Canada: The Canadian Competition Bureau Releases Revised Intellectual Property Enforcement Guidelines

Last Updated: May 19 2016
Article by Andrea Kroetch

As previously reported, the Competition Bureau ("Bureau") released a revised version of its Intellectual Property Enforcement Guidelines ("IPEGs") on March 31, 2016, following an extensive public consultation process held in 2015 based on previous drafts released in 2014 and 2015.  

The IPEGs describe the Bureau's approach to conducting investigations under the Competition Act ("Act") in respect of anti-competitive activities that relate to intellectual property.  The primary revisions to the 2016 revised IPEGs (which represent the Bureau's first major update since the IPEGs original release in 2000) include clarification on the Bureau's position on patent settlements, product switching, the conduct of patent assertion entities, and conduct involving standard essential patent owners. 

Patent settlements

The 2016 revised IPEGs provide additional guidance on the Bureau's enforcement approach with respect to settlement agreements under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations), by identifying factors which will be considered in determining whether a settlement could give rise to competition law concerns under the civil provisions of the Act and by providing clarity as to when such agreements may be reviewed under the criminal provisions of the Act

Specifically, the Bureau indicates that in reviewing settlements for potential competition law concerns, consideration is to be had to the significant differences in the regulatory regimes governing pharmaceuticals in Canada relative to other jurisdictions which may have an impact on the terms and incentives related to settlements.  Such factors include, for example, the availability of exclusivity for the first generic filer, the availability of section 8 damages (brand liability to generic) and the possibility of dual litigation (parallel PMNOC and infringement proceedings) under the PMNOC Regulations, and as well, the significant price restrictions that both brand and generic firms typically face in Canada in order to have products listed on provincial formularies.

The Bureau also articulates its enforcement approach with respect to settlements, in particular identifying the types of settlement which may give rise to prosecution under the criminal provisions of the Act.  A summary of the Bureau's enforcement approach is set out below:

  1. A settlement in which the only consideration is allowing a generic market entry on or prior to patent expiry (an "entry-split settlement") will not pose an issue under the Act;
  2. A settlement with a payment to the generic pursuant to which the generic firm enters the market on or before patent expiry will be reviewed under the civil conspiracy provisions or the abuse of dominance provisions (an "entry-split with payment to generic settlement"); and
  3. The Bureau will review a settlement under the Act's criminal conspiracy provisions only in three specific circumstances, namely, where:

(a)   the parties agree that the generic will only enter the market after the date of patent expiry;

(b)  the settlement restricts competition for products unrelated to the patent subject to the PMNOC proceeding; or,

(c)   the settlement is a "sham" (e.g. where both parties knew the patent was invalid, but nevertheless reached a settlement to allocate monopoly profits by delaying generic entry).

Product switching

Under Canadian competition law, the mere exercise of an IP right is not cause for concern under the general provisions of the Competition Act

In the original IPEGs published in 2000, the "mere exercise" of an IP right was defined as including an "IP owner's use or non-use of the IP".  However, under the 2015 draft IPEGs the Bureau appeared to signal a change to this approach by removing the term "non-use" from its definition of "mere exercise" and by indicating that refusal to use IP could be challenged under the abuse of dominance provisions.  As an illustrative example of "non-use" abuse of dominance, the Bureau provided the example of "product switching" whereby a patentee removes a top-selling patented "Product A" that is about to lose patent protection, and replaces it with a similar patented "Product B" that has several years of patent protection remaining so as to force the market to switch to its new "Product B" thereby impeding market entry by other manufacturers after the expiry of the "Product A" patent.

In the 2016 revised IPEGs, the Bureau reverts back to its original position in that the "mere exercise" of an IP right once again is defined as including an "IP owner's use or non-use of the IP right"; however, the Bureau introduces a caveat, making clear that in some limited circumstances the non-use of an IP right could potentially raise issues under the general provisions of the Act.  

The Bureau also expands on its discussion of "patent switching" by creating a distinction between "hard" switching (the situation discussed above in which a patented product is removed from the market before the expiry of the patent to force a market to switch to a similar product which has several years of patent protection remaining) and "soft" switching (whereby a patentee does not withdraw a top-selling patented "Product A" from the market, but merely stops promoting "Product A" in favour of a similar patented "Product B" that has several years of patent protection remaining).  While the "hard switching" may be investigated under the Act's abuse of dominance provisions, "soft switching" is unlikely to raise concerns under the Act, provided that patentee's new marketing campaign did not involve false or misleading statements about the original product.

Conduct of patent assertion entities

Patent assertion entities ("PAE") are companies who acquire patents for the sole purpose of asserting them against firms allegedly infringing the patented technologies (i.e. they do not manufacture or sell products or services related to such patents). 

In the 2015 draft IPEGs, the Bureau indicated that the conduct of such companies would most likely be examined under the "false or misleading claims" provisions of the Act,  which prohibit making a representation to the public that is false or misleading in a material respect, or which is made knowingly and recklessly, respectively. 

In the 2016 revised IPEGs, the Bureau provides additional clarification as to when PAE conduct may or may not trigger investigation under the Act.  Specifically, the Bureau indicates that the assignment of a patent right to a PAE, simply for the purpose of more effective enforcement (with an agreement to split revenues from the enforcement of that patent), does not raise issues under the Act.  However, the Bureau reminds readers that conduct relating to assignments is potentially subject to review under the general provisions of the Act.

It is prudent to note, however, that the Bureau explicitly warns that the law with respect to PAEs is rapidly evolving and therefore the Bureau may revisit its guidance in this area in the future. 

Collaborative standard setting and standard essential patents

In the 2015 draft IPEGs the Bureau indicated that the development of standard essential patents through Standard Development Organizations or other means can pose competition concerns (e.g., patent hold up, patent ambush, reneging on a license commitment or seeking an injunction against willing licensees after making a licensing commitment).    

The 2016 revised IPEGs, clarify that the Bureau's guidance with respect to standard essential patents applies only in the context of standards developed through collaborative standards-setting activities.  That is, where companies come together to agree on industry standards that require the use of patented technology (i.e. Standard Development Organizations) and where holders of standard-essential patents have expressly committed to license those patents on fair, reasonable, and non-discriminatory ("FRAND") terms in return for their adoption in a standard.  The Bureau's guidance does not apply to "differentiating patents" (i.e. patents which have been widely adopted and are therefore "de facto" standards, but which have not been formally adopted as standardized technology).  

The 2016 revised IPEGs also clarify the Bureau's enforcement approach with respect to conduct involving standard essential patents.  A summary of the Bureau's enforcement approach is set out below:

  1. Conduct relating to the standard-setting process of a Standard Development Organization will be reviewed under the civil agreement between civil competitor provisions of the Act and not the criminal conspiracy provisions of the Act;
  2. Alleged anti-competitive conduct by the patentee of a standard essential patent (e.g. "patent ambush" and "patent hold-up" activities) will be reviewed under the abuse of dominance provision of the Act (rather than being treated only as a contractual dispute between the parties).

As in the case with PAEs (discussed above), the Bureau explicitly warns that it "may revisit certain aspects of the guidance in this subsection in the future in light of experience, changing circumstances and court decisions."


The 2016 revised IPEGs provide further clarity and guidance on the Bureau's approach to conducting investigations under the Act with respect to activities involving intellectual property, particularly in respect of the specific activities discussed above.  Intellectual property owners are therefore well-advised to review the 2016 revised IPEGs to ensure compliance with Canadian competition law.

For more information, please contact a member of our firm's IP Management & Strategic Counselling group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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.

Andrea Kroetch
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