Over the next two days, two House of Commons committees will move toward finalizing their recommendations to address Canadian counterfeiting concerns – the Industry Committee will review its recommendations on the counterfeiting issue today, while tomorrow the National Security and Public Safety Committee will review its draft report on counterfeiting. While I am sure that all the witness comments and submissions will be considered, the Canadian Anti-Counterfeiting Network's Roadmap for Change [pdf] will unquestionably play a key role. During its appearances before the committees, the CACN representatives touted the document as the prescription to address the counterfeiting issue.
The Roadmap for Change was not translated at the time of the committee appearance, however, that has presumably now happened and the document has been posted online. It is generally consistent with the committee appearances – many of the anecdotes and recommendations that were raised before the committees are mentioned here too. The CACN is seeking a far larger IP enforcement framework with more resources, an IP crime task force, and an IP Coordination Council. It is also seeking stronger border measures, changes to the proceeds of crime legislation, and the creation of a criminal provisions for trademark counterfeiting as well as for camcording in a movie theatre.
While there is much to take issue with (just about every media release from the past couple of years is crammed into the report), it is the recommendations and omissions that really matter. I am skeptical about the likely effectiveness of some recommendations (for example, the reliance on stronger border measures is undermined by the GAO study on U.S. border effectiveness), yet several have little downside and will likely make their way into the Committees' reports. There are, however, several recommendations that should be rejected.
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I appeared before the Standing Committee on Industry, Science and Technology on Wednesday to discuss counterfeiting (following on my appearance last week before the Standing Committee on Public Safety and National Security). My opening remarks are posted below – they focused primarily on the need to obtain more accurate data (I cited the inconsistent data associated with camcording) and to separate the counterfeiting issue from copyright reform (I argued that the inclusion of issues such as ratification of the WIPO Internet treaties is hampering progress on the serious counterfeiting problems).
Interestingly, just after the hearing I was alerted to a new U.S. study [PDF] from the Government Accountability Office on U.S. border enforcement activities against counterfeiting. The report is a must-read for people focused on this issue as it highlights two very important things. First, notwithstanding the claims that Canada must dramatically reform the powers afforded to our border services to address counterfeiting, the GAO study demonstrates that even countries like the U.S. are struggling with this issue as it points to a lack of data and coordination within the U.S.
Second, the data contained in the GAO report suggests that the claims associated with counterfeiting are massively overstated. The Industry Committee previously heard from witnesses who noted that there have claims that 5 to 7 percent of world trade involves counterfeit products (some even argue that is growing). The GAO study points to the U.S. Compliance Measure Program, a statistical sampling program, that randomly selects shipments to check for their compliance with the law, including IP laws. Of 287,000 inspected shipments from 2000 – 2005, IP violations were only found in 0.06 percent of shipments – less than one tenth of one percent. This large random sample suggests that counterfeit products are actually only found in a tiny percentage of shipments. Moreover, the GAO notes that despite increases in IP seizures, the value of those seizures in 2005 represented only 0.02 percent of the total value of imports of goods in product categories that are likely to involve IP protection. In other words, the evidence from an independent, U.S. government sponsored agency points to a far different reality from that presented to the two parliamentary committees investigating counterfeiting.
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