Industry Committee on Nov. 18th, 2013

[Chris Charlton, NDP, Hamilton Mountain, ON]

Let me go at that again.

I think all of us in this room agree that we don't want any counterfeit products in our country, period. That would be the goal for all of us. But why is it okay to facilitate the export, essentially through us—the import and then export—of in-transit goods? I understand what you're saying about enforcement, for sure. But aside from that, I'm not understanding what your issue is.

[Prof. Jeremy de Beer]

It's not a matter of facilitating the cross-border flow of counterfeit goods, but simply doing what's practical and feasible to stop it. We can start here by stopping what comes into our own country.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Okay, thank you.

[The Chair, Conservative, David Sweet]

Thank you very much.

Now we go on to Mr. Lake for five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

No, I think Cheryl would like...or no, I'm sorry, Ed....

[The Chair, Conservative, David Sweet]

Oh, I'm sorry.

We'll have Mr. Holder, for five minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair, and to our guests.

Mr. Giddens, you've been awfully quiet. I'd like to bring you into the conversation, if we can.

In your combined presentation a reference was made to organized crime and the connection with counterfeit or pirated goods. I think it was mostly along the line of counterfeit goods.

Would you have any comments? Is that anecdotal? We all have the sense that there could be some connection to organized crime. We've talked about that respecting various types of products and industries. But I'm curious: is this anecdotal, or do you have any real specifics whereby you can confirm, either as a result of charges or filings or litigation or something, or whereby you somehow can attribute to organized crime a counterfeit product that has been brought in?

[Peter Giddens]

Let me address the preface to your question. The reason I've been mostly silent is that—

[Ed Holder, Conservative, London West, ON]

—you didn't get a chance.

[Peter Giddens]

—the questions have largely been addressed to what I call the hardcore, anti-counterfeiting provisions of the bill. I'm here speaking on behalf of INTA with respect to the almost half of the trademark part of the bill that deals with other aspects.

I don't want not to answer your question, but if I could let me suggest that Mr. Lipkus answer that question.

[Ed Holder, Conservative, London West, ON]

Would you prefer someone else to answer that?

He likes to answer.

[Voices]

Oh, oh!

[David Lipkus]

I can tell you that there have been confirmed cases of moneys that have been used with respect to the sale of counterfeit merchandise being sent back to Hezbollah and other organized crime.

I can also tell you that I've been personally involved in seizures of counterfeit merchandise where, instead of being allowed to go into the premises, I have been told I had to wait outside because of the guns and other weapons that have been involved, which weren't anticipated by the police at the store that was selling counterfeit but for obvious reasons ended up being found.

[Ed Holder, Conservative, London West, ON]

Can you be specific?

[David Lipkus]

I can't right now because I wasn't anticipating that question, but I'm happy to provide you that information.

[Ed Holder, Conservative, London West, ON]

It may be useful to the committee—perhaps from you to the committee, through the clerk—just to give us a better sense of specifics as to how deep that issue is. Obviously organized crime is something that concerns all of us around this table, including yourselves, so we all have an interest nationally to do that. So if you would, I would appreciate that, please. So you think you do have some specific things.

Here's what is interesting. When I heard your testimony, Mr. Lipkus—and again, please, I'm not picking on you—you said there is not enough testing, and you're looking for zero tolerance. I can't quite live in your perfect world and I don't mean that as a negative at all, because I think the comment Ms. Charlton made a few moments ago, which we all agree with, is that we should have zero tolerance of counterfeiting.

But do you think the bill strikes the balance you're looking for, that it's trying to go in the direction your clients are looking for while at the same time recognizing that, frankly, if people want to do bad things there are bad people out there who will find ways to do that?

[David Lipkus]

Thank you for that question.

Here is my issue and here is the reality, another working example. We received a telephone call from the police that there was a seizure of a shipment that contained 39 different brands. With the value of each brand in each unit—there might have been 12 or 13 items per brand—it would have been less expensive for our firm's clients to purchase the counterfeit items from the importer than to deal with the seizure of that counterfeit in any other way, whether it were assisting the police or through some form of request for assistance.

Right now, the way the bill is drafted, the right's holder essentially has to write a blank cheque to the Canadian government to participate in this program, without any idea of how much money it's going to cost to participate. Brands require certainty and this bill doesn't provide it.

I can tell you that if the pendulum is swinging, it's way more in favour of the importer than it is of the rights holder. That's what we're trying to have swing back to the rights holder, to say that we, as a government, want to eliminate counterfeit goods. We all agree that they're harmful. Let's do it and let's do it the right way. That's why I'm here today.

[Ed Holder, Conservative, London West, ON]

But you would agree that responsibility falls among all the parties, including the rights holder, to know what they've acquired.

[David Lipkus]

Absolutely, right now with the administrative regimes in the U.S. government and in the EU, there is a small cost to that rights holder in order to participate, and not a blank cheque.

[The Chair, Conservative, David Sweet]

That's fine, Mr. Holder. Thank you very much.

Now, Madam Sgro, you have the last word.

[Judy Sgro, Liberal, York West, ON]

We could have kept right on because of fact that the EU and the United States have a way of dealing with it that seems much faster, much more capable, and we're just trying to do catch-up with Bill C-8. I'm glad it's here but we just seem to be doing catch-up more than anything else.

I do appreciate the amendments that you have suggested we put forward. I would hope that in discussions with departmental staff they would view those as a real positive.

But I want to ask you a couple of questions about the “distinctive” issue. Maybe I'd ask Mr. Giddens.

In your brief there were concerns about the word “distinctive” under the act. You had suggested that the word “distinctive” be changed to the phrase “inherently capable of distinguishing” to replace the word “distinctive”. What were your concerns with allowing the word “distinctive” to go forward?

[Peter Giddens]

This issue comes up with respect to the registration of trademarks rather than the issues that we've been speaking about thus far.

Because the bill has been amended to provide for distinctiveness to be examined during the trademark registration process—right now that is not the case—the bill does use the phrase “inherently capable of distinguishing”. Again, because the examiners will, for the first time, now be asked to examine whether the trademark is inherently distinctive or not, we would like some clarification about what exactly is meant by that phraseology.

[Judy Sgro, Liberal, York West, ON]

You're suggesting “inherently capable of distinguishing”. It might reduce a whole lot of lawyers' fees—even though you're lawyers—and arguments that go on in court about what “distinctive” means.

[Peter Giddens]

We think it would be greatly beneficial to stakeholders, absolutely, to have clarity about that issue from the outset.

[Judy Sgro, Liberal, York West, ON]

And there's the word “utilitarian”. You're suggesting in your proposed amendments that it be dictated primarily by “utilitarian function”, again for the same reason of clearly defining what that word is supposed to mean.