Bill C-8 (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

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

Mr. Speaker, I would like to take a few moments to congratulate my colleague for his bill on conflict minerals. His speech was very eloquent. I congratulate him on this initiative that all members strongly support.

With respect to Bill C-8, my colleague spoke at length about the lack of available data. Experts have pointed that out as well. It is very difficult to determine the impact of counterfeiting. It certainly has an impact, but the data are lacking. As he mentioned, we support the bill.

My colleague spoke about resources and mentioned Mr. Geist, who said that it was not always easy to detect counterfeit goods.

Have we allocated the resources needed for border officers to be able to detect counterfeit goods?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, if I may, I would like to tell a very quick story about my father, who worked for his entire career with Customs and Excise. He worked on the GATT side, the General Agreement on Tariffs and Trade. It was really important that everyone understood the nomenclature and that when we had to enforce copyright, our trading partners agreed on the rules and understood that nomenclature, such as we declare that a book is a book. It sounds simple, one would think, but these debates often go on in trade agreements. In the case of GATT, it was really important to get it right.

I would say to my colleague that if we are handing these powers over to our border officials to use these powers to crack down on counterfeiting, they need to understand exactly what the legislation means. These resources for Canada Border Services agents are absolutely critical. They need to have the proper training so that this legislation will actually work.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, counterfeiting is clearly a criminal activity sometimes. We do not talk nearly enough about the fact that these people can not only counterfeit a product but also sell a dangerous product.

At the international level, if we integrate these products into products made in Canada, our entire production chain loses its value.

Could my distinguished colleague tell us about the impact of counterfeiting on our international image?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I would like to thank my colleague for his question.

It is an incredibly important one. I think of the example in aerospace. Recently there were some investigations in the United States about certain parts for planes. When some of them were examined, they were found to be counterfeit. This is very serious. Imagine if planes have counterfeit parts and there is no oversight as to the quality. We are talking about putting people's lives in danger.

[An hon. member]

The Hercules.

[Paul Dewar, NDP, Ottawa Centre, ON]

My colleague just reminded me of the Hercules. These are the workhorses for our military. If we find we have counterfeit materials in the supply chain, this is very serious. That is an extraordinarily important question.

The other aspect relates to very small items, such as pills and prescription drugs. In the European Union there was a crackdown by Germany in the whole area of counterfeit medicines. Again, people's lives hang in the balance if they are provided with counterfeit drugs that are not effective.

It is an extraordinarily important question. We have to get this right, because it is important to make sure that we create things to very high standards and with proper oversight. We could criticize the government about the need to strengthen the oversight it provides, but we have to make sure we get this right. We want to fight counterfeiting because it can affect people's lives.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, the New Democratic Party will support Bill C-8 at third reading, because the fight against counterfeiting is so important to our economy.

First of all, it is a matter of respecting the economic rights of creators and copyright or trademark owners, who have invested their research into developing their product. This requires time and money. Very often, they invest in advertising and marketing for their product, to demonstrate its quality and the significance of buying it.

Some people pay the bills, while the counterfeiters run off with the profits. This is a great recipe for making a respectable company go under. In addition, when the counterfeit items are of poor quality, both the company’s market and the value of its trademark collapse. If we want to protect our businesses, we must ban this kind of practice.

We must make sure that consumers are really buying the product they are paying for. If you pay $3,000 for a beautiful Rolex watch, you expect it to contain a little bit of gold and silver. If you pay $15 for it in a back alley in New York, of course there will not be any gold or silver in it. It cannot be anything but a toy. Nonetheless, the brand of the watch is being undermined.

Let us imagine that a counterfeiter makes an almost exact copy of a watch but replaces the gold and silver with lower quality metals. First of all, he increases the amount of profit he makes from this inferior product. Then the legitimate company loses the sale and the brand value declines, because the owner believes the watch should last a lifetime but it stops working after six months. It is the value of the brand name that takes a hit. It is important to preserve it.

Very often, it is just a question of keeping the public safe. For instance, children’s toys cannot have lead paint in them. All the major brand companies know this, and the counterfeiters do as well. However, the counterfeiters sometimes like to make a little more money and do not comply with essential international public health standards. They use hazardous products.

If these people started making prescription drugs, there would be a problem. In Canada, we feel it is absolutely awful that prescription drugs we import may be of poor quality, depending on the plant where they were manufactured, even within a company. The plant manager lowers the quality of the brand-name product. This has happened in the United States, where some companies have been banned from selling prescription drugs. We hope of course that control will happen in Canada. It is a matter of public health.

If we expect a prescription drug to contain 70% of active ingredients, and there is a problem if it only contains 50% or if it contains 115%. Doctors write their prescriptions for medications whose properties they know. If someone starts playing around with them, it becomes a public health issue.

With regard to food, Canada bans a certain level of pesticides. If this level is exceeded, the food in question is not safe. The counterfeiters will use poor quality products in their cans and stick on a label from a company that has a good reputation to sell them. They do not meet the standards and this also poses risks.

This is why the NDP is in complete agreement with Bill C-8. We have to make sure this protection is provided in order for food, toys, drugs and even construction materials to have real value. This is the era of globalization, and very often we receive by-products that are incorporated into our own national production. That is what the problem of contamination is all about. If a contaminant enters our production chain at some point, then when the product comes out the end, our chain of production will have a lower value. The estimated value of our product will not be what we had hoped because we will have been duped. This is therefore important. It is a question of security, not just physical but also economic.

One major flaw must be noted, however. It is all very well to enact the finest laws in the world, but if there is no one to enforce them, then things are not going to work. Unfortunately, in recent years, a significant amount has been cut from the budget of the Canada Border Services Agency. That has led to 549 jobs being cut. That is a huge number. We can imagine how many containers inspectors can check and how many long-term investigations they can do into counterfeit products that appear on the market. Those investigations are important. Legislation is nothing if there is no structure to ensure that it will be enforced.

We recently discussed a free trade agreement with Honduras. The problem I raised at the time was that there is no point in having a law that prohibits murder in that country if the leaders of the country can go around killing people with complete impunity because the police will never bother them for it. This is somewhat the same problem.

Prohibiting counterfeiting in a piece of legislation is all very well, but it is not going to stop a fraudster from trying to do it. What is really going to stop them from doing it is telling them that all the lovely dishes from China with lead paint that we find in their container are going to be destroyed with a crusher and the container is going back to China. If we do that once or twice, I guarantee that the third time, they are not going to be interested in bringing in a container with dishes that have lead paint. That is the border. That border is important. It is called the law and the justice system. It is not just thinking that because we are pure of heart, everyone is going to have the same ethics as we do. Ethics have to be protected.

Obviously, it goes without saying that this is difficult to quantify. As I said, we do not have the number of inspectors we need. We know that counterfeiting exists and is here. We have a general idea because companies say their sales are down. How do we determine the value of an underground activity when it is hidden and there is no one to ferret it out? We have seen it grow. The RCMP says that in 2009 it seized $7.6 million worth of goods, and that in 2012 it seized $38 million worth. That is just the tip of the iceberg, because we cannot determine the extent of this underground activity. It is hidden and we do not have the personnel we need to shed light on it.

I will quickly conclude by saying that giving our customs officers the powers they need and instituting civil and criminal penalties for counterfeiting trademarks enables them to share information with the owners of the trademarks and the products. These are things that the NDP and the international community agree with entirely.

We are going to support the bill and we are even going to try to improve it in committee.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I thank my colleague from Marc-Aurèle-Fortin for his very eloquent and very enlightening speech. I would like to take advantage of his qualifications as an economist and get some further information about one of the last points he made. In my opinion, the issue of counterfeiting or piracy, is similar to the issue of under-the-table work in the construction industry, for example.

We can roughly estimate the revenue that society loses as a result of people working under the table. Although it is difficult to do, because of its illicit nature, has anyone been able to put a value or a number on the extent of the problem for the Canadian economy?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, we have a general idea.

The Organisation for Economic Cooperation and Development has indicated that it amounts to $250 billion per year, which is a huge amount. Here, we know only about the portion that we catch, but we know it is enormous and that it is important. The companies that are the victims tell us. They see their market shrinking even though their product is still just as popular. There are therefore commercial indicators, namely, the fact that the sales of the companies that sell the products are affected. There is economic harm. Does it have to be measured within Canada? No. That is the problem, and it relates to our credibility with our own market and our financial and economic partners. They tell us that things are not going well in our country and we are causing them to lose money. For example, Adidas says that it sees its products everywhere here, but it is not selling any, so something is not quite right. Obviously, an ambassador is going to be called in and is going to be told that his country is turning a blind eye to fraud. Canada must not get this reputation. In fact, that is the reason why Bill C-8 needs to be implemented quickly and effectively.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, in his speech, my colleague briefly addressed the issue of counterfeit drugs. Since I am a nurse, the subject is of particular interest to me. At the international level, it is a veritable epidemic. In some African countries, there are more counterfeit drugs than legally produced drugs. When the counterfeiters started out, of course, they had a very shoddy way of doing things. Now, they go so far as to reproduce the packaging and holograms. It is very disturbing. Canadian hospitals have unknowingly bought counterfeit drugs and doctors have prescribed them to their patients, thinking they were the real drugs.

I would like to hear my colleague’s opinion on this epidemic. How can we solve the problem? How much of a risk do counterfeit drugs represent for Canadians’ health?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, this is a danger for Canadians and it is also a danger for those who buy Canadian products.

In the United States, they sell a drug made from a flu medication. One of the ingredients of that medication is basically freely available in Canada. Sometimes it is also imported from foreign countries.

If that product is tainted, it will affect the entire production chain for Canada and the United States, where people take it legally. In addition, and this is the worst part, some of the production is misappropriated so that the illicit drug can be made.

Clearly, we are on thin ice. However, it is important to understand fully that not having absolute control over the quality of medications is harmful to people's health. Even worse, in this age of globalization, we import medicinal ingredients that are reassembled chemically to make another medication. If one of those ingredients is not good, we are selling medications that we think are of high quality when, in reality, they are not. That is the crux of the problem.

I would like to remind hon. members that counterfeit medications are rarely quality medications. They are produced by illicit activity and the people who engage in it have no scruples. Selling tainted medications does not bother them.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I am pleased to rise in the House for a third time today, this time to discuss Bill C-8, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts. It is the NDP's intention, of course, to support it at third reading.

We in the NDP could not agree more with protecting consumers. It is only right to support bills of this kind that have that intent. It is important for Canadian companies and consumers to fight counterfeiting, which, we must remember, is a breach of intellectual property rights. That is no small thing. It is particularly important when the counterfeit products can jeopardize Canadians' health or safety.

The reason I have risen three times today in the House to speak on various bills is because they have one thing in common: the health and safety of Canadians. We can never be too careful to make informed decisions and to really make sure that everything is being done with respect to health and safety because, ultimately, lives are at stake. Once again, this is the issue here.

It is hard to see how a bill such as this one could be implemented when, last year, the Conservatives cut $143 million from the Canada Border Services Agency. That, of course, reduced the number of front-line officers even further and undermines our ability to control our borders.

The Conservatives added to the agency’s responsibilities while cutting its funding. That is where we are risking problems and where that is a concern. That is why we are here tonight in the House to raise this concern and express these well-founded fears.

This government has refused several times to take a balanced approach on copyright. The NDP believes that intellectual property requires an approach that strikes a balance between the interests of rights holders and the interests of users and consumers.

When we look more specifically at Bill C-8, we need to point this out. It adds two new criminal offences under the Copyright Act for the possession or export of infringing copies and creates offences related to the sale or offering for sale of counterfeit products on a commercial scale. It prohibits the import or export of infringing copies and counterfeit goods, and it ensures a balanced approach to this prohibition by creating two exceptions. One is for personal use and the other is for copies in customs transit control.

It gives customs officers new powers to detain counterfeit goods and copies. That is an important policy change, since up until now, border officials required copyright holders to first get a court order before they would seize infringing copies or counterfeit goods.

It gives the Minister of Public Safety and Emergency Preparedness and border authorities new powers enabling them to share with rights owners information relating to the detained goods. Lastly, it expands the scope of what can be registered as a trademark, as described within the broader definition of “signs”, including colours, shapes, scents and tastes.

In June of 2012, I rose in the House to ask the government a question. I referred to a report by the Canadian Chamber of Commerce stating that one-third of all products pose a real threat to the health and safety of Canadians. That is why we have to take action against counterfeiting. This is not just about jeans and handbags.

My colleague said that whenever we talk about counterfeiting, people think we are talking about a handbag sporting a recognizable trademark that someone saw in some back alley in New York. That is the kind of thing most people think of. However, we are also talking about drugs, and that is very serious. They can contain uranium and lead.

We are talking about safety and security because it can be that serious. It is important to have the necessary resources to keep one-third of products from being hazardous to people's health and safety. It is really important for us to take action on this.

Many people support our position, and that is an important thing to add to the debate. Jean-Pierre Fortin, national president of the Customs and Immigration Union, commented on the 2012 budget cuts to the Canada Border Services Agency. He explained how those cuts would reduce border officers' ability to do their work:

These proposed budget cuts would have a direct and real impact on Canadians and our communities across the country: more child pornography entering the country, more weapons and illegal drugs will pass through our borders, not to mention terrorists, sexual predators and hardened criminals.

Mr. Speaker, before I talk about some more of the support we have been receiving, I would like to indicate that I will be sharing my time with the wonderful member for Trois-Rivières.

According to the Canadian Chamber of Commerce’s Canadian Intellectual Property Council, the Canadian system has no tools to track and report the instances of counterfeiting that are actually detected in the country. According to European Commission regulation 1891/2004, customs authorities in all EU member states are obliged to report statistics on customs seizures, and the Canada Border Services Agency does not have a mandate for reporting on intellectual property crime at the border. That is another important source of support.

We also have support from the World Customs Organization, which published Model Provisions for National Legislation to Implement Fair and Effective Border Measures Consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights at the WTO. In its introduction, the World Customs Organization indicates that model provisions ensure the effective enforcement of intellectual property rights at the border without undue restriction of the flow of trade in legitimate goods. The extent and effectiveness of customs interventions are dependent upon the resources available for customs administration.

We have the support of Michael Geist, a law professor at the University of Ottawa and Canada Research Chair in Internet and E-Commerce Law, a field in which we will most certainly have to make some major progress. In relation to Bill C-8, he said that officers are not experts in intellectual property. The purpose of the assessment is to determine whether one of the exceptions in the Copyright Act may apply. This is a complex process. The courts often have a hard time deciding. Nevertheless, the bill still plans to give these powers to border officers without judicial review or a limit on the types of goods concerned.

I could cite more examples of support, but I am sharing my time with the hon. member for Trois-Rivières. It is important to do something about counterfeiting. It is not just a scourge. Counterfeiting results in economic losses, but it is also a health and safety issue.

We cannot allow drugs to be sold on the Internet when we do not have any information about them and they might contain uranium or lead. Honestly. We must absolutely make sure we have better legislation to truly fight counterfeiting.

I think that we have the full support of various players across the country, people who think that it is high time we do something about this.

As the deputy critic for consumer protection, I have risen in this House a number of times. I would obviously like us to move forward with this.

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

Mr. Speaker, I thank my colleague for her speech. As the deputy critic for small business, she has raised a number of important points about the damage counterfeiting does to the Canadian economy.

Although we do not have any conclusive data and it is not always easy to determine exactly what impact counterfeiting is having on the Canadian economy, I think the testimony we have heard shows that there is an impact on small and medium-sized businesses.

My colleague also said that resources are needed to be able to protect consumers and ensure that imported products are safe and healthy. I would like her to talk about the fact that this government is constantly cutting funding, whether for the Canadian Food Inspection Agency or for all sorts of programs that protect consumers. Could she talk about that and about the resulting impact on the health and safety of Canadians?

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I thank my colleague. I think she did a good job of summarizing the key points that are keeping our debate going tonight.

It is difficult to measure the impact of counterfeiting, because it is illegal. Industry Canada points out that the retail value of counterfeit goods seized by the RCMP increased from $7.6 million in 2005 to $38 million in 2012. That is quite a substantial amount. I think action is long overdue.

In terms of health and safety, I know that the government has overlooked a number of issues. Must I repeat this? I have said it several times today in my remarks. In the case of XL Foods, the government did not take the appropriate action by cutting the number of inspectors. Inevitably, consequences, such as the tainted meat crisis, ensue. There is also the maritime search and rescue centre in Quebec City, in my riding. Clearly, being understood in their own language is a question of safety for people using the river. In short, these are health and safety issues.

I could name a whole host of issues that the government has failed to address, but I know that there will be other questions, so I will leave it at that. I want people to take action on this.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, since my colleague has spoken a lot about counterfeit drugs, I would like to make a comment. I do not know what she will think of it. Some scientific and medical articles I read indicate that, currently, 75% of the Viagra on the market is counterfeit. Since men are embarrassed to ask their doctors for this drug, they try to get it without a prescription. An enormous amount is counterfeit. There are even pills that are blatantly counterfeit: somewhat handcrafted, they are simply painted blue.

I would like her to talk about the risks associated with counterfeiting when it involves products that people are a little embarrassed to ask for or go and get, even if they could probably do so legally. If they took the time to see a doctor, they would not get a counterfeit product.

Could my colleague share her observations with us?