On September 18, 2014, the Competition Bureau (Bureau) released
updated Intellectual Property Enforcement
Guidelines (IPEGs). These IPEGs are an update of the
original guidelines released in 2000 and result from recent
consultations; the Bureau has announced that it will soon conduct
another consultation phase in order to address additional
competition/IP law issues. Below, we outline the most significant
revisions to the IPEGs.
previous article we outlined the differences between the draft
updated IPEGs released for public consultation last spring and the
original IPEGs. In response to comments, substantive changes have
been made to the examples section of the updated IPEGs, clarifying
the Bureau's approach to patent pooling agreements and adding a
product switching scenario as an example of circumstances when the
non-use of an IP right could be reviewed:
Patent Pool: The previous example involved a patent pool where
one of the members may not have needed the pool in order to bring
its product to market without infringing on other patents, which
would lead to the Bureau likely investigating the pool as a
criminal conspiracy (section 45 of the Competition Act
(Act)). The new example describes the features of a pool that the
Bureau evaluates when determining whether it
raises competition concerns. Most interestingly, the Bureau
now states that it is likely to investigate patent pools under the
civil provision for agreements among competitors (section 90.1 of
the Act) rather than as criminal conspiracies, unless there is
evidence that the pool is a sham to conceal a conspiracy.
Product Switching: Under the updated guidelines, refusal to use
intellectual property can constitute "something more"
than the mere exercise of IP rights and can therefore be challenged
under the abuse of dominance provision. The updated IPEGs include a
product switching example to clarify the Bureau's position on
the non-use of IP rights. Product switching (also known as
"product hopping"), which we described in a
previous article, is a product life-cycle management strategy
whereby a brand name drug company shifts consumption from an old
formulation of a drug whose patent is expiring shortly to a
functionally similar new formulation with a longer patent life in
order to block generic entry. In the example, the brand name drug
company ceases manufacturing the old formulation and buys back
existing inventory, thereby switching the market to the new
formulation and blocking generic entry, which is contingent on
prescriptions of the old formulation. The Bureau states that it
will likely investigate product switching as abuse of dominance
(section 79 of the Act).
The Commissioner of Competition has indicated that the
IPEGs will be updated in two stages, with the release of these
updated IPEGs concluding the first stage. The Bureau will conduct
in the near future public consultation on a further update of the
IPEGs to address new competition/IP law issues, including patent
litigation settlements, life-cycle management strategies, the
conduct of patent assertion entities and activity related to
standard essential patents.1
The Commissioner of Competition addressed innovation, enforcement and policy initiatives at the Competition Bureau in his keynote speech, "Strengthening Competition: Innovation, Collaboration and Transparency."
Used car listing website operator CarGurus Inc.'s attempt to force rival Trader Corporation to supply it with vehicle listing data has encountered a dead end as the Competition Tribunal denied it leave to commence a private application under several provisions of the Competition Act.
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