Harper Government Highlights Widespread Benefits to British Columbia of Historic Canada-EU Trade Agreement by DFATD | MAECD (CC BY-NC-ND 2.0) https://flic.kr/p/hnn8jC
In late December 2009, Wikileaks, the website that publishes secret government information, posted a copy of the draft intellectual property chapter of the Canada – European Trade Agreement (CETA). The CETA deal was still years from completion, but the leaked document revealed that the European Union envisioned using the agreement to mandate a massive overhaul of Canadian law.
The leak generated concern among many copyright watchers, but when a German television station leaked the final text of the agreement last week, it contained rules that largely reflect a “made-in-Canada” approach. Why the near-complete reversal in approach on one of the most contentious aspects of a 500 page treaty?
My weekly technology law column (Toronto Star version, homepage version) notes the starting point for copyright in CETA as reflected in 2009 leaked document was typical of European demands in its trade agreements. It wanted Canada to extend the term of copyright to life of the author plus 70 years (Canada is currently at the international standard of life plus 50 years), adopt tough new rules for Internet provider liability, create criminal sanctions for some copyright infringement, implement new rights for broadcasters and visual artists, introduce strict digital lock rules with minimal exceptions, and beef up enforcement powers. In other words, it was looking for Canada to mirror its approach on copyright.
Did Canada Cave on the Pharmaceutical Patent ISDS Issue in CETA?: Still No Text, But Official Comments Suggests It Did
For the second time in less than a year, Canada and the EU have announced that they reached agreement on the Canada – EU Trade Agreement. Back in October 2013, there was an announcement of an agreement “in principle”. The announcement did not include a release of the text and the parties said there was still further work to be done on drafting and legal analysis. Yesterday, brought another announcement of an agreement on the text. Once again, the announcement did not include a release of the text and the parties said there was still further work to be done on legal review and translation into 23 languages.
Given the agreement is 1,500 pages, the additional work is expected to take a considerable amount of time. While government ministers claimed that CETA “is ready for debate and ratification”, the reality is that there cannot be a meaningful, informed debate without the actual text. Releasing it for full study and comment is the essential next step.
Analysis without the text is difficult, however, the combination of prior leaks and media reports indicate that Canada caved on its concerns regarding the potential replication of Eli Lilly-style pharmaceutical patent lawsuits.
In the early 1990s, pharmaceutical giant Eli Lilly applied for patent protection in Canada for two chemical compounds, olanzapine and atomoxetine. The company had already obtained patents over the compounds, but asserted that it had evidence to support new uses for the compounds that merited further protection. The Canadian patent office granted the patents based on the content in the applications, but they remained subject to challenge.
Both patents ultimately were challenged on the grounds that there was insufficient evidence at the time of the applications to support the company’s claims. The Federal Court of Canada agreed, invalidating both patents. Eli Lilly proceeded to appeal the decision to the Federal Court of Appeal and later to the Supreme Court of Canada. The company lost the appeals, as the courts upheld the decision to invalidate the patents.
My weekly technology law column (Toronto Star version, homepage version) notes that under most circumstances, that would conclude the legal story as nine Canadian judges reviewed Eli Lilly’s patent applications and ruled that they failed to meet the standards for patentability. Yet in June 2013, the company served notice that it planned to file a complaint under the North American Free Trade Agreement claiming that in light of the decisions, Canada is not compliant with its patent law obligations under the treaty. As compensation, Eli Lilly is now seeking $500 million in damages.
Media reports last week indicated that finalizing the Canada – European Union Trade Agreement has been delayed by a Canadian demand to exclude intellectual property from the scope of the investor-state dispute settlement system. While that sounds like an arcane, technical issue, it actually involves potentially billions of dollars and the Canadian government deserves kudos for adopting its current position even as the pressure builds to simply cave on the issue.
The investor-state dispute settlement provision is among the most controversial aspects of CETA (and the proposed Trans Pacific Partnership) since it opens the door to private lawsuits by companies against the government over the state of national law. These lawsuits can involve claims for hundreds of millions of dollars, with costs that may ultimately be borne by taxpayers. The Canadian government is keenly aware of the risks, since it is currently facing a $500 million lawsuit by pharmaceutical giant Eli Lilly over the approach of Canadian courts to the concept of utility in patent law. The Canadian government is likely to ultimately win the lawsuit, but the legal risks are still significant, with Eli Lilly effectively demanding that every Canadian pay it nearly $15 due to our patent laws. If Eli Lilly can file a $500 million lawsuit over two patented drugs, the potential for numerous lawsuits and billions in claims is a real possibility.
My series of posts on the leak of the Trans Pacific Partnership intellectual property chapter has highlighted Canada’s opposition to many U.S. proposals, U.S. demands for Internet provider liability that could lead to subscriber termination, content blocking, and ISP monitoring, as well as anti-counterfeiting provisions that are inconsistent with Bill C-8. This post discusses the section on protection for geographical indications and explains how U.S. demands conflict with Canada has already agreed to in the trade agreement with Europe (CETA).