IP system falling apart, say lawyers

Stephen Harper take note - Canadian intellectual property law lawyers believe the country’s IP system is falling behind other countries, and they have a list of three big-ticket items that need to be resolved in order to remedy the situation: backlogs, counterfeiting, and copyright reform.

“I think where Canada tends to suffer is that other countries are always moving forward,” says Michael Erdle, president of the Intellectual Property Institute of Canada. “And we have to keep going and moving quickly just to keep up. And we need to do more than that. We need to catch up and be competitive with all of those countries, because IP is so international now.”

“The Canadian government is doing not bad, but it’s definitely falling behind other countries,” agrees Christine Collard, a partner with Borden Ladner Gervais LLP. “We’re certainly not at the front of the pack.”

There is other evidence of how well Canada’s IP system is faring internationally. Last year, Canada once again had the dubious distinction of making the “watch list” produced by the U.S. trade representative, whose Special 301 annual review “examines in detail the adequacy and effectiveness of intellectual property rights protection in 87 countries” and lists countries whose IP rights protection and enforcement is of concern to the United States.

Canada was placed in a group along with such IP luminaries as the Bahamas, Belarus, Bolivia, Bulgaria, Guatemala, Malaysia, and Pakistan. (The list is actually the second-lowest level of concern in the study, coming after the Priority Foreign Country and the Priority Watch List - yet 39 of the 87 countries managed not to be placed on any list at all.)

Erdle, of Deeth Williams Wall LLP, says the time and cost involved in getting patent or trademark protection, including applying for and prosecuting applications, is becoming prohibitive. Delays caused by the backlogs are cutting into the protection available in Canada. Often years pass before patents are issued.

“It makes a significant difference in the amount of protection you have available,” says Collard. “It makes a difference to companies - is it worth the money you have to spend to get the protection when you only have protection available for a limited amount of time? And also, when you’re looking at the litigation side, is it worth suing in Canada when you know it’s going to take you five years to get to trial, when you can sue in the U.S. and be at trial within one year?”

She says companies are choosing to sue in the United States because it’s more patentee-friendly and resolutions are reached faster.

“It’s certainly cheaper here, that’s one thing in our favour. But a lot of companies would rather get the matter settled quickly - and the amount of damages is much higher as well.

“The patent office here in Canada is making an effort to increase the services they offer and to improve the services they offer,” says Collard. “They’re revising their five-year strategic plan. They’re trying to improve the backlogs and timing. I don’t think they’ve reached it yet, I think they have a long way to go, but at least they’re making the right steps in that direction.”

Erdle says Canada also needs more IP courts, or more IP specialists on the Federal Court, perhaps in the form of a dedicated group in the Federal Court.

Collard says this is an area where Canada is really behind other countries.
“We’ve got a problem with counterfeit goods coming in. You’re trying to stop them at the border before they come into the marketplace and the stream of goods.

We need to increase the authority for customs, and look at setting up a specialized tribunal like they have in the U.S., where they have the International Trade Commission . . . and ask customs to stop goods before they come into the country.”

Erdle says, “More criminal enforcement for outright piracy would help, with significant penalties. If you put a few people in jail, then other people stop doing it.”

Copyright reform
There were problems with the proposed copyright bill that died on the table when the Conservative government took power, Erdle says.

“Lots of people had issues with various aspects of those proposed changes. But I think most people would say that it was better than nothing, and right now what we’ve got is nothing.”
He’s been told the bill is going to be re-introduced before the end of the year, but he says he doesn’t know if there will be modifications to the previous incarnation.

“That’s the top priority on the copyright front. And we’ll have to see what’s in the new bill, whether it’s been changed or not. There are so many different interests on the copyright side - music, publishing, artists, educational institutions, libraries. It’s a tough area to legislate in and try to balance everything and make everybody happy.

You’re never going to make everyone happy, but you’ve got to move forward on a lot of the digital rights issues, music, copying, and now other areas of digital copying. Those are things that have to be dealt with.”

Professor Michael Geist, Canada research chair of internet and e-commerce law at the University of Ottawa, says Canada may even have a “last-mover” advantage stemming from our slow response to copyright reform.

“While there have been some suggestions that we need to provide protections for digital rights technologies, along the lines of the kinds of things we’ve seen in the U.S., I actually think that that would be the wrong thing to do,” he says. “The experience in other jurisdictions has been such that I think it’s had a significant negative effect on innovation and people’s ability to use these technologies for new and creative purposes.

If anything, we can learn the lessons from these other jurisdictions in understanding what not to do as much as what to do.

“It’s important to recognize that if we don’t get this issue right, striking the appropriate legislative balance and ensuring that our legislative tools facilitate the kind of growth and development that we’re seeing online today, that we really risk setting ourselves backwards.”
The real dilemma, Erdle says, with respect to all three problems, is catching the government’s attention and turning it to IP reform.

“The Intellectual Property Institute has been trying to do that. We talk constantly with people in the IP office and a lot of that relates to patents and trademarks, especially. We need the policy-makers to be willing to simply make changes in the laws and regulations to keep up with what’s going on: changes in technology, changes in the business environment, changes in the international environment.”

It’s frustrating, notes Erdle, to talk to the government about reforms and hear, “Yes, we should do something about that, but right now the legislative agenda is full.” The government recognizes something needs to be done, but there doesn’t seem to be the urgency to do it right away.

“The government has its certain list of priorities, and we need to get on that list somehow.”

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