Battle against knock-off goods ‘a joke’
COUNTERFEIT: Critics say enforcement of law is having little effect on multi-billion-dollar illegal business
OTTAWA — Nine hundred fake iPhones, 28,000 fake NBA jerseys, 1,100 pairs of fake Oakley sunglasses and 12 pairs of fake Calvin Klein boxers — they are among the items seized by the Canada Border Services Agency since 2015 under a new law that aimed to crack down on counterfeit goods flowing into Canada.
The knock-offs are contained in some of the 36 counterfeit shipments have been seized since the law was passed. But that number is “a joke beyond belief,” says a Toronto lawyer who specializes in anti-counterfeiting.
Lorne Lipkus said the value of Canada’s counterfeit market is likely $20 billion to $30 billion, but the country’s record on fighting fake goods is among the worst in the world.
“We bang our heads against the wall,” he said. “Nobody can believe Canada does so little.”
Counterfeit products are a growing problem. Before the new law was passed in December 2014, the RCMP took the lead on seizing counterfeit goods. In 2012, the police force seized $38.1 million in fake goods, up from $7.7 million in 2005.
But it seems unlikely the CBSA has detained goods worth anywhere near that much. A list of 31 of the 36 shipments detained by the agency since 2015, tabled in the House of Commons recently, shows a total value of less than $600,000, though more than half of the shipments — mainly the smaller ones — don’t have values attached.
The list largely consists of knockoff clothing, glasses, watches and headphones, mimicking brands like Prada, Chanel, Under Armour and Bose. The only Canadian brand on the list is Canada Goose — 20 fake winter coats were intercepted in November 2016. Most of the shipments had come from China and were caught in Montreal or Toronto.
Before the Combating Counterfeit Products Act was passed, the CBSA didn’t have the authority to detain fake goods on its own. But the new law allows companies to file requests asking the agency to stop counterfeit versions of their brands at the border. The companies can provide the CBSA with information about how to identify fakes. Once counterfeits are flagged, they can choose whether to take the importers to court.
There are 169 companies that have filed requests with the CBSA. But those requests have yielded only three dozen results, which Lipkus called “embarrassing.”
In total, 10 of the affected companies have pursued litigation against importers since the law was passed. Three of those cases went to court while the other seven were resolved outside of court.
The RCMP can still seize counterfeit products. But Rowden and Lipkus both said the police force has stopped making border seizures a priority after the new law was passed giving the CBSA more power.
The documents tabled in the House state that “the RCMP federal policing program has not discovered any counterfeit goods since December 2015.” The Mounties’ regional policing divisions were not able to provide information about seizures in the time they were given.
Rowden said part of the problem with the new legislation is that companies pay for the cost of storing counterfeit goods until their cases are settled, which can make them reluctant to sign on. Instead, she said, they may prefer to let the goods enter the country and have police intervene wherever they’re being sold.
But Lipkus said the main issue is that the CBSA hasn’t been given a strong mandate or the resources to tackle the problem.
The office of Innovation, Science and Economic Development Minister Navdeep Bains said there is “currently work being undertaken to raise public and private sector awareness of the new regime,” including a working group of industry and law enforcement officials.
Natasha Tusikov, an assistant professor of criminology at York University, said counterfeit products can be imported by retailers and individuals, who may not always realize the goods are fake.
Conservative MP Dan Albas, who requested the list of detentions, said the fact that most of the products came from China is concerning.
Canada’s record on fighting counterfeit goods is also a source of concern for its trading partners. Canada remains on the United States Trade Representative watch list, in part because customs officials can detain only counterfeit goods destined for Canada — not those passing through to the U.S.