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Posted in: Intellectual Property

Mar 23, 2017

NAFTA Tribunal Finds Promise Doctrine Founded in 35 Plus Years of Canadian Jurisprudence - Not a Dramatic Change in the Requirements for Patent Utility

By Kitt Sinden, M.Sc.


Eli Lilly's arguably last ditch attempt to challenge the Canadian courts' invalidation of two Canadian patents relating to the drugs olanzapine (Zyprexa™) and atomoxetine (Strattera™), using a NAFTA arbitration, has been rejected.[1] Eli Lilly's case was based on demonstrating a "dramatic change in Canadian patent law" relating to the introduction of the Promise doctrine into the utility requirement. In its March 16, 2017 decision (the "Decision"), the Tribunal found that Eli Lilly had failed to establish a factual basis for its characterization of Canadian common law violating NAFTA[2]:

"the alleged promise utility doctrine had a foundation in Canadian law when Claimant's patents were filed. At that time, although Claimant may not have been able to predict the precise trajectory of the law on utility, it should have, and could have, anticipated that the law would change over time as a function of judicial decision-making. The record in this case shows that the law did in fact undergo a reasonable measure of change and development."[3]


Although the Decision provides a useful historical analysis of Canadian jurisprudence regarding the Promise doctrine from as early as 1979 (Monsanto)[4] and 1981 (Consolboard)[5], as discussed in the 2002 AZT decision (Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77) of the Supreme Court of Canada ("SCC"), up to the present, the Tribunal was careful to repeatedly note that its role was not to question the legal analysis of Canadian courts, or Canada's policy choices[6]. "[A] NAFTA Chapter Eleven tribunal is not an appellate tier with a mandate to review the decisions of the national judiciary."[7] The Decision focused instead on whether there was a dramatic change in patent law over 2002-2008 as argued by Eli Lilly.

Eli Lilly's "dramatic change" argument, "outside the 'acceptable margin of change' that investors must anticipate" was based on Canada's alleged "adoption of a completely new doctrine in a well-settled area"[8]. The three main areas of the Promise doctrine that Eli Lilly alleged had dramatically changed were as follows:

  1. setting the Promise (the alleged change was that courts are now scouring the disclosure, not even the claims, to find an elevated Promise, instead of requiring only the traditional mere scintilla of utility)[9];
  2. the use of post-filing evidence (the alleged change was that courts now do not permit a patentee to rely on tests post filing to support actual utility); and
  3. the disclosure required in a patent for a sound prediction (the alleged change was that there is now a heightened disclosure requirement to include the facts and line of reasoning a patentee relies on for its prediction, although there was acknowledgement that this requirement is currently unclear in recent jurisprudence).

    Notably, these three areas had negative consequences for Eli Lilly's two patents. The olanzapine patent was a selection patent which was held by the Canadian courts not to have met the promise, at the time of filing, that olanzapine "would provide markedly superior clinical treatment of schizophrenia with a better side-effects profile than other known antipsychotics," when administered over a long term.[10] The atomoxetine patent was a new use patent which was held by the Canadian courts not to have met the promise, at the time of filing, that atomoxetine was clinically useful for treating ADHD.[11] As would be expected, in restricting its analysis to the ultimate threshold question as to whether there was a "dramatic change" in Canadian patent law, the Decision contains only cursory references to Eli Lilly's two patents. Instead, the Tribunal concentrated on the fact that the Canadian decisions invalidating these patents for inutility[12], and the three main areas of the Promise doctrine, were based on, and rooted in, Canadian jurisprudence over the past 35 plus years. Procedures at the Canadian Patent Office were also reviewed, including the fact that Eli Lilly was made aware of utility requirements during prosecution of its two patents, when it received "Office Actions that called for disclosure of the basis for a sound prediction."[13]

    In its analysis, the Tribunal found:

    • there was no factual basis for an expropriation of Eli Lilly's investment (its two patents) under NAFTA section 1110 by Canada's actions (through Canadian common law)[14];
    • there was no factual basis for a violation of minimum standards of treatment regarding fair and equitable treatment under NAFTA section 1105(1)[15]; and
    • the Promise doctrine is rationally connected to the legitimate policy of discouraging overstatements in patent disclosures, especially in the context of "new use" and "selection" patents[16] - notably, the Tribunal did not need to consider whether this was the only, or best means of, achieving this objective.

      It will be interesting to see whether the SCC comments on the Decision in its eagerly-anticipated judgment regarding the Promise of AstraZeneca's esomeprazole patent[17], which should provide much-needed guidance with respect to setting the Promise. Before the SCC, AstraZeneca had characterized Canada's Promise doctrine as "a utility requirement ...that is out of step with the corresponding requirements in other major jurisdictions," resulting in Eli Lilly's NAFTA challenge. Notably, the Decision, in fact, states that any alleged major differences with other jurisdictions are irrelevant to the central question as to whether there was a dramatic change in Canadian patent law. In any event, the single 2014 U.S. Trade Report, as relied on by Eli Lilly outlining "serious concerns about ... heightened utility requirements" in Canada, was characterized by the Tribunal as an outlier: "silence [from any other State] speaks louder than the single, brief criticism."

      [1] Final Award, Case No. UNCT/14/2, dated March 16, 2017 (Tribunal of the International Centre for Settlement of Investment Disputes);

      [2] The Decision, para. 307

      [3] Para. 384

      [4] Paras. 341, 342, referring to the SCC's decision in Monsanto Co. v. Canada (Commissioner of Patents), [1979] 2 SCR

      [5] Para. 316, 317, referring to the SCC's decision in Consolboard Inc. v. MacMillan Bloedel (Sask) Ltd., [1981] 1 S.C.R. 504

      [6] Paras. 224, 327, 331, 426, 430

      [7] Para. 225

      [8] Para. 269

      [9] The argument that there is no Promise doctrine, and only de minimus utility, in respect of a compound only claim (as opposed to a use claim), irrespective of what the disclosure says, is currently the crux of the issue pending before the SCC in Astra's esomeprazole case.

      [10] Eli Lilly Canada Inc. v. Novopharm Ltd., 2011 FC 1288, ¶ 273, aff'd Eli Lilly Canada Inc. v. Novopharm Ltd., 2012 FCA 232.

      [11] Novopharm Ltd. v. Eli Lilly & Co., 2010 FC 915, aff'd Eli Lilly & Co. v. Teva Canada Ltd., 2011 FCA 220.

      [12] Para. 430

      [13] Paras. 289, 345, 346

      [14] Paras. 226, 469

      [15] Paras. 226, 469

      [16] Para. 423

      [17] AstraZeneca Canada v. Apotex (Esomeprazole), SCC Court File No. 36654

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