Canada: Pharma In Brief - Competition Bureau Releases Consultation Draft Of Updated IP Enforcement Guidelines, Includes Pharma-Specific Examples


The Competition Bureau released draft and updated Intellectual Property Enforcement Guidelines (IPEGs) for public consultation, and is seeking comments on the IPEGs by August 10, 2015.

The analytical framework in this draft is similar to the September 2014 version, although this version includes many more examples on patent settlements and standard essential patents. The Bureau has also stepped back from its earlier position and has clarified that settlement agreements will be reviewed civilly, absent evidence of intent to fix prices, allocate markets, or restrict output.

In September 2014, the Bureau issued a white paper that provides background information on the pharmaceutical industry in Canada, the regulatory regime in Canada, the provisions of the Competition Act (Act) that may apply to reverse-payment settlement agreements, and the Bureau's preliminary views as to how the Act could apply to such settlements. As part of the white paper, the Bureau calls for a notification regime similar to that which exists in the United States.

The Bureau has maintained its position that the circumstances in which the Bureau may apply the Act to conduct involving IP or IP rights fall into two broad categories:

  • conduct involving something more than the mere exercise of the IP right, where general provisions of the Act will be applied; and
  • conduct involving the mere exercise of the IP right and nothing else, where section 32 (special remedies) of the Act will be applied.

The Bureau's general approach

The Bureau generally takes a five-step approach to determining competitive harm. The approach will also be applied, according to the draft IPEGs, when determining whether IP rights or agreements cause competitive harm. The five steps are as follows:

1. identifying the conduct;

2. defining the relevant market;

3. determining if the company(ies) possess market power by examining market concentration, conditions for a new entrant, as well as other factors;

4. determining if the conduct would substantially lessen or prevent competition in the relevant market(s); and

5. considering relevant efficiency rationales or business justifications.

Settlements of proceedings under the PMNOC Regulations

The Bureau has provided guidance on how it will approach settlement agreements reached as part of proceedings under the Patented Medicines (Notice of Compliance) Regulations (PMNOC Regulations). Under the PMNOC Regulations, brand pharmaceutical companies apply to the courts to prohibit generic pharmaceutical companies from receiving marketing approval to sell patented medicines. The Bureau's enforcement approach to settlements under the PMNOC Regulations:

1. An entry split settlement (i.e., which does not involve the brand name company providing consideration to a generic other than allowing the generic to enter the market before patent expiry) will not pose an issue under the Act;

2. A settlement with a payment (i.e., the brand name company provides compensation to a generic in addition to allowing the generic market entry before patent expiry) will be reviewed under section 90.1 (civil agreements lessening competition), or section 79 (abuse of dominance);

3. A settlement may be reviewed under section 45 (criminal cartel agreements) only where there is evidence that the intent of the payment was to fix prices, allocate markets or restrict output.

Pharma examples of conduct that may trigger an investigation

The draft IPEGs contain several examples of the types of conduct that would garner the Bureau's attention. The following are examples of particular interest to the pharmaceutical sector:

Example 9 involves product switching, whereby an innovator that is approaching imminent patent expiry on drug A and the impending entry of generic versions of drug A, pulls drug A from the market and begins marketing drug B. Drug B treats the same affliction as drug A but has a much longer period of exclusivity. Since drug A is the reference product for a generic counterpart, pharmacies cannot substitute generic drug A for drug B. If such conduct was for the purpose of excluding generic drug A, the Bureau may investigate the innovator under section 79 of the Act as it may be an abuse of dominant position.

In Example 12, a brand provides a monetary payment to a generic and the generic comes to market five years before patent expiry. The Bureau would first determine if competitive harm occurred and then determine whether the payment was commensurate with the services provided and if the payment was for the purpose of delaying a generic's entry. Where an efficiency exception is not established, the Bureau may seek a remedy from the Competition Tribunal to prohibit the settlement.

In Example 13A, a brand provides a monetary payment to a generic and the generic comes to market after patent expiry. The Bureau believes this type of settlement would contravene subsection 45(1) as it is intended to be a market allocation agreement. The Bureau may refer the matter to the Director of Public Prosecutions (DPP). If the DPP elects not to pursue prosecution, the Bureau may re-evaluate whether the settlement should be subject to a remedy under the reviewable matters provisions of the Act.

Comment period

It is important for stakeholders to provide their views on the proposals the Bureau has put forward in its revised approach to intellectual property issues, as well as indicate if there are other competition or IP issues that they believe the Bureau should address. The Bureau is accepting comments until August 10, 2015.

We have extensive experience in dealing with competition law issues in the pharmaceutical and life sciences sector. Please contact us directly if you have any questions or comments about the public consultation process or the potential impact that the changes to the IPEGs may have on your business.


The draft consultation Intellectual Property Enforcement Guidelines

The Bureau's White Paper, Patent Litigation Settlement Agreements: A Canadian Perspective

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

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
Related Video
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