A Blog by Jonathan Low


Sep 13, 2013

And Yer Momma's Ugly...: Eli Lilly Sues Canada for $500 Million, Charging that Its Patent Rulings Are Subjective and Unpredictable

So tell us how you really feel.

Imagine that! A decision maker being subjective and unpredictable, to say nothing of biased, irrational and occasionally rabid (an admitted exaggeration, though probably not as slight as you might think).

When it comes to intellectual capital, we are entering unexplored territory. Not only have ideas and concepts surpassed things and stuff in economic value but we must now figure out how to defend and sustain them.

In this case, that means the intangible is being accused of being ephemeral - and perhaps the other way around for good measure. Subjectivity and unpredictability would appear to characterize the very nature of the world in which we find ourselves. We celebrate the disruptive and and lionize the innovative. Attempts to patent thoughts, even mere fragments of them, have become bitterly expensive battles, fought in the full glare of public view.

Accusing someone - a person, a company, a nation - of acting like the rest of the intellectual, financial, commercial, organizational, political and emotional universe hardly seems, well, critical, let alone insulting or illegal. We have enshrined such behavior. That it occasionally, or even frequently, insinuates itself into every day decision-making would appear to be an inevitable conclusion to the processes we have set in train, rather than a source of high dudgeon.

It will be interesting to see how Lilly fares in its attempt to set Canada on the straight and narrow. That the ownership of some of the pharmaceutical patents for which the judgments of the customarily sober-sided northerners have been excoriated include drugs for symptoms of ADHD and schizophrenia make it all the more, shall we say, nutty? JL

Eric Palmer reports in ABC News via Fierce Pharma:

"Patent decisions in Canada over the last decade not only fly in the face of long-established international standards, but they're subjective and completely unpredictable. The standard seems to be that there is no standard,"
Doug Norman, general patent counsel for Lilly said in a statement, according to ABC News in Indianapolis.
Eli Lilly ($LLY) has ratcheted up its international fight with Canada over what it considers unfair patent rulings. The Indianapolis, IN-based Lilly has now filed a $500 million lawsuit against the Canadian government alleging its patent laws are inconsistent and permitted generics of some of Lilly's drugs to hit the market sooner than they should have.

The case was filed Thursday according to provisions of the North American Free Trade Agreement after a 90-day consultation process failed to settle the fight. Lilly turned to international authorities under NAFTA in December after a Canadian federal court ruling tossed out its 1996 Canadian patent for the ADHD drug Strattera. Lilly has also lost patent cases over its osteoporosis drug, Evista, and Zyprexa, a treatment for schizophrenia.

While other drug companies have been unhappy about Canada's aggressive patent decisions, Lilly has been the most vocal. Earlier this year, Lilly CEO John Lechleiter said the loss of exclusivity on those drugs cost Lilly more than $1 billion in Canadian sales. He said that has led to at least 280 job cuts since 2006, warning that if the "pattern persists" there may be no reason for the drugmaker to continue to do business there.
The European Union has also been wrestling with Canada over its patent standards. As part of its negotiations in the Canada-European Comprehensive Economic and Trade Agreement (CETA), it has asked Canada to adopt Europe's 10-year patent protection for drugs instead of the 8 years Canada now provides. The provision has been opposed by many of the local governments, who say it will raise the costs to their healthcare budgets.
Patent losses have taken a toll on the drugmaker, and more are to come. The company in July reported improved earnings, but only after it implemented cost-cutting measures, slashed jobs and upped prices on the blockbuster antidepressant Cymbalta, which loses patent protection in the U.S. later this year.


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