Bill C-8 re Anti-Counterfeiting: Is Parliament Rushing to Respond to a Fake Crisis About Fake Products?

Bill C-8 is a huge and complicated bill that would drastically change existing trade-marks and copyright law, criminalize ordinary “infringement” and impose complex responsibilities on border officials, who have much more serious things to worry about such as dangerous persons who pose risks to national security.  Bill C-8 is intended to allow Canada to sign on to the very controversial #ACTA treaty, an American initiative, and something that even the IP friendly EU has decided against.

Apparently, Bill C-8 is going to “clause by clause” as early as next Monday, December 2, 2013 without hearing from some potentially helpful witnesses, including me. The Committee has heard from a number of lobbyists and had some very general comments from a couple of law professors. The Committee and the Government apparently believe that ratcheting up IP laws to deal with “counterfeiting” will save the world from dangerous fake products and will promote innovation. Nobody supports counterfeiting or piracy, but hasty overreaction in the form of complex and compendious changes to longstanding well working laws won’t necessarily help. Indeed, such rushed changes – when there is no emergency – could cause a lot of harm, except perhaps to the interests of litigation lawyers who will have to clean up the predictable messes.

What this exercise it will do – and has done – is to allow lobbyists with a maximalist agenda to use this fake problem of fakes to create the potential for interference with legitimate trade in parallel imports, vastly increased criminalization of everyday “infringement”, shifting of enforcement costs from the private sector to the taxpayer, and the interference with the transshipment of generic drugs and other legitimate products. The new law will allow incredible opportunity for abusive or even simply incompetent enforcement. This can be very costly to large and SME business, not to mention consumers. This is perhaps the most sweeping legislation in Canadian IP law in 70 years, and it is being done without adequate hearings, study or the demonstration of any need. Anyone looking for counterfeit products can find them on the street in mid-town and downtown Manhattan. One doesn’t find this kind of flagrant counterfeiting in Canada. The “evidence” of a major problem with counterfeit good that can’t already be dealt with via existing laws almost entirely anecdotal or absent. Piling on of responsibility to border officials is an unnecessary and costly mistake. The DNA and fingerprints of the movie and record industries are all over this bill.

However, if there is to be a bill – we need to get it right. Here is my offer to appear sent to the Committee on November 11, 2013. It seems that that the Committee does not wish to hear me on this.

HPK

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Dear Honourable Members of the Standing Committee on Industry, Science & Technology (“INDU”)

Re: Bill C-8 (“Anti-Counterfeiting”) – Request to Appear as Witness

I would like to offer to appear before your Committee in my own personal pro bono capacity as a witness in order to address certain issues of serious concern regarding Bill C-8. While the overall purpose of the Bill is commendable, namely to reduce commercial counterfeiting and piracy, and the drafting shows very diligent work and great competence overall, the devil is in the details and there are 50 pages of highly technical details in this instance – some of which have profound policy implications.

I have resigned from the Canadian Bar Association Anti-Counterfeiting Committee because I have become a “minority of one” on certain key aspects of this Bill, and would like to make my views known to you with sufficient particularity and in person. I attach a short version of my CV, which demonstrates that I have been involved in this area in several capacities for over 30 years.

For the purposes of this Bill, it is useful that you be aware that I made the winning arguments in the very important 2007 Supreme Court of Canada judgement in Kraft v. Euro-Excellence, which involved the issue of parallel imports and copyright. Here is a short analysis I did about that case for the Law Society of Upper Canada.

As I am sure you are aware, questions involving parallel imports loom large in this discussion. If the Bill “gets it wrong” on parallel imports, competition will lessen and prices will rise in Canada and the Government’s specific promises on “consumers first” and cross-border price parity will be seriously frustrated. These questions are extremely complex and there is a great danger that the legislation will lead to unintended consequences and confusion between parallel imports and legitimate goods. Moreover, if the nine judges of the Supreme Court of Canada split several ways on this topic, and if the US Supreme Court recently split on a similar case (Kirtsaeng v. Wiley), are we not asking too much of our border guards to be able to distinguish between a legitimate parallel import and an illegal pirated or counterfeit good?

Here are the main points I would address, if invited. I would need some lead time to prepare a proper brief:

1.    The numerous references apparently intended not to interfere with the free flow of parallel imports are inconsistent and present potentially serious drafting problems that require further study. The bill should propose appropriate declaratory language for both the Copyright Act and Trade-marks Act that makes is absolutely clear that, with the exception of the sui generis book importation scheme now found in s. 27.1 of the Copyright Act, neither of these acts shall in any restrict the importation, distribution or sale of any product, whether tangible or digital, that has been manufactured or first put on the market anywhere in the world with authorization

2.    It would be mistaken and harmful to criminalize routine copyright and trade-mark infringement activity and there is no need to add additional criminal sanctions, much less wiretap enablement provisions or any provisions that would authorize the warrantless search of travelers to determine whether they have infringing items in their baggage or on their electronic devices. Past experience shows the potential for abuse of such provisions both by the state and by the private sector. See  R. v. Laurier Office Mart Inc., 1995 CanLII 7322 (ON SC)

3.    The Bill should contain no provisions that are not essential for the purpose of combatting counterfeit or pirated products. In particular, such provisions as those that would fundamentally change the definition of trade-mark and would allow an examiner to be able to block a registration on the basis that “the trade-mark is not distinctive” should be removed from the Bill.  Such changes to the Trade-marks Act would upset a careful balance and practices that have worked well since 1954, and are totally inessential and irrelevant to the purpose of combatting counterfeiting.

4.    The Committee should resist expected attempts to have Bill deal with transshipment (aka “in-transit shipments”). Customs officers cannot possibly be expected to understand enough about international law to decide what shipments should or should not go forward. There is ample evidence of harmful interference with legitimate shipments of drugs that were mistakenly interfered with even in such a “liberal” jurisdictions as The Netherlands. See New EU Customs Regulation Might Allow Wrongful Seizures Of Generic Drugs In Transit, NGOs Say, Intellectual Property Watch, October 17, 2013 http://bit.ly/HAqqDe ; ACTA: Risks of Third Party Enforcement for Access to Medicines American University College of Law, 10-01-2010 http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1001&context=research

I look forward to addressing the Honourable Members of this Committee, as I have done at several other Parliamentary Committees in various capacities in the past.

Yours sincerely,

Howard Knopf

PS - Interestingly, the Committee has heard  both from Lorne Lipkus and his son David Lipkus, both of the same anti-counterfeiting law firm, in separate presentations that were presumably both very much in favour of this legislation, and presumably both advocating for it to go even further. (David's testimony is now posted - Lorne's not yet). Lorne is a colleague at the bar who I like and respect - and I'm sure his is son is a good lawyer too.  However, it is one thing to have an unbalanced and incomplete list of witnesses, or even lobbying organizations that duplicate and reinforce one another. But, a Committee that is rushing to judgement and refusing to hear testimony that it might not like, while hearing separate testimony from a father and son in the same law firm with the same focus, is really rather unusual - even by Parliamentary Committee standards.