Law Enforcement Seizures

Pursuant to the Criminal Code of Canada, (Section 406 and following, Section 380 relating to fraud and Section 489 relating to plain view seizures), and the Copyright Act and Trademarks Act, law enforcement can seize counterfeit merchandise and lay criminal charges.

At times they seize the products and use their discretion in not laying charges. Other time’s customs officials, acting on specific information we provide or pursuant to the terms of the Protocol between Canada Customs Revenue Agency and the RCMP, will detain counterfeit product.

Border Enforcement

Canada Border Services Agency (CBSA) now has *ex officio* powers to detain suspected shipments of counterfeit products.

• Rights holders can file a request for assistance that is valid for two years
• The addition of civil causes of action for the possession, import, export or manufacture of counterfeit goods;
• The addition of civil causes of action for the manufacture, possession, import, export, selling or distribution of “any label or packaging, in any form”; and
• The addition of criminal offences in the Trademarks Act making it an offence to:
  • Sell, offer for sale or distribute on a commercial scale any counterfeit goods;
  • Manufacture, cause to be manufactured, possess, import, export or attempt to export any counterfeit goods for the purpose of sale or distribution on a commercial scale;
  • Sell or advertise services in association with a trademark that is identical to or cannot be distinguished in its essential aspects from a registered trademark; and
  • Manufacture, cause to be manufactured, possess, import, export or attempt to export any label or packaging, in any form, for the purpose of its sale or distribution on a commercial scale or for the purpose of the sale, distribution on a commercial scale or advertisement of goods or services in association with it.

We have developed a substantial number of law enforcement and customs contacts across Canada. We regularly exchange information on anti-counterfeiting and provide the expert evidence necessary to proceed with criminal charges. In many instances we assist the investigating officers or crown prosecutors in both the obtaining of the search warrant and the prosecution of the criminal charges.

RCMP Canadian Anti-Fraud Centre – Website Payment Processor Removal Project

Kestenberg Siegal Lipkus LLP, on behalf of numerous rights holders, has been working with the RCMP and providing information regarding the sale of counterfeit items on domain names throughout the world. Based on relationships with several payment processors (VISA, MasterCard, Western Union, PayPal etc.), the merchant account information is terminated thereby eliminating the ability to conduct business at the domain. Through this process we have been in receipt of useful information allowing follow-up investigation and enforcement in appropriate cases.

Cease and desist letters or voluntary surrender documents

These are usually effective when there are small quantities of counterfeit merchandise. We also use them if we are enforcing Court Orders for some of our clients and a trade-mark or copyright holder is in the process of obtaining an Anton Piller Order.

Corporate/business/internet searches are usually required in respect of all enforcement methods in order to properly identify the persons served or to be served.

1. Personal Service Model
   • Standard cease and desist documentation is served by an investigator or investigators, occasionally in combination with a police officer, requesting the immediate delivery up of counterfeit products and information regarding source of supply.
   • This method of service is effective when it is believed that product will be delivered up and/or information will be provided to the persons in attendance at the time of service. It allows for a count of counterfeit product out on display and reduces the number of attendances required by investigators. It also permits for an immediate assessment of any intelligence provided and the ability, if warranted, to immediately act on that intelligence. Cost is based upon the average service time of two hours at the hourly rates of the investigators and other enforcement personnel in attendance.
2. Non-personal service Model
   • Unsupervised delivery of cease and desist documents, i.e. by courier, registered and/or ordinary mail.
   • This method is best utilized in out-of-the-way places to put someone on notice of your rights.
3. Inclusion of an un-issued Statement of Claim Model
   • We sometimes recommend the service of a cease and desist letter together with a draft or un-issued statement of claim. This method is designed to communicate to the infringer that you are very serious about the enforcement of your rights and that you are ready to proceed with litigation (as evidenced by the un-issued claim) but that you are prepared to negotiate a resolution and not commence an action provided the resolution is achieved within a short and defined period of time.

In the event we are able to negotiate a resolution without recourse to litigation, we anticipate using a relatively standard form of agreement; we often refer to it as an Acknowledgment and Undertaking, which may include some or all of the following terms:

• An acknowledgement of your intellectual property rights;
• An undertaking not to infringe in the future;
• A relatively small up-front monetary payment to the intellectual property rights holder, with an increased monetary payment upon a breach of the agreement; and
• An incentive for the counterfeiter to provide supplier information. Should that information result in a successful anti-counterfeiting enforcement against the supplier, the original counterfeiter shall receive some agreed upon concession.

Separate Action

• The commencement of separate, defendant specific actions is recommended in situations where evidence has been gathered and monetary recovery is likely, or where there are multiple locations being operated by the same counterfeiter or group of counterfeiters, making cost effective physical attendances difficult.
• It is recommended that all actions be instituted in the Federal Court, as any orders issued by that court will be valid across Canada.
• Kestenberg Siegal Lipkus LLP has experience in numerous cases litigated in the Federal Court of Canada and has regularly attended in all major urban centres, such as Vancouver, Toronto and Montreal, as well as several other Federal Court offices in respect of anti-counterfeiting matters.

Joint Criminal and Civil Enforcement

We regularly attend with law enforcement on anti-counterfeiting operations. This flexibility allows us to assist in the more serious cases in which criminal charges are properly laid and to conduct civil follow-up at a later date to ensure the counterfeiter is enjoined by a Federal Court injunction from continuing with the illegal activity. The exchange of information with law enforcement has and will continue to have a positive effect on our efforts to enforce your intellectual property rights.

Retail Stores

Typically, if we’ve served a retail store, we seek to obtain a judgment which includes, declaratory and injunctive relief and a monetary judgment. If we are settling, then we like to try to obtain that judgment on consent but agree to forebear from relying in the full value of the judgment upon the payment of a lesser sum. The documents are designed such that if the person served counterfeits your product again, you could seek to realize on the difference between the amount paid and the amount of the judgment plus any additional damages and costs would be yours to try to recover.

Enforcement at a Flea Market

In respect of enforcement at Flea Market, the ability to recover monetary damages is significantly reduced because often these vendors are un-traceable, without an investment of money that is ultimately not recoverable. If the vendor is served only with a cease and desist letter, a monetary recovery is less likely.

Importers/Wholesalers/Distributors/Manufacturers

Typically, if we’ve served a significantly large counterfeiter, we seek to obtain a judgment which includes, declaratory and injunctive relief and a large monetary judgment to cover all legal and investigator costs incurred. We also focus on obtaining the appropriate documentation to assist in cross-border enforcement and identifying the source of supply of counterfeit merchandise.

Post Judgement Enforcement

In order to realize on a Judgment, enforcement proceedings would have to be commenced against the defendants (now known as the Judgment Debtors):

You can proceed to enforce on a Judgment by way of:

a) Writ of Seizure and Sale

Enforcement is commenced by issuing a Writ of Seizure and Sale against the Judgment Debtors and filing same with the Sheriff in the jurisdiction where the business is carried on and/or where the individual resides.  Once the Writ of Seizure and Sale is issued and filed with the Sheriff, a Direction to Enforce is then filed with the Sheriff.  The Direction to Enforce sets out specifically what seized merchandise would then be sold at auction by the Sheriff, and the net proceeds paid to the Judgment Creditor.  Other assets owned by the business or individual, such as bank accounts, real property and vehicles, can also be seized and sold by way of Writ of Seizure and Sale.  In every case, however, there is a requirement for a monetary deposit to be made with Sheriff.  The amount of deposit varies depending upon the type of property to be seized.

b) Garnishment

Garnishment proceedings are generally commenced against individuals who are employed and receive paycheques or have their pay automatically deposited into their bank accounts.  This is due to the fact that the Notice of Garnishment would be issued to the employer, obligating the employer to deduct a specified amount from the individual’s pay, which deduction is then paid to the Judgment Creditor.  This method is not effective against individuals who are self-employed or paid in cash as there is not a third party to police the payment under the Notice of Garnishment.  Garnishment proceedings are commenced by way of an ex parte motion to the Federal Court, by the Judgment Creditor, seeking a Show Cause Order that the Judgment Debtor attend at a specified place and time to show cause why the Judgment Debtor should not have to satisfy the judgment.  Once obtained, the Show Cause Order must be served upon the Judgment Debtor personally, at least seven (7) days prior to the hearing.  If the Judgment Debtor fails to attend the hearing, or does not show cause, to the Federal Court’s satisfaction, why the debt should not be paid, the Federal Court shall then issue a Final Garnishment Order.  Upon obtaining the Final Garnishment Order, the Judgment Creditor may then issue a Notice of Garnishment to the Judgment Debtor’s employer.

c) Judgment Debtor Examination

Prior to deciding on the method of enforcement, you may wish to conduct an examination in aid of execution (formerly referred to as a Judgment Debtor examination).  This examination is a fact-finding tool used to determine the extent of a Judgment Debtor’s assets and income.  This type of examination may be conducted against an individual or a company and is very helpful in assisting in the determination of the method of enforcement or whether commencing enforcement proceedings is financially feasible.