© 2001, 1999, Deeth Williams Wall LLP. All Rights Reserved. By: Heather Watts and Sue Diaz (Articling Student at the Firm)

The Government of Canada Competition Bureau released new Intellectual Property Enforcement Guidelines in 2000; these are currently available on the Competition Bureau's web site.

The Guidelines are intended to articulate the principles governing the Bureau's policy with respect to the interface between intellectual property rights and competition policy. The Guidelines discuss the circumstances in which the Bureau would seek to restrain anti-competitive conduct associated with the exercise of IP rights in order to maintain competitive markets.

The Bureau has stated that it intends to "restrain the anti-competitive exercise of IP rights" only in cases where (in the Bureau's opinion) business arrangements or conduct involving IP extend the IP holder's rights beyond those granted under statute or under the common law. The Guidelines state that the Bureau generally begins from the premise that the exercise by an owner of IP rights is not anti-competitive in and of itself. The exclusive right either to use, license, transfer, or sell the IP is fundamental to valid copyrights, rights. However, the Guidelines also state that there may be circumstances in which conduct involves more than just exercising the exclusive right to use, license, transfer, or sell an invention or protected IP. That conduct may have an anti-competitive effect. If an IP owner engages in conduct beyond his or her inherent right and this conduct has the effect of increasing, creating or preserving market power, the Bureau may take enforcement action. The open question is what the Bureau would consider to be a situation where the IP right holder is extending its rights.

The Guidelines contain several hypothetical examples of the application of competition law to IP, including:

  • Exclusive Contracts
  • Exclusive Licensing
  • Output Royalties
  • Patent Pooling Arrangements
  • Agreement to Foreclose Complementary Products
  • Foreclosure by Purchaser
  • Foreclosure by Suppliers
  • Refusal to License a Standard

The Guidelines also outline the Bureau's advocacy role. It intends to monitor and comment on legislation or cases which it feels could lead to an anti-competitive extension of IP rights.

Contact Marijo Coates, Michael Erdle or Heather Watts for more information on the Competition Bureau's Intellectual Property Enforcement Guidelines.

Disclaimer: This Newsletter is intended to provide readers with general information on legal developments in the areas of e-commerce, information technology and intellectual property. It is not intended to be a complete statement of the law, nor is it intended to provide legal advice. No person should act or rely upon the information contained in this newsletter without seeking legal advice.

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