Canada: Competition Bureau Releases 2019 Intellectual Property Enforcement Guidelines

As an independent federal law enforcement agency, the Competition Bureau (the "Bureau") seeks to ensure that Canadian business and consumers prosper in a competitive and innovative marketplace. Keeping with its mandate, the Bureau released its updated Intellectual Property Enforcement Guidelines ("IPEGs") on March 13, 2019.1 The IPEGs articulate how the Bureau approaches the interface between competition policy and intellectual property ("IP") rights, including whether conduct involving IP raises an issue under the Competition Act.

In particular, businesses involved in the assertion and/or dealing of IP rights should be aware of both the general and special provisions of the Competition Act and how the Bureau will seek to apply the Competition Act to IP rights as illustrated in the IPEGs.

What follows is a brief overview of the 2019 IPEGs and more generally the intersection of competition law and IP law. Further publications will address specific issues including the Bureau's approach to settlements of litigation under the Patented Medicines (Notice of Compliance) Regulations, patent assertion entities and standard essential patents/FRAND licencing.

The Competition Act

The Competition Act is a federal statute administered and enforced by the Bureau. The provisions of the Competition Act seek to maintain and encourage competition in Canada by preventing anti-competitive behaviour in the marketplace.2 When warranted, the Competition Act sets out when the Bureau may intervene in relation to certain behaviours.

Conduct that warrants the intervention of the Bureau falls into two categories: (1) reviewable matters (i.e. conduct that is generally pro-competitive but that may, in certain circumstances, significantly constrain competition); and (2) criminal offenses (e.g. conspiracy and bid-rigging). For example, this may include misleading advertising and related deceptive marketing practices, exclusive dealing, refusal to deal, price maintenance, and abuse of a dominant position.

Generally, the Bureau's analysis for determining whether competitive harm would result from a particular type of business conduct comprises five steps:

  1. Identifying the conduct;
  2. Defining the relevant market;
  3. Determining if the firm or firms under scrutiny possess market power by examining the level of concentration and entry conditions in the relevant market(s) (as well as other factors);
  4. Determining if the conduct would substantially lessen or prevent competition in the relevant market(s); and
  5. Considering, when appropriate, any relevant business justifications.

The Competition Act & Intellectual Property

IP laws confer on an IP owner the right to unilaterally exclude others from using that property. While each IP-related statute grants this right to varying degrees, all of the statutes position the owners of the IP to maximize the IP's value through trade and exchange in the marketplace

Since the right to exclude – the basis of private property rights – is necessary for efficient, competitive markets, the enforcement of the Competition Act rarely interferes with the exercise of this basic right. However, the Bureau may apply the Competition Act to anti-competitive conduct associated with IP  which impedes the efficient production and diffusion of goods and technologies and the creation of new products.

The Bureau's overall approach to the application of the Competition Act to IP is outlined in the IPEGs following terms:

  1. The circumstances in which the Bureau may apply the Competition Act to conduct involving IP or IP rights fall into two broad categories: those involving something more than the mere exercise of the IP right, and those involving the mere exercise of the IP right and nothing else. The Bureau will use the general provisions (including the criminal provisions) of the Competition Act to address the former and section 32 (special remedies) to address the latter.
  2. In either case, the Bureau does not presume that the conduct violates the general provisions of the Competition Act or needs to be remedied under section 32.
  3. When conduct involving an IP right warrants a special remedy under section 32, the Bureau will act only in the very rare circumstances and when the conduct cannot be remedied by the relevant IP statute.
  4. The analytical framework that the Bureau uses to determine the presence of anti-competitive effects stemming from the exercise of rights to non-IP forms of property is sufficiently flexible to apply to conduct involving IP, even though IP has important characteristics that distinguish it from other forms of property.

Section 32 of the Competition Act

Section 32 of the Competition Act contemplates the possibility that the mere exercise of an IP right may cause concern and result in the Bureau seeking to have the Attorney General bring an application for a special remedy to the Federal Court.

The Bureau will seek a special remedy under section 32 only if the circumstances specified in that section are met and the alleged competitive harm stems directly from the refusal and nothing else. Section 32 has rarely been used and requires proof that competition has been unduly restrained, prevented or lessened. Further, the Bureau must establish that invoking a special remedy against the IP right holder would not materially alter the incentives of the right holder or others to engage in research and development.

In practice, seeking a special remedy under section 32 of the Competition Act is extremely rare.

IPEG Examples

The IPEGs provide several examples with respect to various IP rights and how the Bureau may apply the Competition Act. The subject-matter of these hypothetical examples includes: (1) general business conduct involving IP (i.e. infringement, price-fixing, exclusive licencing, foreclosure by purchaser,  exclusive contracts, output royalties, patent pooling arrangements, agreements to foreclose complementary products, refusals to licence intellectual property, and product switching); (2) conduct involving Patent Assertion Entities ("PAEs") (i.e. representations made in the context of asserting patents and patent assignment for enforcement); (3) settlements of proceedings under the Patented Medicines (Notice of Compliance) Regulations; and (4) collaborative standard setting and Standard Essential Patents ("SEPs").

With respect to copyright infringement, the IPEGs indicate that the Bureau will use its enforcement discretion and not interfere where companies with competing software products in the marketplace engage in litigation under the Copyright Act. Specifically, the Bureau will not interfere even where a plaintiff company brings action for copyright infringement action against a defendant company started by a former employee selling a nearly identical product.

With respect to software licencing, the IPEGs indicate that the Bureau will not interfere where a company with the majority of the market share refuses to licence technology to smaller competitors, thereby limiting their ability develop and market compatible products. In general, the Bureau would view such refusals as a "mere exercise" of a company's IP rights. Such conduct would therefore only be subject to review under section 32 of the Competition Act (i.e. whether the refusal to licence created an undue restraint of trade or unduly lessened competition). If the facts of the case suggest enforcement under section 32, a recommendation would be made by the Bureau to the Attorney General to seek a special remedy allowing other companies to gain access to the desired software.

Implications for Business

IP owners whose business is derived from dealing with IP rights should be cognizant of competition issues that may arise through their conduct. Most notably, the Bureau may investigate parties they suspect are reducing competition substantially through their dealings. Such conduct triggering an investigation may involve licensing agreements, price setting, assertion of IP rights and settlements from litigation. That said, the Bureau will not generally investigate the mere exercise of IP rights without something more. 




Read the original article on

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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