Thank you very much, Mr. Sweet.
Thank you, members of the committee, for this opportunity to be here as a witness. I've done this once before. I'm no expert, but I'm not as intimidated as I was the first time. It's good fun.
I represent the Canadian Anti-Counterfeiting Network, and I also made some comments to an association that really pays my salary, and that is EFC, Electro-Federation Canada. We do a lot of work with the CACN and some of the other members around the table.
The Canadian Anti-Counterfeiting Network, CACN, applauds the introduction of Bill C-8 and looks forward to combatting counterfeit products with the help of the act as we go forward.
Our organization represents a coalition of individuals, companies, and associations that have gotten together to fight against product counterfeiting and copyright piracy in Canada and internationally. I'd also add that we do a lot of work through CACN on safety as it relates to counterfeit products that don't make the mark or have not been tested by the Standards Association.
The bill recognizes the need to address the widespread issue of intellectual property theft and it is certainly a good step forward. While CACN supports the legislation, we ask that you consider the following issues raised by our members in consideration of the content of the proposed bill. We would like to make some recommendations in that area. Again, I think you'd be surprised if we didn't have any comments. Some of you may have seen these.
Enforcement at the border is the first concern. Are there enough officers available to actually carry out the activities that are proposed in the bill?
We are concerned that the proposed border provisions will not provide an effective means for stopping counterfeit products at the border. While the provisions provide for ex officio detention and the means to confirm the counterfeit nature of suspected goods to CBSA, no provisions are provided for ex officio seizure or forfeiture of the counterfeit goods. Further, the provisions dealing with requests for assistance by rights holders provide for seizure and forfeiture only through civil court proceedings commenced by the rights holders, and we see some issues with that.
It appears that what is contemplated by the provisions is that, to the extent that a request for assistance has been made and the rights holder does not commence proceedings within a short period of time, the goods will be released to the importer or owner. To the extent that no request for assistance has been made in respect of goods, it appears that, by the workings of the Customs Act, importers will be given the option of exporting or abandoning goods confirmed to be counterfeit.
This raises the spectre that confirmed counterfeit goods are being released, or would be released into the Canadian market for export or for use in the Canadian marketplace. This is a clear breach of the prohibitions and of the criminal provisions.
The problem could be alleviated to some extent by providing a mechanism for ex officio seizure and forfeiture by providing alternate procedures contemplating forfeiture if the counterfeit nature of detained goods is not contested, such as those contemplated in article 11 of the World Customs Organization model provisions. This is to say, there is an awful lot of work that would have to be done by the rights holder if he needed to get involved. If his product is being imported into Canada and happens to be suspect, it seems the rights holder would have to do an inordinate amount of work, and he's the one being injured by this.
Some work would need to be done in that area to alleviate or at least help the rights holders achieve their goal, to stop the importation of counterfeit goods.
Increased enforcement is the next item that we would like to draw your attention to. While the bill empowers Canadian customs officers more than before, we are concerned that resources may be insufficient to allow for effective enforcement at the border.
As it currently stands, only a small percentage of the imports are inspected. Without training, the border officers are on their own to identify what might be an inappropriate product coming into the country.
At CACN, we spend some time training border officers and we work with the RCMP to train them as well. We work with our manufacturing members to try to identify authentic goods, what they should look like and what a suspect product may look like.
We draw particular attention to safety. I have some examples that we can deal with during the question period. Safety is a big concern. We want to make sure that the consumers in Canada receive goods that are not going to harm them or injure their children or burn their homes down. We spend a lot of time in that area.
Liability for charges would be the next item. Under proposed subsection 44.07 (1), the rights holder is responsible for costs associated with the storage, handling, and destruction of detained goods. This is a bit of an imposition placed on the rights holders who are being injured. We would ask, where are the perpetrators? They seem to be getting off scot-free in that kind of an assessment.
Often there are a lot of costs associated with the destruction of product, particularly if they are deemed to be hazardous goods, like mercury-containing lamps, for example. If they happen to be off-spec, or batteries. There's a fair amount of work that has to be done to handle those products effectively and make sure they don't get into the marketplace.
We suggest amending the provisions dealing with costs of detention and destruction to put primary responsibility on the perpetrators of the crime, instead of on the rights holders.
Offences and punishment would be the next item. Proposed subsection 51.01 (1) deals with situations where they know not only that the goods are counterfeit, but also that the acts of sale or distribution they are undertaking would be contrary to section 19 or 20.
One would have to ask whether counterfeiters would care, or even know. They certainly wouldn't go out of their way to find out and would probably use that to their own advantage. If they were questioned, they would say they didn't know it was illegal. That's an area that would need to be looked as well.
I'm sure some others in the group will speak more closely to the Trade-marks Act. That will be discussed at the table here.
A broader spectrum of options would be required. Under the legislation, in order for the rights holders to ensure that goods are detained for more than 10 days (or five days if the goods are perishable), they are required to prove that they’ve commenced a court proceeding to obtain a remedy under the act. We recommend that a broader spectrum of options be available to those rights holders who either cannot file in time or may not have adequate funds to immediately begin litigation. We would need to have a look at that.
Simplified procedures would be welcomed. That leads back to the rights holders commencing action. This needs to be considered. Too much is asked of the rights holders in order to take action on counterfeit goods.
I'd be pleased to answer questions later and give you some examples.