The Lawyers Weekly - July 1, 2011

Inequitable
Continued From Page 11

consideration to rebuttal evidence and the general overbreadth of the rule’s definition of materiality. Instead, the court stated that generally, the appropriate test was “but-for” materiality on the preponderance of evidence standard: if the PTO would not have allowed a claim had it been aware of the undisclosed information, then the failure to disclose is material. The court also defined an exception to this general “but-for” rule for those cases where the patentee engaged in “affirmative acts of egregious misconduct” along the lines of the actions taken in the earliest Supreme Court cases.

The decision is still fairly fresh, so it remains to be seen what impact this will have on patent prosecution practice and litigation in the U.S. Hopefully, this decision will usher in an era of reduced inequitable conduct allegations in patent litigation. However, so long as the wording of Rule 56 remains in its current form, it is likely that patent applicants will continue to file as much prior art as they did previously until a visible drop-off in inequitable conduct allegations is observed. n

Jenna Wilson practises patent law and prosecution at IP boutique firm Dimock Stratton LLP in Toronto.

Butterworths®

A Guide to the Youth Criminal Justice Act, 2012 Edition

New Edition!

Lee Tustin B. A., B.Ed., M.Ed. & Robert E. Lutes, Q.C., B.Sc., LL.B., LL.M.

$60 + tax

384 Pages Softcover | June 2011 | Annual Standing Order Terms Apply* ISBN: 9780433469001

Your Portable Guide to the YCJA

This concise guide to the Youth Criminal Justice Act ( YCJA) provides an overview of the youth criminal justice system in Canada, section-by-section commentary on legal and operational implications, and captures key recent developments. A must-have for anyone dealing with young persons and who needs to understand how the YCJA is implemented.

Features and Benefits

• Updated commentary — references relevant cases and
highlights reactions to the YCJA from the courts and those who
work with the Act offering expert insight on recent developments
• Full text of the legislation — allows you to have ready access to
the most current legislation
• Section-by-section commentary — allows you to understand
the legal rationale and operational issues of individual provisions
• YCJA procedural chart — provides step-by-step guidance
• A table of concordance on the YCJA and the former Young
Offenders Act — allows you to identify what has changed and
what has remained the same
• Forms and checklists for police, Crown prosecutors and
officials — provides a handy checklist of what you can and
cannot do when arresting a young person

Order Today! Take advantage of the 30-Day Risk-Free† Examination. Visit www.lexisnexis.ca/bookstore or call 1-800-668-6481

Please quote Reservation Code 3306 when ordering.

† Pre-payment required for first-time purchasers.

* Purchasers will be placed on standing order to receive future editions automatically on 30-day risk-free examination terms.

Price and other details are subject to change without notice. We pay shipping and handling if payment accompanies order.

LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under licence. Butterworths is a registered trademark of Reed Elsevier (U. K.) Limited and its affiliated companies. Other products or services may be trademarks or registered trademarks of their respective companies. © 2011 LexisNexis Canada Inc. All rights reserved.

The devastating effects of counterfeiting on the legitimate global economy are widely known and painfully acknowledged by intellectual property owners (IPOs). In Canada, IPOs are presented with a unique set of circumstances—there is an absence of laws, law enforcement resources and necessary mandates in place to combat the growing counterfeiting issue.

An alarming wholesale shift has been observed from brick and mortar retailers with an inventory of hundreds or thousands of counterfeit items on hand, to an Internet-based counterfeiting economy where inventory is intentionally kept at low levels to minimize losses. Understanding the differences between different types of infringers and enforcement options is essential when implementing a brand protection strategy.

Brick and mortar retailers

The brick and mortar retailer is by far the most straightforward counterfeiter for an IPO to deal with, and for obvious reasons, an increasingly rare find. A business operating in this manner must register with various government agencies. The records concerning these registrations are available for public viewing, which exposes counterfeiters to a level of visibility that they would otherwise avoid. Extraordinary pressure can be applied by the IPO to compel the owners of these types of stores to cease their illegal activities.

Flea market retailers

Flea market retailers can sometimes be difficult to identify. They typically refuse to provide personal identification during enforcement operations, routinely providing fictitious names, addresses and telephone numbers. In most cases, these businesses have no names or other identifying characteristics and are not properly registered companies. Under the circumstances, counterfeit goods are sold at flea markets with relative impunity.

Sustained and repeated enforcement operations over a period of at least several months seem to be the only worthwhile option for controlling the sale of counterfeit goods at flea markets. Repeated enforcement operations can also help publicize an IPO’s commitment to the protection of its brand among infringers operating within the counterfeiting community.

Classified ads

The infringer that uses websites that host classified ads such as eBay, Kijiji and Craig-

ANTHONY
IAFRATE

slist is a commonly observed source of counterfeit products in Canada today. In most cases, the investigator is able to eventually establish the infringer’s real name and possibly other pertinent personal details.

After exchanging emails, phone calls or text messages, the infringer will meet the buyer in a public place (although some choose to meet at their private residence) to facilitate the sale of the counterfeit merchandise. At the meeting, the best strategy is to attempt to obtain any further identifying information that can be used to conduct enforcement at a later date.

Canadian websites

When a Canadian website selling counterfeit goods has been detected, an Internet-based investigation to attempt to identify the individuals that own and operate the website can be conducted. Unless the counterfeiter is highly adept at avoiding identification, the investigator can usually locate enough information to identify the infringer.

These types of websites usually operate in a manner called “drop-shipping.” A Canadian website that uses the drop-shipping method typically has no inventory and simply refers the customer’s order to a factory in Asia. The factory will then send the merchandise to the customer directly.

Enforcement options

The cease and desist letter is the initial step in effecting an enforcement operation against an infringer. Once an evidentiary purchase has been made and confirmed to be counterfeit, investigators will attend at an infringer’s place of business (or residence) and serve the cease and desist letter. Terms usually include, among other things, the delivery up of counterfeit goods and demands to provide information on the source of supply. Following service of the letter, the investigator will then prepare a report and recommendation to the IPO, who will then pursue settlement negotiations.

When conducting enforcement online, the ideal protocol is to provide a cease and desist letter to the owners of the website as well as the website’s Internet service provider (ISP). Following that, the IPO or their agent will then engage the ISP and request that they remove the infringing site from their server.

Some IPOs elect to obtain an Anton Piller order (APO) as a means to further protect their brand. The APO can be loosely defined as a civil search warrant. The APO is an extraordinary form of relief granted by the court that allows a plaintiff, among other things, to conduct a search of the premises and seek delivery up of evidence, as defined in the order, at an infringer’s place of business, whether it be a store, private residence or otherwise. If infringers refuse to co-operate with the terms set out in the order, they may be held in contempt of court and be forced to appear before a judge to explain their refusal.

While an APO can be an effective tool if used under the proper circumstances, the costs associated with obtaining and executing the APO can sometimes be prohibitive. Most IPOs operating an anti-counterfeiting program in Canada currently choose to spend their limited resources on other methods of enforcement.

It is rare for Canadian law enforcement agencies to execute criminal search warrants or lay criminal charges for brand counterfeiting. They are usually hesitant to take on a counterfeiting file until all other civil enforcement remedies have been exhausted. The cases in which police get involved will typically target infringers with links to organized crime or infringers identified as large-scale importers or manufacturers of counterfeit goods.

The wholesale evolution of the counterfeiting industry in the last several years has been overwhelming and the counterfeiter has adapted to the changing landscape accordingly. IPOs who do not keep pace with counterfeiters risk the possibility of their brand becoming a more attractive target to be counterfeited. Adopting a proactive approach that includes conducting in-depth investigations and sustained enforcement operations are the most promising courses of action to convince a counterfeiter that dealing in a particular brand may be more trouble than it is worth. n

Anthony Iafrate is a vice president at Hallmark Investigation Services Inc. in Toronto and has been active in the Canadian anti-counterfeiting industry for the past seven years. He has been involved in the investigation and enforcement of virtually every type of counterfeited product that has been available for sale in Canada.