Canada Capitulates: Supreme Court Throws Away Government's Great Pharma Patent Victory

from the who-needs-the-law-when-you-can-bully? dept

Techdirt readers will probably recall a long-running saga involving corporate sovereignty, $500 million, the US pharma company Eli Lilly, and drug patents. In its claim against the Canadian government, made using NAFTA's Chapter 11, Eli Lilly insisted it should have been given some drug patents, despite Canada's courts finding that they had not met the requirements for patentability -- specifically that there was no evidence that the drugs in question provided the benefits in the patent. Eli Lilly said that Canada was being unreasonable in setting a slightly higher bar than other countries by demanding that a patented drug should actually do something useful. As Mike reported back in March, even the lawyers that made up the corporate sovereignty tribunal hearing this case agreed that Canada was within its rights to take this view. They not only dismissed the claim, but ordered Eli Lilly to pay Canada's legal fees.

This was a huge win for Canada in particular, and governments in general. At the time, it all felt a little too good to be true. And now seems it was: as reports, the Supreme Court of Canada has just overturned decades of precedent -- and implicitly the Eli Lilly ruling -- by making it easier for Big Pharma to gain patents on medicines that don't really work:

This reversal in AstraZeneca Canada Inc. v. Apotex, Inc. is particularly disconcerting because Canada had just won an investor-state arbitration award in the long awaited Eli Lilly v. Canada case upholding its more stringent promise/utility doctrine that had been used successfully to overturn two dozen secondary patents, particularly those claiming new uses of known medicines, where patent claimants failed to present evidence in support of the prediction of therapeutic benefit promised in their patent applications.

Thus Canada's Supreme Court has inexplicably thrown away the government's earlier victory, and undermined the country's more rigorous approach to granting pharma patents. Writing for, Brook K. Baker believes this stunning capitulation is a result of unremitting bullying from the US:

Canada had been under intense pressure from the US, which had placed Canada on its Special 301 Watch List for five years threatening that the promise/utility doctrine unreasonably harmed Big Pharma in the US and from the pharmaceutical industry itself which claimed that the doctrine violated global patentability criteria. President Trump's hardball campaign promise to rewrite or leave the North American Free Trade Agreement because of its failure to adequately protect US intellectual property interests may also have played a role. Likewise, President Trump's more recent assertions that US payers are unreasonably subsidizing biomedical research and development because other countries, like Canada, are paying lower prices for innovator medicines than insurers and other payers in the US may also have increased pressure on the Court.

It's really sad to see the Canadian court kowtowing like this, undermining its own independence and moral authority in the process. Weaker patents will lead to the Canadian taxpayer paying higher prices for less-effective drugs. Worst of all, the Big Pharma bullies, aided and abetted by a newly-aggressive US government indifferent to other countries' health problems, will be encouraged to push for even more patent protection all around the world. That will lead not just to higher prices, but to more suffering and avoidable deaths, as crucial medicines become unaffordable for poorer patients.

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  1. icon
    Anonymous Anonymous Coward (profile), 13 Jul 2017 @ 7:02pm

    Contradiction to concept

    If a patent doesn't do what it claims, or can't be proved to be what it is and does not conflate prior art, or is amended minimally to create a supposed new patent, then why is it patent-able?

    Unreasonably harmed seems like a capitulation to corpratocracy. Just what is the harm to the end user, and why was that not part of the consideration? ISDS? Screw that, the people are the power, and eventually the government, all three branches will come to that understanding. For a time, and then it will be necessary to remind them again.

    These things should be done in such a way that it does not matter which administration is in power...anywhere. So far as the US is concerned, the Constitution says it:

    To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

    To promote progress,not profit.

    reply to this | link to this | view in thread ]

  2. identicon
    bsg, 13 Jul 2017 @ 8:29pm

    Supreme Court != Government

    Sorry, but the essential claim through the story is that Canada's Supreme Court does not make decisions based on Canadian law, but it can be, effectively, lobbied and corrupted.

    That is a really outrageous claim, perhaps worthy of some proof.

    reply to this | link to this | view in thread ]

  3. identicon
    CHRoNo§§, 13 Jul 2017 @ 8:36pm

    our canadain govt is run by idiots

    and its getting worse by the appointment he makes

    if your not a foreigner or female your done for...dont bother this is not your govt....

    they wont be in office next term

    reply to this | link to this | view in thread ]

  4. icon
    JMT (profile), 13 Jul 2017 @ 9:11pm

    Re: Supreme Court != Government

    I don't see any specific claim from the author that the Supreme Court was lobbied and corrupted, only statements of fact that the USG has intensely pressured the Canadian government over this issue, and now the Court has delivered the desired result, seemingly against the country's best interests. It now needs to be asked why the Court made this decision, and whether there was any connection between the Government and Court, which there obviously should not be.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, 13 Jul 2017 @ 9:37pm

    Just a thought. If Lilly's patented compounds were devoid of utility, why were generic manufacturers in Canada pushing so hard for their invalidation? Does anyone seriously believe that they were committed to the manufacture of drugs having no therapeutic efficacy?

    reply to this | link to this | view in thread ]

  6. icon
    MyNameHere (profile), 13 Jul 2017 @ 10:16pm

    Couple of things

    A couple of things, it's Brook Baker or sometimes Brooke K Baker (male) and not Brooke K Baker (that would be a female name). The unlinked story is here: - and is a couple of weeks old already.

    It would also be good to qualify the opinion of Mr Baker by perhaps pointing out that he has been a pretty strong opponent of almost every trade agreement under the sun. The rest of his stories on that site are all pretty monotone. So it's not surprising that he has an opinion about the Canadian Supreme Court being pushed, but with seemingly nothing more to work from than his own feelings and paranoia. If he posted them here, PaulT would rip him a new one.

    reply to this | link to this | view in thread ]

  7. icon
    Roger Strong (profile), 13 Jul 2017 @ 10:40pm


    Wikipedia: Evergreening

    This describes ways that a drug company can effectively extend their patents long after they would have run out.

    Under the NAFTA-induced Canadian regulations, Health Canada was prevented from issuing an authorization for market entry until all of the relevant patents on a brand name product had been proven to have expired. Including follow-on patents for the same drug, patents over uses, delivery systems and even packaging.

    The new patented compounds don't exist to have therapeutic efficacy. They exist as playing cards to extend the patents of those that do.

    reply to this | link to this | view in thread ]

  8. identicon
    Glyn Moody, 13 Jul 2017 @ 11:49pm

    Re: Couple of things

    Thanks, fixed. We've mentioned his work several times before.

    reply to this | link to this | view in thread ]

  9. identicon
    Olga, 14 Jul 2017 @ 5:44am


    I understand that opinions are generally often one-sided. But I'm sceptical of this whole article because despite many citations it doesn't explain what were the actual reasons presented by the Supreme Court for its decision. It only mocks its decision. Hence I feel the author is pushing his agenda instead of being unbiased.

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, 14 Jul 2017 @ 6:14am

    Doesn't Canada's healthcare provide drugs to their citizens? Big deal, give Lilly their patent, just don't put that drug on the formulary.

    What is the big deal, they can have their patent but no sales.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, 14 Jul 2017 @ 6:46am


    Short sighted post.

    Setting the "precedent" is the worst part. Would you maintain that same position if a loved one were suffering but could not access a drug that could potentially save them?

    I have faced this problem before, I hope you remember this post if you have to face the same.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, 14 Jul 2017 @ 7:27am

    Re: Re:

    They can also exist to help build a proper patent thicket. If you want to introduce drug X, you need to prove that it didn't infringe on useless patents A - W.

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, 14 Jul 2017 @ 7:47am

    these drugs do what they are supposed to do. they make pharma even richer.

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 14 Jul 2017 @ 8:10am

    Re: Re:

    Your post doesn't make sense. Without a patent, Lilly wouldn't sell the drug, thus it wouldn't be available. If it isn't a good drug, why would you want to buy it?

    There are quite a few generic drugs that are in short supply, one of them is the best treatment for a form of cancer. Why isn't it easily available? Its off patent, so anyone can make it.

    reply to this | link to this | view in thread ]

  15. icon
    ShadowNinja (profile), 14 Jul 2017 @ 8:30am

    Re: Supreme Court != Government

    If Supreme Court justices aren't politicians in a black robe then why do political parties care so much about who sits on the court and demonize judges nominated by the other party?

    So heck yeah this is politics.

    reply to this | link to this | view in thread ]

  16. icon
    ShadowNinja (profile), 14 Jul 2017 @ 8:33am

    specifically that there was no evidence that the drugs in question provided the benefits in the patent.

    Hmm, I couldn't imagine this backfiring on a bunch of elderly justices who are more prone to getting sick and needing medication.

    Nope, surely these healthy justices will never need to take any medication. So surely they'll never fall victim to scam prescription medications that don't actually provide any benefits.

    reply to this | link to this | view in thread ]

  17. icon
    crade (profile), 14 Jul 2017 @ 9:22am

    The article reads strangely. The supreme court doesn't set the law, they interpret it.. The article speaks as if they are making a moral decision about whether patent should or should not be granted in this case. They are not supposed to do that at all. They are tasked with making the decision about whether Canadian law currently says patents should be granted in these cases or not.

    Entirely missing from the article is any discussion of what laws the supreme court was interpreting and what their stated reasoning was for their decision. Also entirely missing is any indication of why the decision might be and incorrect interpretation of canadian law.

    To blame the supreme court you need at least some speculation as to how the decision is an incorrect interpretation of the law

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, 14 Jul 2017 @ 9:45am

    Re: Supreme Court != Government

    the essential claim through the story is that Canada's Supreme Court does not make decisions based on Canadian law

    Supreme Courts don't make decisions based purely on law. If the law were obvious one way or the other, the case wouldn't get to them. The justices always issue statements explaining how their decisions are "based on Canadian Law", even when they reach opposite conclusions.

    reply to this | link to this | view in thread ]

  19. icon
    BernardoVerda (profile), 14 Jul 2017 @ 10:11am

    The Techdirt RSS feed appears to be broken !!!

    The Techdirt RSS feed appears to be broken.

    My "live bookmark" for the site fails to load.

    I can still reach this page directly with my browser
    when I try to create a new bookmark for the feed.

    Same as yesterday (and maybe day before?)
    Creating a new RSS bookmark doesn't help.

    The Techdirt Podcast feed does appear to be working,
    as do the feeds for all my other sites.
    So this problem appears to be specific to Techdirt itself.

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, 14 Jul 2017 @ 11:03am

    Re: Re: Supreme Court != Government

    I think you're conflating the USSC with the SCC -- there is no "the other party".

    Here's how appointments work in Canada (courtesy of Wikipedia):

    Justices of the Supreme Court of Canada are appointed by the Governor General-in-Council, a process whereby the governor general, the viceregal representative of the Queen of Canada, makes appointments based on the advice of the Queen's Privy Council for Canada. By tradition and convention, only the Cabinet, a standing committee in the larger council, advises the governor general and this advice is usually expressed exclusively through a consultation with the prime minister. Thus, the provinces and parliament have no formal role in such appointments, sometimes a point of contention.

    As of August, 2016 Prime Minister Justin Trudeau opened the process of application to change from the above noted appointment process. The new revised process "will permit any Canadian lawyer or judge who fits a specified criteria can apply for a seat on the Supreme Court, through the Office of the Commissioner for Federal Judicial Affairs."[12]

    The Supreme Court Act limits eligibility for appointment to persons who have been judges of a superior court, or members of the bar for ten or more years. Members of the bar or superior judiciary of Quebec, by law, must hold three of the nine positions on the Supreme Court of Canada.[13] This is justified on the basis that Quebec uses civil law, rather than common law, as in the rest of the country. The 3 out of 9 proportion persists despite the fact that only 24 percent of Canada's population resides in Quebec. As explained in the Court's reasons in Reference re Supreme Court Act, ss. 5 and 6, sitting judges of the Federal Court and Federal Court of Appeal cannot be appointed to any of Quebec's three seats. By convention, the remaining six positions are divided in the following manner: three from Ontario; two from the western provinces, typically one from British Columbia and one from the prairie provinces, which rotate amongst themselves (although Alberta is known to cause skips in the rotation); and one from the Atlantic provinces, almost always from Nova Scotia or New Brunswick.

    A Supreme Court Justice, as with all federal judges, may sit on the bench until the age of 75 years, at which age retirement is mandatory.

    In 2006, an interview phase by an ad hoc committee of members of parliament was added. Justice Marshall Rothstein became the first justice to undergo the new process. The prime minister still has the final say on who becomes the candidate that is recommended to the governor general for appointment to the court. The government proposed an interview phase again in 2008, but a general election and minority parliament intervened with delays such that the Prime Minister recommended Justice Cromwell after consulting the Leader of Her Majesty's Official Opposition.

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, 14 Jul 2017 @ 11:13am


    What this would mean is that due to their evergreening patent, suddenly all the other manufacturers would have to pay Eli Lily a cut, thereby raising the price of the alternative drugs that the government DOES purchase. So if Eli Lily gets the patent, Canada ends up paying them one way or the other, even if the patent is for something useless and the particular drug would never enter the formulary.

    reply to this | link to this | view in thread ]

  22. identicon
    Anonymous Coward, 14 Jul 2017 @ 11:30am

    Re: one-sided

    Wow, it's almost like the author of the article has a viewpoint!

    reply to this | link to this | view in thread ]

  23. identicon
    Anonymous Coward, 14 Jul 2017 @ 11:41am

    Re: Re:

    Actually, they would not have to pay anything if what they (the generic manufacturers) were making was the original compound that has fallen from patent protection.

    reply to this | link to this | view in thread ]

  24. identicon
    Anonymous Coward, 15 Jul 2017 @ 3:19am

    Canada in general and their Supreme Court in particular should be ashamed of what they have done here! but like so many other countries, it has allowed the USA to dictate what happens in a country it has no rights over. is it any wonder why the USA is in the top 5 most hated countries in the world? even worse, it is number 1 of the most untrusted nations of the world!!

    reply to this | link to this | view in thread ]

  25. identicon
    JEDIDIAH, 15 Jul 2017 @ 3:11pm

    Kill em All

    So... this is about an entire class of patents that shouldn't exist at all rather than one particular one that didn't meet it's regulatory burden.

    reply to this | link to this | view in thread ]

  26. identicon
    JEDIDIAH, 15 Jul 2017 @ 3:12pm

    Re: Re: one-sided

    Even "having a viewpoint" means more than just stating it.

    reply to this | link to this | view in thread ]

  27. identicon
    JEDIDIAH, 15 Jul 2017 @ 3:14pm

    Save the hate for the spineless.

    Sounds like a Canada problem, not a US problem. That's a reason to hate on Canada and kick your MP in the balls. It's not a rational reason to hate the US. If you are going to hate the US, at least bother to hate it for what it actually does rather than the spineless crap others do.

    reply to this | link to this | view in thread ]

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