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What the TPP means for Mexico

01-06-2016

Héctor Chagoya

What the TPP means for Mexico

Borna_Mirahmadian / Shutterstock.com

Despite the comprehensive provisions on patents in the Trans-Pacific Partnership, Mexico already largely complies with these rules, explains Héctor Chagoya of Becerril, Coca & Becerril.

The Trans-Pacific Partnership (TPP) has been seen as the biggest multilateral trade agreement in the world. It is not surprising that it includes a comprehensive and controversial intellectual property chapter—the intent of which is to set the basis for minimum standards for securing investment in innovation—considering that the legal profile and culture of the different signatories is diverse.

The TPP took years of complex, intense and hard negotiations. Yet, at the end of the negotiations, a relevant question remains on pending patents: what is the potential impact of the negotiated provisions locally for each country?

Patentable subject matter

Article 18.37 of the TPP establishes the obligation of the parties to recognise new uses of known products, of new methods of using known products, and new processes for using such products, although such processes should not claim the use of the product as such.

Under Article 19 of the current Mexican Industrial Property Law (MIPL), such new uses, provided they are non-obvious, were already considered patentable. However, the interpretation of such an article has been questioned under the current wording of the law. Therefore the TPP is a good opportunity to reinforce and clarify the rules for such patentability and, more important, the terms for the enforcement of claims to such uses, as the law does not have express rules for infringement of method of use claims.

The possibility of excluding diagnostic, therapeutic or surgical methods is still present under the TPP (article 18.37[3]) and therefore Swiss-style or EPC 2000 claims will remain a possibility for second uses of medical products in order to avoid claiming non-eligible methods of this kind.

Grace period

Through a period of grace of the kind provided for in article 18.38 of the TPP, inventors that made non-patent publications of their inventions without filing a patent, thereby losing novelty, can still file a patent application for such an invention for which publication would not be considered prior art for determining novelty.

Canada, the US and Mexico, as parties of the North American Free Trade Agreement (NAFTA), already considered in their law a period of grace of this kind but there are TPP countries that do not have such a period of grace. Mexico already includes such a provision in article 18 of the MIPL providing one year as the period of grace. In addition, the TPP enactment provides an opportunity to clarify under TPP standards the effect of derived publications, which is currently not sufficiently regulated under Mexican law.

Causes for patent revocation

Particularly in civil law countries where formalities are very important, there are causes for nullity of administrative acts, applicable also to patents that are not related to the merits of an invention. Article 18.39 addresses this issue by clearly stating that patents should be revoked only based on the merits, that is, for causes which, if considered during examination, would have led to a denial or rejection of the patent.

Article 78 of the MIPL already limits nullity to standards similar to those required by the TPP, but there is a lack of clarity in fraction II of that article, whose intent is clearly compliant with the TPP but whose wording seems to allow broader causes of nullity. Therefore, there is room for clarification of this provision of Mexican law when implementing the TPP.

Patent rights exceptions

The TPP does not include disruptive provisions related to this matter. Articles 18.40 and 18.41 seem to keep the intent of article 31 of the TRIPS Agreement. From the Mexican perspective, however, the current articles regulating compulsory licensing are not TRIPS and NAFTA-compliant, and therefore TPP implementation will demand a thorough revision of the compulsory licensing provisions in order to ensure compliance with the TPP.

Furthermore, this provision must be watched carefully regarding the rules for pharmaceutical products, in particular in view of the flexibilities of TRIPS that were reaffirmed in the Doha Declaration.

First to file

The provisions in article 18.42 of the TPP seek harmonisation to a first-to-file patent system where the first person to file a patent has the right to obtain it, as opposed to the first-to-invent system that ruled in the US for many years. Mexico already has a first-to-file system and most provisions of the TPP relate to the transition of the US to a first-to-file system, so that is not expected to have an impact on the Mexican patent system.

"With the current international trends of patent examination cooperation, a term adjustment for undue delays is reasonable in order to give certainty to patent owners and the general public."

Opportunity to amend

There are TPP countries where the possibilities of interacting with the patent authority during examination are very limited or almost nil. This is why article 18.43 intends to harmonise the possibility of patent applicants to correct and amend their applications, which in the case of Mexico is not necessary, as the patent system already provides for such opportunities in local law. 

Available information

The TPP provides a good opportunity to make sure patent prosecution is more transparent in all the countries by establishing a minimum standard of available information related to prosecution of applications and the obligation to publish all kinds of applications.

The MIPL will require modifications to make it comply with both standards. On the one hand divisional patent applications are not published in Mexico at all, and on the other hand, the content of patent files is not available to the public if and when the patent is granted. Patent application files are currently confidential in Mexico if the patent is not granted, making it difficult even to gain knowledge of the status of an application.

Patent term adjustment

The asymmetry between the different patent offices of the TPP countries makes evident the need for an incentive to achieve efficient patent prosecution such as the one provided for in article 18.46 of the TPP agreement. With the current international trends of patent examination cooperation, a term adjustment for undue delays is reasonable in order to give certainty to patent owners and the general public, as the knowledge of whether a technology will be protected by a patent is of the essence for investment decisions.

The Mexican Institute of Industrial Property (IMPI) is an efficient office, in part because examiners are mandated to examine patents within a timeframe of five years, to issue the next office action within four months of the last communication with the applicant to the patent office, and to issue no more than four actions before making a definitive decision on issuance or final rejection.

The gaps in the current practice and law in Mexico are found in the beginning of the examination, which is not expressly regulated, and also in the fact that the current rules can be changed by the management of the IMPI because they are not established in a law or its regulations.

This means that future inefficiencies or a backlog in patent prosecution could lead to non-compliance with the TPP. Accordingly, this provision will require specific changes to Mexican law in order to implement the TPP provisions fully.

Non-disclosed data

The provisions of the TPP related to pharmaceutical products and particularly biologic products deserve a full consideration on their own beyond the scope of this analysis. The patent-related provisions in the pharmaceutical arena are more focused in the regulatory interplay with IP rights than patents themselves.

The extent of the Bolar exemption, data exclusivity for traditional and biotechnology drugs, patent term restoration for regulatory delays and linkage of patents covering pharmaceutical products subject to regulatory approval are part of the most controversial and less transparent part of the IP chapter of the TPP.

This was perhaps caused by the express wording towards the end of the negotiation of the TPP as a whole, as recognised by the ministers themselves publicly when a final agreement was announced. No wonder parallel understandings on the implementation of these provisions are sought by the US in order to clarify the true intent of such provisions, which do not seem to be good for either generic or innovator companies.

Despite the TPP’s comprehensive provisions on patents, as compared to other free trade agreements previously signed by Mexico, it seems that Mexico already complies in general with the TPP standards for patents and that the implementation of the TPP in patent prosecution is more an opportunity to clarify than a real challenge or breakthrough change in the patent system.

Given their lack of clarity, the pharmaceutical IP provisions of the TPP are in themselves the biggest challenge for implementation and understanding for Mexico and the majority of the TPP countries, but the rest of the Mexican patent system is expected to improve in transparency and be kept as efficient as it is currently, which is generally good news for the years to come.

Héctor Chagoya is a partner at Becerril, Coca & Becerril. As director of patents and technology, he is responsible for all of the firm’s patent work, from drafting and prosecution—in Mexico and abroad—to patent litigation to technology transfer activities.  He can be contacted at: hchagoya@bcb.com.mx 

Héctor Chagoya, Becerril, Coca & Becerril, TPP, trade deal, patent,

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