Law Times

Page 8 September 26, 2016 • Law timeS www.lawtimesnews.com Where IP intersects with competition law BY MICHAEL MCKIERNAN For Law Times T he Competition Bu- reau's first major up- date to its Intellectual Property Enforcement Guidelines in a generation marks a good opportunity for IP lawyers to reacquaint them- selves with their competition law colleagues, according to one leader in the field. The bureau released its final update to the IPEGs in March after two years of consultations, implementing the first major revision to the guidelines since they were introduced in 2000. IP litigator Peter Wells, a partner with McMillan LLP in Toronto, says despite the com- plementary nature of competi- tion and IP law, very few prac- titioners overlap between the areas in their own practice. "It's useful for everyone to have an idea of how the bureau sees the intersection of these two areas of law, and it forces those in IP who don't do a lot of com- petition law to get it back in our heads," Wells says. "The takeaway for most law- yers is that you should be aware of all the tools available when someone attempts to muscle your client. If you're an IP law- yer, you should think about talk- ing to a competition lawyer, and vice versa. "Between the two of you, you may get a combination of tools that will have a synergistic effect and give a lot more bang for the buck than any one of the rem- edies alone." He says the guidelines were due for an update in order to keep up with trends in the mar- ketplace. "Since the year 2000, people have found some clever ways of using their intellectual property that are not always competition- friendly, which the Competition Bureau has taken a dim view of," Wells says. According to Andrea Kroetch, an Ottawa lawyer with IP bou- tique Smart and Biggar, the up- dated IPEGs were greeted with caution by businesses in the high- tech sector. "It's obviously good to have more guidance, but when you get an update like this, it always makes you wonder if it could signal a renewed interest in en- forcement on the part of the Competition Bureau," she says. Jonathan Bitran, a lawyer in the business law group at McCarthy Tétrault LLP's To- ronto office, says the updated IPEGs reinforce the idea that it will typically take "something more" than the "mere exercise" of an intellectual property right to attract the attention of the bureau under the general pro- visions of the Competition Act. He says the bureau's musings on pharmaceutical patents caused some of the most chatter from clients. "Pharmaceuticals are a big fo- cus for the bureau, so it's not sur- prising that they feature promi- nently. "The framework and prin- ciples are broadly the same, but they've put a lot more meat on the bone," he says. The IPEGs clarify when the bureau will (or will not) get in- volved concerning settlements made under the Patented Medi- cines (Notice of Compliance) Regulations. For entry-split agreements governing the entry of generic drugs in a particular market, the bureau will stay out as long as the settlement does not pro- vide for payment to the generic manufacturer, and the generic's entry comes on or before the ex- piry of the patent at issue. However, in the case a settle- ment includes a payment from the manufacturer of a brand- name drug to the makers of a generic version of the same drug, the bureau says the parties should expect a review under s. 90.1 of the Competition Act. According to the IPEGs, par- ties to agreements can eliminate the chance of a criminal review under s. 45 of the act as long as the settlement: • does not extend beyond the expiry of the patent; • does not restrict competi- tion for products unrelat- ed to the patent at issue; • is not a sham. "The legal community is happy about" the bureau's clarity over criminal liability, according to Bitran, who says earlier draft versions of the IPEGs appeared to contemplate a broader scope for a s. 45 review. The updated guidelines also draw a distinction between "hard" and "soft" product hop- ping, the name given to cir- cumstances when drug makers introduce a new formulation of a medicine whose patent is ex- piring. The idea is to switch the mar- ket to the new tweaked offering, which can undercut the generic market for the old off-patent drug. In the "hard" version of the practice, the patentee removes its old product from the market altogether. That could attract an inquiry under the abuse of dominance provisions in s. 79 of the Com- petition Act, the bureau warns in the IPEGs. However, a softer version of switching, in which the patentee continues to make the old drug available but simply stops pro- moting it to physicians in favour of the newer formulation, will not raise competition issues for the bureau, as long as the manu- facturer did not engage in false or misleading marketing about its old product. The IPEGs also touch on the hot topic of PAEs: patent- asserting entities, more colloqui- ally (and dismissively) known as "patent trolls." The bureau defines PAEs as businesses that acquire patents without actually using or mak- ing products based on the pat- ented technologies it owns. According to example sce- narios given in the IPEGs, pat- entees who agree to share rev- enue by assigning their rights to PAEs for enforcement are unlikely to face proceedings by the bureau. LT FOCUS ON INTELLECTUAL PROPERTY LAW FOCUS Peter Wells says updates to IP Enforcement Guidelines were needed to keep up with trends in the market- place. IT'S TIME TO RANK… THE TOP 10 INSURANCE DEFENCE, TAX, WILLS, TRUSTS & ESTATES BOUTIQUES Complete the survey online at canadianlawyermag.com/surveys and make your picks. SURVEY IS OPEN UNTIL OCTOBER 31 st Untitled-5 1 2016-09-13 2:57 PM

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