Eli Lilly Officially Sues Canada For 'Lost Profits' Because Canada Rejected Eli Lilly's Patents

from the incredible dept

A few years ago, we noted that Eli Lilly was facing some hard times, in large part because it had focused its entire business model around getting patents, and many of those patents were expiring, and very few new ones were in the pipeline. Even so, it was still rather surprising earlier this year to see Eli Lilly claim that Canada owed it $100 million for undermining the company's "expected future profits" by rejecting an Eli Lilly patent. The Canadian court reasonably felt that it shouldn't give Eli Lilly a patent on something that wasn't determined to be useful. Normally, if a country doesn't give you a patent, you move on. However, Eli Lilly used a questionable part of NAFTA, the so-called investor-state dispute resolution mechanism, to argue that Canada was "expropriating its property," and thus demanded compensation -- starting at $100 million, which it then raised to $500 million.

A few weeks ago, Eli Lilly's CEO wrote an op-ed piece, claiming that by not granting his company a monopoly, Canada was "suffocating life-saving innovation." That's wrong. And it's obnoxious. For years we've covered how the pharmaceutical industry has actually used patents to hold back life-saving innovations by locking them up, blocking advances, jacking up the price to absolutely insane rates, and by using a variety of other questionable practices (including patenting historical folk medicines). But, more importantly, every country gets to determine what is and what is not patentable. For Eli Lilly to use trade policies to effectively try to negate Canada's patent validity standards is a blatant attack on Canadian sovereignty.

And now the official case has been filed and Eli Lilly is basically demanding that $500 million because Canada decided that an Eli Lilly drug wasn't worth a patent.

Keep this in mind as we discuss the Trans Pacific Partnership (TPP) agreement and the upcoming EU-US trade agreement TTIP/TAFTA, because companies are asking for similar dispute resolution mechanisms, and this could become a big, big deal. Remember how New Zealand recently has put in a law that should mostly ban software patents? Imagine if Microsoft and others suddenly started trying to sue that country for "lost profits" because it won't give them patents on their software.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    That One Guy (profile), Sep 13th, 2013 @ 7:45pm

    This could be good actually

    If canada loses here, or even has to fight hard, it would hopefully make other countries take a good, long look at any treaty/trade agreement that includes similar investor-state dispute language, as something like this makes it very clear such 'deals' make it so the profits of companies are considered to be of higher importance than laws or even sovereignty of countries.

     

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  2.  
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    sorrykb (profile), Sep 13th, 2013 @ 8:01pm

    For Eli Lilly to use trade policies to effectively try to negate Canada's patent validity standards is a blatant attack on Canadian sovereignty.

    Remember 1812!

     

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  3.  
    identicon
    Anonymous Coward, Sep 13th, 2013 @ 8:33pm

    Canada pissed away

    Canada pissed away their sovereignty when they signed the treaty, and they don't have the guts to stand up and take it back.

     

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  4.  
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    Anonymous Coward, Sep 13th, 2013 @ 9:04pm

    I thought this was what NAFTA was all about - big companies screwing over national sovereignty in the name of investors.

    They're certainly not about consumers, or even the average voter. Which is why many countries see riots when new "free trade" agreements are proposed.

     

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  5.  
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    AC, Sep 13th, 2013 @ 9:17pm

    If Lily does win this by some miracle, we the Canadian People will never buy another of their products. Also their big wigs should be careful when entering the country, they may never leave.

     

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  6.  
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    Anonymous Coward, Sep 13th, 2013 @ 10:13pm

    Neither 1984 nor Brave New World are the blueprints of the future, Jennifer Government is. Corporations will become their own states soon enough.

     

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  7.  
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    Anonymous Coward, Sep 13th, 2013 @ 10:36pm

    Eli Lilly didn't think this through

    'cause Canada is part of Five Eyes....

     

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  8.  
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    Corporate Takeover, Sep 13th, 2013 @ 11:16pm

    Refuse to recognize the court's authority over patents

    If the court were to decide against Canada, the latter should tell the former to fuck off and refuse to recognize the judgment as valid. Don't make the same mistake as US Supreme Court when it decided to extend copyrights on public domain content just to honor trade agreements.

     

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  9.  
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    Anonymous Coward, Sep 14th, 2013 @ 12:26am

    Re: This could be good actually

    Since politicians live or die by lobbyists and the lobbyists represent people who already know that profit is above national laws, it is not so cut and dry.

    No matter the result of the case, there will be more push on ISD since it can now be claimed to be necessary. The only question is if the fight is for harsher language (Lilly loses the case) or forcing the provisions on every future deal (Lilly wins the case).

     

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  10.  
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    Anonymous Coward, Sep 14th, 2013 @ 5:21am

    Why not?

    Downloading a movie off the internet starves the cameraman industry, after all. Those guys totally deseve millions from Canada.

     

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  11.  
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    Crusty the Ex-Clown, Sep 14th, 2013 @ 6:02am

    Yawn

    This is merely the latest attempt by Corporatism to drive a stake through the heart of Democracy. My brokers have been instructed to maintain their long position on tar, feathers, and rails. I expect to see a huge upswing in demand for these staples over the next five-ten years.

     

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  12.  
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    Anonymous Coward, Sep 14th, 2013 @ 6:10am

    more than anything, this begs the question, 'Where did this dispute resolution mechanism' originate? who thought of it first? who tried to get it incorporated into these totally false but always billed as vital 'Trade Negotiations'? on top of that, how long will it be before some companies then take this to the next level and completely cease to do anything except sue countries and governments for 'lost profits? how long before we start seeing countries go completely bankrupt because they are forced to pay out exorbitant amounts of money to companies over these type of ludicrous law suits? how long before there are millions more on the poverty ladder because countries have had to increase taxes to such ridiculously high levels, no one other than the mega rich or very successful companies can pay the rates? how long before countries have to stop innovating and advancing because they simply cant afford to pay the sums expected in these type of law suits?
    i hope that the various courts see sense here before there are some extremely serious back lashes and that these particular 'additions' present atm in the un-public TPP and similar Trade Negotiations are REMOVED NOW and FOR GOOD!

     

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  13.  
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    Shon Gale, Sep 14th, 2013 @ 7:28am

    Went to the doctor recently to hear some nurse exclaim how wonderful gene therapy was and how great it was for everyone. Sorry to take the wind out of your sails nurse lady but my insurance doesn't pay for gene therapy. So what good is it? Same with most of the drugs made.

     

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  14.  
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    Togashi (profile), Sep 14th, 2013 @ 7:29am

    If they win, I should start a company whose sole business model is to ask Eli Lilly for money. My expected future profits will be the $100 million that I will ask for from them. By not giving me that money, they are undermining my expected future profits, so I will sue them. When it gets to court, how can I lose when they won with the exact same argument?

     

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  15.  
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    Shah zaib, Sep 14th, 2013 @ 7:57am

    The company being the large Canadian taxpayer, might have rightly sued Govt. for its lost profits. Is it not a positive reaction. When it comes to taxing company, the govt. is helping. When it says for granting patent rights, it rejects.

     

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  16.  
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    Anonymous Coward, Sep 14th, 2013 @ 8:20am

    It's pretty ironic to see companies that produce products meant to benefit everyone pulling shit that's hurting everyone..

     

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  17.  
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    Anonymous Coward, Sep 14th, 2013 @ 8:23am

    How many times do they need to be told ....
    - never go full retard -

     

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  18.  
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    johnny canada, Sep 14th, 2013 @ 8:27am

    If Lilly win Canada should just pull a US (reaction) and ignore the running.

    Like the US did with all the softwood lumber ruling against them.

    Or basically like they way the US reacts to any ruling against them.

     

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  19.  
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    artp (profile), Sep 14th, 2013 @ 8:27am

    Eli Lilly has a problem with authority

    They have been smacked down by the FDA so many times I lost count. The FDA has even taken over their QA Department at times because Eli Lilly can't get it right.

    It helps to read the regulations and apply them. But they only do that when trying to get around laws, not when they should be trying to obey them.

     

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  20.  
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    New Mexico Mark, Sep 14th, 2013 @ 9:13am

    Hostile takeover of governments by corporations

    Time travel gimmick aside, actions like this are why I find the Canadian science fiction TV series "Continuum" to be so prescient.

     

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  21.  
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    ricebowl (profile), Sep 14th, 2013 @ 10:14am

    An horrific basis for litigation

    Eli Lilly claim that Canada owed it $100 million for undermining the company's "expected future profits"



    Do they also feel they have the right to sue hospitals, or clinics, if their physicians choose not to prescribe their drugs?

     

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  22.  
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    Anonymous Coward, Sep 14th, 2013 @ 11:08am

    No wait, this is great, this might set a precedent for the end of NAFTA/TPP.

    No country is going to want a law that's interpreted as "You have to approve patents or you'll get sued".

     

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  23.  
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    bigpicture, Sep 14th, 2013 @ 11:49am

    Re: This could be good actually

    Since when did the US government or its Corporations ever respect the sovereignty rights of other nations. Especially where there are greed interests such as oil etc.

    The US is not a nation that is self reflective, no more than playground bullies are self reflective. The ploy is self righteousness, the end justifies the means is the spin. We are special and the other guys are the villains who are victimizing us. OH WAIT, that was also Hitlers message "we are a pure and special race and these Jews are villains who are hurting us" So that gives us the right to invade and pillage.

    This is what Putin is trying to point out if anybody is listening, be self reflective and ask the question why does the rest of the world see the US as a bully? Why does the US have to protect itself from terrorism in the first place, why is it always a threatened victim?

     

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  24.  
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    solidyote (profile), Sep 14th, 2013 @ 2:32pm

    Re:

    That might be hard to do for some.. Given that Lily has monopoly on some drugs that were allowed in Canada for treating some illnesses.

    If there aren't alternatives, or if alternative drugs don't work for some, it could hurt a lot of people.

    That's a really nasty business..

    We allowed them patents and enforced them on our people for their own benefits. And then they use it to create something we need, and begin bossing us around with legal threats..

     

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  25.  
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    Anonymous Coward, Sep 14th, 2013 @ 5:47pm

    The government refused to grant me the patent on breathing that I am rightfully entitled to. I am rightfully entitled to any patent I ask for and the government is rightfully obligated to grant me patents. I am going to sue it for lost profits.

     

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  26.  
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    That One Guy (profile), Sep 14th, 2013 @ 8:17pm

    Re: Re:

    Hmm, actually, that brings up a possibility, win or lose a way for Canada to show that companies can't just order it around would be to do something similar to India, where they have mandatory licensing for knock-off and generic versions of much more expensive drugs.

    Drug companies hate it for obvious reasons, the public loves it, also for obvious reasons, so that would probably be a great way to send a message to any other companies that feel like they are 'owed' profits in a country and try to enforce their entitlement through a broken system.

     

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  27.  
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    Anonymous Coward, Sep 15th, 2013 @ 11:52am

    Re:

    Watch Alien and Aliens: the corporation is all. The hidden motivation for the plot of both movies is that the corporation wants a live alien in order to study, then weaponize it, and I'm guessing getting a patent on it. It puts profits above the deaths of a cargo ship full of employees and a colony of settlers.

     

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  28.  
    identicon
    Anonymous Coward, Sep 15th, 2013 @ 11:54am

    Re:

    How long before countries start saying, "Yeah, I ain't signing that!"

     

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  29.  
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    Matt, Sep 15th, 2013 @ 3:25pm

    New Canadian tax

    I can see a new Canadian tax being introduced on a new class of income. The tax rate of 99.99% on all proceeds of NAFTA compensation paid in Canada.

     

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  30.  
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    Anonymous Coward, Sep 15th, 2013 @ 6:06pm

    not soon enuf

     

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  31.  
    identicon
    Anonymous Coward, Sep 15th, 2013 @ 9:55pm

    Re:

    1812 was an entirely different time.

    The same rules no longer apply and there is 0 (ZERO) chance of a repeat should a repeat not be desired...

     

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  32.  
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    Ninja (profile), Sep 16th, 2013 @ 4:27am

    At the very least locking culture behind copyrights still leaves a wealth of public domain behind and doesn't threaten lives. Now preventing people from getting access to stuff that would mean the difference between life and death is despicable. Suing a country that did it right? Well, they can go rot in hell as far as I'm concerned. Chris Dodd almost looks like a selfless, devoted to charity man running an organization of saints.

     

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  33.  
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    Brazilian Guy, Sep 16th, 2013 @ 6:24am

    Re: Re:

    Over ten years ago, as most of Latin America decided they would not sign the American Free Trade Zone deal.

     

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  34.  
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    DB Cooper, Sep 16th, 2013 @ 10:19am

    Canada deserves this. They refuse to pay fair market prices for drugs so the US consumer is forced to pay a higher price for drugs.

     

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