Counterfeit Claims

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.


  1. Graham Henderson and his CRIA jackals are the reason I haven’t bought a CRIA-represented album in ages. I’m going to get the new Jann Arden album from a P2P site JUST TO SPITE HIM! Oh wait – Jan Arden sucks – as does the majority of CRIA’s member label’s catalog.

  2. So what does counterfeit goods have to do with the CRIA ? Are there really counterfeit CDs out there ?

  3. Henderson is losing a war, and his continuing failed analysis of the situation is speeding up the process for him. The days of the mega corporation music labels is coming to an end, the manner in which they accumulate money is outdated and “content” he is selling is devalued simply because of it’s abundance.

    It’s like a money machine that never stops … eventually the value of the money it produces devalues to nothing. With digital music comes permanence; we no longer wear out vinyl. With Internet comes international music, and amateur bands. With movies come sound tracks.

    With all that, we need less and less of Henderson’s music. He is the last elevator doorman shouting how unsafe unmanaged elevator travel will be, and that there “should be a law” to protect him and the guy who cleans his suit.

    People are still buying music … just not from him. People just like me.

  4. Dwight Williams says:

    About those musicians on the CRIA labels
    Anyone checking their names against the Canadian Music Creators’ Coalition roster? You may find some of the musicians openly disagreeing with the record labels in question on these issues…and sympathizing with you.

  5. Block Pirate
    “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”) ”

    LOL a pot-shot aimed at some ummm law prof’s in order to try and paint a certain public picture? LOL

    Block Pirate! Arrrr matey.

    The CRIA propaganda machine at least made a joke…. ummm Thats was a joke right?

  6. Anonymous says:

    I was reading the Pollerror (Pollara) report, it’s interesting that they found ‘more than triple’ Candaians had purchased conterfiet goods than in the states. They took it to mean that more Canadians purchased conterfiet goods.
    This indicates to me,
    A) Canadians are more truthfull
    B) Candians are less afraid of what their goverment will do if they admit to purchasing conterfiet goods.

    Also what are the stats on the ‘participants’ ie, was the Gallop poll done on high income families, the Pollerror poll done on lower income families. Pollerror with younger people, Gallop on older…..

    What were the questions in each, if you word your questions properly, and target the ‘right’ groups in different locations, you can ‘make’ up just about any stats you want.

  7. Captain Blackbeard says:

    Do not succumb to the ridiculous standards of American copyright laws. They are as old as the saying ‘fools gold’.

    On another note, where do I sign up for the piracy party?

  8. perplexed says:

    Graham might as well paint his face white, stick the red ball on his nose and put on the clown suit when he gets on stage because his \”show\” has consistently been a circus event. At least we can count on Graham delivering a speech worthy of publishing in the National Enquirer … oh wait, even they won\’t publish his drivel.

    Someone needs to explain to Graham that Canadians are generally intelligent individuals who happen to have developed a strong sense of how they want to live their lives. Unfortunately for him, those choices don\’t align with the model that his perfect(ly deranged) superior intelligence has created to impose upon them them.

    One day, perhaps after he starts taking his Prozac medication, or stops smoking his preferred hallucinogenic, he will realize that behind every \”Pirate\” is a business opportunity for those smart enough to find a way to capitalize on that demand.

    One day Michael, you will need to explain to us why Government Ministers, their staff, and groups of lawyers like to listen to Graham. Could it be that he shares his fine drugs with them? Common sense certainly does not provide an explanation.

  9. Counterfeit Goods
    “B) Candians are less afraid of what their goverment will do if they admit to purchasing conterfiet goods.”

    It isn’t illegal to own or buy counterfeit goods is it? To sell counterfeit goods would infringe on trademarks, or to make an insurance claim, if it’s lost or stolen, would be fraud. But it isn’t illegal to own or knowingly buy a fake Rolex is it?

  10. Counterfeit products…. OK, does any actually buy these things without knowing they are counterfeit? I once purchased a fake Rolex for $40. Not ever having held a Rolex, it was very clear to me that it was a fake. The vendor didn’t hide that fact either (maybe because he was Canadian). I’ve worked all over Canada and the U.S., and have not seen anywhere near the amount of readily available counterfeit product in Canada as in the U.S. New York city has scores of counterfeit vendors lined up on sidewalks. As do any other number of large U.S. cities I’ve been in. Did I hurt the Canadian economy by buying a fake Rolex? Did I even hurt Rolex? Nope. Because I would never have bought a real Rolex.