Canadian Lawyer InHouse

Janet M. Fuhrer A Canadian approach to combating counterfeits Proposed new legislation aims to help better protect trademark owners. M ay 28 marked World Anti-Counterfeiting Day and so it is fitting to contemplate Canada's recent efforts to tackle counterfeiting with bill C-56. The Combating Counterfeit Products Act was introduced March 1, 2013. It provides new remedies and measures to intellectual property rights holders for dealing with counterfeit activity. Counterfeit products represent a loss of revenue and jobs for manufacturers and pose serious health and safety risks for Canadian consumers. Unchecked, counterfeits also undermine the value and goodwill attached to IPR, particularly trademarks. So what will the bill achieve? It prohibits the importation and exportation of unauthorized copies of a work in which copyright subsists and of goods, their labels, or packaging which bear an unauthorized trademark ("identical to, or that cannot be distinguished in its essential aspects" from, the registered trademark). There is a mechanism for the owners of copyright and registered trademarks to request assistance from customs for the detention of copies or goods for a short period of time, generally five days for perishables and 10 days for non-perishables. Legal proceedings must be commenced to extend the detention. These provisions do not apply, however, to copies or goods transshipped through Canada. Another little wrinkle is the IPR holder is responsible for the costs of handling, storage, and, if applicable, destruction of the detained copies or goods. Further, neither the Crown nor customs are responsible for any loss or destruction which may occur as a result of detention or release from detention. The bill includes new criminal offences for trademark counterfeiting accompanied by significant fines up to $1 million and terms of incarceration up to five years, upon conviction. Civil trademark remedies have been expanded to include specific reference to punitive damages. Several significant changes are proposed regarding the trademark application and opposition processes. Among other things, the term "wares" will be replaced with the more globally used term "goods." Distinguishing guises will be eliminated as a type of trademark and the concept of "signs" will be introduced to replace the previously undefined "mark" in the definition of a trademark. The term "signs" will be defined separately to include three-dimensional shapes, modes of packaging goods, colour, sounds as well as other non-traditional marks such as holograms, moving images, scents, tastes, and textures. The definition of "distinctive" will take into account that signs may be inherently capable of distinguishing goods or services. The implication is evidence of acquired distinctiveness will be required in cases where the Trademarks Office examiner believes the sign or other trademark being applied for is inherently incapable of distinguishing the applicant's goods or services. Registration also can be refused if a trademark's features are dictated primarily by a utilitarian function. The definition of a "certification mark" will be expanded to include a proposed certification mark. Until now, prior use of a certification mark by a licensee in connection with goods or services of a defined standard was required to secure registration of the certification mark. In other words, it will be possible to seek registration at early planning stages to better protect new certification marks. The registrar will have the ability to destroy records of abandoned and refused applications and expunged registrations within six years of abandonment, refusal, or expungement. It remains to be seen the extent to which the Trademarks Office will accommodate requests for the return of material from files prior to destruction. Applicants seeking to register marks comprised of letters, numerals, punctuation marks, diacritical and typographical symbols, or combinations of them, without any limitation as to font, size, or colour, will be required to indicate that they wish the marks to be registered in "standard characters." It will be possible to divide pending applications. This can be useful for obtaining registration sooner for goods or services where the mark has been used as opposed to those goods or services where the mark is not expected to be used for some time. The resulting registrations eventually can be merged. An applicant whose application has been opposed by a third party may request, prior to filing a counter statement, all or part of the statement of position be struck. A counter statement can state the applicant intends to defend the opposition and need not deny any or all of the grounds of opposition. Flexibility for streamlining of the evidentiary and hearing stages will be incorporated. There will be six months from registration during which the registrar may correct "obvious" errors. The need for a six-month limitation is not evident and hopefully the period will be lengthened before the bill receives third reading and Royal assent. IH Janet Fuhrer is a partner with Ridout & Maybee LLP. w w w. c a n a d i a n law y er m a g . c o m / i n h o u s E june 2013 • 13

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