A step into the unknown? Challenges for pharmaceutical companies
The Brazilian patent system is one of the oldest: it was created more than 200 years ago, in 1809, by royal decree. Since then, the country has experienced many changes in this area, with several recent developments to the legal framework.
Our current federal constitution was enacted in 1988, establishing that the law will provide temporary protection for inventions. Brazil is also a member of most of the international treaties governing patent protection. The current intellectual property statute was enacted in 1996, just after Brazil became a member of the World Trade Organization (WTO) in 1995, to adapt the local rules to the minimum standards established by the WTO’s Trade-Related Aspects of IP Rights (TRIPS) Agreement.
For that reason, the Brazilian patent statute is reasonably similar to the ones in force in the US, Europe and other WTO member countries, although its implementation by the Brazilian executive and judiciary can be quite different.
Since Brazil joined the WTO, the Brazilian patent and trademark office (INPI) must issue patents in all fields of technology, including the pharmaceutical area, which was not allowed according to the previous legal framework. In theory, the INPI issues a patent as far as the application discloses a technical solution to a technical problem, complies with the technical requirements—such as novelty, inventive step and industrial applicability—and is not prohibited by the statute.
According to the statute, a few matters are not considered as inventions, and cannot be subject to patent protection. Relevant examples for pharmaceutical companies are the bans on patents covering methods of treatment, diagnostic methods, natural living beings and biological material found in nature or isolated therefrom.
Some other matters are considered ‘non-patentable inventions’, such as anything contrary to public safety, order or health, and living beings, except for transgenic microorganisms that are not mere discoveries.
Brazil has a first-to-file system, with a priority scheme that assimilates the Paris Convention and a 12-month grace period for disclosures made by the inventor or third parties (including INPI) based on information received directly or indirectly from the inventor or as a result of his acts.
If the patent is granted, it gives the patent owner the right to prevent third parties from manufacturing, using, offering for sale, selling or importing the invention without consent, for a period of 20 years as from the filing date—or 10 years from issuance, whichever is longer. The bounds of the protection are defined by the claims, which are construed based on the specification and drawings.
The statute provides for a few exceptions to patent rights, such as the experimental use exception and the Bolar exception, the latter related to acts performed for the sole purpose of producing test results and data in order to obtain marketing registration for the patented product after the patent expires, which is especially relevant in case of pharmaceutical technologies.
Although extremely rare, a patent might be subject to compulsory licensing in some very specific circumstances. For political reasons, pharmaceutical patents are more vulnerable to such extreme measures. In fact, the Brazilian government recently issued a compulsory licence over one of the patents covering Efavirenz, a drug for the treatment of a human immunodeficiency virus.
In court
In Brazil, patent infringement lawsuits are filed by the patent owner before state trial courts. Preliminary ex parte injunctions are available, allowing the trial court judge to immediately order the defendant to stop using or selling the patented invention, to conduct searches and seizures, or to order a recall of the infringing products, for instance.
Depending on the amount of evidence the plaintiff presents with the complaint, to show the plaintiff will most likely prevail on the merits and that it may suffer irreparable harm if the injunction request is not granted, it is possible to obtain a preliminary ex parte injunction order less than 24 hours after filing the complaint. Declaratory noninfringement lawsuits are also available and must be filed before state trial courts as well.
On the other hand, lawsuits challenging an act performed by INPI, such as decisions issuing or rejecting a patent application, are typically filed before a federal district court in the city of Rio de Janeiro. Because the city has specialised district and appellate courts to deal with IP matters, each case is randomly assigned to one of its four specialised IP district courts, and each appeal is assigned to one of its two specialised appellate divisions.
We have learned from experience that most of the few district court and appellate judges in charge of those cases in Rio de Janeiro are, in general, reluctant to overrule a decision issued by INPI, and are frequently considered ‘anti-patent’ judges. In light of that, our law firm developed an innovative—and successful—forum-shopping strategy to be able to file those lawsuits in Brasilia, our federal capital, where one of its more than 50 non-biased federal district court judges will deal with the case.
Another big challenge for the pharmaceutical research-based industry is that pharmaceutical patents cannot be issued without the Brazilian food and drug administration’s (ANVISA’s) prior consent. Since there is no legal provision expressly regulating the grounds for ANVISA to grant or reject its prior consent with regard to an application, ANVISA was insisting on re-examining the patentability requirements already examined by INPI, denying prior approval in case it disagrees with the technical opinions issued by INPI.
Two years ago, after our law firm filed many lawsuits on behalf of clients to challenge this illegal understanding, the Attorney General’s office issued an opinion clarifying that the patentability analysis should be performed only by INPI, and that ANVISA should grant or deny prior approval exclusively based on issues related to public health.
Until now, INPI would examine a pharmaceutical application and, only if the examination established that the patentability requirements were met, the application would be forwarded to ANVISA. To avoid further controversy, the government decided to change the procedure with regard to pharmaceutical applications. Now, the application is filed with INPI, which immediately forwards it to ANVISA if the application is related to a pharmaceutical product or process.
Subsequently, ANVISA will examine the application in light of public health issues, granting or rejecting its prior approval. The application will then be returned to INPI, which will shelve the application if the prior approval was denied by ANVISA, or perform an examination of the patentability requirements, if this was not the case, eventually issuing or denying the patent.
Because it is so hard to obtain and enforce patent protection for pharmaceutical inventions in Brazil, due to INPI’s huge backlog (sometimes taking more than 10 years to examine a pharmaceutical application), the peculiar participation of ANVISA, and the governmental and judicial political alignment, some alternative strategies were developed.
In recent years, for example, our law firm pioneered filing lawsuits to enforce our clients’ data package exclusivity rights, provided for by both the TRIPS Agreement and local provisions regarding unfair competition.
According to Section 195, XIV of the IP statute, “unfair competition is committed by any person who discloses, exploits or uses, without authorisation, the results of tests or other undisclosed data that have been elaborated with considerable effort and submitted to government entities as a condition for the marketing approval of products”.
These rights are especially relevant to research-based pharmaceutical companies, which must submit a huge amount of information to ANVISA to demonstrate their innovative products are safe and effective. The statute does not stipulate for how long the data package submitted before ANVISA would remain protected.
Case law is still unsettled on how to construe the statute—that is, whether it is sufficient to prevent generic companies relying on the data submitted by innovator companies, or if the statute only prevents ANVISA from disclosing the data to competitors.
Case law is also unsettled with regard to the duration of such rights. In some situations, however, enforcing data package exclusivity rights may be the only way to avoid the free riding performed by generic industries seeking to rely on the innovator company’s data package to obtain marketing approval for their generic versions, instead of performing their own clinical trials.
In addition to that, some of the situations can be solved using the Food & Drug Law, rather than the IP statute. Substandard drugs are a serious problem in the country, and judges are generally more sympathetic to the idea of enforcing the Food & Drug Law to protect consumers instead of looking after IP rights owned by international pharmaceutical companies.
Despite the many challenges faced by national and foreign companies with regard to the everevolving Brazilian IP system, the country has witnessed a few positive advances in the recent years, and we hope the executive, legislative and judiciary powers will gradually understand the importance of having vigorous and practical structures that stimulate technological and economic development, particularly in the essential pharmaceutical field.
