1 August 2012Jurisdiction reportsRana Gosain

ANVISA update - will mandatory review on pharma patent cases continue?

The working requirements under Brazil’s patent law oblige the patentee/licensee to manufacture/ produce/assemble the patented product locally. This is inconsistent with Article 27.1 of the TRIPS Agreement, which states that patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

Curiously, for the past 30 years, the penalty of having a compulsory licence granted on the basis of non-working in Brazil has not been applied.

The second inconsistent provision in Brazilian law is not only a violation of TRIPS, but also adverse to most leading IP legislations. Specifically, Law No. 10.196 of February 2001 introduced a new provision in the existing law making patent grant for pharmaceutical products and processes conditional on ANVISA’s prior approval.

Accordingly, in addition to the Brazilian Patent Office’s (PTO) substantive examination, each and every pharmaceutical patent application will undergo a mandatory second examination by examiners from a division of the Ministry of Health.

This provision no doubt stemmed from a political decision made by the former government. It appears evident that the reason behind this amendment is to preclude patents for certain drugs, such as anti-retrovirals to combat Aids, although patents covering drugs to treat other serious maladies have also been denied by ANVISA.

The two-tier examination has brought about a frustrating situation and has generated an antagonistic rivalry between examiners at the PTO and ANVISA. If PTO examiners are regarded as being conservative on controversial patent issues, then ANVISA examiners could be labelled as being totally without regard for IP.

Ever since ANVISA’s mandatory involvement with the analysis of pharma patent applications, protection for ‘Swiss’ type claims has been eroded and, currently, second use claims are being barred on the grounds that the new use of a known substance would be a disguised discovery lacking inventive step.

In recent years, examiners at ANVISA have reviewed and denied patent approval to approximately 7 percent of the all pharma patent applications previously examined by examiners at the PTO. Strangely enough, the grounds for denial go beyond non-statutory subject matter and lack of inventive step. Brazilian IP practitioners and pharma companies (foreign and local) have been dealing with ANVISA since 2001.

As of 2009, some significant developments have surfaced; federal attorneys who are linked to the PTO have questioned ANVISA’s second mandatory examination on pharma applications and the expected outcome is that ANVISA’s interference in pharma cases will become limited.

On October 16, 2009, the Attorney General of the Federal Government issued an opinion on ANVISA and the PTO’s attributions regarding examination of pharma applications. The opinion resulted from a consultation made by one of the federal attorneys representing the PTO with the Attorney General as to what procedure should be adopted in view of a court decision favouring ANVISA’s interference in substantive pharma patent examinations.

The court proceeding concerned the respective competencies of the PTO and ANVISA (including ‘prior approval’). The decision handed down by the Federal Regional Tribunal acknowledged the arguments by ANVISA to the effect that it was empowered to conduct a mandatory patentability examination on pharma patent cases pursuant to Article 229-C introduced into Law 9.279/96 via subsequent legislation No. 10196 of 2001.

The Attorney General’s findings resulted in a difference in the interpretation of ‘prior approval’ established in the law. The discrepancy can be summarised in that ANVISA’s examination in accordance with the law is normally conducted using the same patentability criteria established by the patent law.

Given these circumstances, it would be inappropriate and unfair for the PTO to accept this, as ANVISA would be straying away from its institutional role and taking over extra functions.

The other controversy is that Article 229-C falls under Section VIII of Law No. 9.279/96, which refers to transitional and final provisions; and on account of the fact that so-called pipeline patents were established on a transitional basis (Article 230), it stands to reason that the provision of prior approval should only apply to patents filed in accordance with Article 230.

This leads to an understanding that prior approval has a transitional purpose and consequently should only apply to pipeline patents established in an equally transitional manner by Article 230 of the same law. Brazilian Department of Justice attorneys pointed out that the responsibilities of the two entities are distinct, and quoted the texts disclosed on the official websites of the respective legal entities.

"ANVISA CAN STILL SUBMIT OBSERVATIONS TO AID THE PTO IN TECHNICAL EXAMINATION AND, OF COURSE, DENY MARKETING AUTHORISATIONS TO DRUGS THAT IT CONSIDERS TO BE PREJUDICIAL TO THE POPULATION."

The PTO is a federal entity subordinated to the Ministry of Development, Industry and Foreign Trade, whose responsibilities encompass registering trademarks, granting patents, recording technology transfer and corporate franchise agreements, etc., in accordance with Industrial Property Law No. 9.279/96, whereas ANVISA’s role is to promote health protection for the population via sanitary control of the production and commercialisation of products and services subject to sanitary surveillance, including the environment. The agency also controls ports, airports and liaisons with the Ministry of Foreign Relations and foreign institutions in connection with international affairs.

In concluding, the government attorneys affirmed that it is not ANVISA’s job to conduct examinations (evaluation/revaluation) of the technical criteria related to patentability (novelty, inventive step and industrial applicability) so as to render prior approval, as this is a specific responsibility of the Brazilian PTO, as established by law.

For the purpose of Article 229-C of Law 9.279/96, ANVISA should act in conformity with its institutional attributions to preclude, via sanitary control, the production and commercialisation of products and services that are potentially harmful to human health. Moreover, ANVISA’s mandatory review of pharma cases in terms of rendering prior approval also extends to process pipeline patents as per the Attorney General’s opinion.

ANVISA, in response, submitted a brief requesting the court to review its decision and, on January 24, 2011, the Attorney General issued a new opinion maintaining the previous understanding that ANVISA should limit its analysis to the safety and therapeutic efficacy of the medicine.

The Attorney General’s final opinion suggested that a regulatory decree be issued without delay to ensure that the procedures and obligations of the two federal entities be established with the purpose of complying with Article 229-C.

The final opinion set a precedent, and both the PTO and ANVISA should follow the newly established rules. It should be noted, however, that ANVISA can still submit observations to aid the PTO in technical examinations and, of course, deny marketing authorisations to drugs that it considers to be prejudicial to the population.

On a related issue, it is interesting to note that ANVISA has made serious threats to nullify those pharma cases that have not been reviewed by its examiners. These cases could either be black-box applications filed in 1995 or pipeline cases granted by PTO examiners that were not submitted to ANVISA’s scrutiny.

It is likely that the grant of these patents occurred before the advent of Article-229 C and, as a result, there was no requirement for ANVISA to review them. Another point of concern is the validity, or rather the constitutionality, of pipeline patents.

In 2009, a special court action was brought by the public prosecutor on behalf of the National Federation of Pharma companies, challenging the constitutionality of pipeline patents. The arguments presented are that the pipeline system violates the provisions of TRIPs, the Paris Convention and the PCT.

The Supreme Court has received several requests from entities wishing to become parties to the lawsuit as amici curiae. The court action is still pending, although the Attorney General has since rendered an opinion in favour of the constitutionality of pipeline patents.

IP practitioners have speculated that in the event the Supreme Court rules that the pipeline system is unconstitutional, there would be two possible ramifications: all of the pipeline cases filed could be turned void or only the pipeline cases still under analysis would be annulled.

A rational way for the judges to evaluate this complex issue is to recognise that pipeline provisions and pharma patent protection were introduced into Brazilian IP Law 9.279/96. Pipeline protection was afforded for a one-year period running from May 15, 1996 to May 14, 1997.

It would appear that the pipeline was a trade-off between the government and foreign pharma companies to compensate for Brazil’s delay in providing patent protection for pharmaceuticals, which caused heavy losses of revenue for pharma companies. Thus, a specific law was tailored for pipeline patents, and the official fee negotiated and paid for the filing of a pipeline application was approximately $10,000—significant revenue for the PTO.

Further consideration should be given to the fact that most of the pipeline cases have already been examined, granted and, if they have not yet expired, are about to expire. The remaining cases should expire by 2015, or 2016 at the latest, so any rash decision by the Supreme Court would place Brazil in a ‘defaulter status’ before the international community, and consequently a lot would be at stake.

Rana Gosain is a senior partner at Daniel Advogados. He can be contacted at: rana.gosain@daniel.adv.br

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