In a detailed judgment, justice Denise Cote provides a rather thorough restatement of pleading rules in federal antitrust cases and evidence required to establish a violation of Section 1 of the Sherman Act (the U.S. federal parallel to section 45 of Canada’s Competition Act), which prohibits unreasonable restraints of trade (including horizontal price-fixing agreements, market allocation agreements and in some instances group boycotts).

Some of the interesting aspects of this recent judgment that stood out to me, and there are a number of others, include:

1.  Rather strong language that the Court accepted, at least at this preliminary stage, the plaintiffs’ arguments of a horizontal price-fixing conspiracy.  For example, the Court held that the alleged agreement is “fundamentally horizontal”.

2.  An acceptance of the plaintiffs’ argument that the relevant standard should be a per se (not rule of reason) review, holding that the alleged agreement is “at root, a horizontal price restraint”.  In Canada, section 45 of the Competition Act makes price-fixing, market allocation and supply/output restriction agreements per se illegal, although it largely remains to be seen what types of cases will be challenged by the Competition Bureau under section 90.1 of the Act (which has parallels to the rule of reason standard in the U.S.).

3.  A recap of recent U.S. jurisprudence on hub-and-spoke cartels, including discussions of the Interstate Circuit and Toys “R” Us cases.

4.  A restatement of the types of indirect (i.e., circumstantial) evidence sufficient to establish a cartel, including simultaneous price changes.  In Canada, like the U.S., a number of different types of indirect or circumstantial evidence (sometimes also referred to as “facilitating factors”) can be relied upon to establish a conspiracy, including evidence of meetings, simultaneous price increases and language or conduct that can only be explained by the existence of an agreement.

5.  Distinguishing recent U.S. vertical price maintenance decisions, notably the U.S. Supreme Court’s decision in Leegin Creative, from horizontal arrangements between competitors.

6.  A general review of the necessary elements to establish a violation of section 1 of the Sherman Act (many of which being the same or paralleling Canadian requirements).

Given that class actions have now also been commenced in Canada (in British Columbia, Ontario and Quebec), it will be interesting to see what arguments, if any, may be made by the defendants in Canada in response to the Canadian plaintiffs’ claims.

For a copy of the Court’s Opinion see:

Opinion and Order

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Guests from Industry Canada and Canadian Heritage will include Jenifer Aitken (Director General, Investment Review and Strategic Planning Branch, Industry Canada) and Missy Marston-Shmelzer (Deputy Director of Investments and Director, Cultural Sector Investment Review, Canadian Heritage).

For more information see:

2012 Foreign Investment Review Conference (Toronto)

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One of the most common misconceptions surrounding the law of trademarks in Canada is how trademarks relate to trade names. This misconception can have very costly consequences.

Trade names are used to identify a business or a company. Trade names are the “who” of the business. Customers do business with a business bearing the trade name.

Trademarks are used to identify products or services. Trademarks are the “what” of the business. Customers buy products and services bearing the trademark.

In very simplistic terms, customers buy trademarks from trade names.

Every business registered with the Registrar of Companies or incorporated (provincially or federally) has a trade name. But neither the reservation of a corporate name nor the formation of a corporation create a right to use the business name of the corporation in that jurisdiction.

How can that be? The government registers my business name and I can’t use it? Yes. Unfortunately, corporate registries don’t really check if the name submitted for the registration violates any prior rights. In other words, just because a provincial corporate registry approved your name for registration does not mean that you don’t violate someone else’s prior right (in a trade name or a trademark) and that you will not be compelled to change it in the future.

Rights in corporate names are treated like rights in unregistered trademarks, which means that they are nonexistent outside the geographical areas where the business is actually making use of and it known for its name.

Even if you register a corporate name that no one else had thought of before, it does not give you the right to stop others from using it, unless you can prove that other person’s use of the name creates confusion.

Just because you came up with a fancy company name that helps you attract customers for whatever products or services you are offering does not mean that your name, or brand, is a trademark. If you are not using your trade name as a trademark, your don’t have trademark protection for your trade name.

Trade name can be registered as a trademark, but only if you use it as such, that is, to identify products or services. This is often referred to as using the trade name as an adjective, as opposed to a noun.

Let’s say, your company is called Awesome Software Inc. and you make software. If you phrase your marketing materials to say that “Awesome Software Inc. offers such great titles as Text, Calculator and Presentations”, you are using “Awesome Software” as a trade name. If you phrase them to say “We offer Awesome Software™ Text, Awesome Software™ Calculator and Awesome Software™ Presentations”, then you are using “Awesome Software” as a trademark.

The classic example is, of course, Microsoft® Windows®. We don’t buy Microsoft, we buy from Microsoft. But because “Microsoft” is a part of the name of the product we buy (and part of the reason why we buy it), it is also protected as a trademark in its own standing.

If you believe that a substantial number of your customers are attracted to your business because of your trade name, you should consider using the trade name as a trademark and getting it registered as a trademark.

In other words, if you consider your trade name a factor that gives you a competitive advantage, you should not rely merely on registration of the company name with the Registrar of companies. You should accord the asset that you care about the protection that it deserves, and the only way to do it is through registering it as a trademark.

For more information about this conference and our promotional contest resources see:

Managing Legal Risks in Running Online Contests

Contests

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Since that time, one contested abuse case has proceeded to the Competition Tribunal (the Bureau’s ongoing challenge against The Toronto Real Estate Board, in which the Bureau is seeking only remedial remedies not AMPs) and two new versions of the Bureau’s Abuse of Dominance Enforcement Guidelines have been issued for comment (the current draft version of which, while setting out when the Tribunal may order AMPs in abuse cases, provides no guidance as to when the Bureau will seek them).

On May 15, 2012, the C.D. Howe Institute’s Competition Policy Council issued a report, the result of its third meeting on May 7, 2012, calling for the Bureau to clarify its position as to when it will seek AMPs in abuse cases.  (Unlike some provisions of the Act, in Canada the Bureau has exclusive jurisdiction to bring and prosecute abuse cases, which are heard before the federal Competition Tribunal.)

In issuing the Report, the C.D. Howe Institute’s Council said:

“The Competition Bureau should clarify how it will apply its powers under the Competition Act in seeking administrative monetary penalties for abuse of dominance, according to a consensus of the C.D. Howe Institute’s Competition Policy Council, which held its third meeting on May 7, 2012. …

There was a range of views among the Council members about whether AMPs for abuse of dominance are ever appropriate.  Some members contended that AMPs are appropriate as a deterrence mechanism.  Others expressed the view that the possibility of a firm’s being subject to AMPs would chill efficient arrangements.  There was unanimity, however, on the point that the risks of over-deterrence associated with AMPs are real, and that it would be appropriate to know how the Bureau plans to approach the issue of AMPs in particular cases.  Accordingly, the Council’s key recommendation is that the Competition Bureau issue guidance and explain the basis on which it will assess the AMPs it seeks.”

Some of the issues discussed in the Council’s Report include the constitutionality of AMPs (as yet to be determined) and a more reticent Bureau in terms of its abuse of dominance enforcement positions.

With respect to the latter, the Commissioner of Competition has indicated in recent public remarks that the markedly shorter draft Abuse Guidelines currently subject to public comments is an effort to let the Competition Tribunal, not the Bureau, decide where the boundaries of section 79 lie (which provides little comfort to firms given that there have only been about ten contested abuse cases since the modern Competition Act was introduced in 1986).

For a copy of the C.D. Howe Institute’s news release and Report see:

News Release

The Distortive Power of AMPs: Why the Competition Bureau Must Clarify Its Stance on Administrative Monetary Penalties

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American Bar Association Financial Services and Competition (New York: June 7, 2012): Financial Services and Competition.

13^th annual Civil Liberties and Competition Policy conference (Washington: June 21, 2012): Civil Liberties and Competition Policy.

Georgetown Law 6^th Annual Global Antitrust Enforcement Symposium (Washington: September 19, 2012).  Canada’s Commissioner of Competition will be speaking at this conference: Antitrust Enforcement Symposium.

39^th Fordham Conference (New York – September 20-21, 2012): Annual Conference on International Antitrust Law and Policy.

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The Saskatchewan Government issued a review report on the proposed Glencore/Viterra transaction calling for, among other things, conditions to ensure compliance with Glencore’s Investment Canada Act commitments and a review of potential competition concerns in the retail (i.e., crop input) markets: Government Releases Review of Glencore Acquisition of Viterra

The OECD issued a new Procedural Fairness and Transparency Report, which includes recent Competition Bureau transparency initiatives: Procedural Fairness and Transparency – Key Points 2012

The International Trade Minister delivered remarks to the Canadian Manufacturers & Exporters (BC) about the new Canada-EU trade agreement: International Trade Minister Ed Fast Highlights Benefits of Canada-EU Trade Agreement to Canadian Manufacturers & Exporters

The Canadian Council of Chief Executives has commented on competition and infrastructure in Canada to supply Chinese energy needs: Canada: Competing for China’s energy needs

The CRTC’s Executive Director of Broadcasting addressed innovation and competition in local radio and television markets in BC: Speech to the 65th annual conference of the British Columbia Association of Broadcasters

The Competition Bureau issued its April Monthly Merger Review Report: Merger Review Report

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Saskatchewan is calling for the following, among other things, as part of Investment Canada Act approval: Regina as Glencore’s North American headquarters, maintaining current levels of employment, a five year increase in capital investment of C $100 million and no adverse competitive effects in the farm input (i.e., retail) markets (competition is one of the relevant net benefit to Canada factors under section 20 of the Investment Canada Act).

For the Saskatchewan Government’s news release and report see:

News Release

Review of the Proposed Glencore Acquisition of Viterra and Related Transactions

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The OECD’s booklet also includes discussions of recent transparency related initiatives by the Canadian Competition Bureau including new compliance, merger and Immunity Program related guidelines; the Bureau’s transparency self-assessment (began in 2010, which has resulted in, among other things, its new monthly Merger Registry and merger statements); areas of improvement with respect to transparency (including in relation to merger review and the review of the Bureau’s consent agreement process); and the Bureau’s policies relating to the exchange of confidential information with international agencies.

For a copy of the OECD booklet see:

Procedural Fairness and Transparency – Key Points

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For the Minister’s remarks and related news release see:

Remarks

News Release

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