[Ip-health] WSJ: Canada Slams Lilly for ‘Scattershot’ Patent Filings in a Long-Running Dispute

Thiru Balasubramaniam thiru at keionline.org
Sun Feb 15 01:42:20 PST 2015

11:54 am ET
Feb 13, 2015ADHD <http://blogs.wsj.com/pharmalot/category/adhd/>Canada
Slams Lilly for ‘Scattershot’ Patent Filings in a Long-Running Dispute


In blunt language, the Canadian government has harshly criticized Eli Lilly
<http://online.wsj.com/public/quotes/main.html?type=djn&symbol=LLY> in a
closely watched patent dispute that is being heard by an international
tribunal. At issue is the extent to which a government has the right to set
its own patent laws and the recourse a drug maker has to challenge
unfavorable court decisions.

As we have noted previously, the battle centers on different rulings a few
years ago by Canadian courts that invalidated patents on a pair of Lilly
drugs – the Zyprexa antipsychotic and the Strattera pill for attention
deficit disorder. The decisions triggered the arrival of cheaper generics
in Canada, leading to what Lilly claims were significant sales and job
losses there.

Two years ago, Lilly filed for arbitration
the rules of the North American Free Trade Agreement and sought $500
million in damages in hopes of forcing Canada to alter its approach for
administering patent rights. In technical terms, Lilly is pursuing what is
called an investor-state dispute which, under international trade treaties,
allows companies to initiate claims against foreign governments.

As Lilly sees it, the courts unfairly ruled its original patent
applications should have offered more proof of effectiveness at the time of
the initial filings. The drug maker attempted to obtain additional patents
for other uses, but the courts ruled Lilly did not make its case. Lilly
argues the courts relied on a government doctrine that produced “absurd”
results and accuses Canada of expropriating its patents.

Canada filed an initial response last June, but last month came back with a
blistering andlengthy counter attack
charges Lilly is “profoundly wrong” about the court rulings, which struck
down the patents in 2009 and 2011. Moreover, the government argues the drug
maker took a “scattershot” approach to filing patents in order to
“monopolize whole areas of research.”

For instance, between 1992 and 2004, Lilly filed patent applications
claiming a dozen new uses for Strattera, such as treating psoriasis,
stuttering, incontinence, hot flashes, anxiety, learning disabilities, tic
disorders, cognitive failure, oppositional defiant disorder, conduct
disorder, pervasive development disorder, and ADHD, according to the
government filing.

But “close inspection of the patent specifications for these filings
revealed that roughly half of [the] applications contained no reference to
experimental data. Moreover, of the seven patent applications actually
referencing experimental data, three referenced only a single case study,”
the Department of Foreign Affairs, Trade and Development argues in its

And between 1995 and 1998, Lilly filed 16 separate patents for using
Zyprexa to treat excessive aggression, fungal dermatitis, bipolar disorder,
sexual dysfunction, insomnia, anesthetic agent, nicotine withdrawal, tic
disorder, anorexia, depression, autism and mental retardation, pain,
migraines, dyskinesia, addictive substance withdrawal, and Alzheimer’s
disease, according to the filing.

The government argues the patents were all filed during a period when
Lilly’s “longstanding monopoly” for Zyprexa was about to expire. But
roughly five of the 16 applications did not contain reference to relevant
experimental data. And of the 11 that did, in nine of 11 cases, this was
limited to “bare reference” to a clinical study in which the claimed use
had been demonstrated, the filing states.

The government, which notes Lilly later abandoned most of the applications,
argues the patent filings had “the effect of diminishing, rather than
increasing innovation by discouraging competing research efforts.” The
government argues that “Canadian law does not grant patents for
almost-inventions, even if the applicant’s speculation at the time of
filing is later confirmed.”

In a statement e-mailed to us, a Lilly spokesman writes the drug maker has
reviewed the government response and “nothing in their filing changes our
strongly held belief that Canada has improperly invalidated our patents
under their NAFTA obligations and that Lilly is entitled to compensation
for its losses.”

Lilly, by the way, has attempted to portray Canada as insufficiently
unwilling to protect intellectual property rights in other venues. Last
year, the U.S. Trade Representative did not add Canada to its “Priority
list of countries that fail to enforce patent rights, despite a Lilly
lobbying effort on Capitol Hill in Washington, D.C.

And as part of a prepared statement
<http://freepdfhosting.com/55c00b74f2.pdf> in response to the Canadian
government filing, Lilly circulated a new report
intellectual property issued this month by the U.S. Chamber of Commerce.
The report criticized Canada for “onerous patentability requirements” that
“discriminate against pharmaceutical patents” and court rulings differ from
“international standards” found in trade treaties.

For its part, Lilly maintains that the report describes Canada as being
“among the outliers related to intellectual property protection,” although
the report does not use that word to describe Canada, but does so for
several other countries. In fact, the report notes that Canada’s ranking in
terms of its overall intellectual property environment improved slightly
from its previous report.


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