[Ip-health] Eli Lilly's NAFTA claim against the Canada Supreme Court Patent Decision

Heesob Nam hurips at gmail.com
Thu Dec 13 00:53:10 PST 2012

Pharmaceutical companies are increasingly relying on trade and
investment chapters to challenge domestic court decisions. Eli Lilly's
claim against Canada (filed last month) is the latest example. Apotex
has already attacked two US court decisions in 2010 and 2011.

Canada official site:


December 7, 2012
Eli Lilly fights Canada's move to strip drug patent
Drug maker seeks $100-million in NAFTA challenge

U.S. drug giant Eli Lilly & Co. is launching a challenge under the
North American free trade agreement, demanding $100-million in
compensation for Canadian court decisions that stripped the company of
its patent for a drug used to treat attention-deficit disorder.

Eli Lilly claims the decisions striking its 1996 patent for the drug
Strattera – decisions that sided with Canadian generic drug company
Apotex Inc. –violate Canada's obligations under NAFTA, the World Trade
Organization and other international treaties.

The company says it has exhausted all its avenues in the Canadian
courts after the Supreme Court of Canada declined to hear its appeal
earlier this year, leaving it no choice but to resort to NAFTA.

The Department of Foreign Affairs and International Trade published a
notice of intent filed by Indianapolis-based Eli Lilly on its website
this week. The document marks the first stage of a possible NAFTA

It's the latest in a series of recent challenges launched under
NAFTA's Chapter 11 provisions, which allow U.S. or Mexican companies
to sue the Canadian government over actions or policies.

The challenges have come amid debate over a proposed
investor-protection treaty with China that would grant similar rights
to Chinese companies and investor-protection provisions to be included
in a potential trade deal with the European Union.

"The government is carefully assessing the Notice of Intent," Jennifer
Chiu, a spokeswoman with the Department of Foreign Affairs and
International Trade, said in an e-mail; the department declined an
interview request. "Our government will, as always, vigorously defend
the interests of Canadians."

Eli Lilly argues that Canadian courts have veered away from other
countries' standards in their patent decisions by allowing generic
drug companies to challenge patents for failing to provide enough
evidence of a new drug's "utility," such as clinical trials.

Drugs are often patented in the early stages of research, and the
company says its patent for Strattera, which made Eli Lilly more than
$620-million worldwide last year, has been upheld by U.S. courts.

Canada's recent court decisions on this issue diverge with those in
Europe and the United States, the company argues in its submission,
saying that Canadian judges have developed a legal test called "the
promise doctrine" that sets an impossibly high a bar in evaluating a
company's "promises" about what the drug it is trying to patent will

Generic drug companies are increasingly using the doctrine to pry open
patents in Canada in a way they would not be able to in other
countries, the company says.

"The promise doctrine not only contravenes Canada's treaty
obligations, it is also discriminatory, arbitrary, unpredictable and
remarkably subjective," Eli Lilly's submission reads.

The company says Canadian patents for clearly useful drugs,
subsequently proven to help patients in large clinical, have been
tossed out for failing to include sufficient proof of "utility." This
after challenges launched by generic drug companies vying to make the
very same drugs – a situation Eli Lilly calls "absurd."

Douglas Norman, Eli Lilly's general patent counsel, said a series of
Canadian patent decisions since 2005 "have moved outside the bounds of
international norms," even though Canada's patent laws remain similar
on paper to those in the U.S. and other members of the Organization
for Economic Co-operation and Development.

Canada is the only country in the world where patents are being struck
down this way, Mr. Norman said in an interview: "It's really hard to
explain to my business executives why they keep losing Canadian

Eli Lilly is also fighting a similar legal battle for its patent for
the anti-schizophrenia drug Zyprexa. It has applied to the Supreme
Court of Canada to regain its patent on that drug, but the court has
not yet said whether it will hear the case.

Eli Lilly's patent Strattera was due to expire in Canada in 2016.

Filing a notice of intent is the first stage in launching a challenge
under NAFTA's Chapter 11, which could involve an international
arbitration panel. Eli Lilly said it hopes to resolves its issues
amicably, through negotiation.

More information about the Ip-health mailing list