The Application Of Fair And Equitable Treatment In Patent-Related International Investment Arbitration

In 2013,Eli Lily and Company("Lily")applied to the International Centre for Settlement of Investment Disputes("ICSID")for arbitration,demanding the Government of Canada("Canada")to compensate it 5000 million Canadian dollars.Lily asserted that the claim arised from the invalidation of its Canadian patents named Strattera and Zyprexa by the Canadian courts.Lily held that the invalidation was arbitrary,discriminatory and betrayed investors' legitimate expectation,which resulted in the breach of NAFTA 1105.Canada rejected Lily's claims,and denied Lily's reasons respectively.This case is the first international investment arbitration that involves the invalidation of patents.Although the tribunal finally supported the Canadian Government and denied all the claims of Lily,this case still reminds people that international patents investors now can search for relief through international investment arbitration.It also reminds host countries that arbitrations about international investment disputes may hurt the regulatory power of host countries and the flexibility of policies of host countries.One of the core disputes in Lily case is that whether the invalidation of patents of Lily violates the requirement of FET in NAFTA 1105.Given the important role of FET in international investment arbitrations,the subsequent patent-related international investment arbitrations may also revolve around this problem.Considering the specificities of patent investment,the application of FET in Patent-related international Investment Arbitrations deserves our special attention.Chapter one of this article mainly introduces the significance of the topic of this article.This chapter gives a brief introduction of Lily case,and then introduces the questions arising from it.Then it gives a review of literature of this topic and introduces the approaches of research.Chapter two illustrates the connotation of FET and focuses on the analysis of several important questions concerning the topic of this article.These questions includes the scopeofobligations under FET in international investment arbitrations,the problems about the rules that should be considered in international patent-related investment arbitrations,the legality of behavior of judicial authorities,and how to determine whether or not the behaviors of host countries live up to the investors'legitimate expectation.Chapter three mainly discusses what measures should China take to handle the challenges of international patent-related investment arbitration.The two main measures are to list the concrete obligations under FET and to include patent in the exception clause.This article comprehensively reviews the academic theories,and further elaborates the treaty practice and arbitration practice about the topic of the article.During this process,this article analyses the puzzles of the application of FET in international patent investment arbitrations and puts forward some solutions and advice in detail.Besides,this article reviews all the BITs that China signed in the past 10 years and take suggestions on what measures should China take to face the challenges brought about by international patent investment arbitration.