Canada Capitulates: Supreme Court Throws Away Government's Great Pharma Patent Victory

from the who-needs-the-law-when-you-can-bully? dept

Techdirt readers will probably recall a long-running saga involving corporate sovereignty, $500 million, the US pharma company Eli Lilly, and drug patents. In its claim against the Canadian government, made using NAFTA's Chapter 11, Eli Lilly insisted it should have been given some drug patents, despite Canada's courts finding that they had not met the requirements for patentability -- specifically that there was no evidence that the drugs in question provided the benefits in the patent. Eli Lilly said that Canada was being unreasonable in setting a slightly higher bar than other countries by demanding that a patented drug should actually do something useful. As Mike reported back in March, even the lawyers that made up the corporate sovereignty tribunal hearing this case agreed that Canada was within its rights to take this view. They not only dismissed the claim, but ordered Eli Lilly to pay Canada's legal fees.

This was a huge win for Canada in particular, and governments in general. At the time, it all felt a little too good to be true. And now seems it was: as infojustice.org reports, the Supreme Court of Canada has just overturned decades of precedent -- and implicitly the Eli Lilly ruling -- by making it easier for Big Pharma to gain patents on medicines that don't really work:

This reversal in AstraZeneca Canada Inc. v. Apotex, Inc. is particularly disconcerting because Canada had just won an investor-state arbitration award in the long awaited Eli Lilly v. Canada case upholding its more stringent promise/utility doctrine that had been used successfully to overturn two dozen secondary patents, particularly those claiming new uses of known medicines, where patent claimants failed to present evidence in support of the prediction of therapeutic benefit promised in their patent applications.

Thus Canada's Supreme Court has inexplicably thrown away the government's earlier victory, and undermined the country's more rigorous approach to granting pharma patents. Writing for infojustice.org, Brook K. Baker believes this stunning capitulation is a result of unremitting bullying from the US:

Canada had been under intense pressure from the US, which had placed Canada on its Special 301 Watch List for five years threatening that the promise/utility doctrine unreasonably harmed Big Pharma in the US and from the pharmaceutical industry itself which claimed that the doctrine violated global patentability criteria. President Trump's hardball campaign promise to rewrite or leave the North American Free Trade Agreement because of its failure to adequately protect US intellectual property interests may also have played a role. Likewise, President Trump's more recent assertions that US payers are unreasonably subsidizing biomedical research and development because other countries, like Canada, are paying lower prices for innovator medicines than insurers and other payers in the US may also have increased pressure on the Court.

It's really sad to see the Canadian court kowtowing like this, undermining its own independence and moral authority in the process. Weaker patents will lead to the Canadian taxpayer paying higher prices for less-effective drugs. Worst of all, the Big Pharma bullies, aided and abetted by a newly-aggressive US government indifferent to other countries' health problems, will be encouraged to push for even more patent protection all around the world. That will lead not just to higher prices, but to more suffering and avoidable deaths, as crucial medicines become unaffordable for poorer patients.

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Filed Under: canada, corporate sovereignty, isds, patents, trade agreements
Companies: apotex, astrazeneca, eli lilly

Canadian Supreme Court Says It's Fine To Censor The Global Internet; Authoritarians & Hollywood Cheer...

from the d'oh-canada dept

For the past few years, we've been covering the worrisome Google v. Equustek Solutions case in Canada. The case started out as a trademark case, in which Equustek claimed that another company was infringing on its trademarks online. That's fine. The problem was that the lower court issued an injunction against Google (a non-party in the case) that said it had to block entire sites worldwide. Blocking sites already raises some concerns, but the worldwide part is the real problem. In 2015, an appeals court upheld that decision, and earlier today the Canadian Supreme Court agreed with both lower courts in a 7-2 decision.

The court is dismissive of any concerns about how an order from one country to block things on the internet globally might be abused -- calling the concerns "theoretical" and unproven. That may not last very long. First, let's look at the decision itself, and then the horrific possible consequences for free speech and innovation.

Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction, is theoretical. If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly. To date, Google has made no such application. In the absence of an evidentiary foundation, and given Google’s right to seek a rectifying order, it is not equitable to deny E the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible.

This is a nifty trick: because you can't show that this order might offend freedom of expression laws somewhere else in the world, let's just assume it's fair to apply absolutely everywhere. But... that's not the issue. It's not for a Canadian court to determine if its rulings obey the laws in other countries. A Canadian court has jurisdiction over Canada. And that's it. This is not about balancing theoretical harm v. real harm, this is about jurisdiction.

The court tries to get around the jurisdictional question by saying because Google is available in Canada, somehow that makes it okay to censor globally, and further, notes that the lack of borders on the internet require such a result (ignoring how this will almost certainly create massive problems down the road):

The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink’s sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink’s websites, and Canadian purchasers could easily find Datalink’s websites even if those websites were deindexed on google.ca. Google would still be facilitating Datalink’s breach of the court’s order which had prohibited it from carrying on business on the Internet. There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm.

This sounds nice, but makes no sense. First, again, a Canadian court only has jurisdiction over Canada. If the irreperable harm is happening elsewhere, then that's not the Canadian court's jurisdction and it has no say in the matter. The fact that purchasers outside Canada can find Datalink's website isn't a matter for Canadian courts. This may sound unfair -- as the court seemed to think -- but take two seconds to flip the script and think about how this would work with a ruling in China about stories concerning Tiananmen Square, or in Saudi Arabia about LGBTQ rights -- saying that Google had to de-index such sites in Canada, because they violated local law.

The second scary part about the ruling is that it's not just saying that Google needs to de-index sites shown to involve infringement, but that it needs to de-index an entire site because other pages on that site might, at some future point, infringe. Really. The two dissenting judges pointed out how problematic this aspect is in the ruling, and how it actually gives Equustek even more than it was seeking.

The December 2012 Order gives Equustek more than the injunctive relief it sought in its originating claim. Rather than simply ordering the modification of Datalink websites, the December 2012 Order requires the ceasing of website business altogether.

And that creates an additional problem. Since Equustek is getting more than it wanted, and because the defendant in the original case has ignored the court process, it's likely that this "temporary" injunction will effectively become a permanent one:

In our view, little incentive remains for Equustek to return to court to seek a lesser injunctive remedy. This is evidenced by Equustek’s choice to not seek default judgment during the roughly five years which have passed since it was given leave to do so.

Thus, the dissent notes, this is, in effect, a permanent injunction. And, it doesn't come close to the standards necessary for such a permanent injunction -- specifically in dragging a third party (i.e., Google) into the remedy:

As we will outline below, the Google Order enjoins a nonparty, yet Google has not aided or abetted Datalink’s wrongdoing; it holds no assets of Equustek’s, and has no information relevant to the underlying proceedings. The Google Order is mandatory and requires court supervision. It has not been shown to be effective, and Equustek has alternative remedies.

And, it fears that Google will be forced to continue to monitor and de-index any new website set up by Datalink:

The Google Order requires ongoing modification and supervision because Datalink is launching new websites to replace delisted ones. In fact, the Google Order has been amended at least seven times to capture Datalink’s new sites (orders dated November 27, 2014; April 22, 2015; June 4, 2015; July 3, 2015; September 15, 2015; January 12, 2016 and March 30, 2016). In our view, courts should avoid granting injunctions that require such cumbersome courtsupervised updating.

Finally, the dissent points out that it appears Datalink has assets in France, and Equustek could easily go after them there, and that would be a remedy that leaves Google out of the process.

Unfortunately, the dissent does not really delve into the problematic nature of a Canadian court claiming it can force a website to de-list sites globally. I already provided the Chinese/Saudi Arabian examples above, but Canadian law professor Michael Geist goes much deeper:

Google will obviously abide the ruling, but as I noted last year, what happens if a Chinese court orders it to remove Taiwanese sites from the index? Or if an Iranian court orders it to remove gay and lesbian sites from the index? Since local content laws differ from country to country, there is a great likelihood of conflicts. That leaves two possible problematic outcomes: local courts deciding what others can access online or companies such as Google selectively deciding which rules they wish to follow. The Supreme Court of Canada did not address the broader implications of the decision, content to limit its reasoning to the need to address the harm being sustained by a Canadian company, the limited harm or burden to Google, and the ease with which potential conflicts could be addressed by adjusting the global takedown order. In doing so, it invites more global takedowns without requiring those seeking takedowns to identify potential conflicts or assess the implications in other countries.

Geist also notes that this is part of the "drip drip drip" nature of mutliple rulings chipping away at free expression online:

This last paragraph noting that Google already removes links to certain content (hate speech, child pornography, and copyright takedowns) highlights the cumulative effect of court decisions and regulations that individually may seem reasonable but which quickly move toward takedowns of all kinds. In fact, the majority cites the international support for Internet injunctions with global effect as a justification for its own order. The net result is the expectation of all countries and courts that they may issue global takedown orders regardless of the impact on Internet users outside the jurisdiction or on Internet intermediaries.

Furthermore, Geist highlights where the court went wrong in saying that because it's "easy" for Google to de-index a site worldwide, there's no burden. But the technical burden is not the issue. The legal burden is:

Of course, the inconvenience does not come from the technical side of removing search results, which is indeed trivial. The real inconvenience comes from conflict of laws and the potential for global takedown orders coming from across the planet, thereby opening the door to other countries choosing what Canadians might be able to find in search results. Those issues – along with the need to identify the laws in other countries in order to avoid conflicts – do involve significant inconvenience and expense.

Indeed, a ruling like this likely will give Google more power over others, because Google has a large legal team that can handle this. Most other sites do not. Smaller sites cannot scour the globe to find out where such global takedown orders are legal and where they are not.

Another Canadian lawyer, Howard Knopf, is even more forward in pointing out how this will be abused by Hollywood:

I can just see the RIAA and MPAA salivating that the thought of getting global injunctions against Google at an interlocutory hearing from a trial judge in British Columbia. Will the mere fact that copyright subsists in BC - as it does virtually everywhere - be sufficient to get the injunction? One can imagine that few if any defendants would appear in such proceedings.

And, worse, he points out that even if Canadian trial judges see through that ploy, the RIAA & MPAA can just go jurisdiction shopping for other locations where courts will cite this case as a reason they can issue preliminary global injunctions. Canada just handed anyone who wants it a tool for global censorship. Anyone from authoritarian regimes to Hollywood may now begin to use it.

I recognize that some Google haters are cheering on this ruling because they will cheer on anything that makes Google look bad -- and the RIAA/MPAA types are celebrating this new power over Google. But this is extremely short sighted. Enabling countries to reach across borders to censor the internet does not end well. You are giving veto power over speech to the most repressive regimes, just because you dislike a company. If that's your view, you should perhaps check your priorities more carefully. And this goes doubly for the RIAA and MPAA. Those two organizations both used to fight for free speech. They both used to fight for the ability of musicians and filmmakers to express themselves. This tool that they helped create (they were involved in this case, pushing the view that the court eventually sided with), will be turned around and used to censor music and movies worldwide -- and the legacy recording and film industries will have no one to blame but themselves.

Filed Under: canada, censorship, global, hollywood, injunction, jurisdiction, right to be forgotten, trademark
Companies: datalink, equustek solutions, google

Cheese: The Final Frontier For The Completion Of The Canada-EU Trade Deal CETA

from the blessed-are-the-cheesemakers dept

Remember CETA, the "Comprehensive Economic and Trade Agreement" between the EU and Canada? After years of on-off moments, including one last burst of uncertainty in March of this year, it finally seemed that everything had been settled, and that the deal would soon come into force. But it turns out that there is another, hitherto-unsuspected problem -- cheese:

Canada's CBC reported on its website that plans to have CETA (the Comprehensive Economic Trade Agreement) in place on 1 July were "threatened by a new cheese dispute". It said Europeans were upset at how Canada would allocate import quotas for new EU products, including 18,000 additional tonnes of cheese that Canada has agreed to import tariff-free.

Euractiv has all the details of the problem, which turns out to be bickering over how EU cheese producers will share that new tariff-free allowance. That's just last-minute haggling, and presumably will be solved with some appropriate sticks and carrots on both sides of the Atlantic. But an earlier report on the same site indicates there are deeper issues with CETA that remain unresolved:

In France, 110 MPs have demanded the opinion of the Constitutional Council on the legality of CETA. A ruling is due this summer. And Belgium, whose calls for additional guarantees had led to a confrontation with Brussels, has promised to take its concerns to the Court of Justice of the European Union in the coming weeks.

Most recently, it is France's new President Emmanuel Macron who has put the issue back on the negotiating table, promising in the last days of his presidential campaign to set up an expert committee to examine the CETA agreement before ratification.

The last one of these is particularly problematic. Macron has adopted a surprisingly muscular style in his first few days as French President, most famously in his handshake with Donald Trump, and won't want to be seen backing down from his promise to seek expert scrutiny of CETA before ratification. Looks like there's life in that cheesy CETA saga yet.

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Filed Under: canada, ceta, cheese, eu, trade agreements

Just Because Eli Lilly's Corporate Sovereignty Claim Over Patents Failed Doesn't Mean The Threat Has Gone Away

from the don't-relax-yet dept

Back in March, Mike wrote about how Eli Lilly's demand for $500 million "compensation" from Canada for rejecting two of its patents was finally thrown out. This was a long-running story, and was widely-regarded as a crucial test. Had Eli Lilly won, people suggested, it would have opened the floodgates for many such corporate sovereignty claims. Some also claimed that Eli Lilly's defeat showed what is officially known as the "investor-state dispute settlement" (ISDS) system was actually working well, and needed neither abolishing nor tweaking. But an interesting analysis by Cynthia Ho, who is a professor at Loyola University Chicago School of Law, suggests that things might not be so clear cut. Here are the key points she makes in a column published by Intellectual Property Watch:

It is true that Eli Lilly ultimately failed to persuade the investment tribunal that Canada's invalidation of two patents, based on its interpretation of "useful," compromised guarantees under NAFTA's investment chapter. But, it should be noted, this failure was principally evidentiary in nature. That is, Eli Lilly failed to provide adequate evidence in support of its claims, all of which were premised on its assumption that there was a dramatic change in the law. The tribunal, however, never questioned whether IP rights that were invalidated consistent with domestic law could constitute a violation of international investment law. Even more importantly, the tribunal never questioned whether patent laws consistent with TRIPS could nonetheless be challenged as compromising investment agreements. In addition, although some have suggested that Eli Lilly could not win, the tribunal explicitly stated that the claim was not frivolous.

As Ho points out, there are a number of troubling aspects to the tribunal's decision, even if it went against Eli Lilly. The main one is that countries still have the threat hanging over them of corporate sovereignty cases being brought and won because of disputes over patents and copyright. That would represent a radical departure from traditional ISDS cases, which are typically over physical assets like mines and oil fields. Moreover, she suggests that even if a new law were fully consistent with the main Trade-Related Aspects of Intellectual Property Rights (TRIPS) treaty, it could still be challenged using a corporate sovereignty claim -- in effect, setting ISDS tribunals above global agreements like TRIPS:

the tribunal stated that a judicial decision could form the basis of an investment claim without any actual denial of justice. In addition, while the Eli Lilly tribunal stated that it is inappropriate for ISDS tribunals to serve as an "appellate tier" over domestic decisions, it would be premature to assume, as some have suggested, that this single decision obviates any such concern. Importantly, there is no precedent in investor-state disputes and, unlike the [World Trade Organization] system where panel decisions tend to be consistent and uniformity is promoted with a standing appellate body, there are often inconsistent investor-state rulings with no current mechanism to promote uniformity.

The rest of Ho's column explores these and other concerns, and is well-worth reading. It may be that her fears are overblown, and that Canada's success in defending its patent system will discourage others from bringing similar cases. But given the unpredictable nature of ISDS cases, and the fact that a new wave of speculative funding is available, it is quite likely that investors will be emboldened to try their luck in this area again, irrespective of the Eli Lilly defeat.

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Filed Under: canada, corporate sovereignty, isds, nafta, patents, trade agreements
Companies: eli lilly

Canada's National Police Force Officially Confirms Ownership, Use Of Stingray Devices

from the if-it-wasn't-for-those-meddling-journalists... dept

Just days after Montreal prosecutors cut loose 35 suspected Mafia members rather than disclose the details of Stingray device use by the Royal Canadian Mounted Police (RCMP), the RCMP is admitting that, yes, it does use Stingrays.

It's not like it's not known the RCMP owns Stingrays. It has for nearly a decade now. It's just that it would rather not discuss it in court… or in public… or in public records responses.

The official revelation occurred in Ontario, and it didn't come as the result of a multitude of alleged criminals being released back into the general population. Instead, the (unwelcome) discussion of the RCMP's cell tower spoofers was prompted by a CBC investigation into "suspicious signals" and apparent cell phone tracking around the nation's capital.

The RCMP for the first time is publicly confirming it uses cellphone surveillance devices in investigations across Canada — but at the same time says the potential of unauthorized snooping in Ottawa, as reported by CBC News, poses a threat to national security.

"Absolutely," RCMP Chief Supt. Jeff Adam, who is in charge of technical investigations services, said in an unprecedented technical briefing Wednesday with reporters from CBC News, the Toronto Star and the Globe and Mail.

The RCMP held the briefing in the wake of a CBC News investigation that found evidence that devices known as IMSI catchers may be in use near government buildings in Ottawa for the purpose of illegal spying.

The RCMP Superintendent was quick to point out that if it was the agency's Stingrays the journalists discovered, there was nothing illegal about the spying. But he can't be sure there aren't others out there with the same equipment, doing the same sort of things the RCMP does, but without judicial permission. It has decided to join the news agencies' investigation of the "suspicious signals," which sounds a whole lot like the old joke about heroin addicts:

What's the difference between a thief and a junkie?

A thief will just steal your money. A junkie will help you look for it.

The RCMP let the public in on a few of its Stingray secrets during the press briefing [PDF]. It owns ten devices and claims that all but one deployment (in 2016) has been accompanied by a warrant. Much like those in use in the US, the Stingray's software only allows for the interception of phone numbers and device location (even though they all can be retrofitted to intercept calls and communications).

Discussions of earlier use show the warrant requirement wasn't always a requirement.

Police used to apply for a general warrant to use the technology. In 2015, Adam said there was a period of at least six months — between March and October — when the RCMP didn't seek a warrant at all, acting on advice from the Department of Justice and government prosecutors.

The use of the term "general warrant" suggests those signing off on warrant requests were likely not aware of the devices being deployed to perform the search. Law enforcement agencies have been hiding the existence of cell tower spoofers for years, starting with the judges approving their warrants and subpoenas. In the US, the FBI's own "Stingray Best Practices" instructed law enforcement agencies to lie to judges -- most of which took the form of pen register requests, rather than search warrants detailing the wholesale harvesting of cell phone numbers by repurposed military equipment.

Also admitted during this briefing was the fact that the RCMP didn't seek approval from the Canadian government's FCC equivalent, ISED.

Adam conceded that until two months ago the RCMP itself failed to get express approval to use MDIs from Innovation, Science and Economic Development Canada (ISED, formerly Industry Canada), the government body responsible for regulating technology that might interfere with wireless communications.

He said the RCMP believed at one point that an exemption introduced in early 2015 to the Radiocommunications Act allowing the use of cellular "jammers" might also exempt the use of MDIs — but ISED ultimately disagreed.

Apparently, the world of law enforcement is so fast-moving, there's no time to seek the proper clearances, even when you've had the devices in hand for nearly a decade before double-checking things with regulators. Again, pretty much identical to how things were handled here in the US. Blue minds think alike, or whatever.

With this limited (but public) disclosure, maybe the RCMP will pursue more prosecutions to the very end, rather than play catch-and-release with suspected criminals so that its not-all-that-secret secrets don't end up in defendants' hands.

Filed Under: canada, imsi catcher, stingray

Canadian Prosecutors Cut Loose 35 Mafia Suspects Rather Than Turn Over Info On Stingray Devices

from the how-American-of-them dept

Canadian law enforcement brought down a massive criminal conspiracy. Now, thanks to information it doesn't want to release to the court, most of what was brought down will be re-erected by the suspects it's cutting loose. (h/t Techdirt reader Pickle Monger)

Thirty five people accused of serious crimes like kidnapping and drug trafficking saw the cases brought against them in a major RCMP investigation into the Montreal Mafia dropped on Tuesday because the Crown no longer wants to prosecute them.

The Crown’s sudden change of stance in an investigation dubbed Project Clemenza meant there are only 11 accused left with cases pending following three series of arrests made between 2014 and May last year. Federal prosecutor Sabrina Delli Fraine informed Quebec Court Judge Lori Renée Weitzman of the Crown’s position during a hearing at the Montreal courthouse.

One of the defendants released is believed to be one of the leaders of the Montreal Mafia (which sounds like a Chicago mob farm team). The suspects were snared through the interception of communications, many of which appeared to originate on BlackBerry phones. As was covered here a year ago, the RCMP used a built-in BlackBerry "feature" to intercept and decrypt over "one million messages" during its investigation of a Mafia killing.

Here's the key part of the interception effort:

The RCMP maintains a server in Ottawa that "simulates a mobile device that receives a message intended for [the rightful recipient]." In an affidavit, RCMP sergeant Patrick Boismenu states that the server "performs the decryption of the message using the appropriate decryption key." The RCMP calls this the "BlackBerry interception and processing system."

This is part of the reason these Mafia defendants are seeing their charges dropped. The RCMP does not want to publicly discuss its BlackBerry interception methods. The other reason has to do with how the RCMP tracked down the phone numbers it wanted to intercept.

The RCMP used a mobile device identifier and Stober ordered that the Crown disclose information like the device’s signal strength and its potential impact on a BlackBerrys ability to make or receive phone calls while text messages are being intercepted from it.

This would likely be RCMP Stingray devices. Just like here in the US, Canadian law enforcement would rather see perps walk out of courtrooms than turn over information on interception efforts to defendants.

This is the largest of the RCMP's catch-and-release efforts, but it isn't the first. The National Post points out a similar dumping of defendants occurred last year for the same reason.

The Crown apparently does not want to disclose the investigative techniques used with the device. Last year, it did an about face in a murder trial and six men who were about to go on trial for the first-degree murder of Mafioso Salvatore Montagna were able to plead guilty to the lesser charge of conspiracy to commit murder.

At least in that case, law enforcement still ended up with a few convictions -- albeit on charges lower than what it had hoped to obtain going in.

Cell tower spoofers are resulting in a lot of contradictory law enforcement behavior. Cops say they don't want to turn over info on Stingrays to public records requesters for "public safety" reasons, claiming it could compromise methods and techniques and allow criminals to stay out of their reach. They make the same claims in court when refusing to turn over information to defendants, which results in freshly-caught criminals being put back on the streets -- something that certainly doesn't make the public any safer.

Filed Under: canada, evidence, imsi catcher, mafia, montreal mafia, stingray

Canadian Appeals Court Says Vice Media Must Turn Over Communications With Source To Law Enforcement

from the putting-the-scare-quotes-back-in-'free'-press dept

Roughly a year ago, a Canadian court ruled that Vice Media must turn over conversations one of its journalists had with an alleged terrorist to the Royal Canadian Mounted Police. The ruling created a chilling effect, carving a hole in journalistic protections in favor of national security concerns. Not only would it deter journalists from speaking to sources who might, at some point in the future, face criminal charges, but it also would deter sources from speaking to journalists for fear their cover might be blown by law enforcement court orders.

Vice appealed the decision. Unfortunately, there's no better news awaiting them at the Ontario Court of Appeals. Elizabeth Raymer of Legal Feeds reports the higher court has upheld the previous ruling.

The Court of Appeal for Ontario has upheld a production order requiring a journalist to hand over all his communications with a man charged with terrorism-related offences. Journalist and civil liberties organizations have called the decision a blow to reporters abilities to protect their sources and publish stories in the public interest.

The Appeals Court weighed the competing issues -- journalistic protections vs. law enforcement needs -- and decided it was a toss-up.

“A free and vigorous press is essential to the proper functioning of a democracy,” Justice David Doherty of the Ontario appellate court acknowledged at the start of his judgment.

“The protection of society from serious criminal activity is equally important to the maintenance of a functioning democracy. Those fundamental societal concerns can come into conflict. When they do, it falls to the court to resolve those conflicts. In this case, claims based on the freedom of the press and those based on effective law enforcement collide at two points.”

But in the event of a tie, the win goes to law enforcement apparently. From the decision [PDF]:

After a careful consideration of the entirety of the record before him, the application judge concluded, at para. 47:

I am satisfied that the ITO set forth a basis upon which, after taking into account the special position of the media, the authorizing justice could have determined that the balance between the interests of law enforcement and the media’s right to freedom of expression favoured making the production order.

The reasons of the application judge reveal no misapprehension of the evidence, no failure to consider factors relevant to his assessment, or any other form of extractable legal error. It was reasonable, on this record, to find the balancing of the competing interests favoured making the production order.

Vice's attempt to quash the production order has been denied. Barring an appeal to the Supreme Court, the RCMP will get their man['s communications]… and encroach a bit further on press protections.

Filed Under: canada, free press, free speech, sources, terrorism
Companies: vice

Eli Lilly Loses Quixotic Quest To Get Canada To Pay $500 Million For Rejecting Its Bad Patents

from the corporate-sovereignty-saved dept

Over the last few years, we've written a ton about "corporate sovereignty" provisions in trade agreements. Technically, these tend to be called "Investor State Dispute Settlement" or ISDS provisions, but I really believe that a decent part of the reason they're called something so boring is to stop people from paying attention to just how nefarious these provisions truly are. One of the reasons we first started paying attention to these provisions -- as they were showing up in agreements under negotiation, such as the TPP and TTIP -- was following a story involving the pharmaceutical giant Eli Lilly demanding $100 million from Canada for rejecting two of its patents.

The issue was that Canada had rejected these two patents because the company couldn't prove that the patented drugs were actually useful. Eli Lilly claimed that Canada had no right to reject patents on that basis, arguing that it was a "dramatic" shift in how patents were reviewed, and thus it was "expropriating its property" and undermining the company's "expected future profits." Think about that for a second. By the time this case went to an actual tribunal, the amount that the company was demanding had ballooned from $100 million to $500 million. This battle has waged on for many years -- and for Eli Lilly, this was a huge deal. Management at the company basically bet the company on continuing to get new patents, and any hiccup -- even a rejection of patents for not being useful -- could be a disaster for the company. The company even pushed to get Canada slammed during diplomatic proceedings in the infamous Special 301 Report for the USTR for daring to reject its patents -- and the USTR complied.

Well, it looks like all of that may have been for nothing. That's because Eli Lilly has lost entirely, and not only won't it be getting the $500 million it wanted, but it also has to pay Canada's $5 million in legal fees. You can read the final award here or down below. Of course, some may argue that this shows that the ISDS corporate sovereignty provisions work out fine in the end, with tribunals getting things right (even if that's not actually true in many cases), but just the fact that the Canadian government had to go through this massive and expensive process for many years just for rejecting two bad patents should show why ISDS provisions are such a problem.

In the ruling, the tribunal even notes the Special 301 report that Eli Lilly worked so hard to have call out Canada's patenting practices, but more or less dismisses it, by noting that others, such as Mexico didn't complain similarly:

The Tribunal has paid particular attention to the 2014 and 2015 editions of the Special 301 Report of the USTR. In these documents, USTR notes that the United States “has serious concerns about the lack of clarity and the impact of the heightened utility requirements for patents that Canadian courts have applied recently”. This comment cannot be dismissed outright as a lobbying effort by Claimant, as suggested by Respondent. However, the Special 301 Report stands alone in the record as a complaint regarding Canada’s utility doctrine from any other State, including Mexico, in the decade since the promise utility doctrine was allegedly adopted. For the Tribunal, that silence speaks louder than the single, brief criticism contained in the USTR’s Special 301 Report.

In other words, sure, maybe it wasn't just because Eli Lilly heavily lobbied Congress and the USTR to attack Canada on this point, but the fact that no other country seems concerned with Canada's standards for denying patents, it certainly looks like this wasn't such a big deal.

Also in the ruling, there's a focus on "expectations." Remember, a big part of Eli Lilly's claims was how this impacted its "expected" profits. But here, the tribunal basically notes that just because Eli Lilly expected Canada to ignore its own law, it doesn't mean that it actually enforcing its own laws is some nefarious plot:

The record shows that at the time Claimant made its investments, it was aware that Canadian patent law required patented inventions to be useful. Eli Lilly executives testified that they understood the Canadian utility requirement to be a low threshold. In fact, it appears that the utility of Strattera and Zyprexa in Canada was taken for granted within the company. Claimant expected its patents would not be invalidated for lack of utility.

However, this perception cannot amount to a legitimate expectation. For the reasons stated above, the Tribunal has found that each of the three elements of the alleged promise utility doctrine had a foundation in Canadian law when Claimant’s patents were filed. At that time, although Claimant may not have been able to predict the precise trajectory of the law on utility, it should have, and could have, anticipated that the law would change over time as a function of judicial decision-making.

The idea behind ISDS was to encourage investment in developing nations, where there was a fear that a sketchy government might seize a factory or something. But that's not a problem between Canada and the US, and Eli Lilly should have been able to put on its big boy pants and recognize that maybe, just maybe, Canada can reject some of its patents, and the company doesn't need to throw an international hizzy fit. Next time, rather than betting the company on patents, perhaps the company will start thinking about business models that don't require a complete lottery ticket.

Filed Under: canada, corporate sovereignty, drugs, isds, nafta, patents, tpp, us
Companies: eli lilly

Canada Says It Won't Attend Special 301 Hearing Because USTR Prefers Industry Allegations To Facts And Data

from the lobbyists-all-the-way-down dept

The US Trade Representative's annual Special 301 Report repeatedly points out how other countries are "failing" US IP industries by not doing enough to prevent piracy. The "name and shame" approach hasn't done much to curb piracy, although it has generated a few pressure points to leverage during trade negotiations.

Countries appear to be tiring of the annual shaming. Michael Geist reports the Canadian government has issued a rebuttal ahead of this year's Special 301 hearing.

I recently obtained documents under the Access to Information Act that confirm the Canadian government’s rejection of the Special 301 process. Canada will not bother appearing today largely because it rejects the entire process.

The two-page memorandum goes directly to the heart of the issue: despite Canada now having some of the world's toughest anti-piracy laws, the USTR continues to make the annual claim that the country could be doing so much more. The memo [PDF] puts it bluntly: the USTR represents no one but industry leaders.

Canada is on the "Watch List" of the United States Trade Representative (USTR) annual Special 301 Report, issued on April 21, This report discusses the adequacy and effectiveness of United States (US) trading partners' protection and enforcement of intellectual property

The Government of Canada does not recognize the validity of the process as the findings tend to rely predominantly on allegations from US. industry stakeholders rather than on objective analysis.

The particular point of complaint is Canada's continued inclusion in the report, despite its many anti-piracy efforts. The press release accompanying it goes even further in expressing its displeasure with the USTR's industry-favoring Special Report.

Canada considers the Special 301 process and the Report to be invalid and analytically flawed because the process relies primarily on US. industry allegations rather than empirical evidence and objective analysis. Canada has a strong regime for the protection and enforcement of lP rights that is fully consistent with its international obligations, including under the North American Free Trade Agreement (NAFTA) and the World Trade Organization's Trade-Related Aspects of intellectual Property Rights (TRIPS) Agreement.

Canada remains on the Watch List in 2016 despite recent significant achievements domestically in relation to reform namely, the passage and coming into force of the Copyright Modernization Act and the Combating Counterfeit Products Act. in previous years, the absence of such reforms was a central concern of the US. in relation to Canada's regime.

The Canadian Government also passed amendments to the Trademarks Act, the Patent Act and the industrial Design Act to make Canada's intellectual property regime consistent with key treaties (the Madrid Protocol, the Singapore Agreement, the Nice Agreement, the Patent Law Treaty and the Hague Agreement). in 2015, Canada also completed its ratification of the 1991 Act of the international Union for the Protection of New Varieties of Plants Convention (UPOV 91).

It appears the Canadian government believes the 2017 Special 301 Report (due at the end of April) will continue to ignore Canada's IP protection capitulations advancements. And if the USTR is going to continue to name and shame without evidence or consultation of all affected stakeholders, there's really no reason for any foreign country to appear in its annual puppet show, much less continue to try to placate an entity that's never going to be satisfied.

Filed Under: 301 report, canada, copyright, special 301, special 301 report, ustr