Archive for the 'Uncategorized' Category
The Institute of Competition Law has published a new edition of its e-Competitions Bulletin.
Its new issue includes articles by Damien Gerard (“The Belgian Supreme Court upholds the severability of anticompetitive provisions in a distribution agreement”), Christopher Sagers (“A U.S. Court of Appeal unanimously expands extraterritorial reach of U.S. antitrust rules in a foreign price-fixing conspiracy case”), Danilo Sama (“The Italian Competition Authority fines three operators in the Southern Italian electric market for undertaking a concerted practice aimed at sharing the market for certain dispatch services”), Tomas Cihula (“The Czech Supreme court confirms the supermarket cartel decision”), Eszter Ritter (“The Hungarian Supreme Court confirms the supermarket cartel decision”), Gavin Benjamin Bushell (“The EU Advocate General Mazak issues his opinion recommending dismissing appeal against pharma company’s abuse of dominance”), Alessandro Romano (“An Italian civil court rejects to dispose the delay of a new product launch for patent infringement claim and assumes a leading competitor’s abuse of dominant position as refusal to license”), Michal Miko (“The Antimonopolly Office of the Slovak Republic fines electricity distribution company for abuse of a dominant position by charging excessive prices for electricity mastering”), Erlind Kodhelaj (“The Albanian Competition Authority submits for comments new draft guidelines on the control of concentrations involving undertakings”), Michele Giannino (“The Italian Competition Authority conditionally clears an airline merger by imposing a slot divestiture remedy”) and Marc Waha (“The Hong Kong Legislative Council Introduces a cross-sector competition law regime”).
Guest post by Jacob Kojfman (Vancouver Securities Law)
In early July, American home improvement giant Lowe’s Cos. (“Lowe’s”) made an unsolicited bid for its Canadian counterpart Rona Corp. (“Rona”). Rona’s special committee evaluated the bid and rejected it; two of Rona’s largest shareholders have also done the same.
Aside from the usual concern about the “hollowing out” of Canada‘s business landscape, there is a much bigger concern for Canadian companies and their boards. What options does a board really have when faced with a hostile bid?
One of the most commonly used tactics is the shareholders rights plan or “poison pill”. The use of poison pills has received a lot more attention the last few years as they have come in front of the securities commissions with varying results. It seems more often than not, a securities commission will cease trade a pill since a board will run out of other alternatives.
In the United States, a reporting issuer facing a hostile bid seems more likely to be able to keep its poison pill in place. In the instance of Airgas, that board was able to continue its pursuit of its strategic plan. In Canada, there seems to be a bigger concern: Canadian boards are powerless.
On August 7, 2012, hearings in the landmark Canadian misleading advertising case Commissioner of Competition v. Rogers Communications Inc. began.
The case, the first constitutional test of increased “administrative monetary penalties” or “AMPs” under the Competition Act (the “Act”) for misleading advertising, promises to be a bit of a battle between the Competition Bureau (the “Bureau”) and Rogers in relation to a few key aspects of Canadian advertising law.
The case relates to certain performance claims made by Rogers in connection with its new cell phone brand Chatr, the effectiveness of disclaimers (like other recent high-profile Canadian advertising cases) and, perhaps the issue most likely to capture public attention, whether the potentially significant civil penalties now possible for misleading advertising are constitutional.
The Bureau is principally taking aim at two claims made by Rogers: that its (at the time) new Chatr cell phone brand had “fewer dropped calls than new wireless carriers” and that customers had “no worries about dropped calls”. According to the Bureau these claims, made to compete with new wireless entrants Mobilicity, Public Mobile and Wind Mobile, were either literally false in some cases (in markets where new entrant cell phone companies’ dropped call rates were superior to Rogers) or, where true, misleading (by conveying the general impression of appreciably lower dropped call rates, when any differences were in reality “imperceptible” to consumers).
The Bureau has also taken the position that certain disclaimers used by Rogers were ineffective in altering the general impression of its performance claims, including the view that some technical statements made by Rogers in disclaimers would be meaningless to the average consumer. For example, some Rogers disclaimers included statements such as: “Based on: cell site density; quality of indoor and underground reception; and seamless call transition when moving out of zone”.
With the recent announcement of a proposed friendly take-over of Nexen by the China National Offshore Oil Corporation (CNOOC), some Canadian and international media are asking whether the deal will be blocked under the Investment Canada Act. Questions have been raised regarding the size of the transaction, commercial orientation of CNOOC, policy issues concerning the acquisition of significant Canadian assets by state-owned enterprises (SOEs) and questions as well about the level of China’s foreign investment reciprocity.
This transaction, as well as a number of other Chinese oil related acquisitions in the past few years, has also generated a considerable amount of legal, policy and other commentary in relation to Chinese investment in Canada and the appropriate policy posture for the Canadian Government. There have too also been inevitable comparisons to the recently failed attempt by BHP to acquire Saskatchewan’s Potash Corporation. Despite some speculation as to whether the transaction will get Investment Canada Act clearance, I am going to go slightly out on a limb at this very early stage to hazard that it will. Why?
First, statistically, despite the increasing debate and criticism of Canada’s current Investment Canada Act process, the vast majority of foreign investments have been approved – only two transactions have been rejected since 1985 (of more than 1600 applications for review). Past statistics, of course, are not necessarily an accurate predictor of the result in a process that is highly fact specific and political.
Second, the majority federal Government has made repeated statements that Canada is “open for business”. The most recent of which occurring yesterday, with Canada’s PM heralding a new era for the competitive marketing of grain saying: “Our Government is committed to creating open markets that will attract investment, encourage innovation, create value-added jobs and build a stronger economy for all Canadians.”
Third, the federal Government has increasingly been indicating a desire to strengthen China/Canada trade and investment relations. For example, the Prime Minister completed a significant trade mission to Beijing earlier this year, in which the Conservatives, among other things, reiterated Canada’s desire to strengthen bilateral trade with China and concluded negotiations for the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA). Some of the Prime Minister’s announcements last February in China, which signal a desire to strengthen Canada’s relations with China, include a stated desire to “take relations to the next level and further strengthen [Canada’s] strategic partnership” with China and that “investment flows between Canada and China are at an all-time high contributing significantly to jobs and economic growth in both countries.”
Fourth, with increased political uncertainty relating to Canada’s traditionally most important oil export market – i.e., the U.S. – Chinese investment in Canadian oil production represents at least two benefits: increased necessary capital and more markets.
Fifth, CNOOC appears to have taken many of the right steps to secure approval, including rather fulsome promises to establish Calgary as the head office of its North and Central American operations, maintain Nexen’s current management team and employees, implement and enhance Nexen’s current planned capital expenditure program (maintaining the status quo is not an option under the net “benefit” to Canada test) and to pursue an additional listing on the TSX. Some commentators have said that CNOOC “walks and talks” like a commercial enterprise.
Guest Post by Jacob Kojfman (Vancouver Tech Law Blog)
Apple Inc. (“Apple) may be famous for bringing us 1000s of songs in our pocket with its iPod, and then changing everything again with its iPads. It is also in second place in the smartphone wars, behind Samsung Electronics Co. (“Samsung”). This is not sitting well with Apple, so much so that Apple launched a lawsuit against Samsung. Apple won the first round when it was granted an injunction against Samsung, giving Apple time to catch up in the sales department. That injunction was just the opening act. Now comes the main feature, and if it does go to a jury, who knows what it will mean for these tech titans. Having reviewed Apple’s statement of claim and Samsung’s statement of defence and counterclaim, the central claims are that Apple has certain utility and design patents, trademarks, and trade dress protection and that Samsung is only able to compete because its products “blatantly imitate the appearance of Apple’s…”
Apple’s claim is based on its products being so distinctive and recognizable and that they have been accorded the protection of trade dress. Apple claims that the public will associate Samsung’s products, such as its Galaxy line of tablets, with Apple because Samsung’s products have the “unmistakable Apple look…” Of course, Samsung denies any illegal conduct, and actually points out flaws in Apple’s claim, such as two different definitions of “Apple iPhone Trade Dress”, and denies the distinctiveness of the iPad 2 Trade Dress. Furthermore, Samsung says that it could not have infringed the Apple patents because they are invalid because they fail to satisfy at least one of the conditions of patentability, and that some of Apple’s patents have also been copied and documented by other parties first. Samsung turns the table on Apple by claiming that Apple is violating Samsung’s patents. The implications from this trial could be huge. For one thing, if the jury finds in favor of Apple, it could give Apple the boost it needs in the smartphone wars to overtake Samsung and develop a big lead. It could also answer questions about design – can one protect certain designs as trade dress? After all, there are only so many ways to design a smartphone or tablet.
Law slowly catching up to digital technologies. The law is slowly catching up to the new digital world in which we live. A recent ruling of the Supreme Court of Canada has rejected copyright fees for music downloaded off of the Internet. According to the ruling, downloading music is considered a “private transmission”, while streaming music is still a communication to the public, and are still subject to paying royalties. The Supreme Court said that the online streaming music can be transmitted to large segments of the public and is designed to do just that – be made available to anyone who wants access to it. The Supreme Court rejected the copyright fees for the downloaded music, relying on its judgement in another case in which the decision was that video games do not have to pay royalties to composers for games downloaded from the Internet. The majority decision in that case said that requiring a royalty for music from a downloaded game would violate the principles of technology neutrality, and that the download is not a “communication” under the Copyright Act. These decisions help clarify questions around new ways to listen to music and other technologies. The main thing I get out of these two decisions is judicial clarification about key phrases in the Copyright Act: “communicate” and “to the public”. There are still a lot of questions that need to be answered about digital content and any rights associated with them.
The C.D. Howe Institute has issued a new Commentary entitled Breaking Free: A Post-mercantilist Trade and Productivity Agenda for Canada.
Abstract:
“To revitalize its flagging trade and productivity performance, Canada should adapt its international trade and investment policies to a world of global value chains, evolving trade and investment patterns, and deepening economic integration; according to a new report from the C.D. Howe Institute. In “Breaking Free: A Post-mercantilist Trade and Productivity Agenda for Canada,” Research Fellow Michael Hart says to be more competitive, Canada needs to wean itself more completely from a mercantilist approach best suited to an era in which products and firms had clear national identities, which is rarely the case today. ‘Canada’s trade and investment policies are stuck in the past. We risk being caught flat-footed and side-lined in the highly integrated global marketplace,’ says Professor Hart.”
For a copy of the Commentary see:
Breaking Free: A Post-mercantilist Trade and Productivity Agenda for Canada
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The 3rd edition of the WTO Analytical Index: Guide to WTO Law and Practice has been published (June 2012) – description:
“The WTO Analytical Index is a comprehensive guide to the interpretation and application of the WTO agreements by the Appellate Body, dispute settlement panels and other WTO bodies. It contains extracts of key pronouncements and findings from tens of thousands of pages of WTO jurisprudence, including panel reports, Appellate Body reports, arbitral decisions and awards, and decisions of WTO committees, councils and other WTO bodies.” For more information and ordering instructions see: WTO Analytical Index.
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The Institute of Competition Law has published a new e-Competitions Bulletin, which includes the following:
Unilateral Conduct
Howard Ullman: “A U.S. Court of Appeals Reiterates That It Is Possible to Monopolize a Technology Market (Apple / Samsung) and Andrey Filippov: “A Russian Commercial Appeal Court Imposes a Significant Amendment for a Breach of Competition on the Market of a Domain Name Registration”.
Anti-competitive Practices
Helene Lallemand and Juliett Goyer “The French NCA Issues a Decision Making Compulsory the Commitments of Several French Banks in Order to Abolish Progressively the Main Interbank Fees on Direct Debits, Interbank Payment Orders and Other Non-Cash Means of Payment” (whew … think this may also be a record for exhaustive article title) and Marianela Lopez-Galdos: “The Indian Competition Commission Breaks Up a Cement Cartel and Fines Cartelists With a Record Fine of RPS 60 Billion” and Gavin Benjamin Bushell: “The European Court of Justice Rules on Selective Distribution on the Motor Vehicles Industry”.
Mergers
Ewa Gojniczek: “The President of the Polish Office for Competition and Consumer Protection Issues New Guidelines on the Assessment of Notified Concentrations” and Eduardo Molan Gaban: “The Brazilian Council for Economic Defense Clears Merger Between Two Ammunition Companies Resulting in Monopolization of the Relevant Market”.
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For more information about our regulatory law services contact: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
