Public Safety Committee on March 27th, 2007

[Nancy Segal]

I wouldn't say there aren't any good examples out there. I think there are excellent examples out there, but the question was, is there a regime there that has addressed the problem? It is addressing the problem, but certainly there's no regime out there that I know of that actually has solved this problem, that actually stops all of it at the border or combats it within the country completely.

Things are moving very rapidly, and it's very difficult with globalization, with the increased trade, with technological advances, to stop all of these things completely. So it's more a matter of putting in the best measures that you have--sharing best practices, updating regimes as you can--to combat it, and of working cooperatively.

On the second part, obviously there are countries that are bigger problems than others. A lot of the intellectual property rights infringement, a lot of counterfeiting, is coming from places like China, like Russia, and others. We also hear from some of the countries that some counterfeit goods are created in Russia and say “Made in China” on them, so it's certainly not clear sometimes where all this stuff comes from. Yes, you can certainly track back some of it, but it takes an enormous effort, and it's a moving target. When one jurisdiction closes it down, it just moves someplace else. There are lots of jurisdictions, and it's not necessarily that those countries don't have an interest.

I think earlier it was mentioned that China is gaining a certain interest in protecting its own intellectual property rights, and I believe that China actually might have, in the last year, filed the second-highest number of patent applications. The highest number were filed by the U.S. There is going to be pressure from within the countries where there are currently large-scale problems to address it.

It is an international problem. You have to work at it on an international basis.

[The Chair, Conservative, Garry Breitkreuz]

I would understand that. Sure--every country will have a problem, but I was really wondering if there was any legislative framework in other countries that might be something we could take a closer look at.

[Nancy Segal]

No. We have--and I think Cal spoke to it--the U.S. and the EC models, those kinds of models, but one places more emphasis on government responsibility, on government taking the costs and everything else, while the other one says “We're going to facilitate, to the greatest extent possible, our private rights holders' enforcing of their own rights”.

[The Chair, Conservative, Garry Breitkreuz]

Yes. We as a committee would like to look at what legislative--

[Nancy Segal]

Those are the two models right now, neither of which is 100% effective.

[The Chair, Conservative, Garry Breitkreuz]

Okay. I don't want to abuse my privilege as chair here.

Let's move over to the government side here, and we'll have Mr. Norlock, please, for seven minutes.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Good morning, and thank you for coming and informing us on the current situation with regard to piracy and intellectual property infringement.

I'm going to address Mr. Becker from the Department of Justice first, with a question to follow through on my good friend Mr. Cullen's statements. It's a question with regard to an indictment, that since about the year 2000 we've been seeing an incremental increase--and I wouldn't say it's an incremental increase, I think it's really an explosion--of infringements in those two areas I mentioned.

I guess my questions are going to be based on the fact that we have Canada looking at us right now, and the average citizen wondering what's going on and whether we have enough resources in government. The first thing the man or woman on the street might ask the Department of Justice is how many lawyers we have on staff, approximately, with the Department of Justice, and since the problem has been going on for at least five or more years, would not the group or some of that group of lawyers and experts we have in the Department of Justice have been working on legislation that they think the minister or the minister's staff might want to look at, with a view to beginning to stem this growing tide, which actually endangers not only our desks but the people who use things such as batteries, the people who consume pharmaceuticals, the people who feed food to their pets and to their families? Has the department drafted legislation, etc.?

Before I ask too many more questions, I would like you, and anyone else who might feel disposed, to respond to that question.

[Cal Becker]

The short answer is no, we haven't drafted legislation to address specifically the problems of counterfeiting and piracy.

What we have been doing is providing legal support to the departments with responsibility for these issues, providing legal support to the departments with policy responsibility for border services, for trademarks, for copyright, and so on. Our role, in other words, has been, apart from the prosecution role in relation to counterfeit and pirated goods, one of simply providing legal support to those with policy responsibilities for the legislation we are looking at.

As to how many lawyers are actually involved in that, which I think was the first part of your question, you've got I think ten departments more or less represented today, not necessarily at the table, but there would be ten distinct legal services involved in providing that support in relation to their particular clients. The quick answer is going to be around ten to fifteen, I expect.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Is that ten or fifteen lawyers on staff at the Department of Justice or ten or fifteen lawyers across the board dealing specifically with that problem?

[Cal Becker]

All of the lawyers we're talking about would be Department of Justice lawyers, but they would be located with their clients, whether it's Health, Border Services, Industry Canada, or Canadian Heritage. In other words, they are all justice department lawyers, because the justice department supplies all legal services.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

So we'd have ten to twelve lawyers dealing with these very complex issues and departments.

The impression out there would be that they've got a pantheon of lawyers, and what are they all doing?

[Cal Becker]

No. Of course, we've got ten or so departments with a direct interest in these issues as well.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Thank you for that answer, because I would like to auger down to get to the meat of the issue.

Until you receive explicit or specific--I will not say instructions, I'll be very tender here--requests to draft legislation there wouldn't be a self-motivator to do just that. Based on your experience with the other departments, it sounds like you're providing legal support. So with this legal support you would be able to identify some of the problems and exigencies involved in being in the enforcement of the law. So wouldn't there be a push back to quite frankly the political arm of governance, saying we need this; this is what we need specifically and here is what we think the answer should be--can you help us out by bringing this legislation forth to Parliament? Does that occur, or because I'm a rookie in government am I supposing things that just don't happen?

The first responsibility of a politician, quite frankly, of a member of Parliament, is the health and safety of the people who bring us here. I want to know, does the legislation have to come from the minister? Does the minister have to say you need to do this, that, and the other thing, or should the minister expect you to say, “Listen, this is what we've been encountering for the past five or ten years. It's a big issue out there. We need some help. Here's what we think you guys should be passing as far as legislation goes.”

Would that be an unreasonable expectation?

[Cal Becker]

You used the word “instruction” with some delicacy.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

It is not a tender word. I suppose I could have used--

[Cal Becker]

No. I think it is a very good word to apply in the circumstances here. I think what you've heard is officials have mobilized in the context of an interdepartmental committee comprising ten departments. They have identified possible improvements to the system.

If you like, to some extent we are awaiting instructions.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Thank you.

I don't want to make you feel like this is all about you, because you're part of a team of people who are trying to do their best to help the people of Canada, especially the enforcement arm, for which I have a great kinship.

I would like to follow up on some of Mr. Ménard's questions with regard to the appropriate penalties.

I heard you mention that the maximum penalty is five years imprisonment or $1 million. Would I be correct in saying maximum penalties in Canada are rarely enforced, so usually when you have a maximum penalty the courts would look at not a minor but somewhat serious offence somewhere in the middle of that? So one would assume two years to $500,000. Would that be a correct assumption?

[Cal Becker]

Probably not. The penalties, generally speaking, would be much lower, as actually applied. That's not a reflection of anything, really, except possibly the nature of the case that is brought forward and any understanding that might have been entered into between the Crown and defence in terms of stays in exchange for pleas, and so on.

The penalties, by and large, are low. You will rarely find imprisonment as a dedicated penalty. More often it will be house arrest for up to six or eight months, plus or minus, and a fairly substantial fine. By substantial I'm talking about perhaps $5,000 to $15,000, in that range, depending on the scale of the offence.

I think what has to be appreciated, too, is that many of these offences are very resource-intensive in terms of investigation and prosecution. As I think was intimated by Chief Superintendent Cabana, the RCMP tends to identify as priorities copyright offences that also entail threats to public health and safety, organized crime, or terrorism. You're dealing with a fairly narrow band of what are really threats to public safety from organized crime, terrorism, or the product itself. To some extent, they're not, if you like, pure piracy or counterfeiting crimes. They're something else altogether.

[The Chair, Conservative, Garry Breitkreuz]

I'm sorry, but we're going to have to move on here. That ends the first round.

We'll now go to Mr. Chan for a five-minute round.

[Raymond Chan, Liberal, Richmond, BC]

Thank you very much for coming here to give us such detailed information.

I share the same passion that's around the table about the seriousness of the issue. I want us to pay special attention to those counterfeits that are harming the health and safety of Canadians. Particularly when we are drafting or proposing legislation, we should maybe have minimum sentencing terms for those people who have a huge disregard for the safety of Canadians.

Also, I would like to commend Diana for the department's effort at the border. In 1996-97, when Health Canada proposed to crack down on herbal products, I think that was a serious matter, and it harmed the ethnic community greatly.

I think the most important thing that is bothering us, when we talk about China, is that they now have counterfeit food products. I don't know if you've heard, but they can make eggs that look like eggs. They have fake eggs on the market. It's amazing, right? They make eggs that look like eggs, and they still make a profit.

What really concerns me is that they are counterfeiting even cheap products, like noodles. They are stealing the trademarks, and they are manufacturing them in a very bad manner that hurts the health of people who consume them. It's a big issue in China. People are worried about the food chain that supplies them, particularly when people are stealing trademarks that are very good brands that people rely on, both for health products and for drugs, particularly compounds.

I know that we allow them to come in. It's very difficult to supervise and legislate against them and so on. I accept that sometimes we have to let them in to allow the ethnic community to have access to them. But I think the trademark issue is very important. I hope that when we draw up the new legislation, Cal, you don't overlook those kinds of trademarks on health products and medicines that are coming into the country. It's common.

[The Chair, Conservative, Garry Breitkreuz]

That's very interesting.

Maybe we should give a little time for comments. There really wasn't a question there, but does anybody have a comment in regard to this?

[Nancy Segal]

I'll just say that we do recognize that. It's part of the reason why international efforts at cooperation with China are so important. There are ways of addressing it here, yes, but there ways of addressing it there as well.

As you say, this is not an issue that isn't of concern to developing countries. As I said at the beginning of my presentation, this is not rich country versus poor. In fact, the developing countries are much more at risk, in many ways, because they don't have the type of resources we already dedicate to this.

There are always ways to improve, but we need to work all together, developing countries and developed countries, to address the problem.

[The Chair, Conservative, Garry Breitkreuz]

One minute, Ms. Barnes.

[Sue Barnes, Liberal, London West, ON]

Thank you.

Ms. Segal, you're the chair of this working group. Heritage Canada has a role in this, in intellectual property. I want to know where they stand in relation to your working group. I'm concerned that not all members of your working group have the same priorities on these issues.

I would like to have seen intellectual property people from Heritage Canada be here today, and I'm wondering why they're not.

[Nancy Segal]

I think part of the answer to your question is that this has to do with counterfeit, or at least the title has to do with it. I believe we do actually have someone from Heritage Canada as our backup if there were issues raised, but this was supposed to be about public health and safety risks. To the extent that, yes, there are organized crime elements dealing with copyrighted goods, there is that piracy element, but we had focused our presentation mostly on the health risks of counterfeit goods, counterfeit pharmaceuticals, things like that.

With respect to where they stand in the working group, they are an essential part of the working group. They are there, along with all of the other agencies and departments, at every meeting we have interdepartmentally. We have a very broad consensus, really, on what needs to be done. There is no dissent among the departments or agencies involved; we do need to update our regime, and we're trying to look at the specifics, the details, even the broad strokes of what we need to do. We're trying to look at the resources, the types of changes that probably need to be made in the legislation. There is no dissent in the group.