IP challenges in Brazil

Important decisions were rendered by national courts on various subjects. In 2011 the first landmark decision recognising and enforcing data-package exclusivity protection for the pharmaceutical industry, limited to a 10-year term for new chemical entities, was made.

Additionally, the discussion about ANVISA’s (the Brazilian Food and Drug Administration) statutory authority to review patentability requirements reached a new, pro-inventor position.

Patents

Schering Corporation v Brazilian Patent and Trademark Office

Schering Corporation filed a lawsuit seeking to nullify the Brazilian Patent and Trademark Office’s (BPTO’s) rejection of Schering’s pipeline patent application.

The BPTO affirmed that a pipeline patent could not be granted when the invention had been previously claimed in a Patent Cooperation Treaty (PCT) application that nominated Brazil as one of the countries, but was not filed in Brazil.

After an unfavourable final decision from the trial court, Schering filed an appeal to the Court of Appeals for the Second Circuit. The court granted Schering’s appeal on the grounds that since the PCT application was not filed in Brazil, there was no administrative procedure relevant to this case and, therefore, article 18 of the BPTO Normative Act is not applicable to Schering’s pipeline patent application.

Komlog v BPTO

Komlog, a Brazilian company, was under a threat of being sued by one of its competitors for patent infringement. The patent in question had been subject to an administrative post-grant opposition before the BPTO, which had excluded several claims from the original patent granted, entirely re-writing the claim chart and narrowing its scope.

However, the BPTO did not issue a new claim chart, even aft er Komlog filed an administrative request. Komlog filed a writ of mandamus seeking an order to force the BPTO to publish the new claim chart, stating it was impossible to defend the patent without it. In the final decision rendered by the 31st Federal Court of Rio de Janeiro, His Honour Judge Marcio Solter construed that the BPTO violated both federal and constitutional provisions by not giving the due publicity to its acts.

He also stated that Komlog could know if it was infringing its competitor’s patent only if the BPTO issued the claim chart as amended aft er the post-grant opposition. Twenty days later, the BPTO presented the document in court.

Takeda Pharmaceutical Company Ltd v ANVISA

Takeda filed a writ of mandamus against ANVISA’s decision not to grant prior approval to its patent application. On August 26, 2010, the trial court judge rendered a favourable final decision for Takeda, ruling that ANVISA does not have statutory authority to analyse patentability requirements, and that the agency’s analysis should be restricted to public health and sanitary control aspects.

ANVISA appealed. After three months of not complying with the preliminary injunction, the agency issued a new technical opinion, claiming that every medicine could represent an intrinsic danger to public health, so the prior approval request should be denied.

On January 2011, Takeda reiterated its request for ANVISA to comply with the court’s ruling, arguing that ANVISA’s new technical opinion was illegal, since the same active ingredient as the one used by Takeda’s medicine had previously received the agency’s marketing approval.

On that basis, there were no grounds to maintain that it put public health at risk. Judge Da Silveira agreed with the arguments and called on ANVISA to grant prior approval within 72 hours, establishing a $100,000 fi ne for contempt and a daily fi ne for non-compliance. At last, ANVISA granted Takeda’s request for prior approval.

Germed v Merck and BPTO

Germed filed a patent invalidity lawsuit against Merck and the BPTO in April 2010, based on the following arguments: (i) the expiration of a US patent for lack of annuity payments would cause the extinction of the corresponding pipeline patent in Brazil, and (ii) lack of novelty and inventive step in light of two pieces of prior art.

Germed also requested a preliminary injunction to stay the effects of the patent, which was rejected by the trial court and also by the appellate court (aft er the fi ling of an interlocutory appeal).

Reporting Appellate Judge Mendes stated that any extension to, or reduction of, the term of protection of a foreign patent, if it occurred after the fi lling of the correspondent pipeline patent application in Brazil, does not affect the term of protection of such pipeline patent, especially in the present case, since the end of the foreign patent was caused by the non-payment of the maintenance fees.

Judge Mendes also affi rmed that pipeline patents are not subject to the novelty and non-obviousness technical requirements. After its request for the production of technical evidence was granted, Merck fi led a motion for clarifi cation, in which it aimed at limiting the expert evidence’s scope.

This is very important in this case since the BPTO agrees with Merck that the pieces of prior art were covered by the grace period and, for this reason, should not be considered as part of the state of the art for the patent.

The motion was rejected and Merck filed an interlocutory appeal seeking also the extension of the technical evidence to the case. The Court of Appeals granted only this request.

Merck Frost Canada Ltd v ANVISA

This case covers ANVISA’s denial of prior approval for Merck’s patent application due to the alleged lack of novelty. In addition to challenging ANVISA’s jurisdiction, Merck stated that the patent application fulfils the legal requirements of patentability.

The judge rejected Merck’s preliminary injunction request, followed by an interlocutory appeal against such decision. The appellate court issued a decision requiring ANVISA to analyse the patent application “according exclusively to its institutional attributions”.

Merck presented a motion for clarifi cation to state that ANVISA should examine just the public health impact. Th e court granted Merck’s request and ANVISA fi led a motion for clarifi cation, alleging that the relevant article of Brazilian Patent Law has not yet been applied in Brazil and the court should instruct the agency on how to examine the patent application in light of that provision.

ANVISA’s motion for clarifi cation was rejected by the court of appeals by unanimity. ANVISA will now have to reexamine the patent application in a very narrow fashion. According to the court, ANVISA is not allowed to examine patentability requirements nor the safety and effi cacy of the products covered by the application, but only the impact on public health.

Although this is not a final decision, it is a positive one. After ANVISA complies with the decision, the case should be sent to the BPTO for the immediate continuation.

Copyright

Zynga Inc v Vostu

Zynga filed a copyright infringement lawsuit against Vostu USA Inc, Vostu Ltd and Vostu Participações do Brasil Ltda. The trial court judge issued a decision granting the preliminary injunction after finding a likelihood that Vostu’s games copy Zynga’s.

The judge stated that, even if third party games are also similar to Zynga’s and Vostu’s, this fact doesn’t exclude the alleged copyright violation. Using the concept of “look and feel” of non-necessary functional elements, the judge stated that infringement could be perceived simply by looking at the images without further technical analysis.

Village 284 v Hermès

Village 284 Participações e Comércio de Vestuário Ltda filed a lawsuit against Hermès Internacional, the owner of the famous handbag model Birkin, aiming at preventing any court action by Hermès for infringement of copyright.

On May 20, 2011, recognising that “the copyright is meant to increment the culture of knowledge, ensuring the owner of a work the exclusivity of the use thereof, with guarantee of return on his creation, as a means of encouraging new creations, producing more culture and knowledge”, Judge João Omar Marçura rejected the action filed by Village 284, and confirmed the preliminary injunction granted in Hermès’s counterclaim, ordering Village to abstain from producing, importing, exporting, having in stock and/or commercialising products which would violate Hermès’ copyrights on the Birkin handbag or any other of Hermès’ products, and which would also consist in unfair competition, under penalty of paying a daily fine of R$10,000 up to a limit of R$1 million.

Village was further ordered to produce evidence of the number of infringing products made and sold within 30 days for calculation of material damages, to pay moral and material damages, and to publicise the decision in the press acknowledging the rights of Hermès. Trademarks LG Informática v LG Electrics and LG Electronics LG Informática Ltda, a small Brazilian software company, filed a complaint before the Federal Court of Rio de Janeiro against Korean company LG Electrics Investment, its local subsidiary and the BPTO, aiming to invalidate the trademark LG issued on behalf of the Korean company for computer products, as well as enjoining both companies from using the trademark in this specific segment.

Though LG Informática Ltda’s trademark was issued before the Korean company was established in Brazil, the newcomer grew bigger and the public grew confused between LG Informática Ltda, seeing it as a company affiliated to the Korean LG. The lawsuit combines elements typically present on reverse confusion claims.

The first instance decision was rendered in favour of the plaintiff for considering that confusion could arise from the use of trademark LG by the competitor. This decision was overruled by the appellate court because the companies did not act in the exact same field of activities and that the Korean trademark LG had become well-known in the country.

LG Informática Ltda filed a writ of review to the Brazilian Superior Court of Justice, and the case will soon be analysed by that court. Sindicato da Indústria de Produtos Farmacêuticos no Estado de São Paulo (Sindusfarma) v ANVISA ANVISA had determined the prohibition of marketing and importation of vaccines identified by their trademarks.

In light of that, Sindusfarma filed an administrative appeal before ANVISA, which was rejected. Given this scenario, Sindusfarma filed a lawsuit and a provisional measure seeking the invalidity of the decision. In both cases the court’s decision was favourable to Sindusfarma, allowing Sindusfarma’s associates to proceed with the importation and the marketing of the immunologic product with its trademark.

ANVISA appealed against both decisions and the appeal was partially granted. The appellate court maintained the lower court decision and, in addition, stated that certain scientific information should be present in the products.

As ANVISA only filed a motion for clarification against the decision rendered by the appellate court in the lawsuit, Sindusfarma filed a brief in the provisional measure requesting the agency to comply with the decision, publishing in the Official Gazette a notice authorising the importation and marketing of vaccines by Sindusfarma’s associates.