Canada wins $5m in Eli Lilly patent case

The Canadian government has won nearly $5 million in an arbitration claim filed by Eli Lilly which alleged wrongful termination of its drug patents.

The decision was handed down on Thursday, March 16 by the International Centre for Settlement of Investment Disputes (ICSID).

It denied claims made by Eli Lilly, which had submitted the dispute under the North American Free Trade Agreement (NAFTA).

The claims arose from the invalidation of two of Eli Lilly’s Canadian patents protecting the drugs Strattera (atomoxetine), a treatment for attention deficit hyperactivity disorder, and Zyprexa (olanzapine), an antipsychotic medication.

In 2010 and 2011, the Canadian courts had invalidated the two patents for not meeting the requirement under Canadian patent law that an invention must be “useful”.

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 pharmaceutical company had also asked that the courts’ decisions should be dismissed as they lacked merit, but the ICSID dismissed Eli Lilly’s claims entirely.

On top of paying the costs of the arbitration ($375,000), Eli Lilly was ordered to pay 75% of Canada’s costs of legal representation, amounting to $4.4 million.

The costs were calculated in US dollars.

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