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    Liberals Demand More Draconian IP Provisions: Propose Adding New Statutory Damages to Bill C-8

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    Thursday December 05, 2013
    Liberal MP Judy Sgro continued her efforts yesterday to add lobbyist-inspired provisions to Bill C-8, the anti-counterfeiting legislation. Having already proposed removing the personal exception for travelers (leading to increased border searches) and a "simplified procedure" for the seizure of goodsthat would remove court oversight in the destruction of goods in a greater number of cases, Sgro proposed an amendment to add statutory damages with a mandatory minimum of $1,000 and a maximum of $100,000 in liability. The provision would limit the discretion of judges to order damages based on the evidence.

    The statutory damages provision was another ask for intellectual property lobby groups. As I noted in my appearance before the committee:


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    The TPP IP Chapter Leaks: U.S. Demanding Overhaul of Canadian Anti-Counterfeiting Bill

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    Friday November 15, 2013
    The leak of the Trans Pacific Partnership intellectual property chapter confirms that the many concerns about the agreement were well-founded. My earlier posts highlighted Canada's opposition to many U.S. proposals and U.S. demands for Internet provider liability that could lead to subscriber termination, content blocking, and ISP monitoring. This post focuses on some of the anti-counterfeiting requirements in the TPP.  The anti-counterfeiting issue is particularly relevant from a Canadian perspective because the government has proposed significant new anti-counterfeiting measures in Bill C-8, which is currently at second reading in the House of Commons and being studied by the Industry Committee. If the U.S. border measures demands are included in the TPP, Bill C-8 would be wholly inadequate to meet Canada's new treaty obligations.


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    New Risks Emerge as Anti-Counterfeiting Bill Placed on the Legislative Fast Track

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    Tuesday November 12, 2013
    The government's anti-counterfeiting legislation, which died over the summer when the Conservatives hit the parliamentary reset button, is now back on the legislative fast track. Industry Minister James Moore quickly re-introduced the bill last month and speedily sent it to the Industry Committee for review (I appeared before the committee last week).  

    That review has revealed that the numerous new border measures envisioned by the bill, including seizure powers without court oversight, fall short of the demands of intellectual property lobby groups. Those groups intend to use the committee hearings to seek further expansion of border seizures and to shift more enforcement costs to the public.

    My weekly technology law column (Toronto Star version, homepage version) notes that since virtually everyone is opposed to harmful counterfeiting - particularly when fake goods create health and safety risks - it is unsurprising that the bill appears to enjoy all-party support. The focal point of the bill is that it grants customs officials broad new powers without court oversight. Officials will be required to assess whether goods entering or exiting the country infringe any copyright or trademark rights. Should a customs official determine that there is infringement, the goods may be seized and prevented from entering the country.


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    New Risks Emerge as Anti-Counterfeiting Bill Placed on the Legislative Fast Track

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    Tuesday November 12, 2013
    Appeared in the Toronto Star on November 9, 2013 as New Risks Emerge as Anti-Counterfeiting Bill Placed on Legislative Fast Track

    The government's anti-counterfeiting legislation, which died over the summer when the Conservatives hit the parliamentary reset button, is now back on the legislative fast track. Industry Minister James Moore quickly re-introduced the bill last month and speedily sent it to the Industry Committee for review (I appeared before the committee earlier this week). 

    That review has revealed that the numerous new border measures envisioned by the bill, including seizure powers without court oversight, fall short of the demands of intellectual property lobby groups. Those groups intend to use the committee hearings to seek further expansion of border seizures and to shift more enforcement costs to the public.

    Since virtually everyone is opposed to harmful counterfeiting - particularly when fake goods create health and safety risks - it is unsurprising that the bill appears to enjoy all-party support. The focal point of the bill is that it grants customs officials broad new powers without court oversight. Officials will be required to assess whether goods entering or exiting the country infringe any copyright or trademark rights. Should a customs official determine that there is infringement, the goods may be seized and prevented from entering the country.

    The bill features several safeguards designed to limit the potential for wrongful seizures or targeting of individuals. For example, it excludes both patent claims (which are very difficult to assess) and in-transit shipments (which involves goods that do not originate in Canada and are not destined to stay in Canada). Moreover, there is an exception for the personal effects carried by individual travellers as they cross the border.

    While those are sensible limitations, the lobby groups are demanding several significant changes. First, the groups want to vest even more powers in the hands of customs officials, calling for reforms that would allow for the destruction or forfeiture of goods without court oversight. Moreover, the groups argue that under the proposed system, "too much is asked of rights holders." As a result, they want taxpayers to bear the burden of much of the costs associated with private enforcement of their rights.

    Second, the lobby groups are demanding new statutory damages for trademark infringement. The inclusion of statutory damages would mean that rights holders would not have prove any actual damages, but rather could potentially sue for millions of dollars without evidence of loss. In the U.S., statutory damages for trademark has led to trademark trolls engaging in litigation designed primarily to obtain costly settlements against small businesses that can ill-afford to fight in court.

    Third, lobby groups are seeking the removal of the exception for in-transit shipments, arguing that customs officials should be permitted to seize goods not destined to stay in Canada. Experience with in-transit seizures in Europe reveals that generic pharmaceuticals are often targeted. During 2008 and 2009, Doctors Without Borders found at least 19 shipments of generic medicines from India to other countries were impounded while in transit in Europe. This included a Dutch seizure of AIDS drugs that was en route from India to a Clinton Foundation project in Nigeria. In 2011, the Court of the European Justice ruled against in-transit seizures on the grounds that there was no infringement in the EU.

    Fourth, there has been discussion at the Industry Committee about the possibility of amending the personal traveler exception. If the exception were removed, it might open the door to escalated searches of both physical luggage as well as electronic devices such as iPods, smartphones, and personal computers.

    The government's counterfeiting bill would benefit from some amendments, but the current lobby group emphasis signals that there may be escalating pressure to remove many of the balancing provisions. Those changes could result in cost shifting enforcement to the public and increasing the expenses borne by small businesses that import goods from abroad.

    Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.


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