New guidelines designed to discourage anti-competitive behaviour in IP

The Competition Bureau has issued new guidelines on how it would use federal legislation to enforce intellectual property (IP) rights. The 53-page document, entitled Intellectual Property Enforcement Guidelines (http://strategis.ic.gc.ca/pics/ct/ipegs-e.pdf) is the second draft of the guidelines, and the result of a symposium hosted by the bureau and attended by scholars, government officials, and other leading thinkers on IP and competition law. Assistant deputy commissioner Gwillym Allen says the bureau has received several queries on its treatment of IP under the Competition Act. The proposed guidelines are an attempt to discourage companies from using IP to unfairly dominate particular markets. As the current woes of Microsoft Corp south of the border attest, questions of market power derived from the ownership of intellectual property are front-page news throughout the world. When finalized, the guidelines will identify when charges may apply to price fixing, bid rigging, predatory pricing or other criminal offences. In cases of civil litigation, the bureau is establishing criteria for infractions involving abuse of dominant position, exclusive dealing, mergers and misleading advertising. The bureau has also taken a close look at IP licensing, open-source development tools, and the licensing of standards. While it hasn't attempted to codify all potential conflicts in the guidelines, several hypothetical and concrete examples should provide new media companies and other software developers with an idea of what is and isn't permitted. For example, one situation describes the refusal by a hypothetical electronic spreadsheet maker - which enjoys dominant market position with more than 75 per cent of sales - to license its IP ownership of the layout and words of its command bar to a competitor which wants to join the market. With that permission, the competitor could have launched a new product compatible with the dominant maker's product. In its guidelines, the bureau says that refusing to license the IP necessary to compete in the market puts a chilling effect on the market and stifles further innovation in the field, and could be subject to enforcement under the Competition Act. Industry invited to comment on proposed guidelines Other hypothetical examples include a company which makes a less-expensive tax software product compatible with another company's and which eliminates the need to buy updates from the other. There's also the case of a video-game manufacturer that reversed its policy of permitting independent game developers to access its technical specifications. The guidelines are an abstraction for the moment, and the bureau continues to seek comments from stakeholders as to their validity and breadth. "This is a new and changing field, and we just want to make sure that we haven't neglected anything," Allen told Canadian NEW MEDIA. "We believe that what's in there, we've basically got it right. But what we want to make sure is that if anybody has any contributions that they want to make or would ask to add - put in some additional situations - then we would like to hear from people." The current document takes into account comments from several large players made last fall, including the Information Technology Association of Canada, the Canadian Bar Association, the Intellectual Property Institute of Canada, Microsoft Canada, Nortel Networks Corp, the Association of Canadian Publishers and Canadian Heritage. Those wishing to comment on the second draft of the guidelines should respond to the bureau no later than June 16, 2000.

New guidelines designed to discourage anti-competitive behaviour in IP

Broadcast | May 18, 2000

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