To begin, I would like to thank the committee for the invitation to appear and to give me the opportunity to contribute to its work.
I distributed a one-page summary of my presentation. Should there not be enough time to finish my presentation, you will at least have the essence of the various points I will make. Of course, I submitted the document in both official languages.
I am a partner with the law firm Ogilvy Renault. I have been doing anti-counterfeiting work for the last 10 years. I coordinate the anti-counterfeiting efforts worldwide and in Canada of Canadian clothier, Parasuco. I also do the work in Canada of anti-counterfeiting for a number of famous marks, including Chanel and Lacoste. This is my day-to-day work, whether I'm pleading before the court, conducting seizures, drafting proceedings, or negotiating with adversaries—infringers.
I'm also the author of a number of publications, but more precisely, my main topic of interest is Anton Piller orders. These are orders for seizures that are granted by Canadian courts, and in particular by the Federal Court of Canada, which we often use in the fight against counterfeits.
I have one article in English and I have one article in French, which I've given copies of to Mr. Latimer, should any members of the committee wish to consult them.
In conclusion, I am also the chair of the Anti-counterfeiting Committee of the Intellectual Property Institute of Canada. So I don't think anyone will be surprised at my position on this issue.
I am here in my capacity as a private legal practitioner. You will hear later on from the Intellectual Property Institute of Canada. You will also hear, at another time, from the Canadian Anti-Counterfeiting Network. While I belong to these organizations, what I can bring to you is the view of a practitioner, a coordinator of anti-counterfeiting efforts, and an observer of decisions rendered in this field by the Federal Court over the last 25 years.
When I was preparing my testimony two weeks ago, my main point to make in front of you was to show you the deficiencies in Canadian laws as they pertain to anti-counterfeiting. I may have been a bit ahead of my time, because when I was reading the minutes of the security committee meetings, I realized that before going on to that topic, which is summarized in the written document I provided, I probably needed to address other, more fundamental, issues.
You may hear from some that counterfeiting is not a big deal—that counterfeiting does not affect Canadian businesses, or does not seriously affect Canadian businesses. I've also read in some minutes that no one is duped, because counterfeits are sold at such a low price that a purchaser knows what he's getting is fake. I need to address these points before I can tell you how our laws are deficient.
This country has adopted laws to protect intellectual property, the underpinnings of which are the respect for property and the encouragement to innovate. Counterfeiting is a particular breed of offence that the current laws are not well equipped to deal with. Should counterfeiting be considered any less important than other types of intellectual property infringement? Bearing in mind that counterfeiting seeks to reproduce exactly what is protected—so it's not an inadvertent violation, because you have somebody who is taking a trademark and reproducing it identically on a product that has not been manufactured by the trademark owner—I propose to you that counterfeiting should be afforded an even higher level of importance by the legislator.
In terms of counterfeiting affecting Canadian businesses, one of our firm's clients is Parasuco, a company that has been designing, manufacturing, and selling cutting-edge clothing in Canada since 1975. Salvatore Parasuco has 250 employees scattered across Canada, but mostly in Ontario, Quebec, and British Columbia. He is the first Canadian designer who has been showcased at the Milan fashion week in Italy, and I think he's truly a source of national pride.
Parasuco is affected by counterfeiting. The brand is becoming hot; more and more people want it, and we are noticing instances of counterfeiting on the Canadian market. I will not even mention to you here instances of people in other countries attempting to register the mark Parasuco; that, of course, is not something over which this committee has jurisdiction.
The harm that's suffered here by Parasuco is lost sales, but not just lost sales; there is also a loss of goodwill to the trademark. A loss of goodwill occurs when people who buy the real thing stop buying the real thing because the brand has lost cachet or lost appeal because it's been too massively distributed. On the government side, of course, there is a loss of tax revenue.
There's another loss I'd like to raise to your attention, and this is in my capacity as a practitioner, a guy who works in trademarks all day long. There's a loss of distinctiveness of the Parasuco trademark when counterfeits are sold.
Here's how it works. Our Trade-marks Act provides that a trademark is there to identify the source of a product. In a way, the Trade-marks Act was probably the first piece of consumer protection legislation. A trademark is meant to identify to the consumer that you can rely on this trademark as indicating that the product comes from a given source. Well, if a whole bunch of people start using that very same trademark, the trademark no longer performs its distinctive function. It doesn't distinguish the product as coming from a source.
Let me give you an example. For Montrealers or for people in the room who know Montreal, there is a Montreal car dealership called Decarie Motors. Yet the Decarie Motors brand was removed from the trademark register in 2000 under a federal court of appeal order because too many people were using the brand name Decarie. Therefore, the brand had lost its original distinctiveness. Therefore, as far as counterfeiting is concerned, when a person copies the trademark of someone else, it negatively affects the holder of the trademark.
I'm talking right now of harm that is caused to a Canadian manufacturer. There may be people who say a lot of these famous trademarks are also held by foreigners, so why is it so important and why should we be concerned by it? Well, a foreign right-holder also often employs Canadians, whether as independent distributors or as direct employees, and counterfeiting also impacts at this level.
I have one last point before I go on to the substantive changes that can be made. When I hear somebody say nobody is duped because counterfeits are sold at such a low price that the purchaser knows that what he's buying is a fake, my response is that anybody who practises in my field will tell you that the number of counterfeits on the markets goes up drastically just before Christmas. Why is that? Because people are busy buying Christmas presents for their loved ones.
I propose to you that if the buyer isn't duped—and by the way, I don't subscribe to that position; I think that some people genuinely are duped. But let's assume for argument's sake that the buyer isn't duped. I can assure you that when the buyer gives these counterfeits as presents on Christmas morning, he doesn't say, “Honey, don't you love the knock-off Lacoste polo shirt that I've bought for you?” I should add that last December I conducted a seizure of over 700 items of counterfeit Lacoste clothing in Montreal 10 days before Christmas.
In terms of being duped, it's not only the person receiving the product that's being duped, it's the whole public being duped. Anybody who sees sub-quality garments bearing a trademark will think that trademark is no longer indicative of a quality product. In the end, this goes to the depreciation of the market.
As I have limited time, my suggestions for legislative reform are set out in my written representations. The highlights of them are as follows.
In terms of criminal prosecution, the RCMP and crown prosecutors will only act pursuant to the Copyright Act, and not pursuant to the Trade-marks Act, because there is no criminal dispositions in the Trade-marks Act. That needs to be changed. Counterfeiting needs to be criminalized. Why? Because counterfeiters are not regular litigants. They have covert operations, they make their assets disappear, and they make evidence disappear. They are not habitual participants in the litigation process, which presumes good faith.
From a cooperation point of view, we need a greater exchange of information between the RCMP and Customs. We need stronger border measures. The current system, under which you need to identify a shipment and obtain a court order to block goods, doesn't work.
Finally, from a deterrence point of view, we need stronger penalties. If I have time later on, I can talk about the damages that are awarded by the Federal Court, which are very restricted.
Thank you very much.