Counterfeit Enforcement at the Border - Part 3

An Overview

We are continuing our discussion of the Combating Counterfeit Products Act (CCPA) which has implemented the border enforcement regime. 

As previously noted, the new regime is a great improvement over the previous statutory provisions but requires a relatively large investment of time and resources in proceedings in the courts and triggers potential exposure for the storage and handling charges for the detained goods—and, if applicable, for the charges for destroying them.

Detaining the Goods at the Rights Owner’s Expense

Filing a request for assistance triggers a right to detain goods for a limited period at the owner’s expense to allow the owner to initiate court proceedings.

A customs officer will not detain, for the purpose of enforcing the prohibition, the goods for more than 10 working days—or, if the goods are perishable, for more than five days—after the day on which the customs officer first sends or makes available a sample or information to the trademark owner. At the request of the trademark owner, while the goods are detained the customs officer may, having regard to the circumstances, detain non-perishable items for one additional period of not more than 10 working days. 

If, while the goods continue to be detained the trademark owner has provided the Minister, with a copy of a document filed with a court commencing proceedings (the “Proceedings”) to obtain a remedy under the Act regarding the detained goods, the customs officer will continue to detain them until the Minister is informed in writing that

(a) the Proceedings are finally disposed of, settled or abandoned;

(b) a court directs that the goods are no longer to be detained; or

(c) the trademark owner consents to the goods no longer being detained. 

The Trademark Owner’s Liability for Storage, Handling and Destruction Charges

The trademark owner who has received a sample or information as discussed above is liable to Her Majesty in right of Canada for the storage and handling charges for the detained goods—and, if applicable, for the charges for destroying them—for the period beginning on the day after the day on which a customs officer first sends or makes available a sample or information to that owner and ending on the first day on which one of the following occurs:

(a) the goods are no longer detained to enforce the prohibition described above or purpose of the Proceedings;

(b) the Minister receives written notification in which the rights owner states that the importation or exportation of the goods does not, regarding the registered trademark, contravene the prohibitions described above;

(c) the Minister receives written notification in which the trademark owner states that they will not, while the items are detained, commence proceedings to obtain a remedy under the relevant Act regarding them. 

CBSA provides the following warning in conjunction with the completion of the Request for Assistance relating to costs:

These costs can be minimized by responding promptly to CBSA and advising (1) the goods are not counterfeit or pirated, or (2) you choose not to launch an action for this shipment. Should you choose option (2) and the goods are released but not claimed by the importer within regulatory time limits, you may become liable for the storage, handling and destruction costs for the entire detention period.

Court Powers and Potential Exposure 

In the Proceedings the court may, on the application of the Minister or a party to the proceedings,

(a) impose conditions on the storage or detention of the goods that are the subject of the Proceedings; or

(b) direct that the goods are no longer to be detained for the Proceedings, on any conditions that the court may impose, if their owner, importer exporter or consignee provides security in an amount fixed by the court. 

A court may award damages against the trademark owner who commenced the Proceedings to the owner, importer, exporter, or consignee of the copies, who is a party to the Proceedings, for losses, costs, or prejudice suffered because of the detention of the goods if the Proceedings are dismissed or discontinued. 

In the Proceedings the court may, on the application of the Minister or a party, require the trademark owner to provide security, in an amount fixed by the court, to cover duties, storage and handling charges, and to answer any damages that may be due to the detention.

I am pleased to announce that I have joined Loopstra Nixon LLP as a partner.

Loopstra Nixon is a leading Canadian law firm known for its commitment to excellence and client-focused service. I look forward to continuing to provide strategic advice and practical solutions in the areas of intellectual property and related matters.

If you have questions, please contact me at jmckeown@Ln.Law

John McKeown

Loopstra Nixon LLP.  

130 Adelaide St W Suite 2800

Toronto, Ontario,

M5H 3P5

Canada

jmckeown@Ln.Law

437.290.5960

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances.