CRIA's Graham Henderson was back in the spotlight yesterday with a speech delivered on behalf of the Canadian Anti-Counterfeiting Network at the Economic Club of Toronto understatedly titled "Canada Awash in Piracy" An Action Plan to Secure Our Prosperity". The speech, which has yet to be posted online (then again, CRIA has not posted a release or a speech since last September), followed the usual CRIA formula:
- law firm sponsors to help fill the room (McCarthy Tetrault)
- a questionable Pollara study (this one focused on Canadians' appetite for counterfeit goods)
- cracks at law professors ("we don't have a [piracy party] here yet but there are rumours that some law professors are putting one together")
- an astonishingly critical portrayal of Canada and Canadian policy makers (Canada has "a poorly developed marketplace framework for intellectual property rights", low Canadian attendance at a WIPO counterfeiting conference was "a grievous oversight and it sends a disturbing message", etc.)
There are several issues worth noting about the speech. First, I don't know many people who are in favour of commercial counterfeiting. If the allegations regarding organized crime involvement and health and safety issues (counterfeit pharmaceuticals, batteries, toys) are even partially true, Canada should have a legal system to address these concerns. Henderson suggested several reforms (trademark reform, customs powers) that would likely prove relatively uncontroversial in that regard.
The problem with this latest campaign is that it massively overstates the problem and seeks to conflate commercial counterfeiting with other activities that are not nearly as problematic.
For example, Henderson repeatedly tries to make the case that counterfeiting is having an enormously damaging impact on the Canadian economy. He describes the Canadian economy as a "marketplace that has been infiltrated by counterfeits and pirated goods, endangering consumers and compromising our prosperity. Our marketplace for ideas is in a shambles, and we need to fix it." He adds that "the sale of unauthorized knock-offs of legitimate products has mushroomed into a multi-billion-dollar underground economy, an economy that robs many Canadians of their ability to earn a living and that dims the light of innovation that is essential to our future economic prosperity." In support, he notes the Pollara study finds that 40 percent of Canadians have purchased counterfeit goods.
What he neglects to say is that the most likely counterfeit items to be purchased were clothing, watches, sunglasses, and handbags. All this tells us is that there is a certain percentage of Canadians walking around with fake Ralph Lauren shirts, wearing fake Rolex watches and fake Oakley sunglasses, and holding fake Louis Vuitton handbags. So what? This is hardly constitutes an economic crisis given that few, if any, Canadian name brands that are affected by this issue and virtually none of the counterfeit products are actually made here.
Henderson also exaggerates time and again in his speech. He claims that the House of Commons Standing Committee on Industry "heard again and again from entrepreneurs who were worried about how counterfeit goods were undermining their businesses." Actually, they didn't. There were two written submissions that raised the issue (one which was from CACN) and the transcripts from committee hearings show that counterfeiting was noted by committee members no more than a handful of times.
Henderson also exaggerates the involvement of organized crime, claiming that "regardless of what the counterfeit product is, you can rely on the fact that, in some way or another, organized crime is involved." Actually, that isn't what the RCMP found. I recently obtained a copy of Project Sham, the most recent RCMP report on IP crime, under an Access to Information request. The RCMP says:
"The involvement of organized crime in IP crimes varies in Canada. In the Northwest Region, for example, only a few cases could be classified as organized crime; for the most part, IP crime there involves people who are 'trying to make a dollar.'"
Henderson makes much of the health and safety issue as well, focusing on the potential harm associated with counterfeit products. This is indeed troubling, yet the RCMP report concluded that "in Canada, there are no indications of any serious incidents whose causes have been traced to counterfeit goods."
Finally, primary examples of the harms associated with counterfeiting come back to an assortment of discredited anecdotes (ironic that he frequently criticizes DMCA critics for relying on anecdotal cases yet employs precisely the same technique here). Camcording piracy? Check. IIPA report? Check. USTR Priority Watch list? Check.
This all leaves the feeling of a well-orchestrated effort (or not so well orchestrated as the National Post reports that the speech was beset by problems with the lighting) to tarnish Canada's reputation in an effort to drum up public support for legal change. That – not fake Louis Vuitton handbags – is the real harm to the Canadian economy.
Update: A transcript of the Henderson speech has now been posted on the CRIA site.