11 Pages Posted: 8 Jun 2016
Date Written: February 12, 2016
This amicus brief was submitted to the North American Free Trade Agreement (NAFTA) arbitral tribunal in Eli Lilly v. Canada (ICSID Case No. UNCT/14/2) by Amici. Amici are scholars whose research and teaching focus is intellectual property law (Dr. Burcu Kilic, Professor Brook Baker, HU Yuanqiong, Professor Cynthia Ho, Dr Luke McDonagh, Pratyush Upreti and Yaniv Heled, J.S.D.). The brief was accepted by the Tribunal with respect to Dr. Burcu Kilic (Washington DC, United States), Professor Brook K. Baker (Boston, United States), Professor Cynthia Ho (Chicago, United States), and Mr. Yaniv Heled J.S.D. (Atlanta, United States), denied with respect to the other academics for lack of standing.
In September 2013, the Claimant Eli Lilly and Company (Lilly) launched a CDN $ 500 million claim against the Government of Canada under the North American Free Trade Agreement’s (NAFTA) investment chapter. The Claimant is challenging Canada’s invalidation of secondary patents related to the previously-known and patented active ingredients atomoxotine (Strattera) and olanzapine (Zyprexa), drugs used to treat attention deficit hyperactivity disorder, schizophrenia and bipolar disorder.
Lilly is challenging the decision of Canadian courts to invalidate two patents for failing to comply with Canada’s requirement of usefulness after failing to prevail in Canadian courts. The challenge is under the “investment” chapter of NAFTA, rather than the IP chapter. Lilly argues that this “improper” and “discreditable” invalidation of its patents constitutes a NAFTA-prohibited “indirect expropriation” and a breach of NAFTA’s guarantee of a “minimum standard of treatment” for foreign investors.
This case against Canada is a case of first impression and the first case pursuing investor-state dispute resolution (ISDS) with respect to intellectual property rights affecting pharmaceuticals, the case has heightened significance. The outcome of this case will be instructive about whether other foreign investors pursue future attacks on substantive policies embedded in national patent systems through the arbitral proceedings challenging differences in patentability standards that frustrate their “expectations”.
Of particular concern is that this challenge may make countries hesitant to use legitimate flexibilities under the Agreement on Trade Related Aspects of Intellectual Property (TRIPS). In addition, the invalidated patents are secondary patents that Eli Lilly seeks to use to extend its patent term after initial patents expired, but without substantial evidence that these new inventions are in fact useful. Although Canada bars such patents under the “promise of a patent” for usefulness that is unique, other countries similarly bar such patents, under different patentability doctrines.
The Brief addresses, amongst other issues:
• NAFTA Chapter 17 patentability standards
• Patentability standards in Canada and their judicial interpretation
• Secondary patents and patent evergreening
• Evolving nature of patent law
• Abuse of the system of international investment protection and misuse of the system
• Adverse chilling effect of the case on efforts to enhance access to medicines globally
Keywords: IP, patent, ISDS, investor-state arbitration, TRIPS, NAFTA, expropriation, fair and equitable treatment, utility, industrial application, promise doctrine, secondary patents, evergreening
JEL Classification: 034, K11, K41
Suggested Citation: Suggested Citation
Kilic, Burcu and Baker, Brook K., Amicus Curiae Submission Eli Lilly and Company v. The Government of Canada (February 12, 2016). Available at SSRN: https://ssrn.com/abstract=2791659 or http://dx.doi.org/10.2139/ssrn.2791659