Eli Lilly ("Lilly") filed a CDN$500M North American Free Trade Agreement ("NAFTA") suit against the Canadian Government as a direct consequence of losing patent protection in Canada on two of its major drugs, Zyprexa® (olanzapine) and Straterra® (atomoxetine hydrochloride). The formal notice of arbitration came after it had failed to settle by negotiation the dispute it lodged in June 2013.
NAFTA obligates Canada to grant patents for inventions that are new, non-obvious, and useful. Lilley's position is that Canadian utility patentability rules are different than the Untied States and Europe. In the United States, the utility requirement is met by an assertion of a specific and substantial use, and in Europe the utility requirement is met by a use that is specified and "plausible." However, in Canada there can be the added requirement that if in the patent specification there is a "promise," for example, to treat a human disease with fewer side effects, then the utility is measured against that promise, and the patentee is required to prove that it has demonstrated or soundly predicted the promised result as of the date the patent was filed.
Lilly pointed out that Canada is a party to international treaties that require Member countries to offer a uniform level of substantive patent protection on a non-discriminatory basis, and Lilly argued this sound prediction requirement is discriminatory. The Canadian courts have been applying this "promise doctrine" since around 2005 and have invalidated 19 pharmaceutical or biopharmaceutical patents for lack of utility under this doctrine between 2005 and 2012. This doctrine has been codified within the Canadian Intellectual Property Office. The Manual of Patent Office Practice describes the "promise of the patent" as follows:
Where the utility of an invention is self-evident to the person skilled in the art, and no particular promise has been made in regard to any advantages of the invention (e.g. if the invention was to simplify a known invention), the self-evident utility is sufficient to meet the required standard.
Where, however, the inventors promise that their invention will provide particular advantages (e.g. will do something better or more efficiently or will be useful for a previously unrecognized purpose) it is this utility that the invention must in fact have.