Eli Lilly seeks arbitration with Canada over IP-related NAFTA Obligations

| 2 minutes

This is the latest chapter in the story involving Canada’s judge-made “promise of the patent” doctrine, which is sometimes referred to as the “promise doctrine” or “promise of the patent”. The promise doctrine essentially states that in order to constitute a useful (and therefore patentable) invention, an invention must not only be useful for some purpose, but it must also make good on any promise of utility found in the disclosure of the patent.

On September 12, 2013, Eli Lilly filed a $500 million claim against the Government of Canada over “invalidated patents”, alleging that Canada has “violated its obligations under NAFTA by allowing its courts to invalidate patents for its drugs.”

Lilly asserts that the judicial application of the promise doctrine to invalidate its patents covering drugs STRATERRA and ZYPREXA, amounts to Canada’s contravention of its treaty obligations to protect patent rights, resulting in the unlawful expropriation of Lilly’s intellectual property.  To view Lilly’s full Notice of Arbitration click here.  It makes for an interesting read.

Some say the promise doctrine has been improperly grafted onto the utility requirement enshrined in the Canadian Patent Act. Lilly has been consistent in challenging the rule.

In May 2013, Lilly was denied leave to the Supreme Court of Canada – after a rare oral leave hearing – in its case against Novopharm (now Teva), who succeeded in having Lilly’s ZYPREXA patent invalidated through application of the promise doctrine.  Thus, Lilly’s hopes for judicial clarity about the promise doctrine from the Supreme Court of Canada were dashed – and shattered – against the rocks of national importance.

The full ZYPREXA trial decision can be found here.  Lilly’s appeal to the Federal Court of Appeal was summarily dismissed from the bench.  That decision can be found here.  The Supreme Court leave application dismissal can be found here.

With Canada being on the U.S. IP watch list and concern over the proper forum in which Canada’s domestic law should be shaped, Lilly’s potential arbitration will undoubtedly raise interesting issues.

In the meantime, some good news exists for patent holders concerned with the promise doctrine.  The Federal Court of Appeal provided clarification in its recent Plavix decision.  I wrote a blog about that, which can be found here.

There can be no doubt, however, that more is yet to come.

Patents; Infringement; patent litigation;federal court;



Stay Connected

Get the latest posts from this blog

Please enter a valid email address