Canada bends on TPP trademark infringement extension's Blog on Customs Brokerage and News Updates

Canada bends on TPP trademark infringement extension

In a recent opinion piece on the TPP written by former RIM co-CEO Jim Balsillie and published in the Globe and Mail, Balsillie shares his views on how Canada failed to set its own IP policy and continuously caved in to foreign pressures, namely from the United States.

“Canada’s prosperity strategies for the past 30 years were dominated by the production principle of comparative advantage and trade liberalization. Unfortunately, this approach failed to position Canada for the global knowledge economy, including 21st-century trade agreements, such as TPP, which are not about the movement of tangible goods for developed economies, but rather about protection of their intangibles.”

“…the same outdated thinking from the 1980s is back on display from today’s TPP proponents: Focus on aligning our domestic IP laws with the U.S. system and hope for the best.”

In addition to its petty policy, the TPP also outlines that Canada will be required to submit a report card every six months to the U.S. on its customs activities, meet on the issue whenever American authorities request it, and face the possibility of a dispute settlement complaint should Canada not comply with the above rules.

Fool me once, fool me twice…

But wait, that’s not all.

Buried deep in chapter 18 of the TPP is article 18.76 Special Requirements related to Border Measures, which aims to expand the powers of customs officials by granting them the right to suspend the release or detain any suspected counterfeit or confusingly similar trademark or pirated copyright goods that are in-transit.

The details in article 18.76 are striking  when all things considered, Canada had just recently overhauled its rules for border measures following pressure from…the U.S.

Confusingly Disputed

The Canadian policy did not include “confusingly similar” trademark goods because it was initially thought that those goods were not counterfeit and that requiring personnel at borders to make exceptionally difficult decisions about whether the imported goods violated the law, just seemed like a bad policy choice. Border guards, except the rare standouts, simply do not have the legal training for such decisions.

During a hearing of the Canadian Heritage Committee in 2011, examining the Canada-European Union Trade Agreement, Daniel Drapeau, then a lawyer with Smart & Biggar, exposed the difference between counterfeits and confusingly similar trademark goods:

“A counterfeit is a fake product bearing an indication that would lead the consumer to believe that it comes from a source from which it does not come. A classic example would be a fake Lacoste polo shirt. It’s not made by Lacoste but it has a little alligator on it.”

“Nor are counterfeits goods that bear a trademark that is confusingly similar to the genuine one, say, some other form of reptile besides the little alligator. These are not counterfeits. Counterfeits reproduce the trademark.”

Kim Weatherall of the University of Sydney, Australia, explains why the addition of “confusingly similar” in the TPP’s IP enforcement provisions is disputed around the world:

TPP trademark

“The extension to cases of trademark infringement involving ‘confusingly similar’ marks is internationally controversial, because (a) it requires customs officials to engage in legal analysis that is arguably beyond their level of expertise, (b) it creates the potential for competitive activity to be caught by and fought out at the level of border measures where it would be more appropriate for those fights to occur through the courts (ie it allows a company that believes a competitor is ‘too close’ to use border measures); and (c) it creates potential for application of border measures against generic pharmaceuticals, because allegations are regularly raised that generic pharmaceutical companies are using confusingly similar marks, thus potentially impacting on access to medicine.”

Leaked drafts of the TPP Intellectual Property chapter showed clearly that Canada, alongside almost half of the TPP nations opposed the extension to confusingly similar trademarks during negotiations. Yet, in the recently signed agreement, the provision is present.

In no real surprise, Canada capitulated on the issue.

The fact is now that if Canadian legislators decide to go ahead and ratify the Trans-Pacific Partnership Agreement, they will also be required to submit changes to domestic regulations months after passing new rules that were specially drafted to provide enhanced border measures provisions.