Canada slams Eli Lilly’s patent practices in lawsuit response
The Canadian government has given a scathing assessment of Eli Lilly’s patenting practices in its formal response to the pharmaceutical company’s CAD $500 million ($401 million) lawsuit against it.
Eli Lilly filed a complaint against the government in September 2013, arguing that several court decisions to invalidate patents covering its schizophrenia drug Zyprexa (olanzapine) and its treatment for attention deficit hyperactivity disorder, Strattera (atomoxetine), breached the North American Free Trade Agreement (NAFTA).
The NAFTA, under which Eli Lilly filed the complaint, is a trade deal signed by Canada, the US and Mexico.
Eli Lilly, based in Indianapolis, sought CAD $500 million in compensation. The Canadian government initially responded to the complaint last July, saying that the challenge was “wholly without merit” and that it should be dismissed.
The complaint is still pending.
In its memorial filing, a 178-page document dated January 27, which emerged last week, the government accused Eli Lilly of taking a “scattershot approach” to filing patents to protect the two drugs.
The government alleged in the document that when Eli Lilly’s patents protecting olanzapine and atomoxetine were due to expire, the company filed for patents that claimed dozens of new uses of the compounds.
These applications were based on little relevant evidence, and the “vast majority” were later abandoned, the government claimed.
Eli Lilly had said that the introduction of Canada’s ‘promise utility doctrine’ to patent law in the mid-2000s contributed to the patents-in-suit being invalidated. The company argued that the patents would have been valid under prior law.
According to the doctrine, patents must meet their explicit promise of utility, or risk invalidation.
But in the latest document, the government of Canada disagreed, arguing that the “fair rules of Canadian patent law have not changed”.
Eli Lilly told LSIPR in a statement: “We have reviewed Canada’s counter memorial filing … Nothing in their filing changes our strongly held belief that Canada’s improper invalidation of our patents under its unique and burdensome promise utility is inconsistent with Canada’s NAFTA obligations and that Lilly is entitled to compensation for its losses.”
In the US Trade Representative’s 2014 Special 301 Report, Canada was placed on the ‘watch list’ because of the “lack of clarity and the impact of the heightened utility requirements for patents”.
In the 301 report, the US government said that Canada’s “amorphous and evolving standard” for utility has led to uncertainty for patent holders and “undermin[es] incentives for investment in the pharmaceutical sector”.
