Industry Committee on April 25th, 2007

[The Chair, Conservative, James Rajotte]

Who would like to respond?

[Danielle Bouvet, Director, Legislative and International Projects, Copyright Policy Branch, Department of Canadian Heritage]

Thank you, Mr. Brison, for your question.

First, I want to make it clear for everyone that this is an issue on which we are working. The interdepartmental working group believes that this matter merits our attention, and that this issue should not be taken lightly, on the contrary. There has been general recognition that it is important for the interdepartmental working group to look at this issue. Amending the Criminal Code is one of a number of options we are considering.

If you have texts to provide us, we would be pleased, as members of the interdepartmental working group, to look at your proposal. Obviously, it will be taken into consideration within the framework of our committee's work, in order to make recommendations to our respective ministers.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you. Merci.

[The Chair, Conservative, James Rajotte]

Is there anyone else?

Go ahead, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Is there anything further, perhaps from the RCMP?

It's said that one of the reasons the RCMP feels limited in addressing it is that the current copyright law requires actual proof of the use of the material for commercial purposes. That's being cited as one of the reasons the RCMP is limited in addressing it. Would you like to speak to that on behalf of the RCMP?

[Supt Ken Hansen]

Yes, sir. Certainly, that's one reason.

We are conducting an investigation at this moment that involves camcording, but the investigation essentially has to be conducted backwards. In other words, we have to have proof there is distribution and then go back to the theatre. Using a digital camera in a theatre is not an offence in itself, but that is one of the issues this group is aware of, and certainly we're looking at possible options.

Obviously it's a little more complicated than that, because there are also resource issues. Yes, it's an economic crime, but at the same time, the health and safety aspect has a higher priority, so—

[Scott Brison, Liberal, Kings—Hants, NS]

Certainly.

Well, it's in fact becoming an international issue. I have a letter here, Mr. Chair, that I suspect you're in possession of as well. It's from Dianne Feinstein, a senator from California, to the Prime Minister, and it's on this issue.

We will be under increased pressure to act on this. It's my understanding that other countries, including the United States, have in fact moved to change their criminal codes so as to specifically ban camcording in theatres. It's a very simple change that we could make in conjunction perhaps with bringing it before the justice committee as well.

It strikes me that if we value cultural industries in Canada, and if we value the film industry in Canada—and I'm talking about distribution and production here in Canada—it is a small but important step to make it clear to the international community and the industry that we are serious about acting to protect intellectual property here in Canada.

[The Chair, Conservative, James Rajotte]

Does anyone want to make a quick comment?

[Danielle Bouvet]

Within the context of our work, it is obvious that we look at legislation from other countries. We always do this when we develop policies. We make comparisons with other laws when they are relevant to the issues we are dealing with.

It is important to point out that under the current Copyright Act, a rights holder can take civil action when a film has been copied in a movie theatre. And that is already provided for in our legislation. Intent does not even have to be proven. As soon as a film has been copied, it can lead to civil litigation. A rights holder can ask the court for an injunction and to receive damages. Further, Canada's Copyright Act also contains the notion of pre-established damages, which means that a rights holder can choose to launch a court action and ask for statutory damages, which would entitle him to receive over $500 for each copy made in a movie theatre without having to justify the damages.

This already exists in law. But, as you said, I recognize that, as far as launching a criminal suit is concerned, the court must be convinced that there was criminal intent to allow the case to go forward. We are examining that situation.

[The Chair, Conservative, James Rajotte]

Madame, I'm terribly sorry, but we're way over time. Members are very limited in their time.

Please go ahead, Monsieur Vincent.

[Robert Vincent, Bloc, Shefford, QC]

Thank you, Mr. Chairman.

Ms. Bincoletto, your brief says that since 1997, between 5% and 7% of world trade comes from counterfeit goods, representing between $350 billion and $600 billion. For Canada, that amount varies between $20 billion and $30 billion.

I do not want you to take this the wrong way, but I would like you to tell me what happened in the last 10 years and what measures have been taken to fight piracy and counterfeiting.

[Susan Bincoletto]

As far as the international data is concerned, I told you in my presentation that the assumption that between 5% and 7% of international trade came from pirated and counterfeit products was not based on a methodology but represented the opinion of industry. So you have to take those figures with a grain of salt.

You also have to determine how those figures were evaluated, what the impact was, whether it was a perfect substitution, in other words if the consumer would have bought the same luxury product, but the Real McCoy. You also have to see whether fraud was involved and whether people knew exactly what they were buying. All you have to do is go to New York to better understand this phenomenon. I was there recently for a conference on intellectual property. On the famous Canal Street, there are tonnes of counterfeit goods, and some are indeed more dangerous than others. But when you see school buses filled with tourists who come to buy $10-bags featuring a fake logo, you tend to think that these consumers know what they're doing.

In my opinion, we also have to take into account the level of education of consumers and the impact their purchases may have on their health or on organized crime. I'm referring here to products which are not of the same quality as the authentic, legitimate products. The question is whether the $10-handbag really could be a perfect substitute for the original handbag, which retails for $3,000. So that is the scope of the impact of this phenomenon on rights holders and the economy in general. I am not referring to public health, but rather to the economy.

[Robert Vincent, Bloc, Shefford, QC]

That's a good answer, but it does not answer my question. I asked you what measures have been taken since 1997 to eliminate counterfeiting.

[Susan Bincoletto]

I will probably defer to the chair of the working group, but first, I would like to clarify that, as you heard earlier, the RCMP is cooperating more and more with other agencies and Interpol. We have been studying the industry for several years. For us, that is a very positive contribution, since it enables us to know how these phenomena affect people in the field. The analysis is very important for us, in that it helps us determine what our next steps are, be it from a legal perspective or in terms of increased cooperation with industry and our trading partners. All of this has been done more or less independently. Moreover, the working group brings about cooperation within the federal government that enables us to examine these issues more homogeniously.

[Danielle Bouvet]

I would like to add this, Mr. Vincent. That data has been around since 1997, but for a long time the government thought that legislation, in its current form, could resolve the problem. The Copyright Act covers an area where digital works are constantly used. It was long thought that the act could enable holders to enforce their rights. I believe that is the case with virtually all pieces of legislation dealing with intellectual property.

[Robert Vincent, Bloc, Shefford, QC]

I am going to reword my question. I know that you are thinking about measures, but what specific measures have you put in place since 1997 to eliminate counterfeiting? Figures like $350 to $600 billion are not hard data. Can we agree on a figure of $100 billion? If counterfeiting represented $100 billion, what measures would you put in place to eliminate it? Have you done anything in that regard, or have you just studied the issue?

[Douglas George]

Thank you, Mr. Vincent.

This is a global problem, and we have worked to a large extent with other countries at the multilateral, regional, and bilateral levels. We have done considerable coordination work between the RCMP and U.S. authorities on exporters. We are now endeavouring to raise the awareness among consumers and businesses. There is also the G8, and the Security and Prosperity Partnership, or the SPP. These concrete measures yield concrete results. The working group is in the process of examining our system and comparing it to others.

[Robert Vincent, Bloc, Shefford, QC]

You mentioned five countries. You talked about China, Thailand, and so on. Has any concrete action been taken against these five countries? Are exports from these five countries verified? Do we require these products to be patented before they enter Canada? It seems to me that would be a good place to start.

[The Chair, Conservative, James Rajotte]

Who would like to answer?

[Susan Bincoletto]

That is not really an Industry Canada issue. If you want to know what has been done at the border, my colleague should answer your question.

[Robert Vincent, Bloc, Shefford, QC]

It affects Industry Canada as well, because Canadian industrial products are being copied by these countries. If a product that enters Canada does not have a patent, there should be a verification to see if it was made in China under a Canadian patent. These products can be verified directly as soon as they enter the country.

[Susan Bincoletto]

Rights holders can have access to civil action. In the event that a Chinese product was imported into Canada in violation of a Canadian patent, the patent holder in Canada can initiate action for counterfeiting.

[Robert Vincent, Bloc, Shefford, QC]

But the cost of taking action like that is exorbitant.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

My background is in the health care field, and it really concerns me that there are so many instances in which we're seeing counterfeit drugs coming into the country.

Madame Dowthwaite, you mentioned that you're working to modernize our regulatory framework to more effectively address these types of violations. How fast can Health Canada actually change regulations if they want to get that done?