Brazilian Supreme Court – sole paragraph of Article 40 of the Brazilian Patent Law in jeopardy

16 April 2021

The Brazilian Supreme Court deciding over the constitutionality challenge filed against the sole paragraph 40 of the Brazilian Patent Law will issue its ruling in the next days.

16 April 2021

The Brazilian Supreme Court deciding over the constitutionality challenge filed against the sole paragraph 40 of the Brazilian Patent Law will issue its ruling in the next days.

This whole case questions the minimum period currently established for grant by the article in question, causing insecurity in the world of patents in Brazil.

Article 40 establishes that the term of patent protection for inventions in Brazil is 20 years from the filing date, in accordance with international agreements such as ADPIC. However, sole paragraph 40 of said article guarantees that a patent may be valid for at least 10 years. This provision allows the extension of the validity term of Brazilian patents, as a compensation for INPI´s excessive and worldwide known delays. In other words, even when INPI may take a long time to analyse and grant a patent -let us say, 20 years counted from the first deposit-, such patent will still be valid for 10 years counted from INPI´s granting date.

Although this paragraph is conceived as an exception, almost half of the patents currently in force in Brazil benefit from this legal provision. In said cases, the original 20-year term can reach 30+ years from initial filing.
The Federal Prosecutor’s Office argues that the provision defies several articles of the Constitution, among them, the principle of patent protection temporariness, provided for in item XXIX of article 5.

On the other hand, experts in Brazilian IP claim that this minimum term of validity prevents patents from being granted either already expired or very close to do so, which would make the return on investments unfeasible.

It is undeniable that all technological sectors currently in force will be affected if the sole paragraph of Article 40 of the Brazilian Patent Law is deemed unconstitutional, leading to be extinguished or have very short terms. The two areas which are known to suffer the greatest impact are telecommunications/electronics and pharmaceuticals.

Specifically in the pharma sector, there is an additional complicating factor, as applications related to pharmaceutical processes and products must be submitted to ANVISA (the Brazilian Regulatory Agency) to obtain its prior consent. ANVISA does not only check safety of drugs, such as EMA or FDA, but performs an actual examination, even considering patentability issues. Supplementary Protection Certificates and Patent Term Extensions do not exist in Brazil either, making the situation even harder for the pharma industry.

Last April 7th, Justice Toffoli, the reporting judge of this case, partially granted the preliminary injunction requested by the Federal Prosecutor’s Office to suspend the effect of the 10-year safety net foreseen in sole paragraph 40, effective immediately (from April 8) until the Supreme Court’s final ruling. This has affected dozens of applications already.

On April 8, Justice Toffoli issued a supplementary decision to clarify the scope of the preliminary injunction granted the day before, emphasizing that the application’s scope was restricted to patents covering pharmaceutical products and processes, medical equipment and materials for use in healthcare. Justice Toffoli refused to apply retroactive effects to this injunction, limiting its effects to newly granted patents. However, the Supreme Court in plenary could indeed decide to apply retroactive effects to whatever final ruling it may issue.

Such a dramatic change in the Brazilian patent scenario could ruin all efforts and improvements Brazilian authorities have been made in the last years, including the reasonably successful Patent Prosecution Highway implementation and the drastic reductions achieved against its backlog.

H&A will continue to report further news regarding this important case.

Rogerio Rovetta

Rogerio Rovetta

Patent Engineer. Brazilian office

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