Episode 6: How to deal with pirate (fake) copies in the marketplace

Lisa Desjardins (LD): Counterfeit products or pirate copies are not just cheap copies of an original product; they can be toxic, break, burn, and if they do, it's a challenge to hold anyone accountable. In addition to infringing on intellectual property rights of others, counterfeit players are often involved in a wide range of other illegal activities, including organized crime, street gangs and terrorism. In one of our segments, we discuss how IP rights holders can work with the Canadian Border Services Agency to stop counterfeits at the border. IP rights holders can also work with lawyers and experts that help them detect, and know what to do if, illegal copies of their products are brought into the Canadian marketplace. One of Canada's most dedicated experts in this matter is Lorne Lipkus. Lorne is a lawyer who is particularly known for effective anti-counterfeit enforcement. He was pivotal in working with the Canadian government to get more effective laws to protect us against counterfeit products. Lorne also works with expert forensic investigators, computer forensic specialists, e-discovery professionals and others. Lorne gives training sessions across Canada and knows the ins and outs of the impact of counterfeiting. He knows about the ways to tell the difference between authentic and counterfeit products and the various techniques for how IP rights holders can enforce their IP rights. Lorne, it's a real honour to have you in our podcast and I'm so looking forward to having this conversation with you. Could you tell me a little bit about yourself and why you're so dedicated to stop counterfeit products?

Lorne Lipkus (LL): Thank you for having me Lisa. I'm very touched to be here. Well, I'm happily married to the same wonderful person for the past 43 years. I'm a father to four married children, five grandchildren and two on the way in the next few weeks and months. All of them, who either have been here already or are coming, they're my secret weapons. They're the secret weapons that I have in my quest to deal with the counterfeiting problem in Canada. Personally, I love comic books. I still collect them. Thankfully my mother never threw mine out when I was a child, and I have infected my children and grandchildren with my love of comic books. I've always felt that creators of stories, creators of art and by extension names, logos that create value, they belong to the people that created them. And anybody who copied them without their permission was actually stealing from them. I never believed that I was entitled to something because I didn't have it, and I also didn't believe that just because I couldn't afford something that I was entitled to an illegal or cheaper version of it. I want my children to respect other people's property and feel that I need to practice what I preach. And that's why I'm here, doing what I'm doing.

LD: That's a good cause. Now, we're going to talk a lot about counterfeit products, and I want to dive a little bit into what makes them a counterfeit product. So, in brief, what does the Canadian law say about counterfeit and counterfeit activities?

LL: Well, we have the right to file with the Canadian Intellectual Property Office (CIPO) our trademarks, our copyrights and other intellectual properties. But if we talk about copyrights and trademarks, we have laws in Canada in various statutes including the Criminal Code, the Trademarks Act, the Copyright Act, the Combating Counterfeit Products Act, and other acts, and they make it illegal to sell counterfeit products for commercial purposes in Canada. While we don't make possession for your own use illegal, people should be careful about what they do outside of Canada because there are some countries that consider possession of counterfeit products, even for personal use, as illegal. And in fact, people have visited those countries, bought those counterfeit products and have been caught there and been required to pay very hefty fines. Some people have even missed their flights when they were stopped at customs. While the laws in Canada protect trademark owners and protect copyright owners by allowing them to file their rights with CIPO, the laws in Canada are not as robust as in other countries when it comes to dealing with these counterfeit or pirated products. As a result, Canada has a poor reputation in that area among other countries in the world. I'm not sure if you're aware, but Canada has been placed for many years on the U.S. trade representatives watch list because they're concerned that we don't properly protect our intellectual properties in Canada. And it's not just the U.S.; the EU has consistently complained about Canada's failure to properly protect against counterfeiting and piracy. Also, in Canada, we have many customs and police officers who just don't have the resources to deal with this crime and to prioritize it, and prosecutors are dealing with other serious violent crimes and other crimes, so this crime gets a lower priority in Canada than in other countries.

LD: That's really interesting and thanks for giving us that international perspective as well as to how Canada rates compared to other countries. Now, if I have registered a trademark or I have a copyright and I detect that there are pirates in the marketplace or pirate copies in the marketplace, can you explain how are those counterfeit matters solved typically?

LL: Well, most people would think that they're solved by going to court because that's the first thing that we think of is, let's get a lawyer, let's go to court, and let's sue somebody. But in fact, most counterfeit cases are resolved without the necessity of suing the counterfeiter in a court, in Canada. Very often a brand finds out about counterfeit products, something that bears their intellectual property illegally, and they give a warning to the counterfeiter. They send them what we call a cease and desist, in other words stop your illegal activity, a letter that explains what their intellectual property rights are and explains why the conduct of the counterfeiter is illegal in that circumstance. And very often the brand and the counterfeiter reach an out-of-court settlement. They're not even required to go to court, and the brand doesn't always contact the police every time they find a counterfeit product in the marketplace because they don't want to bother the police with something that is so small if they can resolve it by sending a letter or telling the counterfeiter that what they're doing is illegal. So, I would say that most of the problems with counterfeiting in Canada are solved without the necessity of going to court. Although sometimes, if it's a more serious counterfeiter, somebody that continues to counterfeit and doesn't stop when you send them the cease and desist letter, then you either have to take them to court or go to the police or both.

LD: So, I imagine that there's going to be listeners that have registered trademarks and copyrights. What would be your first advice to a small to medium company if they're completely unaware about counterfeit. Where do they start?

LL: Well, there are many ways that a small medium company, or in fact anyone, can protect their business from counterfeiters. Good news. You don't have to always spend a lot of money and go to expensive lawyers and other professionals to do it! The first thing I tell businesses is to go to the Industry Canada website. There are some excellent self-help materials there that explain what a copyright is, they explain what a trademark is, they even have information on industrial designs and patents. But for our purposes, if we're talking about copyrights and trademarks, they have easily read materials that can explain it. And by reading them, they can learn for themselves, the businesses can learn, what intellectual property is all about. Personally, I think our government should be commended for putting forth such easy to understand materials that are so helpful to individuals and businesses. In addition, it's very easy for somebody in Canada to search for copyrights and trademarks to see if somebody else has them. They can go on the CIPO database to find out if there's a copyright or trademark already filed. They can find out who owns it. They can find out other information about the logo, the artistic work or the name or whatever it is. It doesn't cost anything to search and it's easy to do. You don't need to hire another professional to do it. It's also, it's not as expensive as most people think to put in a monitoring program to find out and keep track of counterfeits that are being sold of your product in the marketplace. Because of the internet, it's levelled the playing field for businesses. They can find out information right away on their own. Who, if you ask yourself, who knows the product better than anyone? The answer is usually yourself. You're the one that either made it, bought it or produced it or imported it. You know it better than anyone,-other than your employees. So, within your own companies, you have the best people to find out about the problem. And I've helped many companies institute their own internal programs to alert their existing staff on what to do if they find counterfeit or suspect counterfeiting of their products in the marketplace anywhere. It's easy to tell people what to do when you're starting a program by telling them what not to do first. And the first thing I tell people when someone says, "oh there's a website and they're selling counterfeits or knockoffs or fakes of our product," and if you run to that website without taking proper precautions, you're alerting the counterfeiter because they're going to see that, oh, 1, 2, 3, 4, 5, 6, 10 people from your company have visited them, and that has happened many times! So, I immediately tell people, don't confront, don't contact the suspected counterfeiter. And certainly, you know that they're going to start hiding their illegal conduct if they knew that what they were doing is illegal. So you want to wait until you have proof. And the best way to find out is to go on the internet safely. By safely, I mean for example to use a VPN, a virtual private network, and then use a search engine. See if products that are bearing your name or your logo or copies of your legitimate products are actually being offered for sale somewhere on the internet. And if they are, there's lots of steps that you can take. And they don't all cost money, and they don't all cost a lot of money.

LD: Is there someone who can help you then to take those steps?

LL: You want to find a brand protection professional. You want to find someone that knows, in this area, whether it's a lawyer or an investigator or a company that specializes in brand protection. And they will guide you by giving you a list of all the different ways that you can protect your program and what you can do. For example, one of the things when you find that your product is being sold on Amazon or it's being sold on eBay, is companies like that, and even Alibaba in China, if your products are being sold there, those companies, they have programs that you fill out certain information and if you satisfy their criteria, they can take down those listings of the illegal product. And you can do it yourself, you can hire someone like me to do it, you can hire an investigator, you can create an internal employee to do the work if it's a big enough job. There are various different ways, and what I tell people is, find out what your problem is, and then decide what kind of a program you put in place.

LD: There's a lot of options there, I can tell. And it's kind of comforting to hear that there's expertise waiting to deal with it if you turn to one of the experts to help you out.

LL: And Lisa, even in our government, we have the Canadian Anti-Fraud Centre. And if you make a purchase by VISA, for example, they can get your money back. They can take steps to take away the payment processing capability of the businesses that are selling the counterfeit. So, and you don't need help for that.

LD: Yeah, thanks for bringing the consumers into this because the companies trying to stop counterfeiters are obviously trying to rescue their business. Someone is infringing on their rights. I understand why a company would try to go and stop that. But as a consumer, we're contributing to some of the other problems that may not be that obvious. What is the biggest challenge with counterfeit as an industry?

LL: Well, I think the biggest challenge is education. We're not educated. None of us. We have to educate ourselves, our colleagues, the public, government, police, customs, everybody, on the dangers of allowing counterfeits to continue to be sold and imported into our country illegally. Counterfeiters have been known to use child labourers. Children are not allowed to go to school because they're forced to work in these factories. Slave labourers, forced labourers. These are illegal factories in other countries. It's been well documented by very well-respected journalists who have actually infiltrated many of these illegal factories that make this money for these criminals. A recent study has confirmed that the number two method of financing for organized crime and terrorists is the sale of counterfeit consumer products. Those are the very same products that are being sold in Canada. It really bothers me that our public in Canada is, and elsewhere, is buying counterfeit products that are being used to purchase guns and to purchase bullets for those guns, to be used to promote illicit activities by street gangs, by organized crime, by terrorists. And if anybody doubts that what I'm saying is true, visit the INTERPOL website or the International AntiCounterfeiting Coalition (IACC) or International Trademark Association (ITA) or the Unifab website. It is well documented and well known. It seems to be a secret here in Canada but is well known throughout the world.

LD: So we're talking about counterfeit and we know now that it's such a big problem in societies. I'm wondering, I know that you do a lot of teaching. Is there a lesson here for parents and children?

LL: You know Lisa, what I enjoy doing is speaking to people, especially young people, about the counterfeiting problem, and I'm touched by the fact that, one day, I was teaching an elementary school grade and it was six, seven and eight-year-olds. Some classes came together, and I was asked by their teacher to talk about counterfeit toys because it was during, I think it was the month of November, and it was talking about honesty. And I said, well, what do you want a lawyer to do to talk about honesty that elementary school children can grasp? And so we came up with something. We started talking about toys, and I explained to these children the difference between counterfeit toys and authentic toys and the different tags and labels and how to have a tag that said, "real material only." And I thought it went very well, and I went home very satisfied that I had had this chance to meet all these children. And then I got a frantic call from my brother who was with me when we were at the class because he was helping me at the time, and he said one of the mothers called him, very upset, because her daughter had come home after school, went into her bedroom and took out all of her stuffed toys and looked at all the labels and lined up over a dozen what she thought were counterfeit plush toys outside her room. Lined them up, closed the door and said she's not coming out until she throws out those toys. They're dangerous and they're bad and they're illegal. The mother called my brother and said, "What happened there?" My brother explained it and said, "Well, are they counterfeit?" And the mother said, "Well, how would I know?" And he explained to her that I had said to look for a certain tag. The mother went, every single toy that that eight-year-old had put on the side, outside her room, was counterfeit. And the ones that she kept in her room were authentic, and the mother was irate that she didn't know. Why did the mother not know that those goods were counterfeit? She said, "I'm her mother. I'm here to protect her, and I didn't know." That's why I like to think that I do this. Because we have to educate everybody, including our children, on what is the difference between counterfeit and authentic products.

LD: Wow, that's very strong as a story. I have two final questions to you, and they're more of a call-to-action kind of questions. If I am a consumer and I find that I have either identified a counterfeit for sale on a website or I ended up buying something that was a counterfeit, how do I protect myself? What can I do?

LL: Well, you can not buy it, that's number one. Number two, you can report that illegal activity to somebody. You can report it to the company. You can report it to Crime Stoppers if you don't want to get involved because that's anonymous. You can report it to the police anonymously. If you want to get more involved, let the municipal government know because that's taking away money and jobs to local economies. Let your provincial government know because that's taking away the same type of money and jobs to the provincial area. And also let the federal government know. Complain about it! That's how you make things happen. And you can contact the Canadian Anti-Fraud Centre. If it's sold online, contact whoever is going ahead and allowing that to be sold. We receive numerous anonymous complaints from consumers who say counterfeit products are being sold. There are a lot of Canadians who believe and know that this is wrong and they don't like it. And they can't compete: legitimate businesses cannot compete with counterfeiters. The counterfeiters aren't paying proper taxes. They're not following our rules and regulations, so we need to report their activity to all of these different places.

LD: And if I'm a company, obviously registering your intellectual property rights with the Canadian Intellectual Property Office is a first step, but where else can I go to get some help with counterfeit products?

LL: Well, some of the places that I've mentioned are some of the places you can go. If you've made a purchase by VISA, go to the Canadian Anti-Fraud Centre,and again, contact the government. Contact any of these international organizations and contact the Canadian Anti-Counterfeiting Network. The Canadian Anti-Counterfeiting Network, the CACN, is a Canadian organization of volunteers. It's a non-profit volunteer organization, and they will take that information and make sure that the right people find out about it. They will send it, if you don't want to get involved, to either Crime Stoppers or the Canadian Anti-Fraud Centreor the government. And in some cases, they will involve the police. It could be that you're not the first person who's complaining about that problem. It could be you're not the first business and not the first rights holder. And you'll find that the counterfeiters don't care who you are. If you've got a product that's popular, they're going to counterfeit it. They counterfeit two basic kinds of products: everything and anything! And that's what's being counterfeited. So you're not alone. Everybody is being hurt by this.

LD: Thank you so much for explaining what kind of help there is out there and why this is such a big problem. Lorne, it's been an absolute privilege to have you in this podcast, thank you!

LL: Thank you very much, Lisa.

LD: You've listened to Canadian IP Voices where we explore intellectual property. In this episode, we met with lawyer Lorne Lipkus, who talked about the multi-faceted problems with pirate copies and what you can do to stop them. If you have detected illegal activities such as counterfeit products, contact Crime Stoppers at CrimeStoppers.ca or contact the Canadian Anti-Fraud Centre at AntiFraudCentre.ca.