ICSID Tribunal Dismisses Eli Lilly Patent Case Against Canada (March 16, 2017) [1]
On March 16, 2017, an International Centre for Settlement of Investment Disputes (ICSID) Tribunal issued an award [3] in Eli Lilly v. Canada that dismissed Eli Lilly’s claim against Canada over the alleged wrongful termination of its patents under the North Atlantic Free Trade Agreement (NAFTA). Lilly’s suit revolved around the “promise utility doctrine” in Canadian law, which provides that patent owners must be able to demonstrate or adequately predict that a patent actually has the utility the patent application promised by the patent’s filing date. Lilly argued that this doctrine is “radically new, arbitrary and discriminatory against pharmaceutical companies and products” and that Lilly had “legitimate expectations that its Zyprexa and Strattera patents would not be invalidated on the basis of a radically new utility requirement.” The Tribunal rejected Lilly’s claims and found that the promise utility doctrine was not a fundamental or dramatic change, but had gradually evolved over a number of years through incremental change, and that Lilly did not demonstrate “that its legitimate expectations were violated by the application of Canadian patent law to the Zyprexa and Strattera Patents.” The Court further noted “that a NAFTA Chapter Eleven tribunal is not an appellate tier in respect of the decisions of the national judiciary” and it will “only be in very exceptional circumstances, in which there is clear evidence of egregious and shocking conduct, that it will be appropriate for a NAFTA Chapter Eleven tribunal to assess such conduct against the obligations of the respondent State under NAFTA.”