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NAFTA lawsuit from pharmaceutical company goes too far

Ottawa – The $500-million corporate lawsuit from Eli Lilly against Canada’s patent regime under an investor “rights” chapter in NAFTA cannot be allowed to proceed and should prompt an immediate review of Canada’s investment treaty obligations, says the Council of Canadians.

“A win or settlement with Eli Lilly would be so harmful to our democracy, and set such a dangerous international precedent, that this NAFTA case cannot be allowed to proceed. In fact, it should trigger a radical rethink of these investor ‘rights’ treaties before the government is allowed to ratify new treaties and trade deals with China, the European Union or in the Trans-Pacific Partnership,” says Stuart Trew, trade campaigner with the Council of Canadians.

Eli Lilly is claiming $500 million in compensation from Canada for the court-ordered invalidation of two patents for Strattera, an attention deficit hyperactivity disorder (ADHD) drug, and the anti-psychotic medication Zyprexa. In both cases, federal judges found that the company did not provide enough evidence of the drugs’ “inventive promise” when it filed for the patents, therefore they are invalid on grounds of inutility.

The NAFTA lawsuit is the first attempt by a brand name drug company anywhere in the world to enforce longer patents than required by national laws. Though Canada’s patent regime has been found to be compliant by the World Trade Organization, Eli Lilly claims that NAFTA and WTO intellectual property rules require Canada to overturn the court decisions and adopt the same patent policies as the European Union and United States.

“Eli Lilly makes the absurd claim that Canada’s legal doctrine in patent disputes – the so-called ‘promise doctrine’ – is arbitrary and unpredictable. But you can’t get any more arbitrary and unpredictable than the secretive investment dispute process in NAFTA and other global investment treaties,” adds Trew. “Instead of the courts, the Eli Lilly case will now be decided by three paid arbitrators in a boardroom somewhere in New York or Washington, and their decision will be final and binding on Canada. This abuse of democracy has gone on too long.”

The Council of Canadians calls on the federal government and provinces to immediately review Canada’s commitments under NAFTA and other trade and investment treaties with a view to radically reforming them to better protect the public interest from abusive corporate lawsuits. Canada is the sixth most-sued country in the world under this corporate “rights” regime, with the eight current NAFTA disputes involving a potential $2.5 billion in claims to be paid by the federal government.

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