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CCCA61_045.qxd:CCCA_V1No2_Col-IntelProp-V1.qxd 02/07/2008 06:23 PM Page 45 Intellectual Property The real deal Counterfeiting moves up the government’s agenda. ounterfeit goods are nothing new. The G8 isn’t the only body calling for However,in response to the ongoing inter- CWhat is new is that we are seeing swift action going forward. The United national efforts to combat counterfeiting, counterfeit goods show up across a broad States Trade Representative (USTR), in its Canada announced on October 23, 2007, range of products — from DVDs and 2007 Special 301 Report, states that that it will participate in preliminary pharmaceuticals to automobile parts. In “stronger and more effective criminal and discussions with various countries, includ- fact, one U.S. automaker estimates lost border enforcement is required to stop the ing the U.S., the EU and Japan, with a sales of US$1 billion on an annual basis manufacture,import,export,transit,and dis- view to establishing an anti-counterfeiting due to counterfeit auto parts. tribution of pirate and counterfeit goods.” trade agreement. Few products are immune from coun- Recognizing the risks posed by coun- terfeiting — as Canadians discovered in the Canada on the spot terfeit goods in general, the intent of an summer of 2007, when Health Canada While some governments have taken con- anti-counterfeiting trade agreement would issued a warning that counterfeit tooth- crete steps toward curbing the trade in pirat- be to develop international standards to paste containing high levels of harmful ed and counterfeit goods, others have been better combat counterfeiting, with a focus bacteria had been found on the Canadian slower on the uptake. In the same 2007 on international co-operation, enforce- market.This heightened the seriousness of report, the USTR pointed to Canada as a ment practices and enforcement systems. the issue among consumers and govern- jurisdiction that needs to be more proactive. The Organization for Economic Co- ments and forced a recognition that coun- Indeed,Canada remains on the USTRWatch operation and Development (OECD) terfeiting is no longer a victimless crime. List, and Canada has been urged to improve released a report in 2007 which estimated As the toothpaste example demonstrates, its enforcement system and give customs offi- that global trade in counterfeit products the counterfeit market has expanded beyond cers the authority to seize suspected counter- could have been as high as US$200 billion simple luxury items and into areas that pres- feit goods without a court order. in 2005. This figure does not include ent a legitimate danger to consumers. Two Standing Committees of the House domestically produced and consumed Manufacturers are also finding themselves of Commons,one on Industry,Science and counterfeit goods, and some still consider increasingly at risk, as counterfeit material Technology, and another on Public Safety this estimate to be low. has found its way, unintentionally, into the and National Security, looked at the prob- However, there is an overall recognition production of legitimate goods.And coun- lem of counterfeiting and released lengthy that trade in counterfeit products is terfeit approval marks (i.e., marks indicating reports in 2007. increasing and, as demonstrated by the that products conform to applicable safety Both committees recognized that recent issue with counterfeit toothpaste, and/or performance standards) have been Canadian laws on counterfeiting need that the problem has grown beyond its tra- found on substandard electrical products. more teeth and recommended that the ditional trade in fake luxury goods. As it The public is only now awakening to the government create a criminal offence for weighs the options presented by the two dangers of counterfeit goods, but govern- manufacturing, reproducing, importing, Standing Committees, Canada looks ments have known about it for some time. distributing and selling counterfeit goods. poised to become much more aggressive in Looking to confront the issue of piracy and They also recommended administrative its stance against counterfeiting. dangerous counterfeit products, the 2007 monetary penalties for the import/export G8 Summit in Heiligendamm saw member of counterfeit goods set at a high enough Robert MacDonald is a partner in Gowling states reaffirm their commitment “to com- level to serve as a real deterrent, and that Lafleur Henderson LLP’s Ottawa office with bat piracy and counterfeiting,” noting that Canada’s border enforcement policies be more than 20 years of experience in all areas pirated and counterfeit goods threaten the modernized to target counterfeit goods. of trade mark practice, including prosecution, health, safety and security of consumers How the government will respond to licensing, oppositions and litigation in the worldwide,particularly in poorer countries. the recommendations remains to be seen. Federal Court of Canada. PRINTEMPS 2008 CCCA Canadian Corporate Counsel Association 45