reverse settlement payments

The Canadian Competition Bureau has published updated guidelines relating to the enforcement of intellectual property rights and the antitrust (competition) rules.

The Bureau does not presume that the exercise of IP rights violates competition rules but, in assessing whether there are competition law ramifications, it distinguishes between two types of conduct: conduct “involving something more than the mere exercise of the IP right, and those involving the mere exercise of the IP right and nothing else.” Special rules, which may be applied in “very rare circumstances” apply to the latter. While the general competition rules apply to the former.

According to the Canadian firm, Tories, the updated guidelines include consideration relating to:

• patent litigation settlement arrangements including reverse payment settlements
• product switching
• patent assertion entities
• standard essential patents

Why should someone in Australia care?

For one thing (bearing in mind the ACCC’s challenge to Pfizer’s practices when its Lipitor patent was expiring – judgment is reserved in the appeal), the US Supreme Court is expected to hand down a decision this year on how US antitrust laws apply to reverse payment settlements.

For another thing, following the Competition Review here in Australia:

• the Government announced its intention to implement the Harper Review’s recommendation that s 51(3) be repealed and, if that happens, the ACCC is supposed to produce its own guidelines; and
• in the meantime, at the Government’s direction, the Productivity Commission is undertaking a review of Intellectual Property Arrangements including its alleged anti-competitive effects.[1]

Lid dip: Peter Willis

1. The draft report is due to published “any day now”.  ?