Canada: Is The Competition Bureau Targeting You? New IP Enforcement Guidelines

Last Updated: June 16 2015
Article by Dominique T. Hussey, Melanie L. Aitken and Emily P. Kettel

On June 9, 2015, the Canadian Competition Bureau released updated draft Intellectual Property Enforcement Guidelines (IPEGs) for public comment. The comment period is open until August 10, 2015. It is the third publication of the IPEGs since early 2014, evincing the Bureau's increased interest in the IP/competition interface.

What are IPEGs?

While competition law seeks to restrain behaviour that would harm vigorous competition, intellectual property laws are designed to exclude competitors from the marketplace. The market exclusivity resulting from IP protection encourages innovation. Despite their inherent conflict, the Bureau views IP laws and competition laws as two "complementary instruments of government policy".

The Bureau publishes the IPEGs to provide insight into and examples of how the Bureau determines whether conduct involving IP raises concerns under the competition laws. The original IPEGs were released in 2000. The Bureau released a preliminary version of the updated IPEGs in September 2014, which primarily addressed amendments to the Competition Act in 2009 and sought to ensure that the IPEGs were consistent with other Bureau guidelines released since the 2009 amendments. All versions of the IPEGs contain examples of how the Bureau might address situations that engage IP and competition laws.

New Analysis in the June 2015 Draft

The June 2015 Draft provides commentary and examples for three additional areas that could attract competition review: patent assertion entities (PAEs), patent litigation settlement agreements (primarily pharmaceutical) and standard essential patents (SEPs), which are patents that protect technology essential to an industry's standardized technology, so that all manufacturers' products meet certain performance and safety standards and can interoperate. Examples 1-9 were previously published.

The June 2015 Draft adds new Examples 10 – 18, which illustrate how the Bureau might address potentially anticompetitive behaviour in the three new areas identified above, as follows:

  • Example 10 addresses PAEs.
  • Examples 11, 12, 13A and 13B address pharmaceutical litigation settlements between brand and generic firms.
  • Examples 14 to 18 address SEPs.

Bureau Review of Patent Assertion Entity Behaviour

PAEs typically do not use patents they own for their own products or production, but instead assert the patents against other firms in litigation.

In Example 10, the entity sent thousands of notices to businesses stating that the PAE had proof that the recipient was infringing one or more of its patents, and demanding that each recipient pay a licensing fee to avoid litigation. Some businesses that received letters complained to the Bureau that the notices were false or misleading, as they had not infringed the patents.

The Bureau's analysis considered whether the PAE made materially false or misleading representations. If the assertions were truthful, no further action would be required and the assertions would not attract further review. If the assertions were made indiscriminately or indifferently, the assertions could raise concerns under the reviewable matters sections (74.01(1)(a)) and the criminal provisions (section 52(1)) of the Competition Act.

Bureau Review of Pharmaceutical Settlements

A large proportion of Canadian patent litigation involves pharmaceutical companies, typically "brand" and "generic" companies, litigating the issues of whether the brand's patent's claims are invalid or infringed by the generic. Many of these cases are governed by the Patented Medicines (Notice of Compliance) (PM(NOC)) Regulations, and many PM(NOC) cases settle before a judge renders a decision that evaluates the non-infringement or invalidity allegations.

The Bureau has taken the general position that settlements that permit a generic to enter the market prior to patent expiration, assuming no payment is provided by the brand to the generic, do not lessen competition. These settlements will not attract Bureau review. The Bureau calls these "entry-split" settlements.

If a brand provides payment to a generic in a settlement, and also allows the generic to enter the market before patent expiration, the Bureau will review the settlement under the Competition Act. In the Bureau's view, the payment could harm competition if the payment serves to delay generic market entry. The Bureau would generally review such a settlement under the arrangements-between-competitors provisions of the Competition Act (section 90.1). However, the Bureau may also review a settlement under the abuse-of-dominant-position provisions of the Competition Act (section 79), if (i) the parties are dominant or jointly dominant, (ii) the agreement results in or facilitates conduct that has a negative effect on competitors that is exclusionary, predatory or disciplinary, and (iii) the agreement would substantially lessen competition in a market. The Bureau could review a settlement under the conspiracy provisions of the Competition Act (section 45); indeed the Commissioner sparked concern from the business community in seeming to suggest in September 2014 that such an approach could be the norm. However, the Bureau has emphasized in the June 2015 Draft that the circumstances for a criminal investigation "would occur on a limited basis" and only when the intent was to fix prices, allocate markets or restrict output.

Bureau Review of Standard Essential Patents

The Bureau recognizes that industries typically develop technical standards, which can provide procompetitive benefits, such as decreasing production costs, increasing efficiency and consumer choice and fostering innovation. However, the Bureau is concerned that the development of such standards can pose competition concerns, by reducing price competition and firm competitiveness when other firms are denied access to the standard. Examples 14 to 18 address a number of possible situations, including a "patent ambush" by a patent owner that did not disclose the importance of its IP in a standard (Example 15), reneging on a licensing commitment (Example 16) and seeking an injunction after making a licensing commitment (Example 18).

How could the New Guidelines Affect You?

In the case of pharmaceutical patent litigation, the Bureau has signalled an increased interest in reviewing settlements by updating the IPEGs and publishing a white paper in September 2014 and in the Commissioner's address at the Global Antitrust Institute conference on September 23, 2014. The Bureau is clearly considering ways to facilitate increased scrutiny.

Despite this interest in identifying and reviewing pharmaceutical settlements, the Bureau finds itself in a challenging position. In Canada, there is no legislative requirement for competition review of pharmaceutical settlements. The Bureau may review settlements or arrangements if they are submitted voluntarily or otherwise come to its attention. By contrast, in the United States, pharmaceutical patent settlements generally must be reported to the Federal Trade Commission (FTC) and all pharmaceutical patent settlements are subject to review by the FTC.

Notwithstanding legislative limitations, given the positions taken by the Bureau in recent publications, we expect the Bureau to become more aggressive in finding ways to access and review such settlements. Once aware of an agreement, the Bureau does have the ability to seek compulsory orders for parties to provide information to it (including, potentially, parties' respective assessments as to the strength of the patent in issue), with a view to investigating, and potentially challenging, a particular settlement as violating the Competition Act.

In the case of PAEs and SEPs, the Bureau is unlikely to be aware of potentially anti-competitive activities absent complaint by affected firms. Accordingly, increased Bureau review is unlikely unless affected firms take steps to notify the Bureau.

Want to Weigh In?

The Bureau has invited interested parties to provide comments on the draft updated IPEGs, by August 10, 2015. See the Bureau's release at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Dominique T. Hussey
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions