Meena Alnajar is an IPilogue Senior Editor and a 3L JD Candidate at Osgoode Hall Law School .

A protects your intangible property from others’ use, but what happens when patent protection operates in a way that ensures no other innovators can build upon a patented invention? When IP and competition clashes, authorities will step in to regulate as demonstrated in a recent dawn raid.

On September 13, 2022 the Swiss Competition Commission (“COMCO”) the pharmaceutical company Novartis’ headquarters in Switzerland at . A rather unusual visit, COMCO proceeded to raid the company’s headquarters for all information related to an unidentified . According to the regulator, the drug’s patent could be a blocking patent used to prevent competing products’ entry into the market. Novartis is allegedly protecting its dermatology drug by using one patent to launch proceedings against possible competitors in the market. Here we see IP and competition law colliding with blocking patents wielded as an anti-competitive tool.

A blocking patent can prevent another inventor from using the patent’s technology or improving it. A blocking patent is often cited by during the patent application examination phase to block a patent application or a patent’s challenger (such as those claiming an existing patent should be invalid). On July 22, 2021, held in Chemours v. Daikin that “[a] blocking patent is one that is in place before the claimed invention because such a blocking patent may deter non-owners and non-licensees from investing the resources needed to make, develop, and market such a later, ‘blocked’ invention.” A blocking patent is therefore broad in scope to deter people from innovating in any way related to the blocking patent. Overall, these patents are a helpful business tool, blocking a competitor to conserve the patent’s commercial success while also observing where competitors are attempting to . But when too successful, the blocking patent has a on competition. Innovators’ fear of overtakes their willingness to build on the invention and the blocking patent becomes an anti-competitive red flag to regulators.

In the Novartis , authorities are questioning whether Novartis is acting appropriately with its drug patent. The investigation is still in its and in the company have slightly fallen after the raid was announced. Regulators unexpectedly taking a business’ commercially sensitive information is not ideal. The investigation thus raises a further question, when does a business’ patent portfolio become anti-competitive and subject to a raid?

Patent rights and anti-competitive practices can overlap. Patent holders should take action to ensure that their IP use does not violate their jurisdiction’s competition law. Balance must be maintained in the patent system through the : setting strict patent content boundaries, preventing exclusive licensing that stops other competitors from market entry, and preventing restrictive selling practices where patent rights are used to price fix. While blocking patents can close the doors to competitors, these patents can open the doors for someone else, like regulators, to come in and conduct their information raids.

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Students interested in trying out for Osgoode’s PADC team must submit answers to our�� in a Word document with your name in the file name to��iposgoode@osgoode.yorku.ca.

Each member of the team will receive up to��3 credits��for participating in the competition.��Please note that only 2L and 3L students may participate.��Please also note that under Academic Rule 4.3e, students may participate for credit in only one lawyer simulation competition in a given academic year unless they obtain permission from the Director of Mooting and Lawyering Simulations.

About the Patent Drafting Competition

Originally created in 2014 as a midwest competition, the Competition is today a national inter-law school competition designed to introduce law students to issues arising in United States patent law. Participants will have the opportunity to develop their patent prosecution skills by applying legal principles to a hypothetical invention scenario (“Invention Statement”) and appreciating the intricacies of drafting a patent specification and claims that are both patentable and valuable. Each team will complete a search pertaining to the Invention Statement, draft a utility patent application, and defend their decisions before a panel of judges comprising USPTO executives/personnel, patent practitioners, academia and/or special guest judges.

The Competition consists of regional rounds held virtually. The winner of each regional round will compete in the National Finals held at the United States Patent and Trademark Office (USPTO) headquarters in Alexandria, Virginia. ��

The Competition consists of regional rounds held virtually. The winner of each regional round will compete in the National Finals held at the United States Patent and Trademark Office (USPTO) headquarters in Alexandria, Virginia. ��

Invention statements will be released to teams on November 1, 2021. Team patent applications will be due on January 16, 2022. Regional virtual tryouts will be held on March 5, 2022, followed by the National Finals Competition on April 8, 2022.��

Read about the experiences of the students on last year’s team here:��

The complete set of rules for this year, can be found here:��.

If you have further questions or would like more information, please email Ashley Moniz at��amoniz@osgoode.yorku.ca.

We look forward to another great year at the Patent Drafting Competition!

The post REMINDER: Tryouts for the USPTO National Patent Application Drafting Competition Team - DEADLINE TOMORROW appeared first on IPOsgoode.

Students interested in trying out for Osgoode’s PADC team must submit answers to our by 3 pm on Friday, October 22, 2021.�� Please send your answers in a Word document with your name in the file name to iposgoode@osgoode.yorku.ca.

��Each member of the team will receive up to 3 credits for participating in the competition. Please note that only 2L and 3L students may participate.��Please also note that under Academic Rule 4.3e, students may participate for credit in only one lawyer simulation competition in a given academic year unless they obtain permission from the Director of Mooting and Lawyering Simulations.

About the Patent Drafting Competition

Originally created in 2014 as a midwest competition, the Competition is today a national inter-law school competition designed to introduce law students to issues arising in United States patent law. Participants will have the opportunity to develop their patent prosecution skills by applying legal principles to a hypothetical invention scenario (“Invention Statement”) and appreciating the intricacies of drafting a patent specification and claims that are both patentable and valuable. Each team will complete a search pertaining to the Invention Statement, draft a utility patent application, and defend their decisions before a panel of judges comprising USPTO executives/personnel, patent practitioners, academia and/or special guest judges.

The Competition consists of regional rounds held virtually. The winner of each regional round will compete in the National Finals held at the United States Patent and Trademark Office (USPTO) headquarters in Alexandria, Virginia. ��

The Competition consists of regional rounds held virtually. The winner of each regional round will compete in the National Finals held at the United States Patent and Trademark Office (USPTO) headquarters in Alexandria, Virginia. ��

Invention statements will be released to teams on November 1, 2021. Team patent applications will be due on January 16, 2022. Regional virtual tryouts will be held on March 5, 2022, followed by the National Finals Competition on April 8, 2022.��

Read about the experiences of the students on last year’s team here:

The complete set of rules for this year, can be found here: .

If you have further questions or would like more information, please email Ashley Moniz at amoniz@osgoode.yorku.ca.

We look forward to another great year at the Patent Drafting Competition!

The post CALL FOR TRYOUTS - USPTO National Patent Application Drafting Competition appeared first on IPOsgoode.

It was a “hallelujah moment,” so to speak, when the Government of Canada announced its national Intellectual Property (IP) Strategy, highlighting IP as a priority for the country. After decades of neglect, IP is finally getting the attention it rightly deserves from Ottawa. The , announced on February 27, 2018, in the 2018 , promises $85.3 million over five years with $10 million yearly after that to support the strategy.

The IP Strategy underscores the need to ensure Canadians are IP-savvy and able to compete in today’s new big-data, tech-driven and knowledge-based economy. While the government highlights conventional mechanisms such as law reform, there is a welcome focus on fixing the very system of IP in Canada. Canadian policy makers must be attentive to the institutional frameworks and socio-cultural and economic processes relating to IP from the very early inventive stages to the later commercialization stages and must craft solutions and provide resources to improve the .

Rationale for a Canadian IP Strategy

To date, Canadian residents have a poor record of registering for IP protection. The 2017 World Intellectual Property Organization (WIPO) report ranks Canada as twentieth in terms of patents, sixteenth for trademarks and forty-third for designs, and there are no Canadian companies in the top 100 patent applicants worldwide.

The Canadian government’s vision of leveraging IP for macroeconomic growth is also consistent with the findings of the Organisation for Economic Co-operation and Development (OECD), which “now, more than ever, policy makers need to harness drivers of growth like the creativity and ideas contained in intellectual property to stimulate economic growth and foster social well-being.” IP allows rights holders to protect and commercialize their knowledge-based capital, which the as a key factor for increasing productivity and improving living standards.

The government rightly recognizes that a holistic and integrated strategy on IP increases the competitiveness and growth potential of firms, especially in the context of start-ups and small and medium-sized enterprises (SMEs). Indeed, research shows that IP, especially in the form of patents and trademarks, is positively related to firm outcome factors, including firm valuations,[1] firm survival[2] and venture capital funding.[3] However, acquiring IP does not guarantee commercial success. Inventors, entrepreneurs and companies use different IP strategies and processes depending on their unique . As such, any successful IP strategy must be mindful of mechanisms offering a tailored approach to innovation from the grassroots.

In the new strategy, the government recognizes underserviced groups often absent from the innovation landscape, such as women and Indigenous communities, and is consciously taking an evidence-based approach to resolving problems. The strategy highlights grassroots initiatives such as university-based IP legal clinics as a win-win: such clinics are nimble, offer tailored solutions to help underserviced groups and start-ups for free, and train law students to improve their knowledge of IP, client-facing skills and ultimate employability.

While Canada’s IP Strategy boasts some holistic ideals, it still has work to do in eschewing the existing siloed approach and linking its mechanisms and eventual data findings to similar exercises within the budget. The IP Strategy must resonate with other initiatives that share a similar end goal: to enhance economic growth by creating and sustaining innovative jobs and talent in Canada.

Unpacking Canada’s IP Strategy

The long-awaited strategy highlights the need for Canadian businesses, creators, entrepreneurs and innovators to understand, protect and access IP. The strategy identifies three main mechanisms to ensure that these objectives are met: IP awareness, education and advice; strategic IP tools for economic growth; and IP law.

IP awareness, education and advice: The government plans to continue to support the work of the Canadian Intellectual Property Office (CIPO) in deploying outreach, learning and advice programs; gathering evidence through a survey on IP awareness and use; and funding IP legal clinics based at Canadian universities that are training the next generation of IP practitioners. At the same time, the strategy advances the provision of quality IP education, awareness and assistance to Canadian businesses, and assists Indigenous peoples to engage meaningfully in policy discussions on the protection of traditional knowledge at the WIPO negotiations. Finally, a new team of advisers to help innovators improve their IP proficiency.

Strategic IP tools for economic growth: The government proposes several , including expedited IP resolution before the Federal Court and the Copyright Board of Canada, a patent collective pilot project, cooperation with the Standards Council of Canada on the standards-setting process, and improving companies’ global competitiveness. The government also aims to create a centralized IP database, which will contain IP held by government and academia for businesses to license and commercialize.

IP law: The government proposes some legislative changes to clarify acceptable practices and prevent misuse of IP rights. These changes include new requirements for demand letters in both patent and copyright law; a new research exception in the Patent Act to allow research and development of patented technology without the need to pay for a licence or triggering infringement; and the expansion of patent licensing protection to bankruptcy and insolvency law. Finally, a new College of Patent and Trademark agents will be created to better regulate the profession.

Prioritizing Knowledge in a Knowledge-based Economy

It isn’t a coincidence that the government highlights IP awareness and education among the first of its strategy mechanisms. There is a need to understand the level of knowledge and practices at the grassroots level of Canada’s inventors, creators and businesses. All too often, IP is not understood or articulated well — it’s not uncommon for patents to be called copyrights or vice versa. Further, IP awareness has been an area of weakness for Canadian start-ups and SMEs. According to , 83 percent of Canadian SMEs indicated that IP was not relevant to their business when citing reasons for not seeking IP rights. This problem is compounded for traditionally underserviced groups. Here, the government aptly shines the spotlight on women and Indigenous entrepreneurs.

The deployment of a survey on IP awareness and use will be a helpful start for policy makers, researchers and IP professionals to ensure that IP services are tailored to the needs of all Canadians. Improvements have been made on involving more women in the IP process, but more work is needed. In particular, that the number of Patent Cooperation Treaty (PCT) applications filed by female inventors originating in Canada has increased by 377 percent between 1997 and 2015. However, female inventors are still outnumbered by men seven to one, and the share of inventors who are women in Canada has trailed the world average since 2011. Even more discouraging figures persist for Indigenous communities. More information is needed to target initiatives through meaningful consultation and recognition.

With those facts in mind, the IP Strategy’s recognition of the need for increased research funding is encouraging. This empirical work is critical to create evidence-based IP policies going forward. For related initiatives to be successful, it is necessary that the power of all the data gathered be harnessed and used for purposeful intervention (not merely shelved or used by unscrupulous third parties). The IP Strategy provides some means for correcting this knowledge gap, largely by funding Statistics Canada work, but time is of the essence to ensure Canada does not lose ground to other countries. Further, while funding Statistics Canada work is useful for some big picture findings, resources must also be afforded to university-based IP legal clinics, fueled by legal experts and their students. These clinics are on the front lines of IP commercialization and understand the pain points of starting up and scaling companies, and can more readily access meaningful data points for analysis.

Spurring Innovation from the Grassroots

The government rightfully identifies university-based IP legal clinics as a win-win for Canada. Legal clinics provide its underserviced clients the ability to recognize, protect and exploit technology and other inventions from the grassroots for free. Indeed, financial constraints constantly plague a specialized field such as IP law, where obtaining a patent (and there are many other forms of IP) can — a price range that is more accessible to large, foreign-owned firms with a wealth of expertise and deep pockets.

Legal clinics can help to bridge those gaps for smaller firms, so that IP-savvy inventors and entrepreneurs can more readily market their skills and creations to attract more funding or higher wages.

IP legal clinics offer access to justice tools that address economic mobility: they provide legal support to under-resourced and marginalized communities. Even when entrepreneurs and small business owners recognize the importance of IP, budget pressures may force them to underinvest in IP protection and commercialization strategies, if they do so at all.

Unfortunately, there such IP legal clinics in Canada. The IP Osgoode Innovation Clinic, founded in 2010 at Osgoode Hall Law School, and the International Intellectual Property Law Clinic, a program of the University of Windsor Law and the University of Detroit Mercy School of Law, are two examples that have made all the difference. They increase the IP literacy of the average Canadian inventor, entrepreneur or business owner while training the next generation of Canada’s IP practitioners. Importantly, IP legal clinics are also education and awareness facilitators: they provide information sessions for free to companies and members of the public on a range of IP issues. Similarly, they can easily partner with other groups where necessary and tailor educational and hands-on events to help women and Indigenous communities. In this way, they are effective solutions to the challenges identified in the government’s IP Strategy.

While little detail is currently available on how the money promised in the IP Strategy will be spent, government funds should help support the operational expenses of legal clinics to ensure sustainable and scalable models across Canada. Clinics face a sizable challenge in obtaining operational funding to serve the innovation community. So far, the government has noted that “funding will also help clinics obtain resources and tools to improve the quality of the prior art searches,” but in reality, legal clinics need funding for the salaries of administrative staff to run the daily operations of the clinic. And in reality, while clinics advance meaningful educational programs and can conduct valuable research work, these too lack funding.

Big-picture Challenges

Reversing the country’s IP oversights will take time, patience and financial investment within the IP space and related areas. Linking an IP strategy to other government policy is necessary for success.

For example, the reviews of the Copyright Act and the Telecommunications and Broadcasting Act should take innovation challenges into account and ensure that any recommendations are in accordance with the national IP Strategy. The National Digital and Data Consultations must also mesh with the IP Strategy. A government on the consultations raises an important question: “How do we best protect the intellectual property of entrepreneurs in an era of increasingly digital innovation and invention and support businesses as they develop new products and services for domestic and global markets?” However, this is the only mention of IP in the paper.

Balancing public and private interests in the IP Strategy will be a hurdle; the government needs to reassure Canadians that their private information and data will remain secure while it provides opportunities for new ways of using this data, to stimulate economic growth and social betterment. Awareness about the importance and appropriate uses of proprietary data and resultant IP is crucial.

Conclusion

Innovators go through a “gap period” — the stage of commercialization between the idea and the proof of principle. If innovators cannot make it across this gap, they cannot attract investment from private financing. This isn’t an easy task in a relatively investor environment. The 2018 federal budget does provide some access to capital — notably for women entrepreneurs under its Innovation and Skills Plan — but more significant resources are needed.

If Canada wants to be a true leader in innovation and IP commercialization — it is currently behind on innovation metrics among OECD countries — the government must be willing to pay for it. Canada’s new IP Strategy is a good and necessary first step in remedying the issue.

[1] Philipp G. Sandner & Joern Block, “The Market Value of R&D, Patents, and Trademarks” (2011) 40:7 Research Policy 969; Christine Greenhalgh & Mark Rogers, “Trade Marks and Performance in Services and Manufacturing Firms: Evidence of Schumpeterian Competition through Innovation” (2012) 45:1 Australian Economic Rev 50.

[2] Raji Srinivasan, Gary L. Lilien & Arvind Rangaswamy, “Survival of High Tech Firms: The Effects of Diversity of Product–Market Portfolios, Patents, and Trademarks” (2008) 25:2 Intl J Research in Marketing 119; Christine Helmers & Mark Rogers, “Innovation and the Survival of New Firms in the UK” (2010) 36:3 Rev Industrial Organization 227.

[3] Joern H. Block et al, “Trademarks and Venture Capital Valuation” (2014) 29:4 J Business Venturing 525.

Giuseppina D’Agostino is a senior fellow with CIGI’s International Law Research Program (ILRP), effective November 2016. She is��the Founder & Director of IP Osgoode, the IP Intensive Program, and the Innovation Clinic, the Editor-in-Chief for the IPilogue and the Intellectual Property Journal, and an Associate Professor at Osgoode Hall Law School.

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The Minister’s comments echo Canadian and international research regarding the costs of wireless services across the country. For example, a 2016 (Nordicity is a consulting firm that produces an annual telecommunications services price comparison study), prepared for the Canadian Radio-television and Telecommunications Commission (CRTC) found that Canada ranks the highest out of 8 selected Organisation for Economic Co-operation and Development (OECD) jurisdictions in Level 1 service basket pricing of Mobile Wireless Telephony (the lowest usage basket) and second highest in Service Basket 3, 4, 5 and 6 (denoting higher usage). The OECD, , stated that to bring down the cost of mobile subscription, Canada needed more competition in the telecom sector by removing foreign ownership restrictions.

, Rogers Senior Vice President of Regulatory, argued that such reports and claims are flawed, because they only factor in the premium players and do not account for flanker brands like Freedom, Chatr, Fido and Koodo.

This claim is not entirely true; although the flanker brands were not used to calculate the national aggregate, they were analyzed in a to demonstrate the price difference between incumbent brands (TELUS, Rogers and Bell), the flanker brands, and new entrants such as Videotron (which recently ). Overall, these flanker brands were 14% cheaper than incumbents and the new entrants’ prices were a further 20% lower than those of the flanker brands. Thus, the new entrants were almost always cheaper than the incumbents. In certain price brackets (such as Level 4, that includes unlimited calling, 2GB data and 300 SMS), they would cost over 60% less than the incumbents. Consequently, competition from new entrants is good for consumers, as was re-iterated by , Executive Director and General Counsel, Public Interest Advocacy Centre, who bemoaned the lack of a fourth national carrier that could effectively compete against the incumbents.

Minister Bains also announced that the government has that route phone calls, texts and data through WiFi networks. Earlier this year, the CRTC ruled against WiFi-based providers, . These Mobile Virtual Network Operators (MVNOs) have had a fair deal of success south of the border; for example, Republic Wireless, which operates off the Sprint network, has had .

However, , the Senior Vice President of Federal Government & Regulatory Affairs at TELUS, argued that this approach works because Sprint is the weakest network in the US and has an excess network capacity. He argued that ninety-nine percent () of Canadians have access to LTE networks because Canadian telecom companies have been successful on the fronts of coverage, quality, and investment. He went ahead to offer cautionary advice against the WiFi first approach saying, “Don’t mess with success because that is actually what has got us here.” , Chief Legal & Regulatory Officer for TekSavvy Solutions, countered that MVNOs like Republic Wireless have at least been successful in stirring competition, bringing the prices down .

To end the panel, the participants were asked to place themselves in the shoes of the federal government , Chief Legal & Regulatory Officer and Executive Vice President for Corporate Development at Bell Canada, argued that Over-the-Top (OTT) services like Netflix should be treated the same as other broadcasters. For the , he argued that since there is a significant amount of facilities based competition, there should be less regulation. He was also in favour of keeping that stipulates carriers to charge a just and reasonable rate for their services.

Interestingly, Bibic was in favour of keeping , which provides the CRTC with powers to enforce net neutrality (the ). While Abramson batted for more transparency in the process, Woodhead was of the view that not much needs to be done in the Telecommunications Act. Woodhead also argued that , which deals with the objectives of Canadian Telecommunications Policy, needs to be looked at as it is conflicting and gives the CRTC broad powers and having a regulatory answer for everything is a bad macroeconomic policy.

Finally, Watt aptly summed up these conflicting opinions saying, “I think we can all see why the rewrite will probably take five years. I wish us all well.”

and the lack of competition from a fourth national player. It will be interesting to see how the CRTC responds to the call for review of its decision against Wi-Fi based MVNOs. Till then, .

Prasang Shukla is an IPilogue Editor and an International Business Law LL.M. candidate at Osgoode Hall Law School.

***

The brings together the leadership of Canada’s telecom, broadcast, and IT industries. For its 16th year, the CTS focussed on and featured keynote presentations and panel discussions on the range of issues facing industry and public policy makers in Canada. IP Osgoode and the IPilogue team members thank the CTS’ organizers ( and ) and for their generous support to allow us to attend.

The post Money Talk(s) and Competition Conflict: The CTS17 Regulatory Blockbuster appeared first on IPOsgoode.

The Bureau recently that Phase 2 of the IPEGs update could address anti-competitive activity surrounding standard essential patents (SEPs). SEPs are patents that are considered essential to implement an industry standard and are common within the technology industry. The European Commission (EC) that competition concerns arise from SEP holders gaining market power once a standard has been adopted by competing rivals. This makes ensuring fair, reasonable and non-discriminatory (FRAND) licensing commitments particularly important. Google/Motorola and Apple’s recent SEP litigation coupled with the corresponding enforcement by the EC and the United States Federal Trade Commission (FTC) raises questions as to how the Bureau will position the pendulum toward SEP activity.

The Competition Bureau’s Current Approach to Anti-Competitive SEP Activity

While not directly addressed, the Bureau’s note one example in which the Bureau would target anti-competitive SEP activity through of the Competition Act. Section 32 allows the Federal Court, on the advice of the Attorney General, to issue an order that remedies an anti-competitive act occurring from the mere use of an IP right. The IPEGs imply that the Bureau must first establish that the SEP holder dominates the relevant market and that refusing to licence the SEP prevents other firms from effectively competing in the relevant market. Second, the Bureau must establish that invoking section 32 against the SEP holder would not adversely affect the incentives to invest in research and development.

Section 32’s procedurally cumbersome requirements partially explain why it hasn’t been used for decades. The section requires the Attorney General to apply to the Federal Court. The Commissioner is also required to meet the “undue lessening” standard that was from other Competition Act provisions due to its outdated language.

Potential New Approaches to Target Anti-Competitive SEP Activity

The Bureau might characterize anti-competitive SEP activity as an abuse of dominance. The EC recently that Motorola’s efforts to seek injunctive relief against Apple’s use of a smartphone SEP constituted an illegal abuse of dominance pursuant to . The Bureau could argue that similar conduct is an abuse of dominance under of the Competition Act. However, unlike Article 102, explicitly exempts “an act engaged in pursuant only to the exercise of any right…under the…Patent Act”. The Competition Tribunal held in that the refusal to licence an IP right falls under the section 79(5) exemption. Therefore, the Bureau might refrain from characterizing the activity as an abuse of dominance unless it argued that the SEP holder’s breach of its FRAND commitments was something more than a mere refusal to licence.

The Bureau might instead choose to characterize anti-competitive SEP activity as an unfair trade practice. The United States FTC recently Google/Motorola’s FRAND commitment breach through of the FTC Act, which prohibits unfair deceptive acts involving commerce. There currently does not seem to be a provision in the Competition Act synonymous with section 5 of the FTC Act. The Bureau could instead argue that such conduct constitutes an illegal refusal to deal pursuant to of the Competition Act, which might allow the Tribunal to order the supplier of a product (the SEP) to sell to a party within usual trade terms (the FRAND commitment). However, the Tribunal held in that the term “product” in section 75 was not intended for licences of intellectual property, making it much less likely that the Bureau could use section 75 to target breaches of FRAND commitments.

Finally, a uniquely Canadian solution would entail amending section 32’s procedural obstacles outlined above to target SEP activity. Amending these obstacles, which is����by the former head of the Bureau,��could improve the provision’s functionality while ensuring common ground with the EC and FTC’s competitive analyses by preserving the IPEGs’ mandated balancing of competitive effects. Overall, the Bureau has some significant provisions with which to target SEP activity. Whichever route they take, however, evidence suggests that the pendulum will continue moving toward antitrust enforcement.


Peter Neufeld is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

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Summary of the Preliminary Guidelines

The guidelines provide information to the pharmaceutical industry regarding when pharmaceutical patent litigation settlements will draw the scrutiny of either the criminal or civil enforcement provisions of the (“the Act”).

Criminal Enforcement Provisions

The guidelines state that the Bureau will likely “pursue” the settlement under the criminal enforcement provisions of the Act (s. 45) if any of the following conditions are met:

1. The settlement includes conduct that goes beyond the scope of the patent (eg. fixing a generic entry date beyond the patent term); or

2. The Bureau finds evidence that the settlement is a vehicle for “naked restraint” on competition or motivated by factors external to the litigation.

Notably, the Bureau also set out that even if a settlement agreement does not satisfy either of the above two criteria, it can still can be reviewed under the criminal enforcement provisions of the Act.

Civil Enforcement Provisions

If the Bureau decides not to review the settlement under the criminal enforcement provisions, the agreement can be examined under the “civil” enforcement provisions of the Act (s. 90.1 and 79). ��Generally, agreements that will draw scrutiny under these provisions must have the effect of causing a “substantial prevention or lessening of competition” (“SPLC”). An agreement may be found to be causing an SPLC if, but for the settlement, the parties would have been likely to compete through the exercise of market power in a way that would lead to lower cost alternatives for consumers. One particular factor that was highlighted by the Bureau as important was a determination if the value transfer given to a generic company as part of a settlement is larger than the patentee’s litigation costs and potential liability for “section 8 damages” under the . If this is found to be the case, the agreement is more likely to cause a SPLC and draw scrutiny under the Act.

The Bureau’s Guidelines – Are They Feasible in Canada?

Various commentators have put forth and regarding the Bureau’s apparent willingness to expansively consider these settlement agreements as per se criminal. This approach has to be very different than the more holistic “rule of reason” evaluation of pharmaceutical patent litigation settlement agreements that was established by the US Supreme Court in (). An unfairly harsh or uncertain competition law framework is certainly a valid concern and an undesirable output for the Bureau.

In addition, one could argue that the Bureau’s intention to evaluate section 8 damages as part of their consideration of settlement agreements is impractical given that the quantification of these damages is still a for even the most experienced Federal Courts. Therefore, it is a valid question if the Bureau would be able to appropriately evaluate settlement agreements on this metric, and it may even be the case that this exercise is simply beyond their competence as an administrative body. This is another valid concern that stems from the current form of the guidelines.

Although these concerns exist, their presence should not stop the Bureau’s commendable efforts to prevent anti-competitive practices in order to curb . However, it must be recognized that an impractical, unpredictable, or overzealous scrutiny of settlement agreements in this sector may lead to the discouragement of litigation settlement which has the . Although certainly having great intentions, the Bureau must continue to refine its approach to creating a feasible and effective competition law enforcement framework in this area. On this very complex issue, like many of its kind, it is certainly not the thought that counts.

��

The post Certainly Commendable but Perhaps not Practical – Canada’s Competition Bureau Releases Guidelines on Pharmaceutical Patent Litigation Settlements appeared first on IPOsgoode.

As , partner with McCarthy Tétrault in the Toronto office and a Member of the IPOsgoode Advisory Board, , “Patent law is based upon the social and economic rationale of balancing encouraging innovation and the avoidance of monopolies which can stifle competition.” In general, these principles have been extended into the realm of software as a means of rewarding and protecting the fruits of the inventor's labour in the hopes of stimulating and fostering further advances and discoveries through public disclosure mechanisms. Patents, and software patents, are, therefore key elements of the contemporary economic system.

However, while software may be generally similar to other types of inventions, the nature of software industries and software itself make the application of existing patent laws somewhat problematic. Economist and former Non-Resident Fellow at the Brookings Institute argues, in , that there are three dissimilarities that must be recognized when dealing with software: 1) detailed descriptions of a software often constitute the program itself, making it hard to distinguish between ‘ideas’ and ‘implementation’; 2) software are pieces of mathematics, which courts agree are not patentable; and, 3) software is written and produced by vast categories of users and programmers, making restrictions to competition problematic (at pp. 4-5).

These three issues entail disproportionate levels of competitive and monopolistic advantage to whoever acquires a patent right first. For example, a patent holder is able to extract burdensome rents from a competitor who wishes to build off of the works of others or create interoperable technologies based on previously existing patented discoveries.

In the SCOTUS was tasked with determining whether the patents at issue in the case, held by Alice Corps', were eligible for patent protection or whether they were simply ‘abstract ideas’.

The case centered around a computerized process for limiting “settlement risk” during financial exchanges between two parties by employing a computer system as a third-party intermediary. This 'third-party' creates and tracks digital account ledgers that mirror the balances that the exchanging parties hold in their ‘real-world’ accounts in order to determine whether or not a given transaction can be processed and supported by the parties' assets. As states, "In sum, the patents in suit claim (1) the foregoing method for exchanging obligations (the method claims), (2) a computer system configured to carry out the method for exchanging obligations (the system claims), and (3) a computer-readable medium containing program code for performing the method of exchanging obligations (the media claims)".

In 2007, CLS Bank filed suit against Alice Corps in the hopes of obtaining a declaratory judgment that the patents at issue��were invalid and, therefore, not infringed by CLS Bank’s use of a similar business practice. Following a SCOTUS decision in 2010, (561 US 593), the parties filed cross-motions for summary judgments on whether the patents were eligible under the .

Section 101 of the Patent Act defines patents as eligible for: “whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title” (). However, since 1972, the SCOTUS has held that "abstract intellectual concepts are not patentable” (, 409 U. S. 63, 67). As recently as 2011, in , the Court has upheld this principle out of concern that “patent law not inhibit further discovery by improperly tying up the future use of laws of nature” (Mayo, 566 US 16).

Using the two-part test set out in Mayo, the Court found that “because petitioner’s system and media claims add nothing of substance to the underlying abstract idea, we hold that they too are patent ineligible under §101” (Alice Corp., 573 US 17). In the concurring statement Justice Sotomayor, joined with Justices Gisburg and Breyer, agreed that “any claim that merely describes a method of doing business does not qualify as a ‘process’ under §101’” (Alice Corp., 573 US 1). The Court found that “there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of ‘abstract ideas’ as we have used that term” (Alice Corp., 573 US 10).

The decision in is careful not to extend this principle too far, which would run the risk of making all software patents ineligible. The Court recognizes that “an invention is not rendered ineligible for patent simply because it involves an abstract concept” (Alice Corp., 573 US 6). Applications of abstract ideas that are “to a new and useful end” (Alice Corp., 573 US 6) remain eligible for patent protection.

The SCOTUS decision in this case represents another step in the evolution of American intellectual property laws, in commercial contexts, in adapting to new technological and social circumstances. The Court has not defined what types of software and business practices are eligible for patent protection. Instead, it has reaffirmed long-standing principles about what types are not: those that monopolize the building blocks of human knowledge and invention, such as abstract ideas, and prevent further innovation.

In doing so, the decision in is another precedent in favour of competitive markets and the avoidance of the deleterious affects of excessive rent-seeking by patent holders that make overly broad claims on the tools necessary for human development and innovative creations.

Joseph F. Turcotte is an IPilogue Editor, a PhD Candidate and SSHRC Doctoral Fellow in the Communication & Culture Program (Politics & Policy) at �첥��Ƶ, and a Nathanson Graduate Fellow at the Jack & Mae Nathanson Centre on Transnational Human Rights, Crime and Security at Osgoode Hall Law School.

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Dispute Details

The Typo Keyboard is a $99 iPhone case that attaches an extended QWERTY keypad to the bottom of the phone. The accessory’s keypad closely resembles that seen on BlackBerry devices.

Blackberry filed the lawsuit with the US District Court for Northern California, the home state of Typo’s operations. The filing accuses Typo of infringing keyboard patents , , and . BlackBerry is asking for an injunction as well as an eventual jury trial.

������������������’s Position

������������������’s claims rely on two main points, namely that the Typo keypad is a clear and intentional misappropriation of ������������������’s trade dress, and also that the trade dress is a key and distinctive part of Blackberry’s value proposition. (Trade dress is a term of art referring to an item’s visual characteristics which act as a source identifier. The concept is similar to the "distinguishing guise" in Canadian trade-mark law.)

“This is a blatant infringement against ������������������’s iconic keyboard, and we will vigorously protect our intellectual property against any company that attempts to copy our unique design,” said BlackBerry General Counsel and Chief Legal Officer Steve Zipperstein about the suit. “From the beginning, BlackBerry has always focused on offering an exceptional typing experience that combines a great design with ergonomic excellence,” continued Zipperstein. “We are flattered by the desire to graft our keyboard onto other smartphones, but we will not tolerate such activity without fair compensation for using our intellectual property and our technological innovations.”

������������������’s outlines in great detail, and with images, its keyboard’s intentional design functionality. Shapes, curves and frets are all included in the intellectual property rights that BlackBerry holds and argues Typo’s keyboard infringes.

Typo’s Response

Typo argues that the QWERTY keyboard is too long-standing to be patented, and that they put significant work of their own into creating their product.

Typo initially responded with this comment to :

“We are aware of the lawsuit that Blackberry filed today against Typo Products. Although we respect BlackBerry [sic] and its intellectual property, we believe that ������������������’s [sic] claims against Typo lack merit and we intend to defend the case vigorously.��We are excited about our innovative keyboard design, which is the culmination of years of development and research.”

Author Analysis

I have to admit, even as a BlackBerry fan, I found Typo’s initial messaging compelling. It seems unrealistic for there to exist a patent on a QWERTY keyboard slapped onto a mobile device. Surely the degree of ubiquity is such that any specifications can’t matter immensely.

������������������’s filing, however, outlines the extensive thought and detail poured into its keyboard. Reading the filing is like catching a glimpse of the recipe for Blackberry's "secret sauce".

Lines like, “… the Bold featured the use of curved bars (referred to as “frets”) above each row of keys. Each of the keys in the top three rows is a roughly square shape, and arranged like the keys on a piano, without any significant space or material between them horizontally,” and “The Q10’s physical keyboard continues to incorporate bars above the rose of keys having the distinctive sculpted appearance of the thumb-optimized ergo-surf design,” make it apparent that the BlackBerry keyboard was not a happenstance success, but rather a major consideration in ergonomics and design.

More to the point, to me it seems as if the Typo keyboard is a direct replication of this design. In that opinion, I am not alone; the tech community also the similarities.

Even Seacrest hinted at the genesis of the Typo keyboard in . When the interviewer commented, “So it’s the best thing about the BlackBerry, within the iPhone,” Seacrest's response was: “That’s kind of how this came to fruition.”

������������������’s confidence in their claim is evident in their choice for jury adjudication. It takes a strong claim to believe that a citizen jury will appropriately comprehend the basis for a claim in a technology patent case. But again, based on the detail of ������������������’s intellectual property rights and the initial response of tech commenters openly admitting the design similarities of the devices, the claim appears to have merit.

From a legal perspective, the most rational response is likely for Typo and BlackBerry to settle, with Typo paying a portion of profits to BlackBerry in design royalties.

From a business perspective, however, BlackBerry may wish to take this to court to permanently shut down Typo’s production. In the grand scheme of the smartphone wars, allowing the existence of any product that allows non-BlackBerry devices to sport a Blackberry-esque keyboard is a threat to BlackBerry's market share and profits. The smartphone market is intense, with companies involved constantly jockeying for positions better than the rest; BlackBerry could easily decide that committing to a legal battle and winning it outright is more important than ceding any ground that will undermine its competitive advantage.

Denise Brunsdon is an IPilogue Editor, a Western University JD/MBA Candidate, and researcher for GRAND (Graphics, Research and New Media) Centre and Commercialization Engine.

The post Would a Keyboard by Any Other Name Feel as Sweet? BlackBerry Sues Ryan Seacrest’s Typo appeared first on IPOsgoode.

The Intellectual Property Institute of Canada (IPIC) and IP Osgoode are delighted to announce our 2014 Canadian writing challenge in intellectual property law.

We are excited to be running our sixth annual writing challenge.�� Our goal is to further enhance thoughtful and well-researched intellectual property public policy scholarship and discussion. We encourage a broad range of perspectives and topics can be from within the various categories of intellectual property law including patents, trade-marks, industrial design and copyright.

There are three categories for entrants this year:

1. Law student category (LL.B, J.D., BCL, and LL.L students)
2. Graduate student category (LL.M, S.J.D.��and PhD students)
3. Professional category (legal and business professionals who have been practicing 7 years or less, including patent agents and trade-mark agents)

The winner from each of category will be eligible for:

1. A prize of $1,000 (CAD)
2. Publication on the IP Osgoode website (www.iposgoode.ca)
3. Consideration for publication in the Canadian Intellectual Property Review and/or the Intellectual Property Journal.

The deadline is Canada Day, Tuesday, July 1, 2014, at 5 p.m. (ET)

More details on Canada’s IP Writing Challenge are available at

We look forward to reading your work!

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