The Customs Act (R.S.C., 1985, c. 1 (2nd. Supp.)) sets out the law in Canada with respect to the importation and exportation of goods, as well as the collection of tariffs on such goods. The Customs Act explicitly refers to patents, trademarks and copyright in two provisions that have important IP-related implications as discussed below.
First, for the purposes of calculating the tariffs applicable for goods that are imported to Canada, section 48(5) of the Customs Act lists a number of factors that can increase the tariffs payable, which includes the following:
48(5) The price paid or payable in the sale of goods for export to Canada shall be adjusted
(a) by adding thereto amounts, to the extent that each such amount is not already included in the price paid or payable for the goods, equal to […]
(iv) royalties and licence fees, including payments for patents, trademarks and copyrights, in respect of the goods that the purchaser of the goods must pay, directly or indirectly, as a condition of the sale of the goods for export to Canada, exclusive of charges for the right to reproduce the goods in Canada (Emphasis added);
An important implication that arises from the above-noted provision is the potential for additional tariffs payable due to an obligation to pay royalties and licence fees. These cost consequences should be taken into consideration when drafting and negotiating licensing agreements in which the type of good at issue is imported and subject to a tariff as opposed to being imported from a country that has a free trade agreement with Canada.
Second, the Customs Act describes when a customs official may provide intellectual property rights holders with customs information related to works and goods detained by customs that may be infringing upon the trademark rights and copyright of those holders:
107(5) An official may provide, allow to be provided, or provide access to customs information to the following persons: […]
(l. 1) any person who may receive information under section 44.03 or subsection 44.04(1) of the Copyright Act, solely for the purposes for which that person is entitled to the information;
(l. 2) any person who may receive information under section 51.05 or subsection 51.06(1) of the Trademarks Act solely for the purposes for which that person is entitled to the information;
For ease of reference, the referred-to provisions of the Copyright Act and Trademarks Act are reproduced below and are mirrored in their structure.
Copyright Act
44.03 A customs officer who is detaining copies of a work or other subject-matter under section 101 of the Customs Act may, in the officer’s discretion, to obtain information about whether the importation or exportation of the copies is prohibited under section 44.01, provide the owner of copyright in that work or subject-matter with a sample of the copies and with any information about the copies that the customs officer reasonably believes does not directly or indirectly identify any person.
44.04(1) A customs officer who is detaining copies of a work or other subject-matter under section 101 of the Customs Act and who has reasonable grounds to suspect that the importation or exportation of the copies is prohibited under section 44.01 may, in the officer’s discretion, if the Minister has accepted a request for assistance with respect to the work or subject-matter filed by the owner of copyright in it, provide that owner with a sample of the copies and with information about the copies that could assist them in pursuing a remedy under this Act, such as
(a) a description of the copies and of their characteristics;
(b) the name and address of their owner, importer, exporter and consignee and of the person who made them;
(c) their quantity;
(d) the countries in which they were made and through which they passed in transit; and
(e) the day on which they were imported, if applicable
Trademarks Act
51.05 A customs officer who is detaining goods under section 101 of the Customs Act may, in the officer’s discretion, to obtain information about whether the importation or exportation of the goods is prohibited under section 51.03, provide the owner of a relevant protected mark with a sample of the goods and with any information about the goods that the customs officer reasonably believes does not directly or indirectly identify any person.
51.06(1) A customs officer who is detaining goods under section 101 of the Customs Act and who has reasonable grounds to suspect that the importation or exportation of the goods is prohibited under section 51.03 may, in the officer’s discretion, if the Minister has accepted a request for assistance with respect to a relevant protected mark filed by its owner, provide that owner with a sample of the goods and with information about the copies that could assist them in pursuing a remedy under this Act, such as
(a) a description of the goods and of their characteristics;
(b) the name and address of their owner, importer, exporter and consignee and of the person who made them;
(c) their quantity;
(d) the countries in which they were made and through which they passed in transit; and
(e) the day on which they were imported, if applicable