Brand protection at the Canadian border: insights and strategies from the front line

In a new series exclusive to WTR, we take readers on a journey to understand the challenges of – and best solutions for – brand protection at the borders and ports of entry in various countries. 

Over the next few months, law firm experts around the world will share their insights on what trademark professionals need to know to effectively collaborate with customs and border patrol officials in their anti-counterfeiting efforts.

Our first stop: Canada.

Lipkus Law partners Lorne M Lipkus and David S Lipkus and associate Melissa Tarsitano share their advice for combatting counterfeits at the Canadian border, including:

  • information that rights holders can prepare to help customs representatives;
  • any time-sensitive considerations; and
  • how to implement proactive strategies.

Can rights holders record brand-related IP information with Customs and, if so, how?

Rights holders can file a Request for Assistance (RFA) – the fancy, Canadian equivalent of a recordal – with Canada Border Services Agency (CBSA). The form is available online here.

The RFA can include registered trademarks and/or registered and unregistered copyrights. Industrial designs cannot be included, but many rights holders in Canada are now obtaining 3D trademarks, and these can be included.

There is no government fee to file an RFA (although a bond may be required in certain circumstances), and it can be updated/amended at any time.

Applications are processed in approximately four to six weeks (although it is typically less, and can usually be obtained the same or next day if there is some urgency). Once approved, an RFA is valid for two years. If a rights holder wishes to amend their RFA (including any schedule), it may do so at any time.

Are copyright registrations also registerable with Customs?

Yes, an unregistered copyright can be included in an RFA, and can be filed by a foreign owner.

Can brand owners send customs officials a product information guide or any additional materials to assist them in identifying genuine products?

Yes, this is a very important part of any brand owner’s RFA programme in Canada. Unfortunately, training CBSA officers in Canada can be difficult, and the best way for brand owners to communicate with the 'boots on the ground' is to file a product information guide including their schedule of trademarks/copyrights, and any additional materials that will assist border services officers to easily identify suspected counterfeit goods, such as training guides and information as it pertains to known importers.

Based on our discussions with CBSA officers in different ports in Canada, we believe that CBSA officers want and gain the most value from a short one-to-two-page document (sometimes referred to as a 'cheat sheet') that clearly identifies the addresses and contact information of authorised entities used to import and export authentic goods in Canada, and comparisons between the most-often seen counterfeit/authentic goods (through the use of digital images/video of the products and packaging).

What is the typical process for confiscation or further investigation in the event that customs officials identify potentially counterfeit goods?

CBSA has the authority to detain counterfeit goods, but unfortunately cannot seize or destroy the counterfeit goods on an ex parte basis. After being notified, the rights holder has three days to confirm if the goods are counterfeit and inform CBSA of an intention to move forward with a civil remedy. This triggers the formal detention and CBSA will provide information about the shipment, including importer/consignee/exporter details.

How will brand owners typically be contacted when suspicious or counterfeit goods are identified?

Brand owners are typically contacted by email and must respond within three days (or such other time allowed by CBSA in that particular case) confirming that the goods are counterfeit and that they intend to pursue a civil remedy. CBSA will then send a Rights Holders Notice of Detention for Goods Suspected of Contravening IPR to the brand owner. The detention period from that date is 10 days after which, failing an agreement with the importer or legal action commenced in a court of competent jurisdiction in Canada, the goods may be released by CBSA to the importer.

The first step that brand owners should take is an investigation and attempt to determine the scope of the counterfeiting operation. For example, is the importer involved in the offering for sale and sale of counterfeit goods? This evidence may be required in the event a lawsuit is issued by the brand owner in the future. Absent further dealing in counterfeit goods and depending on the size of the target, many brand owners send a cease and desist letter to the importer and attempt to obtain an agreement to allow for CBSA to destroy the counterfeit goods.

There is no 'one size fits all' approach to CBSA detentions. It depends on the target/importer in Canada, the brand owner’s budget, and the level of aggressiveness/brand owner strategy. We base our decision to proceed on the number of brands involved in the importation, quantities, related importations or previous illegal infringement activity of which we are or become aware.

Are there any time-sensitive considerations that brand owners should be aware of when dealing with customs-related IP enforcement?

Yes, if the rights holder fails to respond to the CBSA during the initial three-day period, or does not commence litigation or reach a settlement with the importer within the set period (10 days), the detained goods will be released by CBSA. This is a 'worst case scenario' because brand owners must issue a Statement of Claim (ie, commence litigation) and provide a copy of the Statement of Claim to CBSA to extend the detention period.

Once the litigation is commenced, brand owners can seek an order from a judge directing CBSA to destroy the goods and obtain costs, damages and other potential remedies.

What are the potential costs involved in working with customs officials to protect a brand's intellectual property, and how can these costs be managed effectively?

The key to a successful enforcement programme is to act quickly on the first day after the goods are detained. Our preference is always to conduct open-source searches to determine as much information as possible about the importer so that we obtain a response from the importer following delivery of a cease and desist letter, and agreement signed by the importer to destroy the counterfeit goods.

A key benefit to rights holders is sharing costs associated with investigation and enforcement efforts; for example, many detentions include five-plus brands in the same shipment, and these costs can be shared between all the brand owners. In over 95% of cases, there is no necessity to proceed in court as the importer agrees to give up any rights to the imported goods and allow and, in most cases, pay for their destruction. In over 95% of cases, we have experienced the cost of storage and destruction to be minimal, especially in shipments involving multiple rights holders with RFAs filed.

Can you provide examples of successful collaborations between international companies and customs authorities that have resulted in tangible results?

Although Canada remains a laggard behind many other countries around the world, CBSA officers have been excellent at detecting and detaining counterfeit goods, including several container shipments. CBSA has incredible tools that allow it to identify counterfeit goods before the shipment is even opened by the border services officers, and we hope that CBSA will start prioritising the detention of counterfeit goods in the future. Recently, there has been a troubling downward trend in the number of detentions, and while we hope this is just an anomaly, there is not much support from the government in Canada to prevent the importation, sale or otherwise dealing in counterfeit goods. It is therefore not surprising that instances of counterfeiting by organised criminals, street gangs and others continue to rise.

Unfortunately, we cannot provide specific details relating to our clients' successful RFA programmes, but we are pleased to share that CBSA detained and destroyed over 30,000 counterfeit goods in 2022, and these numbers have already increased for our clients to over 45,000 in 2023 (year-to-date). Not surprisingly, these goods included consumer electronics, footwear, clothing and handbags.

We can also advise that the information provided by CBSA pursuant to the RFA programme has resulted in further enforcement efforts by many brands in other jurisdictions, including in the United States and Asia.

What proactive strategies can brand owners employ to enhance their partnerships with customs officials and improve their chances of intercepting counterfeit goods before they enter/exit the market?

Brand owners should regularly communicate with CBSA early, and often. It is important to keep Customs informed and provide them with as much relevant, up-to-date information that will assist them in easily identifying counterfeit goods. This can include sharing information on a rolling basis as it pertains to known importers and/or exporters or incoming shipments, as well as new counterfeit detection mechanisms or 'hard and fast' authentication tips used to call out fakes.

A shipment of any size can play an important role in the global fight against counterfeiters. Based on our discussions with clients, we are aware that shipments detained by CBSA to even one importer have led to uncovering information pertaining to domestic sellers, trending online storefronts and global suppliers in the counterfeit trade.

Recoding rights at the border is a simple and relatively inexpensive tool for brand owners to take advantage of. Brand owners should also reach out to the many trade associations that are regularly communicating with our government in an effort to strengthen and prioritise the laws associated with counterfeit goods. These include the Canadian Anti-counterfeiting Network (CACN), the Intellectual Property Institute of Canada (IPIC), INTA, the International Anti-counterfeiting Coalition (IACC) and others.

Unlock unlimited access to all WTR content