Mexico Faces Renewed Pressure to Implement the 1991 Act of the UPOV Convention

In 1997, as a result of the commitments arising from the North American Free Trade Agreement (NAFTA), and after the publication of the Federal Law on Vegetal Varieties drafted in accordance with NAFTA, Mexico officially adopted the International Union for the Protection of New Varieties of Plants (UPOV) Act of 1978.

As with all UPOV member states, the criteria for the protection of plant varieties in Mexico is that the plant variety be: (1) new, (2) distinctive, and (3) uniform and stable. However, the enforcement of plant breeder rights in Mexico substantially differs from other jurisdictions. As a signatory of the UPOV Act of 1978, instead of the updated 1991 Act, the term of protection for plant varieties is shorter than in most countries, namely, 18 years for perennial species (forest and fruit trees, vines and ornamentals) and their rootstocks) and 15 years for all other varieties.

In 2012, there was an attempt to approve a new Federal Law on Vegetal Varieties to bring Mexico in line with the UPOV Act of 1991 (1991 UPOV Act).  Unfortunately, due to the fragile state of the Mexican agricultural system along with several other issues, approval of the 1991 UPOV Act did not occur.  In 2012, the fragile state of Mexico’s agricultural system was due to the lack of regulations to properly address the social and economic complexities associated with the system as well as the challenges associated with obtaining access to financial resources to further develop the system within the country.

However, the recent negotiations of the Trans-Pacific Partnership (TPP) as well as the current renegotiation of the NAFTA Agreement have resulted in new initiatives from the agroindustry in Mexico to modify the law and implement the 1991 UPOV Act.  Implementation of the 1991 UPOV Act would provide additional rights for plant breeders and improve the economic development of the agricultural industry.

Regarding the new initiatives, three particular areas are specifically being highlighted

a) Extension of the term of protection from 15 to 18 years to 20 to 25 years (depending on the species), in order to provide an equitable remuneration for the breeder and also to distribute the cost of the investment

b) Extension of the scope of protection to cover not only propagating material but also the product resulting from the harvest; an

c) Incorporation of the concept of “essentially derived variety” for the purpose of encouraging

The main objective of these proposed initiatives is to increase the competitiveness of Mexican developed varieties by improving the research programs available for Mexican native species, strengthening the enforceability measures available for protected varieties in order to promote an environment of innovation and investment as well as facilitate access and the transfer of technologies.

The most recent initiative is currently under internal review by the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), however, there is a chance these may addressed sooner by the Mexican Congress.  However, the pace of the renegotiation of NAFTA will likely set the timetable for any movement on these initiatives.

This post was written by Lisa Mueller and Abraham Díaz and Erwin Cruz of Olivares.

Can the Minimum Period of 5 years Established by NAFTA for Regulatory Data Exclusivity be Extended in Mexico for Biological Medical Products?

In Mexico, there is no specific body of legislation governing data protection exclusivity (DPE), also known as regulatory exclusivity, for chemical drugs, biological medical products and new indications. The authority responsible for enforcing the regulatory framework for drugs, biological medical products and medical devices, is the Federal Commission for Protection against Sanitary Risks (COFEPRIS), which is part of the Ministry of Health.

In 2012, in an attempt to provide guidance on DPE, COFEPRIS issued internal guidelines that provided a 5 year-term of data protection for new chemical entities only. The guidelines did not address DPE for biological medical products and new indications. Moreover, the reliability and legal value of these guidelines remains uncertain. However, up to now, these internal guidelines have not been challenged or contested by any generic companies.

Based on the interpretation of international treaties (namely, NAFTA and TRIPS), along with the Mexican legislation specifically related to approval of new molecules, innovator companies have successfully obtained regulatory data exclusivity of 5 years through litigation for new chemical entities, formulations and new indications.

Regarding the length of DPE protection, NAFTA states that it should be for at least 5 years. However, for biological medical products, some countries such as United States, Canada, the European Union, among others, grant a greater length of protection of regulatory exclusivity. 

Article 222 bis of the Mexican General Health Law defines a “biologic product” as any substance that has been manufactured by molecular biotechnology; has therapeutic, preventive or rehabilitative effects; is provided in a dosage form; and is identified as such by its pharmacological activity and physical, chemical and biological properties.

At the end of 2012, Janssen Cilag (Janssen) requested DPE for a biological medical product. Based on an interpretation of International Treaties, International Comparative Law and Mexican regulations for biological medical product approval, protection beyond the minimum period of 5 years established by NAFTA was requested. This request was ignored by COFEPRIS, which was understood as a tacit negative response. As a result of this reaction, at the beginning of 2013, the tacit negative response was challenged before the Federal Court for Tax and Administrative Affairs (FCTA). On November 2014, the FCTA confirmed the denial to grant the protection holding that the minimum period of 5 years established by NAFTA had already expired. The FCTA also concluded that foreign legislation was neither applicable nor mandatory and that the plaintiff failed to prove that considerable efforts were involved in the generation of data and information to prove the safety and efficacy of the biological medical product.

As a result of an appeal, in June 2015, a Federal Circuit Court issued a decision ordering the lower FCTA court to issue a new, accurate decision on the merits, providing certain guidelines as to how to decide the time of protection for clinical data of a biological medical product. In a complying decision issued in July 2015, the FCTA concluded that Janssen had demonstrated that the generation of data and information aimed to prove the safety and efficacy for the biological medical product involved considerable efforts. The FCTA also concluded that COFEPRIS did not accurately analyze the case. As a result, at that point of time, FCTA was unable to assess the applicable provisions in NAFTA, which established a possibility of granting a longer period of protection than the minimum period of 5 years. For this reason, FCTA held that it could not act as an administrative authority. Therefore, it ordered COFEPRIS to issue an accurate decision determining whether to expressly recognize a longer period of protection than the minimum of 5 years established by NAFTA. The FCTA’s decision is awaiting further action by COFEPRIS.

This case is very important because for the first time ever the Mexican courts are contemplating the possibility of having the minimum period of 5 years established by NAFTA as a minimum period of protection and not the only established period of protection for clinical data.

This post was written by Lisa Mueller, Mauricio Sámano and Ingrid Ortiz of Olivares.