Promise doctrine not fundamental or dramatic change under Canadian law
Promise doctrine not arbitrary or discriminatory


As reported in "Life sciences IP update: 2016 highlights", Eli Lilly submitted claims to international arbitration under the North American Free Trade Agreement (NAFTA) seeking damages from the government of Canada, asserting that the Canadian courts' application of the promise doctrine to Eli Lilly's Strattera (atomoxetine) and Zyprexa (olanzapine) patents contravened Canada's obligations under NAFTA.

On March 16 2017 the tribunal issued its final award dismissing Eli Lilly's claims. On the merits of the claims, the tribunal found that Eli Lilly had failed to demonstrate that:

  • the promise doctrine constitutes a fundamental or dramatic change in the utility requirement under Canadian patent law; or
  • the promise doctrine is arbitrary or discriminatory.

Promise doctrine not fundamental or dramatic change under Canadian law

The tribunal rejected Eli Lilly's allegation that Canadian courts dramatically changed the application of the utility requirement through a series of cases adopting the promise doctrine, finding instead that Canada's utility requirement underwent incremental and evolutionary changes between the time that Eli Lilly's patents were granted and then invalidated, particularly from 2002 to 2008.

The tribunal characterised the three elements of the promise doctrine as:

  • the identification of a promise in the patent disclosure, against which utility is measured ('promise standard');
  • the prohibition on the use of post-filing evidence to prove utility; and
  • the requirement that pre-filing evidence to support a sound prediction of utility be included in the patent.

The tribunal concluded that the facts surrounding each of these elements did not demonstrate a dramatic transformation of the utility requirement in Canadian law.

First, the tribunal found that the promise standard has a "strong foundation" in Justice Dickson's articulation of the utility test in Consolboard Inc v MacMillan Bloedel (Sask) Ltd ([1981] 1 SCR 504), which the tribunal observed Canadian courts still cite for the promise standard today. The tribunal also took note of other pre-2005 case law on the promise standard, particularly the Federal Court of Appeal's decision in Wellcome Foundation Ltd v Apotex Inc ([1995] FCJ No 226 (FCA)), and concluded that:

"While the promise standard may not have played a significant role in the Canadian jurisprudence before 2005, and courts looked to the disclosure for the promise in relatively few cases, the rule was clearly 'out there', to be ignored at the patentee's peril."

Second, regarding post-filing evidence, the tribunal recognised that the Supreme Court's holding in Apotex Inc v Wellcome Foundation Ltd (2002 SCC 77) ('AZT') that utility could not be demonstrated through post-filing evidence was unexpected for some practitioners and even judges who had understood the language of the Federal Court of Appeal in Ciba-Geigy AG v Canada (Commissioner of Patents) ([1982] 65 CPR 2d 73 (FCA)) to mean the contrary. The tribunal also accepted Eli Lilly's point that, before AZT, no commercially successful products were found to lack utility, whereas now this is not uncommon. However, the tribunal concluded that AZT did not effect a dramatic change from previously well-established law.

Third, with respect to the disclosure requirement for sound prediction, the tribunal rejected Eli Lilly's position that Eli Lilly Canada Inc v Apotex Inc et al (2008 FC 142) (the '2008 Raloxifene decision') radically changed a well settled rule of Canadian law and instead found that there had been a progressive development of the doctrine of sound prediction over decades, specifically in relation to the required disclosure:

"When the Supreme Court first adopted the doctrine in Monsanto, it did not set a clear disclosure rule. Over the following years, during which there was little litigation over utility, the law was not significantly clarified. Then, the 2002 AZT decision set out the requirements for a sound prediction, identifying proper disclosure as one of those requirements. As proper disclosure was not at issue on the facts of AZT, it was not until the 2008 Raloxifene decision that the requirement was applied by a court."

Further, the tribunal rejected Eli Lilly's assertion that the promise doctrine as a whole constituted a fundamental change. In particular, the tribunal was not persuaded by evidence relating to Canadian patent office practice, the number and rate of utility-based invalidations of pharmaceutical patents before and after 2005, and comparative analyses with other jurisdictions.

In addition, the tribunal found that Eli Lilly had failed to demonstrate, as a factual matter, that its legitimate expectations were violated by the application of the promise doctrine to its patents.

Promise doctrine not arbitrary or discriminatory

The tribunal rejected Eli Lilly's allegation that the promise doctrine applied by Canadian courts is arbitrary because it is unpredictable and incoherent and lacks a legitimate public purpose:

  • Eli Lilly failed to show that the practice of looking to the disclosure for the promise of a patent is unpredictable or incoherent. Further, enforcing promises contained in the disclosure is rationally connected to legitimate policy goals – namely, to ensure that the public receives its end of the patent bargain, as well as to encourage accuracy and discourage overstatement in patent disclosures.
  • The ban on post-filing evidence of utility is a bright-line rule that sets a clear date by which patentees must prove utility and is rationally connected to the goal of preventing patents from being granted on the basis of speculation.
  • The distinction in the disclosure requirement between cases of sound prediction and demonstrated utility is justified as the sound prediction doctrine allows inventors to obtain a patent before they can demonstrate that the invention is useful. In exchange for the monopoly granted, the patentee must disclose to the public the basis of its prediction of utility and what makes it sound.

On discrimination, the tribunal rejected Eli Lilly's allegation that the promise doctrine discriminates against pharmaceutical patents or foreign patent holders.

For further information on this topic please contact Shirley Liang Komosa at Smart & Biggar/Fetherstonhaugh by telephone (+1 416 593 5514) or email ([email protected]). The Smart & Biggar/Fetherstonhaugh website can be accessed at