What's Fake about Canada's Anti-Counterfeiting Bill

With only limited fanfare, earlier this month Industry Minister Christian Paradis introduced Bill C-56, the Combating Counterfeit Products Act. Since no one supports counterfeit products -- there are legitimate concerns associated with health and safety -- measures designed to address the issue would presumably enjoy public and all-party support. Yet within days of its introduction, the bill was the target of attacks from both opposition parties and the public.

The NDP raised the issue during Question Period in the House of Commons, accusing the government of trying to implement the widely discredited Anti-Counterfeiting Trade Agreement (ACTA) "through the backdoor." The public also picked up on the issue, noting that the bill appears to be less about protecting Canadians and more about caving to U.S. pressure (the U.S. called on Canada to implement ACTA on the same day the bill was tabled).

The concerns associated with the bill fall into two main categories: substance and ACTA implementation. The substantive concerns start with the decision to grant customs officials broad new powers without court oversight. Under the bill, customs officials are required to assess whether goods entering or exiting the country infringe any copyright or trademark rights.

While officials are not intellectual property experts, the assessment includes consideration of whether any of the Copyright Act's exceptions may be applied. These determinations are complex -- courts often struggle with the issue -- yet the bill envisions granting these powers to customs officials with no review by a judge and no limits on the types of goods involved. Should a customs official determine that there is infringement and that no exception applies, the goods may be seized and prevented from entering the country.

In addition to the seizure provisions, the bill involves expansive information disclosures, with detailed information sharing on shipments as well as the ability for rights holders able to seek assistance from Vic Toews, the Minister of Public Safety (who will be delegated some responsibilities under the Copyright Act) to detain imports and exports. Moreover, penalties associated with copyright and trademark are on the rise, with tougher criminal provisions added to the law.

Broad brush, broad powers

While most would agree that officials should have sufficient tools to protect public health and safety, the bill does not confine the broad new powers to those special cases. For example, the government could have limited seizures without court oversight to instances where officials reasonably believe there is a public safety risk, but the bill treats everything from counterfeit pharmaceuticals to a suspect painting in the same manner.

The substance of the bill is cause for concern, yet what has many up in arms is that the bill signals Canada intention to implement ACTA. Public protests against ACTA were staged throughout Europe last year, leading to a European Parliament rejection of the treaty. Similar opposition has arisen in ACTA participating countries such as Switzerland (which has not signed the treaty), Australia (where a Parliamentary Committee recommended against ratification), and Mexico (where a Senate motion rejected it).

ACTA is badly damaged and will seemingly never achieve the goals of its supporters to emerge as a new global standard for intellectual property enforcement. But for the U.S., which spent years pressuring ACTA participants to strike a deal, it still hopes to revive the agreement by at least garnering the necessary six ratifications for it to take effect.

With Europe and Switzerland both out of the agreement, there are only nine countries left. The U.S. apparently sees Canada as an easy target for support, leading to mounting pressure to implement the bill. That leaves Canadians with Bill C-56, which may be characterized as a counterfeiting bill, but whose primary objective appears to be to satisfy U.S. pressure to implement an agreement that the majority of our major trading partners have either never signed or flatly rejected.