www.lexpert.ca/usguide-litigation/ | LEXPERT • December 2017 | 15
"It's an important case because that shows the NAFTA
dispute-resolution provisions don't just apply to actions of
government officials, but would apply to courts — including the
Supreme Court of Canada," says John Terry, a partner at Torys
LLP in Toronto.
e case was originally filed in court over two drugs Eli Lilly
already has Canadian patents over: Strattera, used for attention-
deficit/hyperactivity disorder; and Zyprexa, an anti-psychotic
medicine. e company asserted it had evidence to support new
uses for the drugs that warranted extending their Canadian
patents. e Canadian patent office granted the patents based
on the applications, but they remained subject to challenge.
And they were challenged on the grounds there was insufficient
evidence to support the company's claims of new uses.
e Federal Court of Canada agreed. Eli Lilly went all the way
up to the Supreme Court of Canada, and lost, before launching
a NAFTA challenge in 2016 seeking C$500 million in damages
on the ground the Canadian courts' application of the so-called
"promise doctrine" to the two patented drugs contravenes the
country's NAFTA obligations. e promise doctrine allows
a patent on a drug to be overturned if even one "promised"
argument for getting the patent turns out to be overstated.
e case was closely watched because of the possibility the
dispute trade-agreement settlement mechanism would provide
a path to avoiding Canadian courts for these types of challen-
ges. But when the tribunal handed down its verdict, it found
against the drug company and ordered it to pay the government
of Canada millions in costs.
e decision says, in part, that a NAFTA tribunal "is not an
appellate tier in respect of the decisions of the national judiciary,"
and stressed it is not a NAFTA tribunal's job to review the
findings of national courts. It said "considerable deference is to
be accorded to the conduct and decisions of such courts [and] …
only in very exceptional circumstances, in which there is clear
evidence of egregious and shocking conduct" will it find that
appropriate.
Terry, who oen litigates trade disputes, says what's particularly
interesting for American counsel is that the NAFTA tribunal felt
that even the Supreme Court was not immune from review. "It
looked at the Supreme Court decision to look at whether or not
it was discriminatory or arbitrary. It made it clear it's not going to
be a court of appeal in cases from the Supreme Court, but it also
made clear it was willing to look at the way the law had developed
… to make sure there wasn't anything arbitrary or discrimina-
tory" about a ruling.
Susan Hutton, a partner at Stikeman Elliott LLP in Ottawa,
says it's an important decision because it confirms "the ability
of national courts to make changes to a country's laws without
having to compensate foreign investors for losses caused by that
change — within reason."
In the end, ironically, in a case handed down aer Eli Lilly
was out of options, the Supreme Court of Canada found in
AstraZeneca Canada v. Apotex, 2017 SCC 36, that the promise
doctrine is "unsound." e court said that completely reversing a
patent because some part if its claims may turn out to have been
overstated "is antagonistic to the bargain on which patent law
is based wherein we ask inventors to give fulsome disclosure in
exchange for a limited monopoly."
Julie Desrosiers, leader of the global technology and intellec-
tual property group at Fasken Martineau DuMoulin LLP in
Montréal, says the case "is important to Americans because the
'promise of the patent doctrine' has been used to invalidate many
patents in Canada, particularly pharmaceutical patents, over the
last 10 years.
"Now that the Supreme Court has ruled that this doctrine
has no place in Canadian patent law, it is expected that very few
patents will be invalidated for lack of utility. is is particularly
important because it means that, if a patent application is filed
in Canada based on an American or international filing, it is not
necessary to adjust the specifications of the wording in order to
avoid some statements being construed by the courts as a promise
that needs to be fulfilled." — S.R.
7.
Bristol-Myers Squibb
Canada v. Teva Canada
"Inventive concept" and the "obvious to try" tests have long been
critical, if sometimes elusive, concepts in Canadian patent law.
Fortunately, the Federal Court of Appeal's April 2017 decision
in Bristol-Myers Squibb Canada v. Teva Canada, 2017 FCA 76,
has brought some much needed clarity to both concepts.
e case revolved around atazanavir, a drug used to treat
human immunodeficiency virus (HIV) and acquired immuno-
deficiency syndrome (AIDS). But the poor bioavailability of
atazanavir in its free-base form limited its use. So Bristol-Myers
formulated and marketed a bisulfate salt of atazanavir, known
as Reyataz. Teva objected to the validity of two patents, the
"Compound Patent" and the "Salt Patent," listed on the patent
register against Reyataz. Teva contended that the invention was
obvious in both cases.
At trial, Justice Anne Mactavish found that the Compound
Patent claims were neither obvious nor anticipated. But she
CROSS-BORDER SIGNIFICANCE
John Terry
Torys LLP
"[Eli Lilly v. Canada is]
an important case
because that shows the
NAFTA dispute-resolution
provisions don't just
apply to actions of
government officials,
but would apply to courts
— including the Supreme
Court of Canada."
