Combating Counterfeit Products Act introduced in Canada
March 4, 2013

On March 1, 2013, the Canadian Government introduced Bill C-56, An Act to amend the Copyright Act and the Trademarks Act and to make consequential amendments to other Acts. The short title of the proposed legislation is "Combating Counterfeit Products Act" and the bill introduces long overdue amendments to the Copyright Act ("CA") and Trademarks Act ("TMA") to add improved border measures and clear prohibitions to address the proliferation of counterfeit and pirated products in Canada. The bill also includes provisions dealing with significant trademark issues, including expanding the definition of "trademark" to cover non-traditional trademarks, allowing proposed use certification mark applications and divisional applications, and other improvements.

The border provisions added to the acts include prohibitions against import or export of pirated or counterfeit products. However, the prohibitions are subject to exceptions regarding transiting goods, goods imported for personal use and, in the case of the TMA provisions, an exception if the trademark was applied with consent of the owner of the trademark in the country where the mark was applied. The provisions provide for ex officio detention of counterfeit and pirated products by customs officers, provision of information and samples to Rights Holders ("RH") to confirm infringement of their rights, and "requests for assistance" by RH. Requests for assistance allow for registration of copyright works and registered trademarks subject to a possible requirement to post security and complicated provisi ons for determining liability of RH who have requested assistance to pay for detention and destruction of goods detained or damages resulting from detention under the provisions. The provisions provide that the goods shall not be detained under the CA and TMA prohibitions for longer than 10 working days of information being provided to the RH (extendable by 10 days on request and 5 days total if perishable items) unless notification of court action by the RH is received by customs authorities. Provisions are also added to the CA, but not the TMA, for Notice by a RH to customs authorities and entry of copies of works that would infringe copyright if made in Canada on the Customs Tariff prohibited Copyright items provision.

The prohibitions to be introduced to the TMA also prohibit manufacture and possession of goods, or packaging for goods, bearing trademarks registered for such goods or marks confusing therewith for the purpose of sale or distribution. In addition, there is a bar to sale of any label or packaging bearing trademarks known to be intended to be associated with goods for which the trademark is registered. Further, Bill C-56 adds offence provisions to the TMA (the CA already has offence provisions) making it an offence punishable by up to $1,000,000 and/or five years of incarceration to knowingly sell, offer for sale, distribute on a commercial scale, manufacture, possess, import or export goods or packaging for such goods, or to advertise or sell services, in association with a trademark that "is identical to, or cannot be distinguished in its essential aspects from, a trademark registered" for such goods or services.

With respect to other trademark issues addressed in Bill C-56, the most significant is likely the amendment to the definition of trademark. The amendment broadens the definition, which was limited to "marks" and "distinguishing guises," to include "signs." Signs are defined as including "a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign." Numerous amendments are proposed to deal with the broadened subject matter for registration, such as provisions dealing with distinguishing guise trademarks being deleted since such trademarks will be covered under the definition of "signs." Other changes are proposed to promote efficiency in the prosecution of applications and maintenance of registrations and to bring existing provisions in line with current practice in the Trademarks Office. In addition, as noted above, provisions are added for filing proposed use certification mark applications and for filing divisional applications.

Now that bill C-56 has had been introduced, it should shortly proceed to second reading where Parliament will have an opportunity to debate the general scope of the Bill. It should then be referred to committee where witnesses may be called to comment on the Bill and proposals for detailed amendments to the provisions of the Bill will be considered. Once the committee has addressed proposals for amendment and is satisfied with the Bill as amended, it will report to Parliament where there will be debate on possible further amendment, the possibility of referral back to committee, and ultimately third reading and potentially passage of the Bill by Parliament. That is followed by a similar process in the Senate and ultimately passage, Royal Assent and implementation of the Bill. Since the Bill was introduced by the Government, which has a majority in both Parliament and the Senate, it is expected that the Bill will pass during the current session of Parliament.

The Government is to be applauded for introducing Bill C-56. The long overdue amendment of the CA and TMA to address the proliferation of counterfeit and pirated products in Canada, and the broadening of the definition of trademark and other improvements to the TMA, are most welcome.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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