Brazil: An Update of the Most Relevant Events for Pharmaceutical Companies in 2014: Part 1 of a 5-Part Series

The second half of 2014 has proven to be very busy for companies having business and other interests in Brazil that rely on intellectual property (IP) protection. This is part 1 of a 5-part series  providing updates on: 1) mailbox patent litigation; 2) the constitutional challenge filed by ABIFINA against the 10-year patent term guarantee; 3) prior approval challenges and ANVISA; 4) a new Productive Development Partnership (PDP) rulemaking draft proposal; and 5) an opinion issued by the Brazilian Antitrust authority (CADE) regarding sham litigation.

Mailbox Patent Litigation

On September 2013, the Brazilian Patent and Trademark Office (INPI) filed more than 35 lawsuits seeking a declaration of invalidity of 222 mailbox patents (namely, patent applications filed between January 1, 1995 and May 14, 1997, under the terms of Article 70.8 of the TRIPS Agreement). According to INPI, these patents should have received a term of 20 years from their filing date. However, these patents mistakenly received a term of 10 years from the date of grant.

Since June 2014, three mailbox cases have been decided by the Federal Judges (Judges) in Brazil. Two Judges ruled in favor of the patent holders and one against. Not surprisingly, the Judges each conveyed different points of view regarding the inefficiency of the INPI to examine patent applications in a reasonable time and to deal with its current backlog.

The Judges ruling in favor of the patent holders stated INPI violated the IP Statute when it failed to comply with the rule requiring examination of mailbox applications before 2004 (as required by the IP Statute). The Judges also stated that the lawsuits filed by INPI to invalidate these patents are a violation of the constitutional principle of “legitimate expectation,” which requires a certain amount of predictability and trust in the acts of the Public Administration.

However, right after the first favorable decisions were issued, Judge Maria Nunes rendered a decision against certain patent holders and granted an injunction to change the term of the patents at issue to 20 years from filing. Interestingly, Judge Nunes is handling a majority of the pending mailbox cases (she has 17 in total).

According to Judge Nunes, the interpretation of the law defended by the mailbox patent holders would be significantly more prejudicial to society as a whole and, as a result, society would have to accept the burden of an amplified patent term and would have to pay more for the drugs covered by such patents. Additionally, Judge Nunes also stated that constitutional principles that defend the social (and public) interest would have clear precedence over principles that protect private interests, such as legitimate expectation. Therefore, in Judge Nunes’ view, the rejection of the INPI’s claim would prioritize the interests of large companies and would unduly harm free competition, national development and the access to health.

The appeals filed by the INPI and by the patent holders will be heard by the Federal Court of Appeals in 2015. In the meantime, it will be interesting to see how Judge Nunes will rule regarding the counterclaims filed by some patent holders seeking damages from the INPI, since she has already ruled that patent holders who can prove that they were damaged as a result of INPI’s conduct would be entitled to compensation.

A pictorial summary of the mailbox patents challenged by INPI as prepared by the Licks Attorneys can be viewed by clicking here:  MAILBOX.

Please continue to watch the BRIC Wall Blog for further updates on the mailbox patent litigation in Brazil.

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys.

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