WASHINGTON The U.S. government has tossed a brickbat at Canada over its drug-patent rules, and spelled out its intention to push for concessions on the issue in upcoming international trade talks.

In its annual report on intellectual property rights around the world, the American administration Wednesday expressed concern that it's too easy for courts to strike down pharmaceutical patents.

That makes Canada the only G7 country among the 26 on the U.S. Trade Representative's watch list, with another 10 countries listed on the more serious "priority" watch list including China, India and Russia.

Canada actually spent four years on that top-priority list, but improved its standing in 2013 following a pair of moves by the Harper government, including the Copyright Modernization Act targeting Internet piracy.

This year's report says Canadian court decisions have cost American drug makers - and it expresses hope the issue is resolved in negotiations toward the 12-country Trans Pacific Partnership.

"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," said the USTR's annual report on intellectual property standards around the world, released Wednesday.

"Under this amorphous and evolving standard, courts can invalidate a patent on utility grounds by construing the 'promise of a patent' years after the patent has been granted, leading to uncertainty for patent holders and applicants and undermining incentives for investment in the pharmaceutical sector," it continues.

"In applying this standard, courts have invalidated a number of patents held by U.S. pharmaceutical companies, finding now that those products lack utility ... even though such products have been in the market and benefiting patients for years."

Earlier this month, 32 members of Congress wrote to U.S. Trade Representative Michael Froman to complain about Canadian patent standards. It said that over the last decade, the evolving interpretation of Canadian judges had cost U.S. drug makers 18 patents in that country.

No other country had revoked patents on similar grounds, said the letter, which called it egregious that generic drug manufacturers were fighting to have courts declare patents useless, only to turn around later and produce the same drugs.

It called the issue essential for the U.S. economy - with one-third of American jobs tied to innovation.

Indiana-based Eli Lilly and Co. filed a complaint last fall with a NAFTA panel, seeking $500 million in compensation. It says Canadian court rulings invalidating patents for two of its drugs were illegal under the trade pact.

"We believe Canada has gotten a little bit offside in how it goes about making determinations on utility," Doug Norman, Eli Lilly's vice-president and general patent counsel, said in an interview.

Norman said companies like his couldn't afford to keep spending $5 billion a year on research, in a legal climate where generic drug makers could knock down one patent after another and then copy the recipe.

That's exactly what's happening in Canada, he added.

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Federal Court decisions voided patents for anti-psychotic and ADHD drugs by Eli Lilly from 2009 to 2011. In the case of the anti-psychotic drug Zyprexa, generic companies tried the tactic all over the world, but were successful only in Canada.

"If we keep losing patents based upon arguments like this, then sooner or later we're not going to have the ability to continue investing in the underlying research," he said.

Norman called for a federal law in Canada to help guide the courts in future cases to prevent other companies from launching NAFTA challenges.