The Competition Bureau has released draft and updated Intellectual Property Enforcement Guidelines for public consultation, and is seeking comments and feedback by August 10, 2015.
The draft guidelines largely mirror those originally released back in September 2014 with a few notable changes. Specifically, the updated draft guidelines go into much more detail about how the Bureau proposes to address the settlement of proceedings under the Patented Medicines (Notice of Compliance) Regulations. While the Bureau recognizes the benefit in having PM(NOC) proceedings settled privately, they express concern over the competition risks that litigation settlements may pose if the agreements “go beyond what is reasonably necessary to reach a settlement” or “delay the benefits of generic-competition”.
Under the proposed guidelines, a settlement with any payment 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) of the Competition Act. For example, if the Brand company provides a monetary payment to the Generic in addition to allowing the Generic to enter the market 5 years before the relevant patent expires, the Bureau would try to determine whether “but-for” the settlement, the Brand and the Generic would have been likely to compete earlier than the generic entry date specified in the settlement and examine the size of the payment to determine whether it was likely for the purpose of delaying the Generic’s entry. If the Bureau were to determine that the payment was so large that it was probably for the purpose of delaying entry, that the competitive effects from the delay were significant, and that timely entry from other generic suppliers was not likely to occur on a scale sufficient to contain the ability of the Brand and Generic to exercise market power, then the Bureau may seek a remedy from the Competition Tribunal to prohibit the settlement.