcement will have to, over time, improve its own investigative techniques. Border officials will have to improve their investigative techniques to try to stay ahead of the counterfeiters.

Inaction, though, is going to hurt employers, so we need to act.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I want to thank my colleague for his comments. It was a very good discussion, and I value very much the experience he brought to the debate tonight.

There has been some discussion about the Canada Border Services Agency's ability to handle this type of thing. I wonder if he might comment. As he would know, in the bill the request for assistance by the copyright owner would be received by CBSA, which would then do a seizure, as it is used to doing today with any commercial good at the border, and then it would be the responsibility of the copyright owner to address the issue after samples were received from CBSA.

On that point, it is not quite like the U.S. regime, in which there is a lot of training, but could he comment about how that process mitigates a bit of the risk for CBSA?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank my colleague from Tobique—Mactaquac, particularly for his help in bringing me up to speed as a new member of his caucus.

He has identified a couple of critical things that were lacking in our intellectual property enforcement regime.

Trademark and intellectual property holders were asking for a registry and asking for assistance. I encountered instances in which the border officers would find a shipment that had personal care products in the container that were not indicated on the manifest, but even though there were brands on the personal care products, border officials and law enforcement were not able to notify the brand holder or conduct investigations to get to the root of where these products were going and which groups were distributing them across the country.

These requests and this registry that CBSA would run are exactly what industry and rights holders have been asking for. They will be a huge tool to combat this problem.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, as the member of Parliament for Kitchener—Waterloo and as a member of the industry, science and technology committee, I am pleased to have the opportunity to rise this evening to speak to Bill C-56, the combating counterfeit products act, at second reading.

The flow of counterfeit and pirated goods crossing our border is of mounting concern. Knock-off goods undermine the integrity of legitimate Canadian businesses and raise their costs. They deceive consumers and often put their health at risk. They siphon off tax revenue and fuel the growth of organized crime. For all of these reasons, I support Bill C-56, the combating counterfeit products act, which is one more step in our government's march toward a modern and strong intellectual property regime.

For my part today, I would like to look at how the proposed act would promote public safety by fighting serious and organized crime.

First, however, let me reflect on the nature of counterfeit and pirated products, why they are so hard to detect and why they have become such a pressing issue.

Modern counterfeiters operate in more subtle ways than they did in the past. They often remain out of sight, and their clandestine goods reach our borders unannounced and too often undetected. What is worse, their wares often make it all too easily onto the open market to be sold to often unsuspecting customers and consumers.

Counterfeit goods can take the form of consumer products such as clothes, appliances and toiletries—household items that we need to be safe—and even health products like medications that Canadians rely on for their families. Frankly, they can be anything that can be produced and distributed for profit.

Modern-day counterfeiters have an utter contempt for copyright and trademark laws, for the health and safety risks posed by unsafe or inferior products, for the lost tax revenue for our infrastructure and essential services, for the lost profits for intellectual property owners and for lost consumer confidence in the marketplace.

It is disturbing to note this criminal activity is also becoming more common. Between 2005 and 2012, the RCMP estimates that it investigated more than 4,500 cases of intellectual property crime in Canada. During that same period, the value of counterfeit products seized by the RCMP skyrocketed from $7.6 million to $38 million.

As high as these numbers are, they are only a drop in the ocean. Remember that $38 million represents the value of the seized products. How many other products manage to cross the border? How many more millions of dollars were lost? How many more consumers were put at risk?

One fact is clear: counterfeiting is on the rise not just in Canada, but around the world.

At least two House of Commons committees have published detailed reports confirming the growing threat posed by these goods, not only to the Canadian economy but also to health and to safety.

Many of our trading partners have already taken steps to strengthen their intellectual property enforcement regimes. We cannot afford for Canada to be at a disadvantage compared to our peers. We need a made-in-Canada solution that takes account of the key international developments in the fight against commercial counterfeiting.

For several years industry associations have been pushing for changes to Canada's intellectual property legislation. I am proud to say that Bill C-56 responds to demands for a modern approach to combat counterfeiting and piracy.

Once passed, the bill will help reduce the availability of counterfeit and pirated goods in Canada. In so doing, it would protect the integrity of our economy, support Canadian growth and jobs, and help protect Canadians from the health and safety risks posed by harmful counterfeit goods.

From a public safety perspective, a successful attack on counterfeit goods also means taking a lucrative source of revenue away from serious and organized crime. To that end, the bill would introduce new enforcement tools to strengthen Canada's existing intellectual property regime, both within Canada and at our borders. It would also bolster existing protections against commercial counterfeiting activities.

In this way we would be better equipped to prevent large shipments of counterfeit goods from entering Canada. By disrupting the distribution of illegitimate goods, we would make it more difficult for organized crime to make a profit.

Let us make no mistake: the collection and distribution of significant quantities of counterfeit products is not the random work of a few isolated individuals. The scope of the problem and the profit involved would suggest that organized crime is involved.

What is the attraction? Organized crime can take the profits from counterfeit goods to support any number of nefarious activities, from trafficking drugs to smuggling firearms. In other words, the profits from all these fake products are buying real drugs and real guns and threatening the safety of our streets and communities.

Our government stands firm in the fight against organized crime. The bill would give the RCMP new tools to combat the threat posed by counterfeit and pirated goods when serious and organized crime is believed to be involved.

At the same time, it would not be used at the border to search individual travellers who happen to possess counterfeit or pirated goods for their personal use. I will have more to say about the role of consumers in a few minutes, but first let me provide a more detailed overview of the proposed legislation.

It often takes years of hard work and significant investment to develop intellectual property, not to mention the huge effort to turn that property into a brand that consumers identify and trust. Counterfeit goods, then, do not simply result in lost sales for trademark and copyright owners: they also undermine hard-earned reputations and can put the very existence of businesses at risk.

The proposed legislation would help Canadian businesses protect their brands and works. Currently, if counterfeit trademark or copyright goods are sold in the marketplace, for example, the rightful owners could take legal action through civil courts. Specifically, they could ask for civil remedies for the manufacture, distribution and possession with intent to sell counterfeit goods, but how do the rightful owners stop these goods from entering the market in the first place?

Under current legislation, rights holders must first get a court order to have authorities detain suspicious goods at the border. The amount of specific information needed to obtain a court order can lead to delays that work to the advantage of criminals.

Bill C-56 would streamline this system, allowing trademark and copyright owners to submit a so-called request for assistance to the CBSA and provide information to help identify suspicious goods, thus assisting rights holders to seek civil remedies.

These officers in turn would share information about the detained goods with rights holders. Armed with this evidence, rights holders could then pursue the matter in the courts, as I mentioned a few minutes ago. This collaborative approach would help take the wind out of the sails of organized crime.

Of course, the bill supports the Canadian judiciary system for determining who has copyright and trademark rights, thereby protecting against abuse or misuse of these new border measures.

Rights holders would pay the costs associated with the detention of goods, and the proposed legislation would also contain safeguards for information sharing. Importers would also be notified if their shipments were detained and would have the right to inspect them.

Finally, if the system was being abused, the Canada Border Services Agency could remove a rights holder from that request for assistance process, so there are safeguards.

While the new act would introduce civil remedies, it would also strengthen our criminal law.

Currently the Criminal Code has limited offences relating to trademark fraud. The laws primarily target conduct related to forgery of a trademark; possessing instruments for forging a trademark; defacing, concealing or removing a trademark; and passing off wares or services as genuine, with intent to deceive.

These offences, however, do not go far enough. That is why the bill would make it an offence to sell, distribute, possess, import and export counterfeit goods for the purpose of trade. Offenders would be subject to fines and face possible jail time.

In addition, new criminal offences for possessing and exporting pirated goods for the purposes of trade would be added to the Copyright Act. That would allow the RCMP to seize counterfeit and pirated goods. These provisions were not proposed lightly, but considering that profits from such goods can end up in the hands of organized crime, we need to pursue and prosecute offenders more diligently. That is why the proposed legislation would provide new powers to investigate commercial counterfeiting.

Mr. Speaker, you will note now that I said “commercial counterfeiting”. The proposed legislation will not result in searches of travellers at the border who may possess counterfeit and pirated goods for their personal use—we know that consumers do not always know the origin of a product they acquire in good faith for personal use—nor will the government be pounding on the door of law-abiding citizens who may own knock-off DVDs.

The proposed new authorities to seize goods and prosecute are intended to be used against those who knowingly bring in counterfeit goods with the intent to sell, rent or distribute them in the marketplace. That said, I believe consumers play a role in the fight against counterfeit goods. Canadians are increasingly aware that commercial counterfeiting is not a victimless crime and that knock-off goods do hurt. They hurt intellectual property owners who lose hard-earned income. They hurt law-abiding Canadian taxpayers, as commercial counterfeiters do not pay their share. They hurt the entrepreneurial drive that stimulates innovation and fosters new economic growth. Most insidiously, they hurt innocent people through defective products that maim, injure and sometimes even kill.

In the end, Canadians pay a truly high price for the fake products commercial counterfeiters sell. By being smart consumers, all Canadians can help us combat the scourge of counterfeiting and piracy. In so doing, we can all do our part in the fight against serious and organized crime.

I would like to close by putting Bill C-56 into a larger legislative and policy context. This new act is part of this government's ongoing commitment, a commitment I have been very proud to be involved in, to strengthen protection for intellectual property and to ensure our communities are safe.

The bill would complement the Copyright Modernization Act that recently came into force. Together these two pieces of legislation would create a comprehensive approach to the protection of intellectual property rights. I want to reassure the House that Canada is committed to the efficient flow of legitimate goods across our border. We will work with all of our trading partners to ensure that our actions to enforce intellectual property rights do not themselves become barriers to legitimate trade. Our country so depends on the flow of trade.

Canada has always been a trading nation, and no more so than now, but for all the benefits brought by the global economy, there are associated risks. Faced with an escalating threat of counterfeit and pirated goods and in response to the calls for action from industry, the government has tabled this bill before the House. I believe Bill C-56 is fair and balanced legislation that helps us tackle the scourge of counterfeit and pirated products while protecting the rights and the interests of individual consumers, travellers and legitimate business.

By passing this bill, we not only protect industry, consumers and government revenue, but we can also make progress against serious and organized crime. For all these reasons, I urge all members of the House to join me in swift passage of the bill.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I know my colleague across the way sits on the committee that deals with many of these issues.

We are in a bit of a process part of the year. The government has moved time allocation on average at least once a day, sometimes twice a day, often on bills that we agree with the government on and often on bills for which we have said that we will guarantee a certain amount of time in the House, so members must forgive me for being a little suspicious sometimes in terms of the process of the bill we are dealing with.

We have said numerous times as the official opposition that if the resources are granted to the border officials who have to deal with this legislation, then we can actually have some certainty about the goals that are stated in the bill.

We asked the Library to do a bit of research on the amendments that have been considered before committee. I know my friend is a reasonable and intelligent person and has looked at this issue a lot. However, of all the amendments presented by the opposition in the last couple of years, something in the order of 94% or 96% have been rejected, oftentimes out of hand and without any discussion at all. The amendment comes up and it is defeated. There is a process of dictation going on. To suggest that 96% of the amendments are not of value is ridiculous. Most of the amendments are based upon what we hear from witnesses.

The question to my friend is this: if this is as important an issue as we all agree it is, what level of openness exists on the committee on which he sits to deal with this issue, to listen to the witnesses we bring from all sides, and then to actually try to improve the bill?

I do not think anyone is suggesting that the bill is perfect and that every period and comma is exactly right. All legislation could use a little improvement, and sometimes substantial improvement.

What is the level of openness like in the member's committee? What is the working relationship like with the opposition?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I appreciate the question from the hon. House leader for the NDP at this late hour of the evening. To answer his question, there is a great deal of openness and collaboration at the industry, science and technology committee. I think that is one of the aspects of the committee that all committee members enjoy.

It was in this committee—as a result of a motion I triggered, I might add—that we had a very comprehensive study on the issue of intellectual property. It was in the course of the study that it was further underscored how important it is to deal with this issue of counterfeit goods. We heard from industry and, in fact, we even heard from one of the NDP House leader's colleagues, the member for Windsor West, who said:

With foreign counterfeiting and intellectual property theft having a significant impact on our manufacturing industries, in particular the tool, die, and mould sectors as well as auto and aerospace sectors, additional measures are needed to intervene to halt the serious economic damage that is occurring.

We could not agree more. That is why so soon after our study at the industry committee the government tabled this proposed legislation. The legislation will soon go to committee, and we look forward to further discussion and debate on this matter.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank my colleague for Kitchener—Waterloo for his thoughtful speech tonight, particularly his remarks on the impact on businesses and the brands associated with those businesses.

I would like to inform my colleagues here in the House that some of the most iconic Canadian products and brands have been targeted by counterfeit goods. My friends from Quebec would know that Canadian maple syrup has been counterfeited and sold in Asia. My friends from the Okanagan and Niagara would know that counterfeit icewine has been sold in Asia. The iconic BlackBerry from the member's riding of Kitchener—Waterloo has been counterfeited in parts of the world.

Does the member think that an employer like BlackBerry in his riding would appreciate a registry where rights holders can exercise some control in relation to their intellectual property at international borders?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, let me begin by saying how grateful we are to have the member for Durham now in our caucus here in the Parliament of Canada.

It is so important that we create the conditions in Canada where we can foster innovation. I think particularly of technology companies, of course, as the member for Kitchener—Waterloo with companies like BlackBerry in his riding. These are companies that invest significant time, money, research and development, and resources into global-leading brands and products. It is so critical that investment be protected.

The tools to protect those investments are our Copyright Modernization Act and this more recently proposed act to combat counterfeit goods. We need this legislation to protect the interests of business and consumers to ensure that we continue to grow our Canadian economy and create jobs.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, despite the gag order imposed on us, I am very pleased with our discussion because it gives us the opportunity to gain a better understanding of the implications of Bill C-56.

I thank my colleague, who serves on the Standing Committee on Industry, Science and Technology, as I do. I would like him to tell us again how important it is that the committee conduct a thorough study, since this is the committee that the bill will be referred to. Accordingly, as one of his colleagues indicated, the report must include certain specific issues that were raised during the consultations I held with a number of industry stakeholders.

I would like him to talk about the significant role the Standing Committee on Industry, Science and Technology has to play in the review of this bill. As he mentioned, this bill is important for intellectual property, for the protection of intellectual property rights and for several industries, including those in his riding and in the riding of LaSalle—Émard.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I do appreciate the opportunity to work with my colleague from LaSalle—Émard on the industry, science and technology committee. Whether we are doing a committee study on intellectual property, on digital technology or reviewing legislation, as we will do with this piece of legislation, it is a committee that deals with its work in a very open and thoughtful way.

We did a very comprehensive study on the issue of intellectual property. We heard from a range of businesses on this issue of counterfeit goods. When the time comes, we can consider much of that testimony we have already heard as we deliberate on this important piece of legislation that is important for families, businesses and consumers in Canada.