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Amicus Curiae Submission of Dr. Burcu Kilic, Professor Brook AMICUS CURIAE SUBMISSION Eli LILLY AND COMPANY v. THE GOVERNMENT OF CANADA I. Introduction In September 2013, the Claimant Eli Lilly and Company (Lilly) launched a CDN $ 500 million claim against the Government of Canada under the North American Free Trade Agreement’s (NAFTA) investment chapter. The Claimant is challenging Canada’s invalidation of secondary patents related to the previously-known and patented active ingredients atomoxotine (Strattera) and olanzapine (Zyprexa), drugs used to treat attention deficit hyperactivity disorder, schizophrenia and bipolar disorder. Lilly argues that this “improper” and “discreditable” invalidation of its patents constitutes a NAFTA- prohibited “indirect expropriation” and a breach of NAFTA’s guarantee of a “minimum standard of treatment” for foreign investors. In essence, Lilly claims that NAFTA country patentability practices must be uniform, largely in conformance with U.S. standards, and that Canada’s standards must remain static or change only in the direction of more permissiveness from NAFTA’s 1994 signing. Lilly argues that its expectations of continuing monopoly-based profits must be respected at the expense of Canada’s sovereignty to establish, clarify, and even adapt its NAFTA compliant standards for granting or invalidating patents. In addition to Canada’s arguments, Amici here address a number of considerations based on principles of international patent law and practice and the human right of access to affordable medicines that the Government of Canada either did not address or elaborate. The Amici collectively are international intellectual property experts around the globe who focus broadly on maximizing permissible use of standards and flexibilities in NAFTA and other trade agreements to ensure access to knowledge, goods, and most particularly medicines. Because the Lilly case against Canada is a case of first impression and the first case pursuing ISDS with respect to intellectual property rights affecting pharmaceuticals, the case has heightened significance. Generally, under NAFTA and other analogous agreements, including the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), countries have significant flexibility to set their own standards for patentability as long as basic minimums are maintained. Every patent system has built-in checks and balances that seek to disseminate knowledge and promote access and innovation. A wide range of policy options and flexibilities have been built into patent systems to accommodate diverging national public health interests and objectives. The well-accepted international legal principles discussed in this submission support the premise that the Tribunal should take these principles into account. II. NAFTA does not impose a uniform standard of patentability criteria and clearly not so with respect to industrial applicability, the criteria at issue in this case. 1 NAFTA, in parallel with TRIPS1 requires that patents be granted when prototypical standards for patentability, novelty, inventive step and industrial applicability, are satisfied. NAFTA does not specify how these criteria should be defined and applied. The Claimant claims infringement of patentability standards “enshrined” in NAFTA ‘in a way that contradicts the standard accepted by the NAFTA parties at the time the treaty was negotiated’2. It does so as if the definitions in Article 1709(1) were clear and immutable, but they certainly are not. The Article does not provide for a definition of the concepts that it refers to, such as, novelty, inventive step, capable of industrial application. This is a matter which is intentionally left to the Parties to deal within their own legal system and practice. Given the latitude of NAFTA provisions in not providing any definitions, Parties can determine when an invention is deemed to be a capable of industrial application or useful. This view has long standing support; the same terms in TRIPS are viewed as being ones that parties can self-define and policy makers and scholars have in fact recommended parties do so.3 Parties may treat the terms as synonymous, but are not required to do so. Indeed, in patent law and practice the term ‘useful’ is not treated same as industrial application per se. Article 1709(1) clarifies that there is significant flexibility with respect to inventions ‘capable of industrial application’ which may (but need not) be deemed by a Party to be synonymous with the term ‘useful’. Not only are differences in industrial applicability standards widespread, there is substantial variation globally with respect to inventive step. NAFTA does not seek to achieve (nor its implementation likely to produce) harmonization of patent laws throughout North America. NAFTA, like TRIPS, is only intended to impose flexible minimum standards. The lack of harmonization is underscored by the fact that after NAFTA and TRIPS, some parties attempted to create uniform standards of patentability through the World Intellectual Property Organization (WIPO) that failed.4 1 Although NAFTA was signed in 1992, three years before TRIPS, NAFTA Article 1709 (1) on patentability standards is based on the Article 27 of ‘Dunkel Draft’ from the GATT Secretariat which was presented in Geneva in December 1991. The text then became the Final Act of the TRIPS Agreement. Margaret Smith, Patent Protection for Pharmaceutical Products In Canada - Chronology Of Significant Events, Law and Government Division (March 30, 2000), available at http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.htm 2 Notice of Arbitration dated September 12, 2013, para 68 3 E.g. Declaration on Patent Protection: Regulatory Sovereignty Under TRIPS, available at https://www.mpg.de/8132986/Patent-Declaration.pdf; UNCTAD-ICSTSD Capacity Building Project on IPRs, Resource Book on TRIPS and Development: An Authoritative and Practical Guide to the TRIPS Agreement (2005); Carlos Correa, Guidelines for the Examination of Pharmaceutical Patents: Developing a Public Health Perspective, WHO-UNCTAD-ICTSD (2007);World Health Org. et al., Promoting Access To Medical Technologies And Innovation: Intersections Between Public Health, Intellectual Property And Trade 57 (2012); Chan Park et al., Using Law to Accelerate Treatment Access in South Africa: An Analysis of Patent, Competition and Medicines Law 41–46 (U.N. Development Programme 2013); Carlos M. Correa, Patent Rights, in Intellectual Property and International Trade: The TRIPS Agreement 189, 198–200 (2d ed. 1998); Straus, Implications of the TRIPS Agreement in the Field of Patent Law, From GATT to TRIPS – The Agreement on TRIPS 187 (Beier & Schricker eds., 1996). 4 E.g., Jerome Reichman & Rochelle Dreyfuss, Harmonization without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty, 57 Duke L J 85, 89-90 (2007). 2 III. Canada is well within its rights under NAFTA to set an industrial applicability standard requiring adequate disclosure of promised utility of an invention – what Canadian courts identify as the sound prediction doctrine. Canada is well within its rights under NAFTA to set its own industrial applicability and disclosure requirements. The Claimant is asking the Tribunal to reinterpret this flexible NAFTA standard and require adoption of a lax, U.S.-centric usefulness standard. It further seeks to deprive Canada of its NAFTA compliant flexibility to define its disclosure requirements with respect to patent claims generally and with respect to industrial applicability specifically. The Claimant seeks to gain unchallengeable patent exclusivity without having to satisfy adequate disclosure of its claims of industrial applicability at the time of filing its patent application. The patent right is a negative right; it confers the right to exclude others doing or making anything that falls within the subject-matter contained in the patent’s claims in exchange for a full and adequate disclosure of the claimed invention sufficient to allow the invention to be worked by persons skilled in the art. Patents do not provide positive privileges. The ultimate goal of the patent system is to promote progress of science and technology through incentives to innovation and dissemination of disclosed5 inventions. Under Canadian law, utility means having industrial or commercial value in a manner that benefits the public. Utility serves two functions: a) it determines general patentability of the invention and b) it signals completion of the invention. In order to offer immediate concrete benefits to the public, sufficient disclosure becomes critical.6 In the case of an explicit promise of utility, the utility of a claimed invention is measured against that promise. If a patent specification “promises” a specific result, benefit or use, a patent should do what the specification promises that it will do. This is called the “promise of the patent” or “promise doctrine” in Canada. Utility should either be demonstrated directly and fully or soundly predicted as of the application filing date. The patent applicant can rely on data or other evidence obtained before filing to demonstrate utility. If the applicant is unable to demonstrate the full utility, he can rely on evidence that is not included in the specification to show that the utility is not based on “mere speculation” – that it is not merely an idea. The Supreme Court of Canada established the “sound prediction” test in Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77. The “sound prediction” test recognizes
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