Thank you, Mr. Chairman and honourable members.
I thank you for having given me the opportunity to speak to the committee about counterfeiting and piracy.
I have been a lawyer since 1981. I'm a partner in a law firm, and since 1999 I have practised exclusively in anti-counterfeiting enforcement across Canada. My life is spent dealing with several hundred counterfeiting cases per year on behalf of over 75 different brand owners, manufacturers. In doing so, it is rare that I am not able to find counterfeit products in a particular area of Canada. That's what I hope to explain here today. On a constant and continual basis I have found, and I'm still finding, counterfeit products at virtually every major shopping centre or mall across Canada.
I have found counterfeits in numerous--I'm talking about hundreds--retail locations per year across Canada. I have been involved in the raids of manufacturing facilities in Canada, manufacturing counterfeit apparel, including counterfeit cellular batteries being manufactured in Canada. I was in a distribution facility that was importing hundreds of thousands of dollars of counterfeit ink-jet cartridges separate and distinct from the packaging, and the distribution facility was putting these together. We've recently seized large quantities of counterfeit Bluetooth headsets, the kinds that many of us are wearing for our cellular phones. The importer was importing the headsets separate from the packaging.
Since the end of November 2006, I have worked on in excess of 50 different files involving counterfeit headsets across Canada. I would not want to put a headset near my brain that hasn't been tested properly. Who knows what's inside? I'm aware that there are a large number of counterfeiters or pirates who are dealing only in cash, and I have every confidence that they are not reporting their income to the Canada Revenue Agency.
Counterfeiters are becoming more clever. There are dozens of businesses I have dealt with in Canada, in Vancouver and surrounding area, in Toronto, and in Montreal in which at the back of what looks like a legitimate store they sell the counterfeit. There is more counterfeit in the back than there is in the front. On many occasions per year the RCMP, through the CBSA, have informed me that they have identified a shipment of counterfeit products, but they're letting it go through into Canada even though they know the goods are counterfeit. No seizure, no charges, no particulars are sent to the rights holder for them to follow up. If we're lucky, we'll find it in the stores before someone gets hurt.
On many occasions per year I've been advised by police or crown prosecutors that even though they've identified the counterfeit product, they are not proceeding with charges. The goods are protected by trademark law and not copyright, and they don't feel they can proceed. Very often shipments are brought into Canada broken down and then exported to other countries, primarily the United States. We've raided a number of websites with physical locations in Canada delivering product around the world.
The RCMP very often refuse to deal with cases because there is no health and safety component. There is no link to organized crime. Sometimes they'll open up an investigation file, but nothing is done. Until there's an investigation, how is the brand owner supposed to know who was involved in organized crime? I can tell you that I've been personally involved in over a dozen cases in which I've worked on the case and someone in local police or the RCMP has said, “Be careful, this involves organized crime”--whatever that means.
I've seen counterfeiters in retail locations with signs that say “cash only”. Our investigators try to give them a credit card, try to give them a debit card. They say no. We ask for a receipt and they say no. This happened as recently as last week to me personally.
I conduct training sessions and have done so for law enforcement across Canada for over 11 years. Representatives of the Canada Revenue Agency regularly attend the conferences I host, and they say, give me these cases. They must want the cases because they're successful with them. They won't tell us, but I have to assume that they like these cases because counterfeiters are dealing in cash. Why aren't there more crown prosecutors coming to these conferences?
Legitimate businesses regularly provide me and others with tips saying there are counterfeit products over here. They are frustrated because legitimate businesses that have to pay the proper taxes and abide by Canada's rules cannot compete with counterfeiters. They just cannot do it.
Everyone expects that counterfeits will be in the flea markets. We've come to expect that. And believe you me, they are there, in large quantities.
But the RCMP basically do not want to go to flea markets. Local police, basically, do not want to go to flea markets. What has happened is we have very clever crooks, counterfeiters. They realize that's the case, and there are numerous flea markets across Canada that have more product on display and available for sale than most distribution or warehousing facilities in Canada.
There are even mainstream department stores that I've been involved with that have been caught purchasing counterfeit products. It's not just something that is for flea markets.
Counterfeiters do not specialize in a particular commodity. They mix a shipment of drugs stuffed in luxury purses. They mix it with counterfeit cigarettes, with apparel. A container comes in and it's a mix of things. They specialize only in greed, not in commodities.
When people ask me where to find counterfeits in Canada, I have a very simple answer: everywhere. When they ask me what we are doing about it, I say not enough.
But I do thank you for the opportunity to speak before you, and I welcome the opportunity to answer any questions you may have.
Thank you.