I. Introduction

A. Background and Qualifications

1. I am a Professor of Law at the University of New Brunswick, in Fredericton, New Brunswick. I reside in Fredericton, New Brunswick. I teach in the areas of intellectual property law, commercial law and remedies. My academic research focuses on patent law, in particular pharmaceutical patent law, patent law remedies, and the intersection of patent law and commercial law. My academic articles are regularly cited by the Canadian courts, including the Supreme Court of Canada. Attached as Appendix A is my curriculum vitae. I occasionally consult on matters within my area of expertise. I have recently consulted for Apotex Inc, a generic pharmaceutical manufacturer, in the remedial stage of its litigation with Merck regarding the drug lovastatin.1 I have also recently consulted for Industry Canada on the treatment of intellectual property rights in insolvency.

2. I have been asked by counsel for Eli Lilly and Company (“Lilly”) to provide an overview of the requirements for obtaining a patent in Canada, to describe the law of utility in Canada both at the time Lilly’s Strattera and Zyprexa patents were filed and granted, and at the time they were held to be invalid, and to describe the legal consequences of the current law of utility in Canada. I confirm that I have no other relationship to Eli Lilly and Company or any of its affiliates.

B. Overview of Patent Law in Canada

(i) Purpose of Patent Rights

3. Patent rights in Canada are wholly a creature of statute: “An inventor gets his patent according to the terms of the Patent Act, no more and no less.”2 The grant of a patent for an invention provides the patentee with exclusive rights over the exploitation of the invention3 for a limited term.4 The purpose of the patent system is to promote the public good by providing an incentive for the creation and disclosure of new inventions.5 By giving an inventor exclusive rights to exploit the invention, the reward to the inventor is made commensurate with the social benefit of the invention. This means that patents give the inventor a strong incentive to invest in research in areas which the inventor believes will lead to commercially and socially valuable inventions.