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Intellectual Property _ Antitrust

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Intellectual Property & Antitrust
in 26 jurisdictions worldwide
Contributing editor: Susan M Hutton                   2009
                                                                  Published by
                                                  Global CoMPetition Review
                                                           in association with:
                                                                   ¯
                                                         Anderson Mori & Tomotsune
                                                             Arnold & Porter (UK) LLP
                                                                        Bär & Karrer
                                                                       Blake Dawson
                                                             Chiomenti Studio Legale
                                                          Correia da Silva Advogados
                                                                Crowell & Moring LLP
                                                                       Dahl Law Firm
                                      Debarliev Dameski & Kelesoska Attorneys at Law
                                           Eisenberger & Herzog Rechtsanwalts GmbH
                                                           Heuking Kühn Lüer Wojtek
                                                        Hoet Pelaez Castillo & Duque
                                                                    Horák & Chvosta
                                                                  Ivanyan & Partners
                                                                  Jun He Law Offices
                                                      Latournerie Wolfrom & Associés
                                                                           Lex Orbis
                                                                                   ¸
                                                 Luther Karasek Köksal Consulting AS
                                                                              Lydian
                                                                            Roschier
                                                                 Stikeman Elliott LLP
                                                   Uhthoff, Gomez Vega & Uhthoff, SC
                                                               Werksmans Attorneys
                                                                   White & Case LLP
                                                            Yoon Yang Kim Shin & Yu
Stikeman Elliott LLP                                                                                                                             canada




canada
Susan M Hutton, Vivien Tzau and Michael Kilby
Stikeman Elliott LLP



Intellectual property                                                            the Competition Act relevant to the exercise of IP rights are discussed
                                                                                 in greater detail below.
1   Intellectual property law
                                                                                     Canada’s IP rights are compliant with minimum standards
    Under what legislation are intellectual property rights granted? Are there
                                                                                 required by TRIPs. Unlike the US and EU, Canada has not extended
    restrictions on how IP rights may be exercised, licensed or transferred?
                                                                                 copyright protection beyond the minimum standard required by the
    Do the rights exceed the minimum required by the WTO Agreement on
                                                                                 agreement. In the context of trademarks, TRIPs requires only a seven-
    Trade-Related Aspects of Intellectual Property Rights (TRIPs)?
                                                                                 year initial term of protection, while Canada’s initial term is 15 years.
Legislative intellectual property rights in Canada are granted by                The initial term for trademarks is renewable indefinitely, as long as
virtue of the following primary statutes: the Trade-Marks Act, the               conditions for renewal are met.
Copyright Act, the Patent Act, the Industrial Design Act, the Inte-
grated Circuit Topography Act and the Plant Breeders’ Rights Act.                2   Responsible authorities
Additionally, the Canadian common law and civil code of Quebec                       Which authorities are responsible for administering IP legislation?
offer protection of trade secrets, confidential information, business
names and common law trademarks and protection against unfair                    The Canadian Intellectual Property Office (CIPO), a special operat-
competition or passing off.                                                      ing agency associated with Industry Canada (a federal government
    The contours of protection offered by the various statutes and               department), is responsible for the administration and processing
the common law and civil code of Quebec vary with the nature of                  of the greater part of intellectual property in Canada. CIPO’s areas
the right claimed. For example, the Copyright Act will only protect              of responsibility include patents, trademarks, copyrights, industrial
the expression of an original idea from copying, not the underlying              designs and integrated circuit topographies. The Canadian Food
idea itself. The term of protection for copyright in Canada is, except           Inspection Agency (CFIA) administers plant breeders’ rights.
as otherwise expressly provided in the Copyright Act, the life of the
author, the remainder of the calendar year in which the author dies,             3   Proceedings for enforcing IP rights
and a period of 50 years following the end of that calendar year. In                 What types of legal or administrative proceedings are available for
contrast, the Patent Act will, subject to novelty and utility require-               enforcing IP rights?
ments, protect any ‘new and useful art, process, machine, manufac-
ture or composition of matter, or any new and useful improvement                 Depending on the nature of the right infringed, legal enforcement
in any art, process, machine, manufacture or composition of matter’.             of statutory IP rights may occur before either the Federal Court of
The term of patent protection is from the day the patent is granted to           Canada or the provincial courts owing to concurrent jurisdiction.
a maximum of 20 years after the date on which the patent application             The Federal Court of Canada administers those federal statutes
was filed. Trademark protection is granted to a mark that is used by a           which confer jurisdiction upon it, including the Trade-Marks Act,
person ‘for the purpose of distinguishing or so as to distinguish wares          the Copyright Act, the Patent Act, the Industrial Design Act, the
or services manufactured, sold, leased, hired or performed by him                Integrated Circuit Topography Act and the Plant Breeders’ Rights
from those manufactured, sold, leased, hired or performed by others’             Act. Additionally, each province has superior courts with concur-
and includes certification marks, distinguishing guises and proposed             rent jurisdiction over IP matters, and in some cases such as common
trademarks. Trademark protection is awarded for 15 years from the                law actions for misappropriation of personality, trade secrets, and
date of registration and may be renewed for further 15-year terms in             restrictive covenants, provincial jurisdiction is exclusive. The Trade-
accordance with the Trade-Marks Act.                                             Marks Act also allows for any person to oppose the registration of a
    Restrictions on how IP rights may be exercised, licensed or trans-           trademark before the Trade-Marks Opposition Board, an administra-
ferred also vary depending on the nature of the right being asserted.            tive tribunal charged with determining registrability of any contested
For example, the Copyright Act forbids the assignment or licensing of            trademark application.
an author’s moral rights, although they may be waived entirely by the
author and such waiver need not explicitly be in writing. The Copy-              4   Remedies for infringed IP rights
right Act, the Industrial Design Act and the Patent Act all require that             What remedies are available to a party whose IP rights have been
an assignment be in writing, whereas an assignment of trademark                      infringed?
rights can be oral. The Trade-Marks Act also imposes significant
statutory restraints on the assignment and licensing of trademarks               The remedies available to a party whose IP rights are found to have
by requiring that, for a trademark to remain valid, it must remain               been infringed include injunctive relief (interim, interlocutory and
inherently distinctive such that the goods and services it is used in            permanent) to prevent continued and future infringement; compen-
association with are distinguished from those of others. Provisions of           satory damages for losses suffered (and, in the case of copyright or


www.gettingthedealthrough.com                                                                                                                              27
canada                                                                                                                            Stikeman Elliott LLP

in the alternative in the case of trademarks, patents and industrial            Business Practices Acts have been enacted to deal with potential abuse
designs); an accounting of the defendant’s profits proven to have been          of consumers through unfair business practices. All such provincial
earned by the infringing activity; statutory damages for infringement           trade practices statutes prohibit false, misleading or deceptive acts
of copyright and punitive and exemplary damages should circum-                  that induce the consumer to believe that the goods or services have
stances warrant. Anton Piller orders, permitting the plaintiff and its          sponsorship, approval, performance characteristics, accessories, uses,
counsel to attend the defendant’s business or residence and (without            ingredients, benefits or quantities that they do not have.
prior notice) seize infringing products and documents evidencing the
extent of the defendant’s infringing behaviour, the delivery up and
                                                                                7   Technological protection measures and digital rights management
destruction of infringing goods, and the recovery of legal costs also
                                                                                    With respect to copyright protection, is WIPO protection of
may be available.
                                                                                    technological protection measures and digital rights management
                                                                                    enforced in your jurisdiction? Does legislation or case law limit the
5    IP legislation and competition                                                 ability of manufacturers to incorporate TPM or DRM protection limiting
     Does IP legislation make any specific mention of competition or                the platforms on which content can be played? Could TPM or DRM
     contain provisions on the anti-competitive or similar abuse of IP              protection be challenged under the competition laws?
     rights?
                                                                                There are currently no statutory provisions that grant legal pro-
Section 7 of the Trade-Marks Act sets out specific prohibitions against         tection to technical protection measures (TPMs) and digital rights
unfair competition and prohibited marks and includes prohibitions               management (DRM) in Canada, but anti-circumvention provisions
against false or misleading statements intended to discredit the busi-          were included in the proposed federal legislation denoted as Bill
ness of a competitor; passing off; making use of any description that           C-61. These provisions would have implemented Canada’s WIPO
is false in a material respect and likely to mislead the public as to           obligations and allowed Canada to ratify both the WIPO Copyright
the character, quality, quantity, composition, geographical origin or           Treaty (WCT) and the WIPO Performances and Phonograms Treaty
mode of manufacture production or performances of wares or serv-                (WPPT). Bill C-61 died on the order paper with the autumn 2008
ices; and also prohibits any other act or business practice contrary to         federal election, but similar legislation will likely re-surface in a new
honest industrial or commercial use in Canada.                                  Parliament.
     Section 65 of the Patent Act allows any interested person, three                The combination of DRM and anti-circumvention legislation
years after the grant of the patent, to apply for a compulsory licence          has raised competition concerns with some public interest groups.
in respect of the patent on the grounds that there has been an abuse            Among the concerns raised by public interest groups is the challenge
of the exclusive rights thereunder. The exclusive rights under a patent         DRM poses to interoperability, because content subject to DRM is
are deemed to have been abused if, among other things: the invention            frequently linked to specific hardware, leaving consumers unable
is not being worked on a commercial scale in Canada without satis-              to transfer the content from device to device or potentially being
factory reason; the working of the invention on a commercial scale in           required to purchase a particular type of device. Absent statutory
Canada is being impeded by the importation of the patented article              protection, and given the right facts, it is conceivable that DRM or
into Canada by the patentee; Canadian demand for the patented                   TPMs could be challenged under the Competition Act as an abuse of
article is not being met to an adequate extent and on reasonable                a dominant position or potentially as an instance of tied selling.
terms; and if the refusal by the patentee to grant licences on reason-
able terms impedes the industry in Canada.
                                                                                8   International standards
     Additionally, sections 67 to 78 of the Copyright Act set out
                                                                                    What consideration has been given in legislation or case law to the
the legislative framework that permits the formation of collective
                                                                                    impact of proprietary technologies in international standards?
societies to represent copyright owners and grants them the rights
to file proposed tariffs with the Copyright Board or enter into agree-          There has not yet been any consideration of this issue by the courts
ments with users without risk of being accused of engaging in anti-             in Canada. A review paper on the interface between competition law
competitive behaviour.                                                          and IP law was jointly commissioned by the Competition Bureau,
                                                                                the Department of Industry and the Canadian Intellectual Property
                                                                                Office and released in March, 2007. Among other things, the paper
6    Remedies for deceptive practices
                                                                                called for an empirical study of patent pooling to determine how
     With respect to trademarks, do competition or consumer protection
                                                                                prevalent the practice is in Canada, and whether it is used to pro- or
     laws provide remedies for deceptive practices in addition to traditional
                                                                                anti-competitive effect.
     ‘passing off’ or trademark infringement cases?

The Competition Act contains a number of civil provisions prohibit-             Competition
ing false or misleading representations to the public made to promote,
directly or indirectly, the supply or use of a product or to promote,           9   competition legislation
directly or indirectly, any business interest, by any means whatever.               What legislation sets out competition law?
Criminal charges for such claims may also be brought under the                  The legislation setting out competition law in Canada is the federal
general prohibitions against false or misleading representations con-           Competition Act. The Competition Act sets out criminal offences
tained in the Competition Act. Additionally, the Consumer Packag-               and civilly reviewable conduct. The former include conspiracy, bid
ing and Labelling Act contains general prohibitions against false or            rigging, predatory pricing, price discrimination, resale price mainte-
misleading representations, and it is a criminal offence pursuant to            nance and some types of misleading advertising. The latter includes
the Criminal Code to forge a trademark with the intent to deceive               abuse of dominance, deceptive marketing, refusal to deal, market
or defraud the public.                                                          restriction, exclusive dealing, tied selling and consignment selling.
     Several Canadian provinces have enacted consumer protec-                   The Competition Act also sets out a merger control regime.
tion statutes establishing a regulatory scheme designed to address a                The Competition Act is primarily enforced by the commissioner
number of specific practices considered to be ‘unfair business prac-            of competition (the commissioner) who is the head of the Competi-
tices’ (including misleading advertising). In other provinces, separate         tion Bureau (the Bureau). The commissioner and the Bureau investi-

28                                                                               Getting the deal Through – Intellectual Property & antitrust 2009
Stikeman Elliott LLP                                                                                                                        canada

gate both criminal offences and civilly reviewable matters. Regarding       or another court. The criminal provisions in respect of which dam-
offences, when the commissioner believes there are sufficient grounds       ages may be claimed include section 45 (conspiracy or cartel), 47 (bid
for a criminal prosecution the commissioner will recommend to the           rigging) and section 61 (price maintenance), among others. To the
director of public prosecutions (DPP) of Canada that charges be laid.       extent that conduct relating to IP rights violates one of these provi-
The final decision to prosecute, however, lies with the DPP. Criminal       sions, or violates an order of the Tribunal or another court, private
matters are tried before the provincial courts. Private parties may sue     parties can sue for the loss or damage they suffered (as noted, a prior
for damages in respect of alleged criminal violations (but convictions      conviction is not necessary).
are not required prior to such suits). With respect to civilly review-          Additionally, private parties may apply for leave to the Tribunal
able conduct and mergers, the commissioner may act as prosecutor            to make a claim under section 75 (refusal to deal) and section 77
before the specialist Competition Tribunal (the Tribunal) for all such      (exclusive dealing, tied selling or market restriction) although dam-
matters. In addition, private parties may seek leave to file applications   ages are not available in respect of these sections. To the extent that
with the Tribunal with respect to refusal to deal, exclusive dealing,       conduct relating to IP rights violates one of these provisions, private
market restriction and tied selling cases (but, notably, not the more       parties could apply to the Tribunal to have the conduct stopped,
general abuse of dominance or merger provision). Only injunctive            although it is clear from the Warner Music case (discussed in ques-
relief is, however, available from the Tribunal to private parties and      tion 26) that the mere refusal to license IP rights does not violate
the commissioner alike.                                                     section 75. Private parties do not have direct access to section 32,
                                                                            the IP-specific remedy (see question 14), but can complain to the
                                                                            Competition Bureau if the mere exercise of an IP right (typically, a
10 IP rights in competition legislation
                                                                            refusal to license) is anti-competitive.
    Does the competition legislation make specific mention of IP rights?

Intellectual property rights are referred to in several sections of the
                                                                            13 competition authority guidelines
Competition Act. For example, the Competition Act specifies that
                                                                                Has the competition authority issued guidelines or other statements
acts engaged in pursuant only to the exercise of an IP right will not
                                                                                regarding the overlap of competition law and IP?
be subject to sanction under the general abuse of dominance provi-
sion. In contrast, the Competition Act specifies that its resale price      In 2000, the Bureau released its Intellectual Property Enforcement
maintenance provision does apply to holders of IP rights.                   Guidelines (the Guidelines). The Guidelines set out how the Bureau
    Significantly, the Competition Act also contains a specific provi-      views the interface between IP law and competition law, explain the
sion (section 32) dedicated to IP rights and which contemplates that        analytical framework that the Bureau uses to assess conduct involv-
the mere exercise of such a right may, in certain circumstances, give       ing IP and discuss the circumstances under which the Bureau may
the competition authorities grounds to seek a special remedy from the       apply the Competition Act to restrain anti-competitive conduct asso-
Federal Court. Section 32 is discussed throughout this chapter.             ciated with the exercise of IP rights.
                                                                                 The Guidelines provide that the circumstances in which the Bureau
                                                                            may apply the Competition Act to restrain anti-competitive conduct
11 Review and investigation of competitive conduct
                                                                            involving IP rights fall into two broad categories: those involving anti-
    Which authorities may review or investigate the competitive effect of
                                                                            competitive conduct that is ‘something more’ than the mere exercise of
    the conduct related to IP rights
                                                                            the IP right, and those involving the mere exercise of the IP right and
As noted in question 9, the commissioner, supported by the Bureau,          nothing else. Although the Guidelines are not binding statements of
has the jurisdiction to investigate conduct that could offend the           law, they do reveal the Bureau’s approach to IP and competition law
Competition Act. Where this conduct falls under the criminal provi-         and have been cited by the courts.
sions, the commissioner will investigate and the director of public              In March 2007, the Bureau released a paper entitled ‘The Com-
prosecution (DPP) of Canada will lay charges and prosecute before           petition/Intellectual Property Interface – Present Concerns and Future
the courts, if appropriate. Where this conduct is a civilly review-         Challenges’. The paper discusses topical issues at the intersection of
able matter the commissioner will investigate and will bring a case         competition and intellectual property law and identifies areas of study
before the Tribunal, if appropriate. Private parties may, with leave,       and concern for law and policy makers in Canada, such as patent
also bring civil cases before the Competition Tribunal in respect of        pooling, authorised generic drugs, TPMs, whether litigation settle-
refusal to deal, exclusive dealing, market restriction and tied selling     ments can violate the Competition Act, and the compulsory licensing
cases involving IP rights (but not if the conduct involves the ‘mere’       of intellectual property rights. See www.competitionbureau.gc.ca.
exercise of the IP right).
    Under section 32, the IP-specific provision of the Competition
                                                                            14 Exemptions from competition law
Act, the Bureau has stated that it will recommend to the DPP that an
                                                                                Are there aspects or uses of IP rights that are specifically exempt from
application be made to the Federal Court only when, in the Bureau’s
                                                                                the application of competition law?
view, no appropriate remedy is available under the relevant IP statute
and the conduct involves only the exercise of an IP right. Remedies         The Guidelines state that the mere exercise of an IP right is not cause
available under IP statutes are described above. No cases have been         for concern under the general provisions of the Competition Act, no
brought to date under section 32 of the Competition Act.                    matter to what degree competition is affected. The mere exercise of
                                                                            an IP right is defined as the exercise of the owner’s right to unilater-
                                                                            ally exclude others from using the IP, and includes the owner’s use or
12 competition-related remedies for private parties
                                                                            non-use of the IP. The approach of the Guidelines is consistent with
    Do private parties have competition-related remedies if they suffer
                                                                            the Tribunal’s approach in several earlier decisions, where it was held
    harm from the exercise, licensing or transfer of IP rights?
                                                                            that the mere exercise of the right to refuse a licence to a complainant
Under the Competition Act, private parties have a damages remedy            was not an anti-competitive act under the general provisions of the
where they have suffered loss or damage as a result of conduct con-         Competition Act, as well as with express language in the abuse of
trary to the criminal provisions of the Competition Act or as a result      dominance provision to this effect.
of the failure of any person to comply with an order of the Tribunal             However, under section 32, the Bureau may seek a remedy for the


www.gettingthedealthrough.com                                                                                                                       29
canada                                                                                                                         Stikeman Elliott LLP

unilateral exercise of an IP right where the Bureau establishes that the      into Canada, for sale or distribution purposes, that either infringe a
mere exercise (typically the refusal to license IP) has unduly restrained     copyright in Canada or would infringe a copyright in Canada if the
trade or lessened competition. In these circumstances, the Bureau will        goods had been made in Canada by the person who made it abroad.
use a two-step approach which resembles closely the approach of the           With respect to ‘grey marketing’, the notion of exhaustion applies
European Court of Justice in its IMS Health judgment.                         insofar as Canadian copyright cannot be used to prevent the impor-
    First, the Bureau will consider whether the unilateral exercise of        tation and sale of works that have already been legitimately made
an IP right has adversely affected competition to a degree that would         and sold in a different country by the same person who owns the
be considered substantial in a relevant market that is different or           Canadian copyright. However, in situations where a foreign owner
significantly larger than the subject matter of the IP or the products        of copyright has assigned the Canadian copyright to another entity,
or services which result directly from the exercise of the IP. This first     including a subsidiary company, the foreign owner no longer has the
step is satisfied only by the combination of the following factors:           right to make copies in Canada. If copies made or authorised by that
• the holder of the IP is dominant in the relevant market; and                foreign owner are then imported into Canada, the Canadian copy-
• the IP is an essential input or resource for firms participating in         right owner (assignee) can make a claim of infringement under sec-
    the relevant market – that is, the refusal to allow others to use the     tion 27(2)(e). In Kraft Canada v Euro Excellence Inc, six of the nine
    IP prevents other firms from effectively competing in a broader           Supreme Court judges confirmed this position, stating that assignees
    or different market.                                                      could bring infringement actions against assignors, as well as against
                                                                              parallel importers.
In the second step, the Bureau must establish that invoking a special               Whether copyright can be used by exclusive licensees (as opposed
remedy against the IP holder would not adversely alter the incentives         to assignees) to prevent the importation of copies made or authorised in
to invest in research and development in the economy. According to            another country by a licensor who remains the owner of the Canadian
the Guidelines, this step is satisfied if the refusal to license the IP is    copyright is less clear. In Kraft, the Supreme Court faced such a plain-
stifling further innovation.                                                  tiff: Kraft Canada (the exclusive Canadian importer and distributor of
     The Bureau recognises that only in very rare circumstances would         Cote d’Or and Toblerone chocolate bars and exclusive licensee of the
this test be satisfied and will generally recommend to the attorney           Canadian copyright in the chocolate bar logos) sought to rely on sec-
general that an application be made to the Federal Court under sec-           tion 27(2)(e) to prevent another firm, Euro-Excellence, from importing
tion 32 only when no appropriate remedy is available under the rel-           and then distributing and selling in Canada legitimate chocolate bars
evant IP statute. There have been no such applications to date.               that had been purchased in Europe from Kraft Canada’s parent com-
                                                                              panies (the owners of the Canadian copyright). Three majority judges
                                                                              (in obiter) and the two dissenting judges held that an exclusive licen-
15 copyright exhaustion
                                                                              see can sue a copyright owner for infringement (and can therefore sue
     Does your jurisdiction have a doctrine of, or akin to, ‘copyright
                                                                              parallel importers), while four majority judges found that it could not.
     exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine
                                                                              In the result, based on all the facts of the case, the exclusive licensee,
     interact with competition laws, for example with regard to efforts
                                                                              Kraft Canada, was not successful, and the right of exclusive licensees to
     to contract out of the doctrine, to control pricing of products sold
                                                                              challenge parallel importing remains in doubt. In the meantime, Kraft
     downstream and to prevent ‘grey marketing’?
                                                                              Canada has now been assigned the copyright in question and has re-
In Canada, copyright includes the right to sell or distribute copies          launched the case. (Kraft Canada v Euro Excellence Inc T-2103-07
of the copyrighted work. The doctrine of ‘copyright exhaustion’ or            (FedCt) (Notice of Application filed 4 December, 2007)).
‘first sale’ means that once this right to sell or distribute has been used         The Copyright Act also contains an explicit provision, section
and a copy is sold, the right to control the further sale or distribu-        27.1, to allow Canadian copyright holders, exclusive licensees and
tion of that particular copy is ‘exhausted’. As the Supreme Court of          exclusive distributors to use copyright to prevent the parallel impor-
Canada stated in Théberge v Galerie d’Art du Petit Champlain Inc,             tation of books. This provision applies only to books (as opposed to
‘once an authorised copy of a work is sold to a member of the public,         other literary works like magazines) in English and in French, and its
it is generally for the purchaser, not the author, to determine what          application is restricted by a number of rules regarding, for instance,
happens to it.’ Thus, although the doctrines of ‘copyright exhaus-            the ability of an exclusive distributor to supply the public’s needs
tion’ and ‘first sale’ have not been specifically adopted in Canada,          within a specified time frame.
Canadian law generally recognises that a copyright owner cannot
control or prevent subsequent downstream sales of genuine products
                                                                              16 Import control
within Canada.
                                                                                  To what extent can an IP rights holder prevent ‘grey-market’ or
     As framed in Théberge, this notion of exhaustion was seen in
                                                                                  unauthorised importation or distribution of its products?
terms of protecting the balance between the interests of the public
and creators, rather than in terms of preserving competition. That            See question 15 for a discussion of copyright-holders’ ability to pre-
said, competition law applies to copyrighted products as it would             vent parallel importation.
to other products. For example, section 61 of the Competition Act                  Trademarks cannot be used, by either owners, licensees, or
prohibits ‘price maintenance’, and was drafted to include IP rights           authorised distributors, to prevent the parallel importation of goods
such that certain attempts by licensors to influence prices upwards           put on the market abroad by the Canadian trademark owner or a
(or discourage reductions in price) in a downstream market are pro-           licensee or authorised distributor (ie, international exhaustion – once
hibited. See question 23 for further information on section 61 of the         the goods are put on the market anywhere in the world, the trademark
Competition Act. To our knowledge, there has been no case law in              is considered exhausted). However, it is possible to use the passing-
Canada dealing specifically with the interaction of copyright exhaus-         off action to restrict the parallel importation of branded goods which
tion and price maintenance – not surprisingly, since the two concepts         are manufactured according to different formulations, quality stand-
are conceptually aligned.                                                     ards, or health and safety standards than those for goods intended
     A potential exception to the general rule exists in Canada, how-         to be marketed in Canada, since these goods are arguably different
ever, with respect to ‘grey marketing’ (parallel imports). Section            from Canadian-marketed goods and thus an element of deception is
27(2)(e) of the Copyright Act prohibits the importation of goods              involved if they are sold as if they were equivalent. It is also possible


30                                                                             Getting the deal Through – Intellectual Property & antitrust 2009
Stikeman Elliott LLP                                                                                                                                    canada

to prevent importation if the ‘grey’ goods originated with a foreign                 rights are involved. However, the Bureau has stated in the Guide-
trademark owner different from the Canadian trademark owner, ie, if                  lines that its assessment of market power in the IP context will focus
the mark is owned by different entities in different jurisdictions.                  less on traditional measures of market share and more on qualita-
    In Canadian patent law, infringement has been interpreted to                     tive factors such as barriers to entry and the pace of technological
mean any act that interferes with the full enjoyment of the monopoly                 change. Among other things, the Guidelines also note that a high
granted to the patent owner. Therefore, the importation and sale of                  degree of concentration is less problematic in industries characterised
‘grey’ goods that are protected or produced by a Canadian patent is                  by low barriers to entry, rapid technological change, and a pattern of
an act of infringement. The infringement action may be brought by                    firms ‘leap-frogging’ or ‘innovating around’ previous technologies.
the owner of the patent, as well as an exclusive or non-exclusive licen-             The Guidelines also note that transactions involving IP often have
see or an exclusive distributor, provided that the owner of the patent               pro-competitive benefits (such as combining complementary factors)
is made a party to the action. Although there have not yet been any                  and these would be considered as part of any efficiencies analysis
reported cases involving a ‘grey’ patented product obtained abroad                   conducted by the Bureau.
from the Canadian patent owner, licensee or authorised distributor,
Canada would likely follow English precedent and limit exhaustion
                                                                                     20 challenge of a merger
in such a case to the jurisdiction in which the goods were obtained
                                                                                         In what circumstances might the competition authority challenge a
(and thereby, provided the goods were sourced outside Canada,
                                                                                         merger involving the transfer or concentration of IP rights?
allowing a patent infringement action to proceed).
                                                                                     As noted above, the Bureau can challenge a merger before the Com-
                                                                                     petition Tribunal where it believes that a merger is likely to substan-
17 competition authority jurisdiction
                                                                                     tially prevent or lessen competition in a relevant market. In practice,
    Are there circumstances in which the competition authority may have
                                                                                     with respect to mergers involving IP rights, the Bureau has negotiated
    its jurisdiction ousted by, or will defer to, an IP-related authority, or vice
                                                                                     remedies with merging parties rather than litigate at the Tribunal,
    versa?
                                                                                     with the result that case law is sparse. Some examples of negotiated
As noted in question 14, the Bureau has said in the Guidelines that                  remedies are as follows:
it will only seek a remedy under section 32 of the Competition Act                   • In the Bayer/Aventis CropScience merger, Bayer agreed to divest
where the conduct in question involves the ‘mere’ exercise of an IP                       three agricultural chemical products used by the pesticides indus-
right, and no appropriate remedy is available under the relevant IP                       try and to license a fourth chemical product. The Bureau had
statute. Of note, while the mere fact of licensing an IP right is permit-                 argued that the industry was characterised by significant barriers
ted under IP statutes, the Bureau views the establishment of the terms                    to entry, lengthy and expensive product development processes
of such licences and indeed the choice of the licensee to constitute                      and patent protection.
‘more’ than the mere exercise of those rights.                                       • In the Pfizer/Pharmacia merger, Pfizer agreed to divest vari-
    Significantly, as discussed in question 32, in the recent Apotex                      ous developmental pharmaceutical compounds, even though
case, the Bureau successfully intervened at the Federal Court of                          the divested compounds all related to products in development
Appeal where the court reversed an earlier decision the ratio of which                    which did not yet compete with existing products.
logically would have blocked the Bureau from investigating conduct                   • In the GE/Instrumentarium merger, the Bureau agreed not to
(such as licensing) that, although permitted under an IP statute, could                   challenge the merger on the condition that Instrumentarium’s
otherwise offend the Competition Act. It is clear therefore that with                     patient monitoring equipment business be divested and that GE
respect to licensing behaviour (other than a mere refusal to license),                    ensure that third-party suppliers could effectively interconnect
the Bureau will not be impeded from enforcing the general provi-                          with their equipment.
sions of the Competition Act simply because an IP statute generally                  • In the Johnson & Johnson/Pfizer acquisition, Johnson & Johnson
authorises licensing of the IP rights.                                                    was required to divest Pfizer’s Zincofax brand of diaper cream
                                                                                          and related assets, including any Canadian intellectual property
Merger review                                                                             rights, to satisfy the Bureau’s concerns and allow it to clear the
                                                                                          acquisition of the consumer health care business of Pfizer.
18 Powers of competition authority                                                   • In the Schering-Plough/Organon acquisition, the Bureau was
    Does the competition authority have the same powers with respect                      satisfied that Organon’s divestiture of the CHOLERVAC-PM-1
    to reviewing mergers involving IP rights as it does with respect to any               fowl cholera vaccine, as required by the US FTC, would resolve
    other merger?                                                                         any outstanding competition concerns in the Canadian market
The Bureau’s powers in reviewing a merger are not reduced or                              for fowl cholera vaccines.
enhanced by the presence of IP rights. However, as explained in ques-                • In the Akzo Nobel/Imperial Chemical Industries acquisition,
tions 19 to 21, the Bureau’s analysis of the competitive impact of a                      Akzo Nobel agreed to divest the PARA and Crown Diamond
merger involving IP rights will differ from its analysis of one that does                 paint brands, as well as cease its loyalty reward programmes in
not. Furthermore, the merger remedies sought by the Bureau may                            Quebec for a period of five years, to address the Bureau’s com-
also be different where IP rights are involved.                                           petition concerns regarding the supply of paint.


19 analysis of the competitive impact of a merger involving IP rights                21 Remedies to alleviate anti-competitive effect
    Does the competition authority’s analysis of the competitive impact of               What remedies are available to alleviate the anti-competitive effect of
    a merger involving IP rights differ from a traditional analysis in which IP          a merger involving IP rights?
    rights are not involved? If so, how?                                             As a preliminary matter, the Bureau’s preference is to negotiate rem-
In general, the Bureau can challenge a merger before the Competi-                    edies with the parties rather than litigate at the Tribunal. Negotiated
tion Tribunal or negotiate remedies with the merging parties where                   remedies often include divestment of assets. The Bureau views ‘struc-
it believes that a merger is likely to substantially prevent or lessen               tural remedies’ such as divestments to be more effective than behav-
competition. This substantive test does not depend on whether IP                     ioural remedies. In the IP context, though the Bureau has sought and


www.gettingthedealthrough.com                                                                                                                                 31
canada                                                                                                                              Stikeman Elliott LLP


obtained divestments, it has also noted that remedial action involv-             competitive acts’), both tied selling and exclusive dealing must result
ing IP is often accomplished through licensing rather than outright              or be likely to result in a substantial lessening of competition. There-
divestment. The Bureau has stated that licensing can enable one or               fore, a holder of IP rights may not use its rights to prevent or compel
more third parties to participate in markets and that, compared to               the use of other products where this conduct leads or is likely to lead
divestments, licensing can be efficiency-enhancing because it is less            to the requisite anti-competitive effect. The Bureau has stated in its
likely to discourage future research and development. A licence that             Guidelines that even where it concludes that exclusive dealing or tied
is part of a remedy may be exclusive to the licensee, co-exclusive or            selling will substantially lessen competition, it will not likely challenge
non-exclusive, depending on the facts of the case.                               conduct that has a strong efficiency rationale or pro-competitive busi-
                                                                                 ness justification.
Specific competition law violations
                                                                                 25 abuse of dominance
22 cartels and conspiracies                                                          Describe how the exercise, licensing, or transfer of IP rights can relate
     Describe how the exercise, licensing or transfer of IP rights can relate        to abuse of dominance.
     to cartel or conspiracy conduct.                                            Abuse of dominance is civilly reviewable by the Tribunal upon
Under section 45 of the Competition Act, an agreement among com-                 application by the commissioner. The Competition Act’s abuse of
petitors or between suppliers and customers that would lead or would             dominance provision specifically exempts conduct engaged in pur-
likely lead to an undue lessening or prevention of competition is a              suant only to the exercise or enjoyment of any interest derived from
criminal offence punishable by fine, imprisonment or both. Section 45            specified IP statutes. In the Tele-Direct case, the Tribunal found that
is comprehensive enough to apply to agreements between owners of                 the respondents’ refusal to license their trademarks fell within the
competing IP rights and between licensors and licensees. The Guide-              exemption because it represented nothing more than the mere exer-
lines recognise that most restrictions contained in licensing agreements         cise of statutory rights. The Guidelines further emphasise that the
will not lead to the requisite ‘undue lessening or prevention of compe-          mere exercise of a unilateral right (the owner’s right to exclude, for
tition’ because licensing IP is generally pro-competitive. However, it is        example) cannot result in a finding of abuse of dominance.
still possible that the market power of the contracting parties, or the              However, both the case law and the Guidelines provide that non-
effect of the agreement on the relevant market could lead the competi-           unilateral conduct falls outside the scope of the exemption. In the
tion authorities to allege that section 45 has been violated.                    NutraSweet case, the Tribunal found that conduct seeking to extend
      As noted, section 45 allows pro-competitive agreements and                 an IP right beyond its scope (in that case, inducing customers to enter
therefore permits cross-licensing arrangements and patent pools to               long-term supply agreements just before patents expired) amounted to
the extent that they are pro-competitive. The Bureau has stated in its           an abuse of dominance. Furthermore, in the Interac case, in which the
Guidelines that pro-competitive benefits of such arrangements can                director of investigation and research under the Competition Act (the
include: the clearing of blocking patents, reducing transaction costs,           former title of the commissioner) and the respondents entered into a
integrating complementary technologies and avoiding costly infringe-             consent order, the director alleged that respondents used their control
ment litigation. Protection for collective societies is provided for in          over the Interac electronic banking network and enacted exclusionary
the Copyright Act (see question 5).                                              by-laws to engage in joint abuse of dominance. Among other things,
                                                                                 the consent order contained provisions requiring Interac to grant a
                                                                                 commercially reasonable software licence enabling others to join the
23 (Resale) price maintenance                                                    Interac network, without any licence fee or royalty charge.
     Describe how the exercise, licensing, or transfer of IP rights can relate
     to (resale) price maintenance.
                                                                                 26 Refusal to deal and essential facilities
Resale price maintenance is prohibited under section 61 of the Com-                  Describe how the exercise, licensing, or transfer of IP rights can relate
petition Act and carries criminal sanctions. Section 61 was designed                 to refusal to deal and refusal to grant access to essential facilities.
to include IP rights such that attempts by licensors to influence prices
upwards (or discouraging reductions in price) in a downstream mar-               See question 14 for a discussion of the circumstances in which a sim-
ket are prohibited. Although a licensor may suggest a resale price,              ple refusal to license IP could violate section 32 of the Competition
it must make clear to the licensee that the licensee need not accept             Act, the section specifically dealing with the unilateral exercise of IP
the suggested price and that the licensee’s business relations with the          rights. See question 28 for a discussion of the remedies available for
licensor or any other person will not suffer if it chooses not to accept         violations of section 32 of the Competition Act.
the suggested price.                                                                  Section 75 is the general provision of the Competition Act cov-
                                                                                 ering refusals to deal. Refusals to deal are civilly reviewable by the
                                                                                 Tribunal, upon application by the commissioner or, with leave, by
24 Exclusive dealing, tying and leveraging                                       private parties. Under section 75, a refusal to deal occurs where a sup-
     Describe how the exercise, licensing, or transfer of IP rights can relate   plier refuses to supply a product to a customer and where the refusal
     to exclusive dealing, tying and leveraging.                                 has an adverse effect on competition (and the customer is willing and
Both exclusive dealing and tied selling (which are forms of leveraging)          able to meet the usual trade terms, but is unable to obtain adequate
fall under section 77 of the Competition Act, and are civilly review-            supply because of insufficient competition among suppliers). In the
able by the Tribunal, upon application by the commissioner or, with              Warner Music case, the Tribunal rejected an application made by the
leave, by a private party. Generally, a supplier engages in tied selling         director of investigation and research under section 75 in which the
where, as a condition of supplying a product, it requires or induces             director sought compulsory licensing of copyrights to enable a new,
a customer to purchase another product or refrain from using a par-              fledgling competitor to compete with an incumbent. Although the
ticular brand of product; exclusive dealing occurs where a supplier              Tribunal disposed of the application on other grounds, it noted that
uses incentives to require or induce a customer to deal exclusively or           as a matter of copyright law the respondents (ie, the IP holders) had
primarily with products supplied or chosen by the supplier.                      the right to refuse to license their IP. The Tribunal seems therefore
     In order to offend section 77 (or the abuse of dominance                    to be of the general view that section 75 does not apply to refusals
provision in section 79 if they form part of a ‘practice of anti-                to license IP.


32                                                                                Getting the deal Through – Intellectual Property & antitrust 2009
Stikeman Elliott LLP                                                                                                                   canada

Remedies                                                                 30 Scrutiny of settlement agreements terminating an IP infringement
                                                                             dispute
27 Remedies for violations of competition law involving IP                   How will a settlement agreement terminating an IP infringement
    What sanctions or remedies can the competition authority or courts       dispute be scrutinised from a competition perspective?
    impose for violations of competition law involving IP?
                                                                         As noted in question 13, the Bureau recently released a paper deal-
See question 28 for a summary of the remedies available for viola-       ing with the interface between competition and intellectual property
tions of section 32, the section of the Competition Act specifically     laws. The paper highlighted litigation settlements as a future chal-
dealing with IP. In addition to these special IP-specific remedies,      lenge for competition law and policy makers, stating that although
which include compulsory licensing and the voiding of licences, other    litigation settlements are not regulated under any particular law, they
remedies are available for violations of the general sections of the     may result in the following conduct which could have anti-competi-
Competition Act for conduct that happens to involve IP. For exam-        tive effects:
ple, if an IP-related agreement was found to violate section 45 of the   • the grant of exclusive and restrictive licences such as licences that
Competition Act (the cartel or conspiracy provision), then the normal         define narrow geographical areas in which the licence can be
remedies available under section 45 (ie, fines up to C$10 million,            exploited;
imprisonment for up to five years, or both) would be available. If the   • parties engaging in cross-licensing and patent pooling such as
Bureau blocked a merger on the basis that the combination of the              where two or more parties agree to license IP rights to each
merging parties’ IP would substantially lessen competition, then the          other or to pool patents together. The Bureau recognises that
Bureau may seek the same remedies as are available for mergers that           these agreements can be pro-competitive, but they can also result
do not involve IP (divestitures, for example) or IP-specific remedies         in price-setting structures, coordinated output restrictions and
such as mandatory licensing.                                                  illegal tying arrangements;
                                                                         • reverse payments where one party agrees to a restrictive covenant or
28 competition law remedies specific to IP                                    delayed licence in return for a substantial amount of money; and
    Do special remedies exist under your competition laws that are       • payments made from one party to another party not to enter a
    specific to IP matters?                                                   market.

As noted in question 14, section 32 of the Competition Act provides      A July 2008 patent infringement case, Laboratoires Servier v Apotex,
for special remedies specific to IP-related matters. Where the factors   is the only one in which a court has considered the possibility of a
outlined in question 14 are met, and when it is the Bureau’s view that   Competition Act claim arising from a patent dispute settlement agree-
no appropriate remedy is available under the relevant IP statute, the    ment. In that case, the patent at issue had been the subject of a dispute
Bureau will recommend to the attorney general that an application        among three applicants before it was issued. There was disagreement
be made to the Federal Court under section 32.                           as to which of the applicants were entitled to patents for certain
    If it agrees with the attorney general, the Federal Court may make   particular claims in the application. The three applicants brought
one or more of the following orders:                                     the matter before the Federal Court for resolution, but they settled
• declaring void, in whole or in part, any agreement, arrangement        soon afterwards. In response to the allegation that it had infringed
    or license relating to the impugned use of IP rights;                said patent, Apotex alleged that the settlement agreement among the
• restraining a person from carrying out or exercising any or all        three companies amounted to a conspiracy to lessen competition
    of the terms or provisions of the agreement, arrangement or          unduly contrary to section 45 of the Competition Act. The Servier
    licence;                                                             court followed the basic reasoning in Eli Lilly v Apotex, discussed in
• directing the grant of licences to such person and on such terms       question 32, but distinguished the two because there was nothing in
    and conditions as the court may deem proper or, if the grant and     the Servier case that resulted in the parties to the settlement obtaining
    other remedies under this section would appear insufficient to       more market power than was inherent in the patent itself.
    prevent the impugned use, revoking the patent;                            Although, to our knowledge, there have been no Competition
• directing a registration of a trademark or an integrated circuit       Bureau proceedings based on settlement agreements to date, there is
    topography to be expunged or revoked; and                            no reason why such a settlement agreement could not offend section
• directing that such other acts be done or omitted as the court         45 or 79 of the Competition Act (the cartel/conspiracy and abuse of
    deems necessary to prevent the impugned use.                         dominance provisions), particularly if it arguably extends beyond
                                                                         the area of exclusivity granted by the IP rights. See question 22 for
29 Remedies and sanctions                                                a brief discussion of section 45, and question 25 for a discussion of
    What competition remedies or sanctions have actually been imposed    section 79.
    in the IP context?
                                                                         Economics and application of competition law
Section 32 remedies (see question 28) have not yet been imposed by
a court. Furthermore, it should be noted that the Bureau has adopted     31 Economics
a cautious approach to section 32, as set out in the Guidelines, which       What role has economics played in the application of competition law
is unlikely to produce a great number of cases.                              to cases involving IP rights?
     Under the general provisions of the Competition Act, however,
                                                                         As there have been relatively few competition law cases involving IP
sanctions or remedies have been imposed in the IP context. For exam-
                                                                         rights, it is difficult to assess what role the courts and the Tribunal
ple, sanctions or remedies were imposed or agreed upon in the abuse
                                                                         have assigned to economics in the IP context. However, the Guide-
of dominance context in the Nutrasweet and Interac cases, described
                                                                         lines are replete with economics-based reasoning and the Bureau’s
in question 25. In merger cases (see question 20), the Bureau has
                                                                         approach to IP rights as evidenced in the Guidelines, speeches of the
entered into consent agreements with the merging parties in which
                                                                         commissioner and elsewhere suggests that the Bureau’s understand-
divestments or licensing of IP or both have been obtained.
                                                                         ing of the relationship between IP rights and competition policy is
                                                                         suitably informed by economic theory.


www.gettingthedealthrough.com                                                                                                                  33
canada                                                                                                                           Stikeman Elliott LLP



     Update and trends

   The Competition Bureau has identified 13 areas for future academic          In June 2008, the federal government introduced a long-anticipated
   study in its report ‘The Competition/Intellectual Property Interface        bill to amend the Copyright Act. The proposed changes include
   – Present Concerns and Future Challenges’ (www.competitionbureau.           protection for TPMs and DRM (see question 7), new format-shifting,
   gc.ca). These are:                                                          time-shifting, and educational exemption provisions, and a new
   •    empirical evidence of the competitive effect of patent pooling;        ‘making available’ right for performers and producers, among others.
   •    establishing guidelines regarding rules for when standard setting      Although Bill C-61 died on the order paper with the call of a federal
        will be a violation of the Competition Act;                            election in the fall of 2008, it was similar to a previous bill which met
   •    effect of obtaining multiple patents on cost and quality of            the same fate in the previous election.
        medicines in Canada;                                                       Praised by video game and music industry groups, critics claimed
   •    effect of authorised generics on consumers and innovation;             that the anti-circumvention provision in Bill C-61 regarding TPMs and
   •    publications regarding the extraterritorial application of US patent   DRMs was over-protective of copyright owners. By imposing a blanket
        laws;                                                                  ban on breaking digital locks on copyrighted material, opponents
   •    examination of the different approaches to collective                  noted that the anti-circumvention clause would trump the rights
        management of copyright;                                               granted in the Bill to make even limited copies for the purposes of
   •    the impact of new technologies on protecting copyrights in the         time- or media-shifting. Others feared that even the proposed limited
        digital context from a competitive perspective;                        authorisation of copying for time- or media-shifting, however, would
   •    examination of the use of official marks by public authorities in      cause an increase in the prices of computers and iPods. Despite
        the private market;                                                    controversial elements of the bills, similar legislation seems likely to
   •    empirical research on existing and potential instances of tying in     be introduced at some point in the future.
        traditional and high-tech industries;                                      Also in June 2008, Canada’s Competition Policy Review Panel
   •    examining the role of competition in ensuring access to essential      released its final report, aimed at making all aspects of Canada’s
        facilities, and whether the issue is best handled through IP law,      laws and economy more competitive on an international level.
        competition law or industry-specific regulation;                       With respect to intellectual property, the panel’s recommendations
   •    examining the effect of competition policy on R&D joint ventures;      included updating the copyright and patent laws to reflect the
   •    examining what the benefits are of litigation settlements and          changes wrought by the internet, as well as strengthening anti-
        areas of concern from a competition perspective; and                   counterfeiting and anti-piracy laws.
   •    examining the merits of compulsory licensing as a competitive
        remedy.



32 Recent cases                                                                copyright protection of the ‘works’ that appeared on the packag-
     Have there been any recent high-profile cases dealing with the            ing. Justice Fish went on to express ‘grave doubt whether the law
     intersection of competition law and IP rights?                            governing the protection of intellectual property rights in Canada
                                                                               can be transformed in this way into an instrument of trade control
In November 2005, in the Apotex case, the Federal Court of Appeal
                                                                               not contemplated by the Copyright Act.’ No reference was made
found that there is no inherent conflict between section 45 of the
                                                                               by the Court to the Competition Act or competition law principles
Competition Act (the conspiracy provision) and the right of a pat-
                                                                               and, in particular, no evidence was discussed which would suggest
ent holder to assign a patent under the Patent Act. The court there-
                                                                               an attempt to properly define a relevant competition market.
fore rejected the argument that because the assignment of patents
is permitted under the Patent Act, all such assignments should be
immunised from the conspiracy provision of the Competition Act.                33 Recent changes
The court found that where the assignment of a patent increases                    Have changes occurred recently or are changes expected in the near
the assignee’s market power in excess of that inherent in the patent               future that will have an impact on the application of competition law
rights assigned, section 45 may apply. The court’s finding was there-              to IP rights?
fore supportive of the Bureau’s Guidelines, which provide that the
                                                                               As explained in question 32, the Apotex case represents an impor-
Bureau may challenge an arrangement where it creates, enhances or
                                                                               tant recent court decision on the application of competition law to
maintains market power.
                                                                               IP rights.
    As noted in question 15, a very divided Supreme Court of Can-
                                                                                    Although specific legislative changes to the Competition Act
ada held in the 2007 Kraft case that an exclusive licensee of a copy-
                                                                               are not currently anticipated, the Bureau, Industry Canada and the
right could not prevent the importation of grey market goods into
                                                                               Canadian Intellectual Property Office (CIPO) are working together
Canada where the goods had been made by the copyright owner,
                                                                               on the interface between intellectual property and competition
and where the copyrighted work was a logo on a wrapper and thus
                                                                               policy.
held by some of the Court to be only ‘incidentally’ related to the
                                                                                    As noted in question 13, in March 2007 the Bureau released a
imported goods. Despite this being the result of the case, in fact
                                                                               paper setting out major issues at the interface of competition and
a majority of the Court held in favour of the dissent on each of
                                                                               intellectual property law. The paper identified 13 specific topics for
the main issues. Although the Court did not expressly deal with
                                                                               future study (see ‘Update and trends’). In addition, the paper stated
the issue based on competition law principles, Justice Fish stated
                                                                               that since section 32 of the Competition Act has been rarely used
in obiter that the exclusive licensing agreements that Kraft Canada
                                                                               by the Bureau since it was enacted in 1910 and since there are other
entered into with its parent companies had more to do with the
                                                                               provisions of the Competition Act that can be relied on to deal with
monopoly on the sale of these chocolate bars in Canada than with


34                                                                              Getting the deal Through – Intellectual Property & antitrust 2009
Stikeman Elliott LLP                                                                                                                    canada

anti-competitive conduct related to IP rights, the utility of section 32   opponents noted that the anti-circumvention clause would trump the
may need to be reviewed.                                                   rights granted in the Bill to make even limited copies for the purposes
     In June 2008, the federal government introduced a long-antici-        of time- or media-shifting. Others feared that even the proposed lim-
pated bill to amend the Copyright Act. The proposed changes include        ited authorisation of copying for time- or media-shifting, however,
protection for TPMs and DRM (see question 7), new format-shift-            would cause an increase in the prices of computers and iPods. Despite
ing, time-shifting, and educational exemption provisions, and a new        controversial elements of the bills, similar legislation seems likely to
‘making available’ right for performers and producers, among oth-          be introduced at some point in the future.
ers. Although Bill C-61 died on the order paper with the call of a              Also in June 2008, Canada’s Competition Policy Review Panel
federal election in the autumn of 2008, it was similar to a previous       released its final report, aimed at making all aspects of Canada’s laws
bill that met the same fate in the previous election.                      and economy more competitive on an international level. With respect
     Praised by video game and music industry groups, critics claimed      to intellectual property, the panel’s recommendations included updat-
that the anti-circumvention provision in Bill C-61 regarding TPMs          ing the copyright and patent laws to reflect the changes wrought by
and DRM was over-protective of copyright owners. By imposing               the internet, as well as strengthening anti-counterfeiting and anti-
a blanket ban on breaking digital locks on copyrighted material,           piracy laws.




    Susan M Hutton                                                          shutton@stikeman.com

    1600 – 50 O’Connor Street                                               Tel: +1 613 234 4555
    Ottawa, K1P 6L2                                                         Fax: +1 613 230 8877
    Canada                                                                  www.stikeman.com


www.gettingthedealthrough.com                                                                                                                  35

				
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