Counsel's Corner

Canadian Border Protection of Legitimate Copyright and Trademarks

ICPA members in the United States are familiar with border enforcement that generally protects legitimate copyright and trademark usage while offering importers of goods containing intellectual property rights protection against those who, by importing or selling such goods without license, infringe intellectual property rights and cause damage to rights owners and licensors/licensees.

Typically, an intellectual property right represents the right of the owner to produce and distribute his/her products. The rights holder may also permit the use of the right by others through licensing. Where an intellectual property right is used without the consent of the owner or holder of the right, an infringement occurs. Some examples of infringement mentioned in the recently published Canada Border Services Agency Memorandum D19-4-3 include the following:

(a) “applying a trademark without the authorization of the rights holder to a watch that is not manufactured by the company that holds the trademark;

(b) manufacturing a doll or toy that represents a popular television, movie or comic book character without the authorization of the rights holder; or

(c) making copies of a videotape or an audiotape without the authorization of the copyright owner.”

There are numerous pieces of Canadian legislation which are intended to protect intellectual property rights. In addition, international agreements including the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, and Free Trade Agreements such as NAFTA, reflect international agreements to establish procedures at the point of entry (border) to assist intellectual property right owners in protecting their rights in relation to copyright and trademarks.

The Canada Border Services Agency (“CBSA”) plays a role in protecting legitimate rights holders at the border in relation to copyright or trademark goods only. It does not engage in action in relation to patents or industrial designs, or other intellectual property right infringements.

In Canada, in order for legitimate intellectual property rights holders to enforce their rights, they cannot rely upon the CBSA to take action based on requests, legal submissions, or self-initiation by CBSA officers. Rather, the owner of a registered trademark, the owner or exclusive licensee of a copyright, or the owner of a performer’s performance must apply to the Federal Court of Canada (“Court”) for an order directing the Minister of Public Safety (the Minister who has responsibility for the Canada Border Services Agency) to take responsible measures to detect and detain alleged infringing goods. Equipped with such an Order, the Minister of Public Safety notifies the applicant and the importer if goods are detained and the reasons why.

The application for the Order may be made ex-parte. This means that the applicant may apply to the Court without the presence of the infringing party, normally the importer. However, all applications must be made on notice to the Minister of Public Safety.

It may be helpful to enlist the assistance of the CBSA who may make a representative available in Court to ensure that the Court’s Order is sufficiently specific to allow CBSA officers to detect the goods.

Once an Order is obtained and provided by the applicant to the Environment and Trade Unit of the CBSA, it is helpful if those seeking action on the part of the CBSA provide certain information to facilitate detection of shipments of goods which are described in the Order. These would include the following to the extent available:

(a) a complete description of the goods;

(b) the classification of the goods under the Harmonized System;

(c) the quantity and value of the goods;

(d) the identity of the importer, e.g. name, address (location), business number;

(e) the identity of the exporter and vendor;

(f) the country of export;

(g) the country of origin;

(h) the place of importation or release;

(i) the approximate date of arrival;

(j) the mode of transportation (e.g. sea, rail, land); and

(k) the notification procedure for the applicant in the event the goods are detected (e.g. letter, fax).

When goods are detained for inspection, both the importer and the applicant will be given opportunities to inspect the goods for purposes of substantiating or refuting the applicant’s claim. The goods remain under CBSA control and therefore inspection must take place where they are being held by CBSA officers.

Within two weeks from the date of that Notice of Detention was received by the applicant, it must notify the Minister of Public Safety that it has commenced an action for final determination of the issue by the Court. If the applicant has not notified that further Court action will begin, normal importation procedures leading to the release of the goods will continue without further notice to the applicant.

On the other hand, where the applicant does notify the CBSA office, concerned that the action is being undertaken in Court, goods will be detained until the Court issues a final judgment respecting disposition of the goods or until the action is withdrawn.

Once the Court has issued its final judgment, CBSA’s officers will act in accordance with that judgment.

The Canadian legislation and Court procedures require intellectual property right holders to proactively effect claims against imports of infringing goods bearing their copyrights and/or trademarks. Intellectual property right holders should be aware that their rights will not be enforced by CBSA officers unless and until they take the proactive approach in Court described above.

Darrel H. Pearson ( ICPA Canadian Counsel)

Senior Partner

Gottlieb & Pearson

(416) 250-1550 (Ext. 110)

pearson@gottliebpearson.com

July 1, 2008