Protection of Intellectual Property in International Investment and Trade Agreements

In September 2013 pharmaceutical company Eli Lilly filed a notice of arbitration under NAFTA chapter

11 against the government of Canada for the invalidation of previously issued patents for Strattera and

Zyprexa. This followed earlier investment arbitration claims launched by cigarette manufacturer Philip

Morris in 2010 and 2011, against Uruguay and Australia respectively, citing public health legislation which

restricted the company’s use of its lawfully acquired trademarks. These investment claims are founded on

intellectual property (IP) provisions in international investment agreements (IIAs), which include IP as a

covered investment. The Eli Lilly and Philip Morris claims have exposed pre-existing tensions arising from

standard IIA clauses which protect IP as a covered investment; as well as newer provisions that incorporate

regulatory language from the agreement on trade related aspects of IP (TRIPS). IP has benefitted from

international investment protection for as long as IIAs have existed, but enforcement and dispute settlement

have always taken place at the national level. The willingness to deploy investment treaty based provisions

to enforce IPRs in arbitral proceedings is likely the result of a broader investment driven, bilateral shift in

the approach to IP regulation . The addition of IIAs to the list of international regulatory tools available for IP protection and enforcement is likely to transform international IP regulation, as well as state - investor dispute settlement.