Canadian COMPETITION LAW

A few interesting competition and regulatory developments caught my eye today including:

John Greenwood (Financial Post) wrote a rather good article on the LIBOR investigation: Fallout from LIBOR Scandal Likely to Hit Canada’s Financial Industry

The Conference Board of Canada published a new report on Chinese foreign direct investment in Canada: Fear the Dragon?  Chinese Foreign Direct Investment in Canada.

The Fraser Institute published a comparative note on Canadian and European airline pricing: Why Europe Has Cheap Airfares: Competition.

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I’m a bit of a sucker for eloquent [if geeky] old competition law quotes.  In that vein, I came across this oldie where the Alberta Supreme Court (in R. v. Clarke, 1907) talks about the importance of competition in a new country.  When I reflected a bit on this quote, I realized that Canada had only had competition law for 18 years when this case was decided, in relation to a lumber cartel in Alberta.  (Although us Canadians can continue to brag as having competition law for one whole year longer than the U.S.)   In any event, great quote I thought and something of the western frontier spirit in it:

“If there is anything important in connection with the affairs of a new country, anything important in connection with the affairs of a business community, it is that men should have the right – and I have no doubt that that was the intention of parliament so far as this section is concerned – that men should have the absolute right, so long as they did not interfere with the rights of the public, to conduct their own business in the manner in which they see fit.  If this firm did not desire to make profits in selling lumber to the city of Edmonton or in selling lumber to the city of Calgary, that was a matter of their own concern, and it was not in the interests of the public that the members of this association assumed to bulldoze this particular individual in regard to the manner in which he should conduct his business.  Various other instances were brought forward in which practically the same class of thing was done.”

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For anyone that doesn’t know, the Institute of Competition Law’s website has a terrific online directory of current competition/antitrust law articles and posts from around the world on its e-Competitions National Competition Laws page.

And thanks a lot to the Institute for including some of our material on their very fine (and apparently growing) site!

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The Oxford University Press, Journal of Antitrust Enforcement has issued a call for papers:

“Oxford University Press is delighted to announce the launch of a new competition law journal dedicated to antitrust enforcement. The Journal of Antitrust Enforcement forms a joint collaboration between OUP, the Oxford University Centre for Competition Law and Policy and the George Washington University Competition Law Center.

The Journal of Antitrust Enforcement will provide a platform for cutting edge scholarship relating to public and private competition law enforcement, both at the international and domestic levels.

The journal covers a wide range of enforcement related topics, including: public and private competition law enforcement, cooperation between competition agencies, the promotion of worldwide competition law enforcement, optimal design of enforcement policies, performance measurement, empirical analysis of enforcement policies, combination of functions in the mandate of the competition agency, competition agency governance, procedural fairness, competition enforcement and human rights, the role of the judiciary in competition enforcement, leniency, cartel prosecution, effective merger enforcement and the regulation of sectors.

Submission of papers: Original articles that advance the field are published following a peer and editorial review process. The editors welcome submission of papers on all subjects related to antitrust enforcement. Papers should range from 8,000 to 15,000 words (including footnotes) and should be prefaced by an abstract of less than 200 words.

General inquiries may be directed to the editors: Ariel Ezrachi at the Oxford CCLP or William Kovacic at George Washington University. Submission, by email, should be directed to the Managing Editor, Hugh Hollman.”

For more information see:

Journal of Antitrust Enforcement

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A few regulatory law developments and news items that caught my eye in the last couple days included:

Consumer Protection BC issued its 2011 Annual Report, which includes some discussion of marketing law enforcement and telemarketing: Debt collection, retail and travel are top questions for Consumer Protection BC.

The CBA National International Law Section has issued a call for papers: Call for papers.

Canada’s long awaited (and seriously criticized by some) Copyright Act amendment Bill (Bill C-11) passed in the House of Commons and is now moving through the Senate: Bill C-11.

The CBA has posted some information regarding its upcoming Canadian Legal Conference in Vancouver (August 12-14, 2012): CBA Canadian Legal Conference.

Health Canada announced new tougher health warnings for tobacco products: Harper Government takes action with larger health warnings on tobacco products – tough new warning labels take effect today.

Canada’s PM announced (and some industry groups, including the Canadian Council of Chief Executives, have praised) that Canada has joined negotiations for the Pacific-region trade agreement (Trans-Pacific Partnership): PM welcomes all-member support for entry into Trans-Pacific Partnership.

And, thank you to Acquisitions International for short-listing me for their M&A Awards 2012 (Legal category): 2012 M&A Awards.

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The Antitrust Section of the American Bar Association has published the June edition of their  Intellectual Property E-Bulletin, which includes discussions of recent U.S. and EU cases (the Sandisk flash memory case, reverse settlement pharmaceutical case FTC v. Watson Pharmaceuticals and European Commission’s clearance of the EMI Group’s music publishing business by Sony Corporation).

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Davies Ward has published a paper on competition and IP (patents) entitled “Mind the Gap: Economic Costs and Innovation Perils in the Space Between Patent and Competition Law”.

Outline:

“[T]he aims and objectives of patent and antitrust laws may seem, at first glance, wholly at odds. However, the two bodies of law are actually complementary, as both are aimed at encouraging innovation, industry and competition.”  (Atari Games Corp. v. Nintendo of America, Inc., 897 F.2d 1572 (Fed. Cir. 1990)

“As the U.S. Federal Circuit Court explains above, the legal regimes of competition law and patent law act as complementary instruments in the pursuit of innovation and consumer welfare. Antitrust law and policy strive to maintain competitive markets, prohibiting unreasonable restraints on trade that could act as barriers to new innovation. Robust and effective competition in turn drives competitors to improve existing products or introduce new products to maintain their market share. Meanwhile, patent law and policy aim to foster long-term dynamic efficiency through incentives to invest and innovate over time. Patent law grants enforceable property rights to inventors which, as a reward for disclosure of the invention, allow the owners of the patent to unilaterally exclude others from using the property.  The patent system promotes innovation by providing incentives for owners to invest in the creation and development of new inventions,4as well as by making the invention available to the public to promote build-on innovation.

Although competition and patent regimes share the same goals of innovation and related economic and consumer benefits, tensions at the interface between these areas of law have often been considered. The well-recognized challenge is to permit the legitimate exercise of patent rights while continuing to enforce competition laws where anti-competitive practices involve patent rights. But what happens where both regimes are implicated and yet neither effectively controls conduct that harms innovation and imposes economic costs? How do we compare the cost/benefit trade-off of addressing the problem via the competition system, patent system or both? When intellectual property laws are being used to impede innovation should competition law intervene?

This article considers a gap between patent law and competition law that is being profitably exploited by “patent trolls”, firms whose business is the acquisition and assertion of patents against parties who are already using the patented technology.5 First, we frame the discussion by considering the interaction of competition law and patent law and how the interaction can, in theory, impact innovation. Then we look at the example of patent trolls and how they are taking advantage of an absence of competition and patent law enforcement: what they are, the reasons for their recent emergence and the main arguments in defence of patent trolling. Next we examine the economic cost and harm to innovation caused by patent trolls in the context of wider issues in competition and patent law and policy, including asymmetry of litigation risk, the hold- up problem and the growing valuation of patents based on the right to exclude rather than the economic value of the underlying invention. Finally, we survey the efforts to stem patent abuse, including patent trolling, through market, judicial, legislative and regulatory means. Regardless of the source of the solution, be it patent or competition law or policy, patent trolling highlights a clear need for reform to achieve the innovation goals of both the competition and patent regimes. Law makers, enforcement agencies, regulators and the courts need to bridge the ever-widening gap.”

For a copy of the paper see:

Mind the Gap: Economic Costs and Innovation Perils in the Space Between Patent and Competition Law

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Christine Duhaime
(Duhaime’s Anti-Money Laundering Law in Canada)

New York lawyer Matthew Kluger was sentenced yesterday in federal court in New Jersey to 12 years in prison for insider trading. His sentence is the longest term ever imposed for that crime in the U.S.

Kruger stole undisclosed transactional information on approximately 30 deals when he was a corporate lawyer with several U.S. law firms including Cravath, Swain & Moore LLP and Skadden, Arps, Slate, Meagher & Flom LLP. The deals involved Sun Microsystems Inc., 3Com Corp. and Acxiom Corp. According to U.S. prosecutors, trades from the illegal tips generated US$37 million. Kluger tipped off a middleman who subsequently tipped New York securities trader Garrett Bauer, using disposable cellular phones to escape detection. The illegal activity spanned 17 years.

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