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.

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  1. identicon
    Anonymous Coward, 14 Sep 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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