Good morning, Mr. Chairman and honourable members.
I'm Brian Isaac. I'm another IP lawyer. I'm a partner with Smart & Biggar. I've been practising in the field for about 20 years. I'm also the chairman of the legislation committee of the Canadian Anti-Counterfeiting Network, CACN, and I'm sitting on a number of other anti-counterfeiting—if I can use that term—committees: the CBA, Intellectual Property Institute of Canada, the International Trademark Association, etc.
There's no question that it's widely accepted and acknowledged, including by Canadian government officials who have been studying the issue, that Canada's IP crime enforcement policies and legislation are outdated and ineffective. The bottom line is that despite recognition of the need to reform and the fact that many of our peers have done so, we have not updated our laws to address the explosion in the variety and volume of counterfeit and pirated products arising from globalization, international outsourcing with the related technology transfer, and advances in digital and other technologies that facilitate people making copies of anything and everything.
Some of the problems have already been identified by Mr. Webster and my friends at the Canadian chamber. There is no effective border enforcement, and I, like Mr. Webster, have had many calls where I have to tell people that we can write to the RCMP, but there's no border system in Canada, unlike the case with most other developed countries. We have no effective trademark offences—including the offences that are in the Criminal Code; they have too many problems.
We have insufficient resources applied to combating the problems. We have insufficient dedicated personnel with experience in prosecution of counterfeiters, including within the ranks of the federal prosecutors. We have insufficient civil procedures and remedies to facilitate enforcement by rights holders.
It's an interesting point that some people seem to think that rights holders should bear the brunt of enforcing against piracy and counterfeiting. But you have to recognize that civil proceedings are not effective against criminals. That's been shown time and again, and I've experienced it time and again. Civil remedies are generally not effective against criminals because they arrange their affairs to avoid any significant civil penalties.
The bottom line is that the rights holders are victims, and they operate on business principles. I don't want to put it too strongly, but I would say it is naive to expect that we're going to have rights holders making an effective sole stand against this problem, when the business doctrines dictate against throwing good money after bad losses by pursuing expensive litigation against counterfeiters and pirates with little hope of any significant award—or of collecting an award, even if you do get an award, because of the way criminals arrange their affairs.
The problems with civil enforcement combined with the RCMP policy of leaving enforcement against retailers to rights holders has resulted in an environment in Canada where there is open sale of counterfeit and pirated products at retail. It is not only in flea markets, but also in bricks-and-mortar stores, including sale of pirated digital products that are manufactured by the retailers in house, and all kinds of other counterfeit consumer goods that are imported from China and elsewhere.
But the criminal side is not doing much better at addressing this problem. The penalties that are imposed in the few cases that are prosecuted are too low to be a real deterrent, as a result of plea bargains and problems in actually obtaining convictions flowing from the inadequacy of the offence provisions, particularly on the trademark side.
The situation is such that there is little risk of being caught, little risk of being charged if you are caught, and even if you are charged, there is little chance of receiving a penalty that is other than a minor cost of doing business.
Removing profitability is further unlikely because of the exclusion of copyright offences from proceeds of crime legislation and the fact that trademark offences are so weak that the RCMP and federal prosecutors prefer to proceed under the Copyright Act, and often refuse to proceed under the Trade-marks Act, even in clear cases of trademark counterfeiting.
I have a number of examples, but I'm going to skip over them and get to the bottom line.
The fact is that Canada has gone from a situation, when I first started in the IP field, of being a leading, sophisticated IP country to a market where effective enforcement is—arguably correctly—viewed as a lost cause by many of our international and national rights owners.
We need to reform our laws, and there's no question except when and how. The answers are straightforward, in my opinion. Now is the time, and we have to take the sophisticated approach, with Public Safety and Industry Canada taking the lead to effect the laws. Public Safety should be looking at the resource side, with Industry Canada looking at the IP legislation, which they are primarily the custodians on.
With that, I'll pass it over to Mr. Lipkus.