[Ip-health] Corporate Power Unbound: Investor-State Arbitration of IP Monopolies on Medicines ­ Eli Lilly v. Canada and the Trans-Pacific Partnership Agreement

Baker, Brook b.baker at neu.edu
Wed Sep 30 07:03:12 PDT 2015

This timely paper analyses the most recently leaked draft IP, Investment, and Transparency Chapters and the latest arguments in the Eli Lilly v. Canada ISDS case to highlight the risk that the TPP's investment chapter imposes with respect to enhanced enforcement of IPRs as investor rights.  The entire article can be downloaded from the ssrn link.

Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
416 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
NGOs Board Member UNITAID
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
skype: brook_baker
b.baker at neu.edu<mailto:b.baker at neu.edu>


Corporate Power Unbound: Investor-State Arbitration of IP Monopolies on Medicines - Eli Lilly v. Canada and the Trans-Pacific Partnership Agreement

Prof. Brook K. Baker and Katrina Geddes



Despite the deep irony of free trade agreements being subverted to codify and extend anti-competitive monopoly rights and despite the equally deep irony of foreign investors having greater enforcement rights than local investors, the joining of enhanced intellectual property rights (IPRs) and protections and strengthened investor rights is creating a wild-west opportunity for unbounded corporate power. Two current contestations show the dangers of this expanded power in sharp relief. In the Trans-Pacific Partnership Agreement (TPPA), at the behest of its powerful pharmaceutical lobby, the United States is seeking the most extreme forms of pharmaceutical patent, data, and enforcement rights that have ever been proposed at the same time that it is seeking enhanced IP-related investor rights in the most recently leaked Investment Chapter. In the pending investor-state-dispute-settlement case under an older but parallel North America Free Trade Agreement (NAFTA) investment clause, an American pharmaceutical company, in Eli Lilly v. Canada, is for the first time claiming $500 million in investment-related damages because of Canada's sovereign decision to invalidate previously granted patents on two medicines on the grounds that those patents failed to meet well-established Canadian standards of patentability.

This article is not written as an abstract juxtaposition of these two current events. It is written to expose the dangers that countries face, especially low- and middle-income countries, in trade negotiations with the U.S., Europe, and Japan that seek to impose stronger patent, data, and market entry protections and at the same time seek to expand the armamentarium of enforcement powers available to pharmaceutical behemoths. Part II of the paper contains a brief introduction to the international IP regime, namely the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the TRIPS-plus pharmaceutical protections being sought in the mostly recently leaked TPPA Intellectual Property Chapter and Transparency Chapter still being negotiated between twelve Pacific rim countries. Part III gives a brief historical background on investment treaties and investor-state-dispute-settlement (ISDS). Part IV analyses the TPP Investment Chapter in more depth, particularly its provisions that deal with protection for and enforcement of IP-related investments. Part IV discusses the pending Eli Lilly v. Canada ISDS arbitration, including the claims and defenses of the parties. Part V concludes with a recommendation that investment chapters be struck from the TPP and other trade agreements or that such chapters should not apply whatsoever to the protection or enforcement of IPRs given the many other enforcement powers available to patent holders. The article claims that extending boundless corporate power to Big Pharma through adoption of ISDS for IPRs presents a grave danger to the communal right to health and the right of access to affordable medicines for all.

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