June 2021 – Brazil – Rossetti Advogados
The full bench of the Brazilian Federal Supreme Court (“STF”) invalidated, in a trial that took place last May 6, a provision of the Industrial Property Law – Law No. 9.279 of May 14, 1996 (“LPI”) that extends the term of a patent due to a delay, by the Brazilian Industrial Property Institute (“INPI”), in analyzing administrative proceedings for the grant of patents.
The action was filed in 2016 by the then Federal Attorney General against art. 40 of the LPI, which governs the rights and obligations relating to industrial property.
Said provision sets forth that the term of effectiveness of an invention patent is twenty (20) years, and of utility models (updates to something that already exists) is fifteen (15) years, in both cases as from the date of filing of the patent application with the INPI.
However, the polemic issue involves a rule provided in the sole paragraph of art. 40 of the LPI, which sets forth that the term of effectiveness of a patent shall not be shorter than 10 years, in the case of inventions, and 7 years for utility models (updates to something that already exists), as from the date on which the patent or utility model is granted by the INPI.
However, since no term has been defined for the INPI to grant the patent, it is not possible to know when the protection will be lifted, and many inventions remain protected for more than two decades, which is the standard term in the rest of the world.
For example, if it takes the INPI 10 years to grant an invention patent application, it will be effective for another 10 years. Therefore, in the end of the term of effectiveness, twenty years will have elapsed since the patent application was filed. In another example, in case it takes the autonomous government agency 15 years to grant the application, and since it is guaranteed that the patent will be effective for another 10 years as from the grant, in the end of the term of effectiveness 25 years will have elapsed since the patent application was filed.
By a majority vote, the Brazilian Supreme Court Justices decided that the extension of the term breaches several constitutional principles, such as the legal certainty and the free competition.
In addition, the Supreme Court understood that the current rule produces negative effects in times of sanitary crisis, such as the crisis caused by the COVID-19, since as long as the term of effectiveness of patents of large laboratories does not expire, the pharmaceutical industry will be prevented from producing generic drugs against the new coronavirus and its current and future variants.
For instance, pursuant to the report prepared by the Federal Accounting Court (TCU), between 2008 and 2014 the patent of almost all pharmaceutical products were extended for a term of more than 20 years. According to the TCU, the exploitation protected by the patent of pharmaceutical products lasts 23 years in average, and the grant of patents that will last 29 years or even more is usual.
Subsequently, on May 12, the Supreme Court resumed the discussion on this issue and defined a modulation of the effects of the decision rendered in the previous week. By 8 votes to 3, the Justices understood that the new rule would only apply to patent applications filed after the date of such trial. However, for patents in the pharmaceutical and hospital industries, the new rules regarding the calculation of the patent shall be effective for all patents in effect or which are under analysis by the INPI.
This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.