US Chamber of Commerce criticises Canada’s ‘promise doctrine’

The US Chamber of Commerce has urged the Canadian government to address its ‘promise utility doctrine’, claiming that it “dramatically undermines legal certainty for medical innovators in Canada”.

This statement followed the Canadian government’s  win of nearly $5 million in an arbitration claim filed by Eli Lilly, which alleged wrongful termination of its drug patents.

Handed down on Thursday, March 16, the decision by the International Centre for Settlement of Investment Disputes (ICSID) denied claims made by Eli Lilly, which had submitted the dispute under the North American Free Trade Agreement (NAFTA).

The arbitration arose after the Canadian courts invalidated two of Eli Lilly’s patents in 2010 and 2011, protecting the drugs Strattera (atomoxetine), a treatment for attention deficit hyperactivity disorder, and Zyprexa (olanzapine), an antipsychotic medication, in 2010 and 2011.

As LSIPR previously reported, the decision from ICSID said: “According to claimant, the basis for the Canadian courts’ decisions was their adoption in the mid-2000s of the ‘promise utility doctrine’, which claimant considers to be radically new, arbitrary and discriminatory against pharmaceutical companies and products.”

Eli Lilly argued that the promise utility doctrine is inconsistent with Canada’s obligations related to patent protection under NAFTA.

The promise doctrine requires the demonstration or evidence of a patent’s utility—if the utility falls short of fulfilling the “promise” contained in the patent, the patent will be invalidated, even if it is useful for purposes other than those promised.

In response to the decision, the US Chamber of Commerce claimed that the doctrine undermines legal certainty for medical innovators in Canada.

Patrick Kilbride, vice president of international IP in the chamber, said: “Since 2005, there has been a sharp increase in medical patent invalidation, with 25 patents revoked that were previously approved by Health Canada and that were being used to treat millions of patients around the world.”

He added that these actions are “outside international norms” and have “undermined the stability” that drug makers rely on.

The chamber urged the Canadian government to address the “stifling challenges” of the doctrine.

Pharmaceutical Research and Manufacturers of America (PhRMA) also expressed disagreement with the ICSID’s decision.

The organisation said in a  statement: “We are disappointed that the tribunal’s decision was made on narrow investment dispute grounds and did not even address whether Canada’s ‘promise’ doctrine is consistent with NAFTA intellectual property rules.”

It added that that the doctrine undermines Canada’s stated goal of shifting to an innovation economy.

“Canada remains the only country in the world that interprets patent utility in this manner, breaking the letter and spirit of its international commitments on intellectual property rights,” said PhRMA.

PhRMA also urged the Canadian government to take action toin “fixing” the provision, in order to show its commitment to protecting IP.

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