Open Letter from Global Academics in Support of Proposal to Amend Brazil’s Patent Law to Take Advantage of TRIPS-Compliant Flexibilities

 

UPDATE: Final Documents in Support of Proposed Amendments, to be presented to the Chamber of Deputies on October 9, 2013:

  • Open Letter from International Intellectual Property Scholars and
    Experts Supporting Brazil’s Proposed Patent Reform (PDF)
  • Brief Technical Review of Brazil’s Proposed Patent Law Reforms (PDF)
  • Civil Society Statement in Support of Brazilian Patent Law Reform
    to Increase Access to Medicines for All (PDF)

 


Colleagues:

As many of you may have heard, Brazil has been engaged in a long process of studying patent law reform and in August 2013 (originally scheduled for July 10, 2013) will be issuing a major report and proposed legislative reforms.  In sum, as detailed below in (1) an open letter and (2) its attached brief technical review which has the text of the proposed bill as an annex, Brazil is seeking to incorporate lawful TRIPS flexibilities, into its patent law including: eliminating patent term extensions and data exclusivity, restricting patents on new forms and new uses and tightening the the inventive step requirement (following the India example), adopting a government use procedures, and clarifying the role that ANVISA, its drug regulatory agency, plays in the patent examination system.

Sean Flynn, Amy Kapczynski, and I have worked on an academics/experts letter and brief technical review.  (If you have brief, crucial editing suggestions, please send to b.baker@neu.edu).  If you wish to sign-on, please provide the following information (or you can email the same to b.baker@neu.edu).

In our judgment, this is a very important moment where Brazil is rectifying past mistakes when it prematurely adopted TRIPS plus measures under pressure from the U.S.  The proposed patent reform demonstrates growing momentum in low- and middle-income countries to maximize use of TRIPS-compliant flexibilities to help ensure access to medicines for all.

We believe that the support of academics is useful both internally to help support adoption in Brazil and externally to counteract what is certain to be strong negative reaction from the US and EU and Big Pharma.

Open Letter

We are legal, intellectual property, trade, development, human rights, and other academics and legal experts who are writing in support of the proposed changes to Brazil’s patent law recently released by the Brazilian government and recommended in a report by the Brazilian House of Representative, Center for Strategic Studies and Debates, titled Brazil’s Patent Reform:  Innovation Towards National Competitiveness.[1] The draft law and report propose amending Brazil’s existing patent law to take greater advantage of policy options (aka “flexibilities”) that are permitted by the World Trade Organization’s agreement on Trade Related Aspects of Intellectual Property Rights and that would promote access to affordable medicine in Brazil as well as adherence to Brazil’s national and international human rights obligations. As documented the attached Technical Review, in our judgment each of the described reforms is both TRIPS compliant and desirable in light of Brazil’s human rights obligations and public health goals and in light of its goal of increasing its technological and innovation capacity and self-reliance with respect to knowledge goods.

Bill no. H.R. 5402/2013[2] proposes the following substantive amendments to the Brazil Patent Act, Law no. 9279, of May 14, 1996:

      1. limits the patent term at 20 years maximum, as authorized by Article 33 of the TRIPS Agreement (see Article 2, revoking Patent Act Art. 40, sole §);
      2. clarifies subject matter that is not considered inventive particularly new use patents and patents on new forms of known substances, as allowed by TRIPS Articles 1.1, 7, 8, 27.1 and 27.3(a) and along the lines of Section 3(d) of the India Amended Patents Act 2005 (see Article 3, amending Patent Act Art. 10);
      3. increases the standard of inventive step, as allowed by TRIPS Articles 1.1, 7, 8, and 27.1 and along the lines of the India Amended Patents 2005, to require a “significant technical advance in regards to the state of the art” in order to heighten the standard for incremental innovation and to discourage ever-greening (see Article 3, adding Patent Act Art. 13 [with respect to patents] and 14 [with respect to utility models]);
      4. creates a full-fledged pre-grant opposition mechanism, including provision for electronic submission of evidence of related inventions and prior art and for commission of technical opinions from academic and other experts, as allowed by TRIPS Articles 1.1, 7, 8, and 62.4 (see Articles 3 and 4, amending Patent Act Art. 31 and adding Art. 31-A);
      5. clarifies that the protection of undisclosed pharmaceutical test data in Brazil prevents unfair commercial use and unauthorized disclosure, but permits “use, by government bodies of test results or other undisclosed data, for market approval of products equivalent to the product for which they were initially presented,” as allowed by TRIPS Article 39.3 (see Article 3, amending Patent Act Art. 195);
      6. updates the Sanitary Agency’s (ANVISA) prior consent mechanism for pharmaceutical patents, in accordance with the recently adopted ANVISA Resolution 21/2013 and as allowed by TRIPS Article 1.1, 7, and 8, granting ANVISA the duty to analyze, prior to the Patent Office, patent applications involving pharmaceutical/chemical (i) products that have previously been rejected by the Agency, and thus present health risks, and (ii) compounds that are of interest to support Brazil’s National Health System’s access to medicines policy or a pharmaceutical care program, and that may not meet the patentability requirements set forth by the Patent Act (see Article 3, amending Patent Act Art. 229-C, and Article 5, amending Article 7 of Law no. 9782 of 26 January 1999);
      7. incorporates within the Patent Act the public non-commercial use mechanism as set forth by the WTO TRIPS Agreement Article 31 (see Article 4, adding Patent Act Art. 43-A).

In pursuing the patent law reforms outlined above, Brazil is exercising its lawful sovereign right to make use of TRIPS-compliant flexibilities so as to meet its aspirations and needs with respect to self-reliant and sustainable development, participation in the global knowledge economy, and fulfillment of its human right obligations to its people.  Brazil is also joining countries like India, the Philippines, Argentina, and Zanzibar, which have already incorporated legal rules that prevent excessive granting of patents and promote patent quality, particularly on global public goods such as medicines, and with progressive civil society movements in other countries like Uganda and South Africa where campaigns to amend TRIPS-plus patent legislation have recently been launched.  Brazil is also relying on, and has closely documented, a broad array of scholarly research and expert analysis that supports each of the patent reform initiatives that it is proposing.  Indeed, many of the steps that Brazil is taking to help ensure patent quality and eliminate abusive patents practices can be understood as locally tailored versions of steps recently taken in high-protection jurisdictions such as the U.S. and E.U., where increasing concern has been expressed about the anticompetitive effects of overgrown patent laws.  In the US, for example, both Congress and the Supreme Court have recently imposed new restrictions on patent law and introduced new measures to improve patent quality.[3]

If history serves as a guide, we can expect that the United States, Europe, and patent-intensive industries, especially the patent-based multinational pharmaceutical industry, will oppose the proposed reforms both internally in Brazil and internationally in various forums.  We fully expect that there will be vigorous, even angry protest; claims that Brazil is undermining pharmaceutical innovation locally and globally; and threats of retaliatory action.  But in our collective and considered view, Brazil’s patent reforms are both modest and prudent, as well as fully compliant with international norms.  Armed with these reforms, Brazil should be able to reduce the number of weak pharmaceutical (and other) patents that are filed; weed out poor-quality patents through informed opposition procedures and the involvement of experts in its drug regulatory authority in the review process; prevent evergreening of patent monopolies by restricting secondary patents on new forms and new uses of known substances and by limiting patents to 20 years only; preclude the creation of a new form of monopoly on data submitted to drug regulators; and allow Brazil to have ready access to government-use licenses upon notice and payment of adequate remuneration so as to meet the needs of its patients for affordable medicines.

If adopted and implemented, the proposed reforms will help Brazil to protect, respect and promote human rights, and also help incentivize local production, generic entry, and competition, and lead to greater technological capacity and employment in patent-based industries.   We applaud the Brazilian patent reform initiative and hope for its speedy adoption and implementation.

Very truly yours,

Professor Brook K. Baker, Northeastern U. School of Law, Program on Human Rights and the Global Economy, Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa

Professor Amy Kapczynski, Yale Law School

Professor Sean Flynn, American University Washington College of Law, Program on Information Justice and Intellectual Property


Brief Technical Review of Brazil’s Proposed Patent Law Reforms

Limiting patent terms to 20 years with no extensions is TRIPS compliant: 

Article 2 of Bill No. H.R. 5402/2013 limits patents to 20-year terms by revoking Article 40 of Law no. 92790 of 14 May 1996.[4] Article 33 of the TRIPS Agreement merely requires that “The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date.”  There is no requirement in TRIPS that there be patent term extensions to compensate for regulatory delays either in the granting of a patent or in the registration/marketing approval of a medicine.  In fact, the term of 20 years was adopted in substantial part to compensate for customary periods of regulatory delay.  Accordingly, Article 40 of the current Patent Law, which grants patent protection beyond 20 years whenever the date of granting a patent exceeds 10 years, can properly be revoked.

As explained in the Report, a patent applicant in Brazil has an expectation of eventual patent grant and a right to seek retroactive damages from persons who infringe the pending patent once a patent has been granted.  Thus, in a practical sense, patent applicants have de facto exclusive rights even during periods of delay.  Admittedly, the Brazilian Patent Office should develop more capacity so that it may reduce its patent application backlog[5] and increase the quality of issued patents, where warranted, on a more reasonable time table.[6]  Despite its current delays and stretched capacity, TRIPS does not require patent term extensions such as those in Article 40 of Brazil’s Patent Act.

Disallowing patents on new uses or new forms of existing medicines is TRIPS compliant:

Article 3 of Bill No. H.R. 5402/2013, seeks to amend the Patent Law to add Article 10.X and XI in the following way:

Art. 10. [The following are not considered to be inventions or utility models:]

X – any new property or new use of a known substance, or the mere use of a known process, unless this known process results in a new product;

XI – new forms of known substances that do not result in an improvement in the known efficacy of the substance.

For the purposes of this Article, salts, esters, ethers, polymorphs, metabolites, pure form, size of particles, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance shall be considered the same substance, unless they significantly differ in terms of properties regarding efficacy.

This provision mirrors one that has been in place in India for eight years, and that has been upheld against challenge by the multinational pharmaceutical industry in Indian courts.  The stated purpose of these provisions is to prevent the practice of evergreening, the granting of new 20-year patent monopolies on the basis of minor or trivial changes to a known substance or on the basis of easily discovered new uses of existing substances.  The “efficacy” standard suggests that there may be an inventive step worth patenting if the product shows significant or dramatic improvement in therapeutic efficacy.[7]

Article 27.1 sets for the basic standards of patentability under TRIPS:  “[P]atents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application (emphasis added).”

The terms new, inventive step and industrial application are not further defined and Members are granted substantial interpretive freedom to adopt loose or strict standards of patentability according to their own needs and circumstances, subject only to meeting the treaty’s minimum requirements.  Indeed there is substantial variation in precise patenting standards between Europe, the U.S. and other WTO Members, and many countries overtly limit the scope of patentability in various ways.  (See, for example, the recent US Supreme Court case, Association for Molecular Pathology v. Myriad Genetics (2013), which held that US law forbids patents on genes.).  Members’ interpretive freedom is expressly set forth in Article 1.1 of the TRIPS Agreement, which states that:  “Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.”  This interpretative freedom is amplified by Articles 7[8] and 8[9], dealing respectively with mutual advantages for owners and users of IP and the right to promote public interest and public health and to prevent abuse of IPRs. These provisions were further amplified by the Doha Declaration on the TRIPS Agreement and Public Health, which confirmed that Members to prioritize public health and access to medicines for all:

4. We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all. [10]

There are additional justifications concluding that patents on new uses and new methods of use are not required by TRIPS.  As explained in the Report, the inventions forbidden by the new proposed provision are, and should be expressly understood, as mere codifications of longstanding requirements of patent law.  The proposed provisions thus represent the considered view of the drafters that new uses and new forms of existing substances (without significantly enhanced efficacy) should not be considered “inventions” per se due to lack novelty and/or inventive step.

New uses are ordinarily discovered through routine/obvious investigations of existing, not new, substances and thus lack novelty and/or inventive step.  New uses and methods of use may be considered more in the form of abstract ideas than of a new industrial product.  Finally, TRIPS Article 27.3(a) allows Member to exclude from patentability “diagnostic, therapeutic and surgical methods for the treatment of humans … .”  A new use of a known medical substance is a new therapeutic use and thus can be excluded from patentability.

With respect to denying patents on new forms of existing chemical entities, Brazil is following in the shoes of section 3(d) of the India Amended Patents Act 2005, including an exception where the new form results in a significant improvement in the known efficacy of the product.  Here again, the listed variations in form are often pre-existing, e.g., in polymorphs, or they are mere discoveries routinely made in the process of trying to optimize the active pharmaceutical entity in terms of stability, solubility, etc.

Heightening the inventive step requirement is also TRIPS compliant:

Article 3 of Bill No. H.R. 5402/2013, seeks to amend the Patent Law Article 13:  “The invention carries inventive activity when, for a person skilled in the art, it does not derive in an obvious or evident manner from the state of the art, and provided it represents a significant technical advance in regards to the state of the art.”  For the reasons outlined in the discussion above, Brazil may adopt heightened standards for inventive step just as it proposes to do with respect to excluding new uses and new form of known substances from being inventions.  Jurisdictions around the world, including the Supreme Court in the United States,[11] are taking steps to tighten up inventive step analysis so as to avoid granting 20-year monopolies on minor or trivial advances in the art.

Adopting opposition procedures is fully TRIPS compliant:

Article 3 of Bill No. H.R. 5402/2013, seeks to amend Patent Law Article 31 to allow full-fledged opposition procedures:

From the publication of the patent application until the end of the exam, any interested party may file an opposition.

§ 1 The applicant shall be notified of the opposition through publication in the official gazette, and may respond within 60 days from the publication of the opposition.

§2 In cases where an opposition to a patent application is filed, the Brazilian Patent Office may commission technical opinions from the Public Administration, from organizations recognized by the Government as consultancy bodies, and from university professors and students.

§ 3 After the opposition is filed, the examiner may, upon justified demand, application any additional clarification he/she deem necessary, as well as the presentation of supplementary documents.

§ 4 The examiner shall mandatorily respond to each filed opposition, indicating the reason by which he/she accepts or rejects the arguments presented.

 Article 4 of Bill No. H.R. 5402/2013 seeks to the amend the Patent Law to add Articles 31-A also dealing with opposition procedures by allowing electronic submissions of relevant information:

Art. 31-A. The Brazilian Patent Office shall offer an intuitive electronic channel, of easy access, connected to the Internet, for any person to present, free of charge, evidence or proof of previous existence, in Brazil or abroad, of the related invention or state of the art.

It shall be allowed the presentation of evidence or proof of prior existence, in Brazil or abroad, of the related invention or state of the art, even after a patent is granted, and especially during the opposition and the post-grant opposition procedures.

The TRIPS Agreement indirectly references Members’ rights to have opposition proceedings in Article 62.4:

Procedures concerning the acquisition or maintenance of intellectual property rights and, where a Member’s law provides for such procedures, administrative revocation and inter partes procedures such as opposition, revocation and cancellation, shall be governed by the general principles set out in paragraphs 2 and 3 of Article 41 (emphasis added).

There is nothing in TRIPS otherwise referencing or limiting the adoption of opposition procedures – indeed TRIPS Article 62.1 allows Members to require certain procedures and formalities.  Here, relying on favorable precedent elsewhere,[12] Brazil has proposed to adopt eminently reasonable opposition procedures that (1) allow pre-grant opposition by any interested party until the end of the patent examination, (2) allow the patent applicant to respond with 60 days of the publication of the opposition, (3) allow the commission of expert technical opinions, (4) may require clarifications from the patent applicant, and (5) mandates written and reasoned response to each filed opposition.  Such procedures are desirable to add to the quality of patent examinations by securing inputs and analysis that can help deter and appropriately reject unmeritorious patent applications.

Rejecting data exclusivity is TRIPS compliant:

Article 3 of Bill No. H.R. 5402/2013 seeks to amend the Patent Law Article 195 to add § 3: “The provision set forth under item XIV does not apply to the use, by government bodies, of test results or other undisclosed data, for market approval of products equivalent to the product for which they were initially presented.”

Article 39.3 of the TRIPS Agreement provides for data protection, but not data exclusivity/monopoly:

Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Brazil’s Patent Law Article 195.XIV fully provides for these limited degrees of protection both with respect to unfair commercial use and unlawful disclosure:

A crime of unfair competition is perpetrated by anyone who:

XIV. divulges, exploits, or utilizes, without authorization, results of tests or other undisclosed data whose preparation involves considerable effort and that were submitted to government agencies as a condition for obtaining approval to commercialize products.

Unfortunately, Brazilian courts have begun to interpret this limited provision as essentially requiring data exclusivity instead of data protection.  To correct this misinterpretation, Article 3 of Bill No. H.R. 5402/2013 seeks to clarify that the acts of government bodies may lawfully use or rely on undisclosed data for the purpose of granting market approval or equivalent products.  This interpretation is fully consistent with the state practice of many countries and with the weight of expert commentary on this subject.[13]

Involving ANVISA in the patent examination process and requiring its prior consent is TRIPS compliant:

Article 3 of Bill No. H.R. 5402/2013, seeks to amend the Patent Law Article 195 to add
Article 229-C:[14]

The granting of patents for pharmaceutical products and processes shall depend on the prior consent from the National Sanitary Agency – ANVISA, that shall examine the object subject to the patent application in light of public health.

§ 1 A patent application shall be considered as contrary to public health, according to further regulation, where:

I-the product or pharmaceutical process in the patent application present a health risk, or

II – the patent application for pharmaceutical product or pharmaceutical process is of interest to an access to medicines policy or to a pharmaceutical care program under the National Health System – SUS, and provided that it does not meet the patentability requirements and the other criteria established by this law.

§ 2 Following the prior consent examination and after the decision is published, ANVISA shall return the application to the Patent Office, that shall examine the approved application, and definitely archive the application that has not been approved.

As discussed above in the section on pre-grant oppositions, Brazil has freedom under the TRIPS Agreement to design its own mechanisms for examining and granting patents and need not do so under the auspices of a single administrative agency, i.e., a patent office.  We anticipate that this provision might be challenged as out of compliance with the requirements of the TRIPS agreement, particularly the provisions of TRIPS Article 27 that ban discrimination by field of technology and that require that patents “shall be available” for any new inventions “provided that they are new, involve an inventive step and are capable of industrial application.”  We think such a challenge would be unmeritorious.

First, we read section 1(I) above to implement the TRIPS Article 27(3) authorization to exclude from patentability any invention that “the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health.”[15]  Second, section 1(II) permits ANVISA to reject certain classes of patents that fail to meet “the patentability requirements and the other criteria established by this law” if, in addition, the invention is determined to be “of interest to an access to medicines policy or to a pharmaceutical care program under the National Health System.” This provision thus sets up a different system for examining medicines patents than exist for other types of inventions, which we understand merely to select certain patents for careful review, and not to apply anything beyond the usual substantive requirements for the grant of those patents.  Here, Brazil confirms a historic national judgment that the expertise of ANVISA is a useful guarantor of patent quality in the pharmaceutical context, and the reasonable view that patent quality is particularly important with respect to medicines that are central to Brazil’s access to medicines policy and its pharmaceutical care program.  In this regard it should be noted that a WTO panel has held that the word “discrimination” in TRIPS Article 27 does not ban all differentiation by field of technology.[16] It permits differentiation that has a reasonable justification and this provision may pass muster as long as Brazil can adequately document that justification, as it has by relying on ANVISA’s special expertise.[17]

Adopting clear guidance for government use (public, non-commercial use) is fully TRIPS compliant under Article 31:

Article 3 of Bill No. H.R. 5402/2013, seeks to amend the Patent Law to add Article 43-A:

The Government, by Ordinance from the Minister of State concerned, may use the subject matter of a patent or of a patent application, for non-commercial purposes, without consent or authorization from the patent holder or patent applicant, directly or upon contract or authorization to third parties, for public interest purposes, including national defense and social interest.

§ 1 Should the invention be a process, the public non-commercial use of the patent or patent application shall include the use in relation to any product that may be obtained by the process that is protected by the patent or the patent application;

§ 2 The Government shall notify the patent holder or patent applicant upon public non-commercial use;

§ 3 Public non-commercial uses shall meet the following conditions:

I – not hinder the full exercise of the other rights of the patent holder or patent applicant;

II – be non-exclusive, and not admit sub-licensing;

III – be undertaken exclusively to serve the goals of the Ordinance that authorized it, resting assured that any other use that, without the character of public non-commercial use, would constitute an infringement of Art. 42 of this Act, is hereby prohibited;

§ 4 The remuneration for public non-commercial use shall be set by the Government, taking into account the circumstances of each use, shall take into account the percentage that would customarily incur upon a voluntary license between independent parties, applied over the cost for the Government resulting from the use of the subject matter of a patent or patent application, and weighed according to the collaboration supplied by the patent holder in the transfer of technology;

§ 5 In the case of patent applications, the remuneration shall be legally deposited until the granting of the patent;

§ 6 The Judiciary shall not, in regards of public non-commercial use, decide whether public interest purposes apply;

§ 7 Public non-commercial uses shall not be lifted, limited or interrupted by legal appeal over the appointed remuneration.

Brazil’s proposed adoption of an explicit mechanism for granting government use licenses is fully legal under Article 31 of the TRIPS Agreement.  Article 31 directly references the right of “involuntary use” for “public, non-commercial uses” such as those described in proposed Article 43-A.  In such instances, Article 31 does not require that the government or its proposed licensee engage in prior negotiations with the patent holder seeking commercially reasonable terms and instead merely requires notification and eventual payment of adequate remuneration, a requirement amply fulfilled by § 4.  Moreover, the adoption of remuneration guidance, like that contained in § 4 is permissible under TRIPS.[18]  In addition to providing for proper purposes, notification to patent holders/applicants, and payment to right holders, the Brazilian proposal also follows requirements with respect to continued use of the patent by the patent-holder, non-exclusivity, and disallowance of sub-licensing.

Brazil has adopted some unique and highly desirable additional provisions, all of which, in our judgment, are TRIPS compliant.  First, it allows a government use license during the period of patent examination and before the patent is granted, conditioned on the legal deposit of remuneration pending grant of the patent.  Article 31 does not directly discuss pre-grant government use licenses, nor does it prevent them.  With this provision, Brazil has confirmed that government use licenses may, as a measure of extra security, be issued even before patent status is determined, so that the uncertainty during the pendency of a patent examination is not a barrier to Brazil’s sovereign right to implement a government use license.  Second, Brazil confirms that the public-interest grounds of the license – public, non-commercial use alone suffices – are a matter for the elected branches to determine, and are not subject to substantive review by the judiciary.   The law also does not allow courts to enjoin or interrupt the government use during the course of review of the amount of remuneration, a measure that is also TRIPS compliant under TRIPS Article 42.

Conclusion:

Although this is a necessarily brief examination of Brazil’s proposed patent law reform, this technical review does confirm the TRIPS compliance of the measures discussed herein.  Granting fewer and higher-quality patents, limiting patent terms, avoiding data monopolies, and guaranteeing the right of government use will go a long way in ensuring that Brazil is able to meets its human rights obligations while gaining technological expertise, building its industrial base, increasing skilled employment, and becoming more innovative and self-reliant with respect to knowledge goods.

 


FOOTNOTES FOR LETTER AND TECHNICAL REVIEW:

[1] This comprehensive Report, which has previously been made available on a limited basis in draft form and will be released in final form on 10 July 2013, is nearly 300 pages long and documents a long process of consultation on patent reform in Brazil and some of the challenges Brazil faces, particularly in terms of access to medicines, because of TRIPS-plus patent rules it prematurely adopted in 1996 in response to trade pressure from the United States.  The Report also documents policy incoherence and inconsistencies between different levels and branches of government as well as persistent problems in the administration of the Brazil Patent Office, which is experiencing a growing backlog of unexamined patent applications.  Although the Report touches on other important policy issues that will be further explored in Brazil, such as increasing its research and development expenditures, exploring alternative innovation-incentive systems, reforming its governance architecture for intellectual property policy, and increasing the capacity and performance of its Patent Office, we focus our attention solely on proposed revisions to Brazil’s Patent Law.

[2] We are relying on an informal English translation of the proposed bill annexed to the Report.  Accordingly, the precise language in official English versions may be slightly different.

[3] See, for example, http://www.peertopatent.org/ and the new provisions for post-grant patent opposition created by Congress in the US, as well as the U.S. Supreme Court’s recent restrictions on patentable subject matter, in Bilski v. Kappos (2010), Mayo v. Prometheus (2012), and Association for Molecular Pathology v. Myriad Genetics (2013).  Concern about anticompetitive behavior surrounding pharmaceutical patents is demonstrated by FTC v. Actavis (2013).  It is perhaps worth noting, in addition, that many secondary patents of the type that would be covered by proposed Article 3 in the Brazilian reforms appear to be invalidated in litigation in the U.S., in a process that is much more expensive, but may achieve similar results.  See C. Scott Hemphill & Bhaven N. Sampat, ‘Evergreening, Patent Challenges, and Effective Market Life in Pharmaceuticals,’ Journal of Health Economics 31, (2012) 327-339.

[4] “The term shall not be less than 10 (ten) years for patents and 7 (seven) years for a utility model, beginning on the date of granting, unless the INPI has been prevented from examining the merits of the application by a proven pending judicial dispute or for reasons of force majeure.”

[5] The TRIPS Agreement Article 62.2 does require some reasonable degree of timeliness in rendering patent decision:

Where the acquisition of an intellectual property right is subject to the right being granted or registered, Members shall ensure that the procedures for grant or registration, subject to compliance with the substantive conditions for acquisition of the right, permit the granting or registration of the right within a reasonable period of time so as to avoid unwarranted curtailment of the period of protection.

[6]  It should also be noted that delays can result from applicant behavior, such as aggressive seeking of patents of poor quality, which require lengthy review and narrowing in the application process.

[7] Whether Brazil intends that this provision incorporates the Indian requirement that there be enhanced therapeutic efficacy in the treatment or prevention of human disease is unclear, but the Novartis v. Government of India decision by the Supreme Court of India has been referenced favorably in the report.

[8] The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

[9] 1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement. 2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

[11] See, e.g., KSR Intern. Co. v. Teleflex Inc., 127 S.Ct. 1727, 1741-43 (2007) (increasing the obviousness standard in the U.S.); see also Pfizer v. Apotex, Inc., 480 F.3d 1348, 1362 (U.S. Fed. Cir. 2007) (invalidating a new form salt patent as obvious, and suggesting that most salt selection patent are obvious under U.S. law).

[12] WIPO, Standing Committee on the Law of Patents, Opposition Systems, SCP/17/19 (Oct. 31, 2011), available at http://www.wipo.int/edocs/mdocs/scp/en/scp_17/scp_17_9.pdf.

[13] See, e.g., World Health Organization, Briefing note: access to medicines. Data exclusivity and other TRIPs-plus measures (2006), available at http://209.61.208.233/LinkFiles/IPT_Briefing_note2_Data_exclusivity.pdf; Carlos Correa. Protection of Data Submitted for the Registration of Pharmaceuticals: Implementing the Standards of the Trips Agreement. South Centre, University of Buenos Aires and Department of Essential Drugs and Medicines Policy of the World Health Organization (2002), available at http://www.who.int/medicines/areas/policy/protection_of_data.pdf; Brook K. Baker, Ending drug registration apartheid – taming data exclusivity and patent/registration linkage, 34 Am. J. Law & Med. 303-344 (2008)

[14] Article 5 of Bill No. H.R. 5402/2013 also would amend Law no. 9782 of 26 January 1999 with respect to the duties of ANVIA:

The Sanitary Agency shall implement and enforce the provisions set forth under sections II through VII of Art. 2 of this Law, and the Agency shall:

XXVIII – participate in the process of examination of patent applications for pharmaceutical products and processes, including the analysis of the patentability requirements and the other criterion set forth under the specific legislation.

[15] To bolster this interpretation, the legislation might consider amendments to more clearly apply this authorization, such as stating in section 1(I) that ANVISA may reject an application  — “the prevention of the commercial exploitation of which in Brazil is necessary to protect human health.”

[16] Canada – Pharmaceutical Products, WTO Dispute DS114 (2000), available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds114_e.htm.

[17] It should be noted that Doha Agreement on TRIPS and Public Health itself singles out pharmaceuticals for special treatment by TRIPS members, condoning policies needed to promote “access to medicine for all.” U.S. policy as well frequently singles out pharmaceuticals for special and favorable patent treatment, including through special patent extensions and particular rules of data protection applicable only to that field of technology.

[18] James Love, Remuneration Guidelines for Involuntary Use of Medical Technologies, WHO and UNDP, Health Economics and Drugs, TMC Series No. 18 (2005), available at http://www.who.int/hiv/amds/WHOTCM2005.1_OMS.pdf.

 


 Annex

Bill no. H.R. 5402/2013

(Dr. Newton Lima, and Dr. Rosinha)

Amends the Patent Act no. 9279/96, of 14 May 1996, to revoke the sole paragraph of Art. 40, modify Articles 10, 13, 14, 31, 195 and 229-C, and add Articles 31-A and 43-A; and amends Article 7 of Law no. 9782, of 26 January 1999.

The National Congress enacts:

Art. 1 This law revokes the sole paragraph of Art. 40; amends Articles 10, 13, 14, 31, 195 and 229-C; and adds Articles 31-A and 43-A, all in Law no. 9279/96, of 14 May 1996; and amends Art. 7 of Law no. 9782, of 26 January 1999.

Art. 2 The sole paragraph of Art. 40 of Law no. 9279 of 14 May 1996 is revoked.

[Sole Paragraph. The term shall not be less than 10 (ten) years for patents and 7 (seven) years for a utility model, beginning on the date of granting, unless the INPI has been prevented from examining the merits of the application by a proven pending judicial dispute or for reasons of force majeure.]

Art. 3 Articles 10, 13, 14, 31, 195 and 229-C of Law no. 9279 of 14 May 1996 shall be amended as follows:

“Art. 10. [The following are not considered to be inventions or utility models:]

……………………………………………………………………………………………………………………………………….

X – any new property or new use of a known substance, or the mere use of a known process, unless this known process results in a new product;

XI – new forms of known substances that do not result in an improvement in the known efficacy of the substance.

Sole paragraph. For the purposes of this Article, salts, esters, ethers, polymorphs, metabolites, pure form, size of particles, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance shall be considered the same substance, unless they significantly differ in terms of properties regarding efficacy.” (new text)

“Art. 13. The invention carries inventive activity when, for a person skilled in the art, it does not derive in an obvious or evident manner from the state of the art, and provided it represents a significant technical advance in regards to the state of the art.” (new text)

“Art. 14. The utility model carries inventive activity when, for a person skilled in the art, it does not derive in a common or vulgar fashion from the state of the art, and provided it represents a technical advance in regards to the state of the art.” (new text)

“Art.31. From the publication of the patent application until the end of the exam, any interested party may file an opposition.

§ 1 The applicant shall be notified of the opposition through publication in the official gazette, and may respond within 60 days from the publication of the opposition.

§2 In cases where an opposition to a patent application is filed, the Brazilian Patent Office may commission technical opinions from the Public Administration, from organizations recognized by the Government as consultancy bodies, and from university professors and students.

§ 3 After the opposition is filed, the examiner may, upon justified demand, application any additional clarification he/she deem necessary, as well as the presentation of supplementary documents.

§ 4 The examiner shall mandatorily respond to each filed opposition, indicating the reason by which he/she accepts or rejects the arguments presented.

…………………………….” (new text)

“Art. 195. [A crime of unfair competition is perpetrated by anyone who:]

……………………………………………………………………………………………………………………………………….

[XIV. divulges, exploits, or utilizes, without authorization, results of tests or other undisclosed data whose preparation involves considerable effort and that were submitted to government agencies as a condition for obtaining approval to commercialize products.]

§ 3 The provision set forth under item XIV does not apply to the use, by government bodies, of test results or other undisclosed data, for market approval of products equivalent to the product for which they were initially presented.” (new text)

“Art.229-C. The granting of patents for pharmaceutical products and processes shall depend on the prior consent from the National Sanitary Agency – ANVISA, that shall examine the object subject to the patent application in light of public health.

§ 1 A patent application shall be considered as contrary to public health, according to further regulation, where:

I-the product or pharmaceutical process in the patent application present a health risk, or

II – the patent application for pharmaceutical product or pharmaceutical process is of interest to an access to medicines policy or to a pharmaceutical care program under the National Health System – SUS, and provided that it does not meet the patentability requirements and the other criteria established by this law.

§ 2 Following the prior consent examination and after the decision is published, ANVISA shall return the application to the Patent Office, that shall examine the approved application, and definitely archive the application that has not been approved.” (new text)

Art. 4. Articles 31-A and 43-A shall be added to Law no. 9279 of 14 May 1996:

Art. 31-A. The Brazilian Patent Office shall offer an intuitive electronic channel, of easy access, connected to the Internet, for any person to present, free of charge, evidence or proof of previous existence, in Brazil or abroad, of the related invention or state of the art.

Sole paragraph. It shall be allowed the presentation of evidence or proof of prior existence, in Brazil or abroad, of the related invention or state of the art, even after a patent is granted, and especially during the opposition and the post-grant opposition procedures.

Art. 43-A. The Government, by Ordinance from the Minister of State concerned, may use the subject matter of a patent or of a patent application, for non-commercial purposes, without consent or authorization from the patent holder or patent applicant, directly or upon contract or authorization to third parties, for public interest purposes, including national defense and social interest.

§ 1 Should the invention be a process, the public non-commercial use of the patent or patent application shall include the use in relation to any product that may be obtained by the process that is protected by the patent or the patent application;

§ 2 The Government shall notify the patent holder or patent applicant upon public non-commercial use;

§ 3 Public non-commercial uses shall meet the following conditions:

I – not hinder the full exercise of the other rights of the patent holder or patent applicant;

II – be non-exclusive, and not admit sub-licensing;

III – be undertaken exclusively to serve the goals of the Ordinance that authorized it, resting assured that any other use that, without the character of public non-commercial use, would constitute an infringement of Art. 42 of this Act, is hereby prohibited;

§ 4 The remuneration for public non-commercial use shall be set by the Government, taking into account the circumstances of each use, shall take into account the percentage that would customarily incur upon a voluntary license between independent parties, applied over the cost for the Government resulting from the use of the subject matter of a patent or patent application, and weighed according to the collaboration supplied by the patent holder in the transfer of technology;

§ 5 In the case of patent applications, the remuneration shall be legally deposited until the granting of the patent;

§ 6 The Judiciary shall not, in regards of public non-commercial use, decide whether public interest purposes apply;

§ 7 Public non-commercial uses shall not be lifted, limited or interrupted by legal appeal over the appointed remuneration.

Art. 5. Article 7 of Law no. 9782 of 26 January 1999 shall be amended as follows:

“Art. 7.    [The Sanitary Agency shall implement and enforce the provisions set forth under sections II through VII of Art. 2 of this Law, and the Agency shall:]

……………………………………………………………………………………………………………………………………….

XXVIII – participate in the process of examination of patent applications for pharmaceutical products and processes, including the analysis of the patentability requirements and the other criterion set forth under the specific legislation.

Art. 6. This law shall come into force within one hundred and twenty (120) days from the date of its publication.

FacebookTwitterRedditStumbleUponWordPressTumblrBlogger PostEmailPrintFriendly

  One Response to “Open Letter from Global Academics in Support of Proposal to Amend Brazil’s Patent Law to Take Advantage of TRIPS-Compliant Flexibilities”

  1. I think it is a priority to achieve reform of drug access to the majority of the population.

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

(required)

(required)


*