Eli Lilly & Co. v. Government of Canada
International Centre for Settlement of Investment Disputes Ad Hoc Tribunal
Case No. UNCT/14/2 (2017)
Facts
In 2011, the Canada Federal Court invalidated Eli Lilly & Co.’s (Lilly) (plaintiff) patents for two drugs known as Strattera and Zyprexa. The court cited a lack of utility, concluding that there was insufficient evidence to demonstrate that the drugs would do what their patent promised. In November of 2012, Lilly filed a claim against the government of Canada (defendant) under the investor-state dispute-settlement provision (ISDS) of the North American Free Trade Agreement (NAFTA), contained in Chapter 11 of that agreement. Lilly offered two theories of liability: (1) that the court’s decision, by upending a well-settled rule of Canadian law, amounted to a violation of international law’s customary minimum standard of treatment under Article 1105(1), and (2) that the court’s decision constituted the nationalization or expropriation of an investment under Article 1110. Lilly also argued that Canada’s patent standard was inconsistent with NAFTA’s own standard, contained in Chapter 17. Canada argued that the ISDS did not apply to Chapter 17 intellectual-property obligations and also defended its patent standard on the merits. In 2017, the dispute was heard by an arbitration tribunal.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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