Understanding Bolar and Bolar-Like Exceptions in the U.S. and Abroad – Part 3– Mexico

This is part 3 in our multiple part series examining Bolar and Bolar-like exemptions in U.S. as well as in a number of foreign jurisdictions.   Part 1, the Bolar Exemption in the U.S., can be found here.  In Part 2, the Bolar Exemption in Canada can be found here.


In Mexico, no medicinal product for human use can be placed on the market unless it has been approved by the Federal Commission for Protection against Sanitary Risks (COFEPRIS).  Like the U.S., Mexico has a linkage system.  However, in Mexico, not only do the linkage regulations prevent medicinal product approvals in violation of patent rights but the regulations also establish a Bolar-like exemption for generic and biologic follow-on products (biocomparables). Accordingly, under certain conditions, the Bolar-like exemption allows pilot production and tests to be performed.  However, as will discussed in more detail below, the recent importation of considerably large amounts of active pharmaceutical ingredients (APIs) covered by Mexican patents for the purpose of conducting clinical trials has tested not only the scope of the exemption but also COFEPRIS and the Mexican Patent Office (which is known as the Mexican Institute of Industrial Property (IMPI)).

Exclusivity rights and the Bolar exemption

The Mexican Health Law and its Regulations set forth an abridged procedure for generics, as well as a recently enacted hybrid-procedure for biologic follow-on products (biocomparables). The Regulations establish a Bolar-like exemption for these products.  In Mexico, applications for approval of a generic or biocomparable product can be submitted at a certain time point prior to expiration of any innovator patents covering the product.  Specifically, this time period is three years prior to expiration for generic products and eight years prior for biologic follow-on products.  Under certain conditions, the exemption allows pilot production and tests to be performed.

Nevertheless, in contrast to European Law, Mexican domestic law is silent about providing a research and development exemption (RDE) for patent infringement.  As will be discussed further below, although COFEPRIS considers formulation patents when deciding whether to grant an application for marketing authorization, it recently approved the importation of a large (4 kg) quantity of API by a non-authorized party.

Regulatory Data Exclusivity

Prior to 2008, Mexico’s domestic law was silent regarding Data Package Exclusivity (DPE) rights. However, in January 2008, the Mexican Health Regulations were amended with respect to generic medications.  Specifically, the amendments eliminated the requirement that a generic applicant prove the safety and efficacy of its products.  However, this provision was replaced with the requirement that a generic applicant prove the interchangeability of its products with those of the innovator in order for a marketing authorization (MA) to be granted.

Additionally in 2008, the Regulations were further amended to implement an abbreviated approval procedure for generic drugs based solely on bioequivalence and bioavailability studies.  However, these Regulations did not provide any provisions regarding non-reliance by a generic applicant on the MA holder’s data during the data exclusivity period as established in the international treaties such as NAFTA and TRIPS.

In Mexico, no specific legislation exists regarding regulatory exclusivity.  However, there are some provisions applicable to this issue in  the intellectual property (IP) law (IP Law), the Health Law Regulations, New Molecules Regulations and International Treaties enacted and/or ratified Mexico (e.g., such as NAFTA and TRIPS).  In fact, in 2012, COFEPRIS published an internal memorandum on its website providing guidelines on regulatory data exclusivity (RDE)  According to these guidelines (as well as a minimum term set by NAFTA), a MA holder has a five year exclusivity period during which its information cannot benefit or be used to support a third party application for registration of a generic drug.  It is important to note that the guidelines do not preclude generics from conducting their own clinical trials to obtain MA.

Although these guidelines show COFEPRIS’ willingness to protect RDE according to NAFTA and TRIPS, several concerns exist.  Some of these examples include: (i) the uncertainty regarding the legal status of an internal memorandum published on a website rather than in the Official Gazette; and (ii) the wording of the guidelines do not clearly address either RDE for biological products, registration of new formulations and indications, nor proceedings and measures to enforce and observe RDE.

Linkage System

The linkage system in Mexico is a system in place between COFEPRIS and IMPI.  The purpose of the linkage system is to prevent the granting of MAs to non-authorized third parties for products that would fall within the scope of the patents listed in the Linkage Gazette (Gazette).  The Gazette is a document published periodically (e.g., about every six months) by IMPI listing the patents covering medicinal products.

For many years, IMPI listed only patents covering small molecules.  However, in 2012, IMPI began listing patents covering pharmaceutical formulations.  The inclusion of formulation patents in the Gazette eliminated the need for patentees to spend time and money in legal challenges to include these patents in the Gazette while also expanding the application of the linkage system to more than just compound patents prevent.

Interestingly, the excitement of the inclusion of formulation patents in the Gazette was short lived because practically speaking, COFEPRIS only recognizes compound patents.  As a result, COFEPRIS has paid very little attention to formulation patents listed in the Gazette during the approval of follow-own products  Unfortunately, this has undermined the preventive aim of the system and as a result, presented issues for patentees monitoring their competitors for potential infringing activities and increased the number of linkage litigation cases.

The Importation of APIs

COFEPRIS is in charge of granting approval of imports of APIs, which is mandatory before Mexican Customs. However, neither the wording of the Bolar-like exemption nor the rules governing the importation of APIs clearly address the amount of API that can be imported by an applicant of a follow-ons product for the purposes of conducting the tests needed to obtain marketing approval.  IMPI nor COFEPRIS have published their opinion of whether the exemption allows for the importation of only small quantities of APIs for purposes of conducting the tests and trials necessary obtain a MA.  This has led to circumstances where unauthorized parties received approval from COFEPRIS to import large amounts (e.g., 4 kilograms) of patented APIs which were far beyond the small amounts necessary to conduct pilot production and testing.

In most instances, the approvals by COFEPRIS for importation of large amounts of patented APIs are for those APIs where the patents are close to expiry.  However, during the last four years, this trend has increased because parties manufacturing medicinal products in Mexico no longer have to have a facility physically located within Mexico.  The removal of this requirement has significantly changed the pharmaceutical business in Mexico.  Now, many small and medium foreign companies start their business in Mexico by:  (1) entering into partnerships with pharmaceutical companies already established in Mexico; and (2) introducing their products via brokers and distributors.

On July 1, 2013, COFEPRIS published amendments to their guidelines in the Official Gazette, regarding the importation of APIs.  Specifically, the amendments stated that with respect the importation of Tadalafil, Sildenafil, Raloxifeno and Clembuterol, applicants had to provide the details of the clients being supplied these APIs as well as justify the total amount of API being imported based on the number of clients.

Patent Enforcement

The IP Law entitles a patentee to prevent the importation and manufacture of patented subject matter by non-authorized parties.  Although the IP Law provides an experimental exemption, this exemption applies only to scientific research that has absolutely no commercial purposes whatsoever.  Therefore, the experimental exemption would not apply for a generic company seeking to apply for a MA.

The IP Law also provides for interim injunctions for alleged patent infringement.  Additionally, at the border, a database managed by Mexican Customs in coordination with IMPI has been created.  This database is populated with the registered trademarks of owners that are interested in the surveillance of their IP rights throughout the forty-nine customs checkpoints that are distributed in boundaries, seaports, bus and train stations and airports.

With respect to medicines, pharmaceutical substances, chemicals and APIs, the activities and efforts of the Customs Office are primarily focused and limited to detecting prohibited drugs and narcotics.  After detecting any such prohibited drugs and narcotics, the next step involves enforcing the IP protection with the borders for patents, particularly those that protection pharmaceutical products.  Since June 2012, Mexican Customs has collaborated to detect and seize APIs grounded in border measures granted by IMPI to IP right holders.

Current Situation

IMPI has applied the Bolar-like exception with some flaws in its interpretation and scope (Note:  In Mexico, patent enforcement occurs before IMPI at the first stage).  For example, IMPI adopted the criteria that if the importation of patented products was conducted by brokers or third parties different from the manufacturer of the drugs in Mexico, the Bolar-like exemption does not apply (as a defense) and thus, ther will be a finding of patent infringement.  In contrast, if the importation is conducted by the manufacturer, the Bolar-like exemption applies and there will be no finding of patent infringement.  In both situations, the amount of the imported product is disregarded by IMPI.  As a result, this gives more weight to the activity of the importer rather than the final destination of the imported product.  Currently, these cases are under debate at the Mexican Supreme Court (assuming that the Mexican Supreme Court affirms their discretion to review the case).

In conclusion, there have not been any changes in the regulations involving the Bolar-like exemption in Mexico.  The few cases in which the Bolar-like exemption has been litigated have some flaws in terms of the understanding of the facts and applicable procedural rules (for example, IMPI determined that the burden was on the plaintiff in a patent infringement action to prove that the amount of patented product exceeded amount needed to obtain regulatory approval.  Such a determination is clearly contrary to the procedural rule that the Bolar-like exception is a defense, and as such, must be proven by the defendant and not the plaintiff.  It will be interesting to see how the Mexican Supreme Court decides this issue.

Conclusions and Recommendations

There are several areas that can be improved in the Mexican legal framework to grant legal certainty to both innovators and applicants of follow-on products.  These include, for example:

  • That COFEPRIS use and observe the patent Linkage Gazette when it is deciding whether or not to approve the importation of APIs. .
  • That COFEPRIS establish standards for small amounts of APIs need to adequately comply with the regulatory tests needed for a MA for follow-on products, and deny imports for quantities outside these amounts.
  • That COFEPRIS require importers to declare the destination of the eventual imported products.
  • That IMPI clearly establish as appropriate, the differences between the experimental use and the Bolar-like exception.
  • That IMPI be careful when, on a case-by-case basis, it reviews whether there is an adequate amount of API being imported for tests necessary to support a generic MA application. In some instances, even a small amount of an API may represent the manufacturing of thousands of infringing products (which may end in the grey and black market.).
  • That Customs take advantage of the information contained in the Gazette to detect and stop substances that could enter the country in violation of any patents.
  • Renegotiations of NAFTA will likely impact the IP and regulatory legal frame in Mexico. It is expected that the new NAFTA will raise the IP protection available in Mexico and will cause Mexico to review it entire IP system thus impacting patentability subject matter, linkage regulation, the Bolar-like exception and data package exclusivity for chemicals and biologics.

Please continue to watch the BRIC Wall Blog for updates on the Bolar-like exemption in Mexico.

This post was written by Lisa Mueller and Alejandro Luna of Olivares.

3 thoughts on “Understanding Bolar and Bolar-Like Exceptions in the U.S. and Abroad – Part 3– Mexico

  1. It is very well written
    I have some doubts – can you distinguish between bolar exemption and data exclusivity, i.e. bolar exemption applies only with the usage of patent and not with clinical test.

    further it would be helpful if you list down some Mexican case laws on bolar exemption

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