Piracy in Canada

New Canadian border measures

Piracy in Canada
On January 1, 2015, amendments to the Trade-marks Act, the Copyright Act and the Customs Act came into force establishing new border enforcement measures to assist intellectual property rights holders in combating two types of infringement: copyright piracy and trademark counterfeiting.

Under the new system, the owner of a Canadian trademark registration and/or works protected by Canadian copyright, may file a Request for Assistance (“RFA”) with the Canada Border Services Agency (“CBSA”) and seek assistance from the CBSA in blocking the importation of pirated and counterfeit goods into Canada.

To rely on a trademark in a RFA, it must be registered on the Trademarks Register. No such requirement exists for Canadian copyrights. But, in practice, it is recommended that copyrights also be registered on the Copyright register so the rights holder will have a certificate of registration to attach to the RFA and also because a rights holder’s enforcement options are often improved by the acquisition of copyright registrations (see, for example, section 39(2) of the Copyright Act).

The RFA form is available for download on the CBSA website (Form BSF738). The RFA is valid for an initial period of two years and may be extended in two-year increments upon request. If suspected pirated or counterfeit goods are discovered by the CBSA during inspection at the border, the CBSA can contact rights holders and provide them with information on the suspected shipment. The shipment will remain in detention for 10 days (five days for perishable goods) with a possible extension of a further 10 days. If the rights holder initiates court proceedings relating to the detained goods, and provides the CBSA with notice of such proceedings, the goods will remain in detention until the proceedings are disposed of or a court orders that they be released.

While this is obviously a welcome development for rights holders in Canada, it is important for rights holders to understand their obligations after filing a RFA. First, as a condition of accepting the RFA, security for costs may be required from the rights holder. While the CBSA has indicated a bond may be acceptable security, it is not yet clear if any other forms would be valid, or what amount of security may be required. Second, by filing a RFA, rights holders agree to be held liable for the costs associated with storage and destruction of the detained goods. The CBSA has advised that the storage costs for one shipping container may be $300 per day and the costs for the destruction of the goods may be approximately $1,700 per event. Rights holders must therefore include these obligations and costs in their cost-benefit analysis. If, for example, an importer does not consent to the destruction of detained goods, a default judgment or summary trial may take several months and during that period the rights holder could be liable for tens of thousands of dollars in costs.

A similar system is in place in Europe and has proven to be a successful tool to block the importation of counterfeit and pirated goods into European countries. So, the benefits for rights holders in Canada, subject to the cost issues above, are clearly evident. Rights holders interested in filing a RFA should review their trademark and copyright portfolios in order to ensure that any RFAs filed with the CBSA provide the broadest possible protection.

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