[Ip-health] Threat of Pharmaceutical-Related IP Investment

Bryan MERCURIO (Faculty of Law) b.mercurio at cuhk.edu.hk
Sun Sep 22 22:44:39 PDT 2013

Dear Brook


While I agree with you that Eli Lilly's claim against Canada should
fail, I do not entirely agree with your analysis. In part II of your
paper, I find your analysis of the draft TPP chapter (essentially, the
US submission from 2011 rather than agreed upon text) at times to be
unfairly negative. Language such as that of 4(b) [also seen in the
KORUS, but not in earlier treaties] is a huge win for public health and
the environment, and I fear the constant press without recognizing gains
will eventually undermine the cause as governments tune out - no matter
what they do it will never be enough. The intent of the language is
clear, and it is worded as strongly as it possible could be: 


"Except in rare circumstances, non-discriminatory regulatory actions by
a Party that are designed  and applied to protect the legitimate public
welfare objectives [23 For greater certainty, the list of legitimate
public welfare objective in this subparagraph is not exhaustive] such as
public  health, safety, and the environment, do not  constitute indirect


Really, if this is not good enough what is it that you want? What would
satisfy you? A blanket exception whenever the word "health" is used in a
regulation?  So, while a provision such as "foreign investors cannot
invest in Boston" would violate NT and MFN but "foreign investors cannot
invest in Boston, for health reasons" would be immune to challenge? Of
course, the language is no panacea or magic bullet, and it does shift
the argument to whether something is a "rare circumstance",
"legitimate", and actually a "public health/environment/etc" measure,
but it's a pretty clear statement of intent from the parties.


I should also mention your claim that direct expropriation is "limit[ed]
...to governmental seizure of real property" is flat out incorrect. If
the US government seized the trademarks of foreign companies and
distributed them to US companies, there would be a direct violation of
the relevant treaties. Full stop. While the claims we have seen relating
to IPRs (i.e. tobacco) are indirect expropriations, there is no


This is a case worth publicizing, and it should be receiving as much
attention as the Indian cases of Glivec and Novartis (hello, NGOs!), but
careful attention must be paid not to conflate issues or fail to
recognize how treaty language is moving in the pro-health/environment


Kind regards







Bryan Mercurio

Professor and Vice Chancellor's Outstanding Fellow of the Faculty of Law

Associate Dean (Research)

The Chinese University of Hong Kong

Shatin, NT


Tel: +852 3943 1139

Faculty webpage: http://www.law.cuhk.edu.hk/people/mercurio-bryan.php

SSRN author page: http://ssrn.com/author=346439







Message: 1

Date: Fri, 20 Sep 2013 14:34:03 +0000

From: "Baker, Brook" <b.baker at neu.edu>

To: IP-health <ip-health at lists.keionline.org>,

                "healthgap at lists.critpath.org"
<healthgap at lists.critpath.org>,

                "internationaltreatmentpreparedness at yahoogroups.com"

                <internationaltreatmentpreparedness at yahoogroups.com>

Subject: [Ip-health] Threat of Pharmaceutical-Related IP Investment

                Rights in the Trans-Pacific Partnership Agreement: An
Eli Lilly v.

                Canada Case Study

Message-ID: <CE61D516.437F0%b.baker at neu.edu
<mailto:CE61D516.437F0%25b.baker at neu.edu> >

Content-Type: text/plain; charset="Windows-1252"


Threat of Pharmaceutical-Related IP Investment Rights in the
Trans-Pacific Partnership Agreement: An Eli Lilly v. Canada Case Study


Brook K. Baker



After losing two patent cases before the appellate courts of a Western
democracy, should a disgruntled foreign multinational pharmaceutical
company be free take that country to private arbitration claiming that
its expectations of monopoly profits had been thwarted by the courts?
decisions? Should governments continue to negotiate trade agreements
where expansive Intellectual Property-related investor rights and
investor- state dispute settlement (ISDS) are enshrined into hard law?
Should we be concerned about the impact of billion dollar arbitral
judgments on the willingness of governments to regulate pharmaceutical
companies and to corral their efforts to expand their patent and data
protection monopolies? Ultimately, should policy makers be concerned
about the impact of investor rights on the affordability and
accessibility of medicines both in rich and low- and middle-income



The answers to these questions become more urgent given proposed IP and
Investment Chapters in the Trans- Pacific Partnership Agreement (TPP)1
and the recent NAFTA investor dispute notifications by Eli Lilly against
Canada.2 The Eli Lilly case clarifies the risks of including IP rights
in investment chapters and the boundary- pushing claims that can be
brought on behalf of foreign pharmaceutical companies.



4:4 Investment Treaty News 8-10 (2013), available at,





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