[Ip-health] The Star - Canadian reply to $500 million U.S. pharma suit: Guesses don’t make valid patents

Reshma Ramachandran reshmagar at gmail.com
Thu Feb 12 15:20:17 PST 2015

Canadian reply to $500 million U.S. pharma suit: Guesses don’t make valid
[image: The drug Strattera, produced by Eli Littly, is a focal point of an
international property suit.]


The drug Strattera, produced by Eli Littly, is a focal point of an
international property suit.
*By:* Alexander Panetta The Canadian Press, Published on Wed Feb 11 2015

WASHINGTON—The Canadian government has delivered a scathing response to a
$500 million lawsuit from the American pharmaceutical industry, dissecting
the intellectual-property practices of the company that launched the case.

The government accuses it of applying for patents based on guesses.

That response is laid out in a submission filed with a NAFTA panel, made
public this week, which seeks to rebut multiple claims in a suit from
drug-maker Eli Lilly.

The company sued after Canadian courts struck down its exclusive right to
produce two drugs. It has claimed Canada’s patent protections are
unpredictable, and weaker than the international norm. That complaint has
been echoed by the U.S. government, resulting in Canada being placed on an
intellectual-property watchlist.

But the Canadian government attacked those claims in a 178-page response.

It disputed the legitimacy of Eli Lilly’s own patents. It accused the
company of a scattershot practice — blast away with patent applications in
every direction, and claim whatever gets hit.

“(The) claimant adopted a scattershot approach,” said the document, filed
Jan. 27.

“(It claimed) dozens of new uses of known and previously-patented compounds
on the basis of little apparent evidence, only to abandon the vast majority
of these applications.”

It lists all the different patent claims made for the two drugs in question.

For the attention-deficit drug Atomoxetine, it said Eli Lilly had filed for
12 separate patents between 1992 and 2004 claiming it could treat
psoriasis, stuttering, incontinence, hot flashes, anxiety, learning
disabilities, tic disorders and, finally, ADHD.

For the anti-psychotic drug Olanzapine, the government listed 16 patent
applications, for excessive aggression, fungal dermatitis, bipolar
disorder, sexual dysfunction, insomnia, nicotine withdrawal, tic disorder,
anorexia, autism, mental handicaps, pain, substance abuse and Alzheimer’s

“Canadian law does not grant patents for almost-inventions,” said the
submission. “Even if the applicant’s speculation at the time of filing is
later confirmed.”

Canada’s Federal Court struck down those two patents between 2009 and 2011,
essentially allowing generic drug-makers access to products that had been
marketed under the name Strattera and Zyprexa.

The document attacks the suit on other fronts:
On the idea that Canadian courts are now changing the rules, it said
Canadian cases since at least the 1970s have reaffirmed that patent
applications must include evidence to support claims that a drug might
become useful.
To the claim that Canada’s high proof-of-usefulness standards are killing
patents, the government said only one-third of challenges were successful
in Canada on utility grounds, while a far greater margin — half — succeeded
on other grounds.
It said there was almost always an additional reason when a Canadian court
struck down a patent on utility grounds. It listed three exceptions — two
involved Eli Lilly.

“(The) claimant’s own patent filing behaviour actually suggests the
importance of Canada’s rules,” said the document.
The company said Canada was an international outlier. It said it had the
ADHD drug in 36 jurisdictions, but was only challenged in three countries
and only lost its patent in Canada.

But the Canadian response argued that the drug is only sold in four major
markets. It was challenged in three, and was struck down in two before a
U.S. district court overturned a New Jersey decision.

Eli Lilly isn’t backing away from the case.

It said in a statement that it’s not alone in criticizing Canadian
standards for proving the utility of a patent. In addition to the U.S.
government, Eli Lilly said the U.S. Chamber of Commerce also considers
Canada an international outlier.

“Nothing in their filing changes our strongly held belief that Canada’s
improper invalidation of our patents under its unique and burdensome
promise utility is inconsistent with Canada’s NAFTA obligations and that
Lilly is entitled to compensation for its losses,” the company said in a

The Canadian government shrugged off its appearance as the only G7 country
on last year’s U.S. Trade Representative watchlist. It described the list
as a bunch of allegations from U.S. companies, published by the U.S.

Reshma Ramachandran
Harvard Kennedy School of Government '15
Warren Alpert School of Medicine at Brown University '15
National Physicians Alliance FDA Task Force Co-Chair
m: 786-271-1531

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