NAFTA, Chapter 11

Among many other reasons, this is why the North American Free Trade Agreement (and most modern FTA accords) are ultimately bad news for sovereign nations: they constrain the ability of the federal (and local) government from acting in the interests of the people while ensuring that corporations can operate in the best interests of their shareholders / profit motive. The profit motive has no place in the creation of a just society.

Eli Lilly files $500M NAFTA suit against Canada over drug patents



Eli Lilly is accusing Canada of violating its obligations to foreign investors under the North American Free Trade Agreement by allowing its courts to invalidate patents for two of its drugs.



The company officially filed a complaint this week with NAFTA seeking $500 million US in compensation.



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The NAFTA claim alleges that several Canadian court rulings invalidating the patents for Eli Lilly's drugs Straterra and Zyprexa were illegal under international law because they violated Canada's obligations under Chapter 11 of NAFTA, the international trade treaty that covers the U.S., Canada and Mexico.



Chapter 11 protects the investments of companies and investors from NAFTA countries that operate in other NAFTA states. Eli Lilly alleges Canada violated the provisions of Chapter 11 that guarantee fair and equal treatment to foreign investors and protect them from expropriation of their investments.



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The company argues that by not rectifying the "judge-made law" on utility that expropriated Eli Lilly's exclusive rights as the patent holder, the government was guilty of expropriating Eli Lilly's investments, the company said, which is prohibited under Chapter 11 and entitles the company to compensation "equivalent to the fair market value of the expropriated investment."



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The Council of Canadians, the Washington, D.C.-based government watchdog organization Public Citizen and the global consumer rights group Sum of Us have all spoken out against Eli Lilly's complaint, and Sum of Us created an online petition calling on Eli Lilly to drop the suit.



Eli Lilly's NAFTA complaint is unprecedented and should worry the citizens of Canada and other NAFTA countries because the drug maker is not only challenging the invalidation of its particular patents but is challenging "Canada's entire legal doctrine for determining an invention's 'utility' and, thus, a patent’s validity," Public Citizen wrote in a brief on the case.



"While pushing for an entirely different patent standard, Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, is demanding [$500 million] from Canadian taxpayers as compensation for Canada’s enforcement of its existing patent standards."



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In an interview with the American online news magazine Politico, Toronto attorney Lawrence Herman, a former trade official with Canada's foreign service, agreed that Eli Lilly is less interested in compensation than in changing Canada's patent law so that judges no longer have the leeway to make the kind of rulings they did in its case.

(CBC)

via ehMac.ca http://www.ehmac.ca/showthread.php?t=109929&goto=newpost