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06 July 2015
On June 9 2015 the Competition Bureau released an update to its draft IP Enforcement Guidelines for comment. The guidelines describe the bureau's approach to the interface between competition policy and IP rights and describe how the bureau will determine whether conduct involving intellectual property raises an issue under the Competition Act.
The changes focus on providing guidance on the application of the bureau's analytical framework in respect of specific activities, including representations made in the context of asserting patents and conduct involving patents that are essential to an industry standard ('standard-essential patents'). The guidance on such activities will be of particular interest to businesses in the high-tech sector, where issues associated with these activities most often arise. The changes also cover settlements of proceedings under the Patented Medicines Notice of Compliance Regulations.
The updated guidelines provide guidance on conduct involving companies which acquire patents for the sole purpose of asserting them against firms that are allegedly infringing the patented technologies (ie, they do not manufacture or sell products or services related to such patents). Such companies are often referred to as 'patent assertion entities', 'non-practising entities' or, colloquially, 'patent trolls'.
Specifically, the bureau indicates that the conduct of such companies will 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 is made knowingly and recklessly, respectively. For example, where there is evidence that a company sent thousands of notices to various businesses indiscriminately or was indifferent as to whether the allegations of infringement contained in the letters were accurate (eg, claiming to have proof of infringement where no such proof existed), such conduct would raise concerns under the civil and criminal misleading advertising provisions of the act.
Industry standards (ie, a common set of characteristics for a good or service) often rely on patented technologies. The updated guidelines indicate that the development of standards through formal standard development organisations or other means can pose competition concerns and provides the following examples:
The bureau indicates that if a standard development organisation standard setting arrangement is reviewed, the bureau will proceed according to the process set out in its Competitor Collaboration Guidelines. With respect to patent ambush and patent hold-up activities, the bureau indicates that these activities will likely be reviewed under the abuse of dominance provision in Section 79 of the act.
While the changes made to the updated guidelines do not represent a significant departure from how the bureau approaches the interface between competition policy and IP rights, the changes should assist parties in understanding its approach to enforcement in respect of the particular activities discussed and may signal greater interest on the part of the bureau with respect to enforcement in these areas.
The bureau has invited interested parties to provide their views on the draft updated guidelines by August 10 2015.
For further information on this topic please contact Colin Ingram or Andrea Kroetch at Smart & Biggar/Fetherstonhaugh by telephone (+1 613 232 2486) or email (firstname.lastname@example.org or email@example.com).The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
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