Canada: The Interaction Between IP Rights And The Competition Act

Last Updated: September 28 2017
Article by John McKeown

The Interaction between IP Rights and the Competition Act

Recent decisions of the Federal Court of Appeal and the Ontario Superior Court of Justice raise some concerns about the interaction between IP rights and the Competition Act.

The Facts

Digital marketing has transformed how consumers purchase cars. Though transactions between buyers and sellers are still conducted in person, much of the research is done online prior to the actual sale via research websites ("Digital Marketplaces"). Information available on these Digital Marketplaces will typically include, for each vehicle, the make, model, year, Vehicle Information Number, mileage and price, and photographs (collectively "Vehicle Listings"). Digital Marketplaces aggregate Vehicle Listings from several sources, including vehicle manufacturers, automobile dealers, private sellers, and the marketplace. Certain other businesses known as "Feed Providers" also receive Vehicle Listings from dealers and provide them to Digital Marketplaces.

Cargurus, Inc. ("Cargurus") is a private company registered under the laws of Massachusetts. Its website has been active in the United States since 2007, and it entered the Canadian marketplace in May 2015 through a website at".

Trader Corporation (Trader) owns and operates an English and French Digital Marketplace at and respectively. Trader also offers "capture services" where its employees create Vehicle Listings for dealers. A Trader employee or contractor will visit the dealership to gather information and take photos of the vehicle. The listings can then be posted on Trader's websites, and on the dealer's own website. The listings can also be provided to other Digital Marketplaces through a licensing process.

Trader received complaints from dealers that their vehicles were appearing for sale on CarGurus' website without their permission. In June 2015, Trader sent a letter to CarGurus alleging that CarGurus was "scraping" or "crawling" the Trader website.

The Ontario Superior Court of Justice Action

Trader and CarGurus could not agree on licence terms and Trader commenced an application asserting that CarGurus infringed Trader's copyright in 196,740 photos taken under the Capture Service. Trader sought a declaration of copyright infringement and a permanent injunction restraining CarGurus from using Trader's photos. Trader further claimed statutory damages under the Copyright Act.

Trader succeeded and the court issued a declaration that CarGurus infringed Trader's copyright in 152,532 photos and awarded statutory damages payable by CarGurus to Trader for $305,064.

The Application to the Competition Tribunal

Part VIII of the Competition Act sets out the matters reviewable by the Tribunal, including restrictive trade practices that the Tribunal can review on application either by the Commissioner of Competition or by another person granted leave. Under section 75, the Tribunal has jurisdiction to review a situation where a person cannot obtain adequate supplies of a product on usual trade terms. If the test set out in that section is met, the Tribunal may order that one or more suppliers of that product accept the person as a customer.

Under section 77, the Tribunal can review the practices of exclusive dealing, tied selling, and market restriction. If the Tribunal finds these activities are occurring within the meaning of the section, the Tribunal may make orders prohibiting those practices.

Because of the copyright proceedings being launched, CarGurus removed over one million photographs it had obtained by crawling dealer websites. The lack of access to Trader's inventory and the resulting decrease in page views and in advertising revenues were the basis for CarGurus' application for leave before the Tribunal. CarGurus claimed that Trader engaged in anticompetitive conduct, including refusing to licence Trader's Vehicle Listings to CarGurus on the usual trade terms, instructing third parties not to deal with CarGurus, and improperly asserting copyright.

The Tribunal found that CarGurus' evidence lacked sufficient particulars and credibility. Given the weaknesses in CarGurus' evidence, the Tribunal concluded it could not reasonably believe that CarGurus may be directly and substantially affected in its business by Trader's conduct. Because of this finding the application for leave was dismissed.

The Federal Court of Appeal

Cargurus appealed from the Tribunal's refusal to grant leave to the Federal Court of Appeal. The Court said that CarGurus provided the Tribunal with a set of "initial projections" and a set of "revised projections" purporting to show the impact of Trader's alleged conduct. However, as noted by the Tribunal, the affidavit to which these projections were attached did not explain how and by whom these calculations were performed. Absent any background for these projections, the Tribunal could reasonably conclude that the evidence was neither sufficient nor cogent and that the forecasts used by CarGurus were speculative and only amounted to a mere possibility of substantial effect.

In the circumstances, the Tribunal reasonably found that the projections amounted to no more than a mere possibility of substantial effect and were speculative. As a result the appeal was dismissed.


This decision of the Federal Court of Appeal and the Ontario Superior Court of Justice raise concerns about the interaction between IP rights and the Competition Act. Generally, a competitor may use its IP rights to compel or prevent the use of goods and/or services only to the extent that it is not a part of anti-competitive conduct that is something more than the mere exercise of the IP right. While the proceedings alleging a breach of the Competition Act were not dealt with on substantive grounds they would have been decided on this basis.

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.

John McKeown
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