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10 February 2021PatentsMarina Hurtado-Cruz

Have patent term adjustments arrived in Mexico?

A new Federal Law for the Protection of Industrial Property (LFPPI) came into force in Mexico last year. The new law will affect industrial property rights including patents. For the first time in Mexico, the possibility of adjusting the validity of patents is allowed when there have been unjustified delays during its examination. All patents filed as of November 5, 2020, may benefit from this right if the requirements established in the LFPPI are met.

But what about patents filed before November 5, 2020? The previous law established a validity period of 20 years from the filing date, which was non-extendable. However, a ruling from Mexico’s federal high court, the Supreme Court of Justice of the Nation, issued at the end of 2020, opens the possibility to correct the validity of these patents.

Patent term adjustments

The LFPPI was published as a result of various commitments acquired by Mexico through international agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018 and the US–Mexico–Canada Agreement (USMCA) which replaced the North American Free Trade Agreement (NAFTA) in July 2020 (NAFTA had been in place since 1994).

Strengthening the protection and enforcement of IP rights, including patents, is a priority of the USMCA. Unlike the former NAFTA, this agreement does not outline minimal terms for patent protection, but states that parties shall process patent applications in an efficient and timely manner, provide procedures to expedite examination and avoid unreasonable or unnecessary delays in the issuance of a patent.

Furthermore, the USMCA states that a patent term adjustment proceeding shall be implemented to compensate for unreasonable delays of patent offices to grant a patent. In accordance with the USMCA, an unreasonable delay is when the patent is issued more than five years from the date of filing or three years after a request for examination, whichever is later. Similar provisions are included in the CPTTP.

As part of the commitments made by Mexico, adjusting the validity of patents through supplementary certificates is now possible for the first time under the LFPPI. These supplementary certificates must be requested by the patent applicant to compensate for unreasonable delays from the Mexican Institute of Industrial Property (IMPI), provided that the granting of the patent took more than five years from the date of its presentation in Mexico.

It is an important decision, given that IMPI and the Mexican authorities have historically been very reluctant to correct or adjust patent terms.”

The term of validity of the supplementary certificates may not exceed five years, and the validity will be one day for every two days of unreasonable delay attributable to IMPI.

Unreasonable delays will be counted from the date on which IMPI notifies the patent owner with the official action informing that the formal examination has been concluded. To account for the unreasonable delay, the periods attributable to actions or omissions of the applicant will not be taken into account, such as delays in answering requests or extending the deadlines to respond to them; or periods not attributable to IMPI, such as the procedure being suspended due to litigation or by acts of force majeure.

In practice, patent term adjustments may not be a relevant issue for IMPI. This is because during the negotiations of the USMCA, IMPI issued internal guidelines for examiners stating that the resolution of a patent procedure should not take more than five years from the filing date. Examiners regularly adhere to the deadlines established in the guidelines and in most cases, patents do not take more than five years to be granted.

In addition to the above, Mexico has implemented patent prosecution highway (PPH) programmes with several patent offices to speed up patent prosecution in Mexico. Under such a programme, the claims of an application have to be adapted to the claims granted by the other participant patent office. If the examiner considers that the new claims comply with local law, the patent may be issued in the short term.

Mexico has signed PPH agreements with the US Patent and Trademark Office (USPTO), the Canadian Intellectual Property Office, the European Patent Office, the Japan Patent Office, and the Spanish Patent and Trademark Office, among others.

Additionally, in December 2020, the USPTO and IMPI officially announced the start of a new scheme called parallel patent grant (PPG). Under this agreement, a patent granted by one office can accelerate the granting of the corresponding patent in the other office. All of these programmes will undoubtedly help to considerably reduce the timeframes for granting patents.

Finally, it is important to mention that the USMCA establishes another obligation for member countries related to adjusting the validity of patents for pharmaceutical products: that each country shall make best efforts to process applications for marketing approvals in an efficient and timely manner, avoiding unreasonable or unnecessary delays.

Furthermore, USMCA states that each country will make available patent term adjustment when the pharmaceutical product is protected by a patent to compensate the patent owner for unreasonable delays in obtaining marketing authorisation. This is because some pharmaceutical products require a prior marketing authorisation to be commercialised, and if this takes too long to be issued, the right of exploitation conferred by a patent is affected.

Mexico has not yet complied and has not implemented this obligation in its local legislation, but there is a transition period of four-and-a-half years from the enforcement of the USMCA.

A correction of patent validity terms

It is important to mention that the patent in question, the owner of which is a pharmaceutical company, filed the patent application in Mexico in 2001, when the previous Industrial Property Law was in force. This law was in force from the early 1990s (when the NAFTA negotiations were taking place) until November 4, 2020, and was superseded by the current LFPPI.

The patent’s notice of allowance was issued on July 26, 2006. It was not however notified until 2007, so the patent processing took about six years. Therefore, in 2019, when the patent was close to its expiry date (January 12, 2020), the patent owner asked IMPI to compensate for the delay during the patent study and to adjust the term of the patent.

IMPI responded by denying the request, arguing that article 23 of the Industrial Property Law states that the term of a patent is 20 years from the filing date and that this term is non-extendable. The patent owner then challenged IMPI's refusal to correct the validity of the patent before the courts, and this matter eventually reached the Supreme Court.

Among the arguments put forward by the patent owner, there was the unconstitutionality of article 1709 section 12 of NAFTA and article 23 of the Industrial Property Law, which establish the following.

NAFTA, article 1709: Patents, section 12: “Each party shall provide a term of protection for patents of at least 20 years from the date of filing or 17 years from the date of grant. A party may extend the term of patent protection, in appropriate cases, to compensate for delays caused by regulatory approval processes.”

Industrial Property Law, article 23: “The patent will be valid for 20 years, non-extendable, counted from the filing date of the application and will be subject to payment of the corresponding fee.”

The Supreme Court confirmed the constitutionality of article 1709 section 12 and asserted that the NAFTA text establishes that the compensation of the validity of a patent is not an obligation for the parties, but a possibility, which would have to be analysed on a case-by-case basis before each patent office.

Regarding article 23 of the Industrial Property Law, the Supreme Court did not specify anything about its constitutionality but clarified that article 23 indicates that the patent will be valid for 20 years, non-extendable, counted from the date of presentation of the application, to the extent that the delays derived from the administrative approval procedure are considered.

According to the Supreme Court, if such delays have a negative impact of the 20-year non-extendable term, the validity of a patent must be 17 years from its granting as stated by NAFTA. Likewise, the Supreme Court pointed out that the foregoing cannot be considered an extension of the patent, but rather as compensation for delays attributable to IMPI.

With this, the Supreme Court granted constitutional protection to the patent owner and ordered IMPI to account for the delay in the process, granting a validity of 15 years from its granting, to correct the original validity term This is an important decision that contrasts with the criteria that IMPI and other courts have historically had in refusing to correct patent terms. Although this decision is binding only for this specific patent, it opens the possibility for patent owners in similar situations to try to obtain (most likely through litigation) patent term adjustments.

This may apply especially for patents processed under the validity of NAFTA (January 1, 1994 to June 30, 2020) and in the event that delays to granting are accredited and attributable to IMPI. For patents filed as of November 5, 2020, there will be supplementary certificates when applicable accordance with the new law.

Marina Hurtado-Cruz is a partner at Baker McKenzie and head of the firm’s Mexico patent practice. She can be contacted at:  marina.hurtado@bakermckenzie.com

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