Canadian Lawyer

52 A u g u s t 2 0 1 4 w w w . C A N A D I A N L a w y e r m a g . c o m patent cases. They've branded this the 'promise of the patent' and the argument that there's this area of the law that is out of step with international norms. The truth of the matter is there's nothing different that's happened in the law over the last 10 years and it's an attempt to get some traction and make some major changes in well-established Canadian law." The promise doctrine is a principle of Canadian patent law and has been the basis for the recent invalidation of several pharmaceutical patents and for having sparked a challenge by Eli Lilly against Canada under the North American Free Trade Agreement. "It's a very big issue for us. We think the Canadian judiciary has gotten far out of bounds on their heightened scrutiny being set forth against the utility question," says Doug Norman, general patent counsel at Eli Lilly in the U.S. "In a harmonized global patent arena what is needed to seek a patent is you must have a molecule that is new, non-obvious, and must show utility. That's the way it used to be in Canada." But Norman argues since 2005, decisions from the Canadian judiciary began around the utility question that started raising the bar according to the promise doctrine, which is "singularly peculiar to Canada and Canada alone," says Norman. "There have been about 18 to 20 pharmaceutical patents held invalid for lack of utility arising from this promise doctrine. If you look around the world those same patents are not being stricken any- where else in the world, arising from the utility question." Eli Lilly and others argue Canada's system is opposite to the rest of the world. Last fall, Lilly filed a notice of arbitration under NAFTA against Canada over its patent dispute with the Canadian government for allowing its courts to invalidate patents for two of its drugs — Strattera (atomoxetine), used for atten- tion deficit-hyperactivity disorder, and Zyprexa (olanzapine), an anti-psychotic drug. Zyprexa is said to be the company's biggest product. Eli Lilly is seeking damages of $500 million. The Zyprexa patent was challenged in dozens of countries around the world and upheld everywhere except Canada. That decision was so off base Lilly says it had no choice but to seek the arbitration under NAFTA. "It would be great if the Canadian legislature would step in and pass a new utility law statute that puts things back the way they were but that would not satisfy our NAFTA claim because what we're seeking is remuneration for the damage that has been caused arising from having lost our patents significantly more early than we otherwise should have," says Norman. Mehes says a comparison of how courts in Europe, the U.S., and Canada treat patents show they differ on a number of grounds. As well, Canada was the only jurisdiction where a detailed, extensive trial took place over olanzapine, dealing with more evidence than anywhere else in the world. The court decided the patent was invalid based on the facts, she says. "There is no substantive harmonization of patent law with which Canada is out of step because there is no international norm," she says. "There are different standards for obviousness, double patenting — a multitude of aspects of patent law. You can't cherry-pick this utility requirement we have in Canada and say we're out of step because the question is: Out of step with what?" But it's perhaps not as clear cut as either side presents it, says Andrew Skodyn, a partner with Lenczner Slaght Royce Smith Griffin LLP. "In both the Eli Lilly cases, the decisions in other countries were largely, if not exclusively, in Eli Lilly's favour and so it's a bit of a shock to lose both of them here when everywhere else in the world you're winning," he says. Skodyn says he understands where Eli Lilly and others are coming from, but notes, as the old maxim goes, "hard cases make bad law." It comes down to the fact the systems in each country are very different. "For them the facts are compelling, for the broader jurisprudence the results have been more mixed," he says. "That's why you don't see other companies making as much noise about it because it's been more even — you win some you lose some. You need to look at the whole picture and say yes, 'promise' is an argument you may not find in other countries but it's balanced by other opportunities in other countries for invali- dating patents you don't have here in Canada." Not surprisingly, no universal standard of patentability has arisen internationally and patent litigation routinely results in different outcomes for patentees in different jurisdictions, says John Lucas, an associate with Deeth Williams Wall LLP in Toronto. "To the extent an innovator pharmaceutical company wants to include promises of what a drug can do in a Canadian patent application, greater upfront research costs may be incurred in order to adequately support those promises at the LEgaL rEport/InTelleCTual pRopeRTy Dimock Straon llp experience. results. 20 Queen W. 32 nd fl, Toronto | 416.971.7202 | dimock.com Always get at least three quotes "Canada's leading IP boutique … regularly turns in superb performances in … the country's highest-stakes patent suits." IAM Patent 1000 2013 Gold Level Litigation & Licensing "…a strong reputation in … patent contentious … focus on pharmaceutical, high tech sectors." MIP 2013, Tier 1 Patent Contentious "…Dimock and company do it all…" Benchmark Canada, 2013 Recommended Read more about our track record at dimock.com ntitled-1 1 14-07-10 8:36 AM

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