Making up lost time: patent term adjustments in Mexico

The country has taken steps to compensate rights holders for delays that cut patent terms short but questions remain, says Edith Rivero of Dumont.

Patent protection is a cornerstone of innovation, providing owners with a 20-year term of exclusivity to capitalise on their inventions. However, the exclusivity starts from the legal filing date, often making the effective protection period shorter due to delays in patent prosecution. During the prosecution of patent applications in many countries, delays not always attributable to the applicant can occur. In Mexico, there were no mechanisms such as patent term adjustment (PTA) to recover time lost due to administrative delays at the Mexican Patent Office until recent years. This article delves into the evolving landscape of PTAs in Mexico.

The historical context

Understanding the current state of PTAs in Mexico requires a glimpse into the past. The Industrial Property Law (IPL), in force until November 5, 2020, served as the previous governing legislation for patents and offered no scope for term adjustments. This rigidity persisted despite Mexico aligning with international trends, specifically by signing the North American Free Trade Agreement (NAFTA). Effective from January 1, 1994, NAFTA permitted the possibility that each contracting party provides a term of protection for patents of at least 20 years from the filing date or 17 years from the date of grant. Therefore, there existed a theoretical possibility in Mexico of extending the term of patent protection to compensate for unjustified delays during the prosecution attributable to the Patent Office. Nonetheless, attempts to enforce the NAFTA provision failed for some time, primarily because the IPL was not amended to align with the international treaty.

Landmark ruling

The issue took a significant turn on October 14, 2020 with a groundbreaking decision by the Mexican Supreme Court. The court ruled that, in line with NAFTA, the minimum effective patent term should be 17 years from the grant date if there were unjustifiable delays caused by the Patent Office. This decision, although not a binding directive for the Patent Office, paved the way for future PTAs for patents filed under the old IPL. Despite resistance from the Patent Office, which often rejected PTA requests on the grounds that the IPL limits the validity of a patent to an unextendable 20-year term, many have been successfully overturned through constitutional appeals.

"The court ruled that, in line with NAFTA, the minimum effective patent term should be 17 years from the grant date if there were unjustifiable delays."

It is worth mentioning that although the term of some patents has successfully been adjusted by demonstrating that the Patent Office’s performance during prosecution resulted in delays that prevented the patent owner from enjoying at least 17 years of effective patent term, it remains uncertain how PTAs will be handled in relation to divisional cases. These, independent of the existence of delays, usually do not reach 17 years of effective protection because they are typically filed several months or even some years after the filing of the parent application.

The nuances of the new legislation

As if in response to the landmark judicial intervention, a new era for Mexican patents began with the enactment of the Federal Law for the Protection of Industrial Property (FLPIP) on November 5, 2020. The FLPIP was groundbreaking in that it introduced, for the first time, the concept of PTAs under the form of Supplementary Certificates (SCs) in the Mexican system.

The FLPIP addresses some of the longstanding issues and provides a structured way to compensate for delays caused by the Patent Office. Under the new law, patent holders can now qualify for an SC, effectively adjusting the term of a patent. However, this adjustment comes with its own set of stipulations:

• The term can be extended by only half of the time delayed, capped at a maximum of five years.
• The application for an SC must coincide with the payment of the patent grant fees.
• The request for an SC involves the significant application of a fee.

These new rules have introduced a complex, yet navigable, path to term extension, but they also leave some questions unanswered.

Legal and procedural hurdles

The FLPIP already contemplates the possibility of adjusting patent terms through the concept of an SC, but the applicant will be able to apply for it only once, by requesting it when paying the corresponding grant fees; otherwise, the opportunity to obtain the SC will be lost. In contrast to the PTA request currently used for adjusting the term of patents filed under the IPL provisions, which is not subject to the payment of a fee, the SC request will involve the application of a fee of approximately US $1,953 according to the current tariff structure.

The Mexican Patent Office will inform the applicant whether the SC is granted, so the applicant can pay for its issuance. The corresponding issuance will also be subject to the payment of a fee, currently set at approximately US $220, plus the payment for the maintenance fees corresponding to the adjusted term.

As noted, the FLPIP restricts the possibilities for applying for the SC and mandates the payment of the corresponding fees for both applying and issuing the SC. However, the benefit is also limited by restricting the adjustment to only half of the delayed time, which could result in legal controversies in relation to the actual compensation obtained.

The pharmaceutical and biotechnological sectors, characterised by long development cycles and hefty R&D investments, are most poised to try to benefit from PTAs and SCs. For these industries, every month of patent protection can translate into significant revenue, making the subject of SCs particularly pertinent.

Global comparisons

When compared globally, Mexico still has strides to make. In jurisdictions such as the United States, the system is more favourable to inventors, offering well-defined PTA protocols and additional mechanisms like patent term extensions for delays in market authorisation by regulatory bodies.

Final thoughts

Mexico has made progress in the right direction with the issuance of a Supreme Court decision on PTAs and the implementation of SCs under the new FLPIP. However, some work remains to be done to create a balanced ecosystem that adequately compensates for lost time, particularly when compared to more developed patent systems globally. Given the complexities and significance, the issue of PTAs in Mexico will likely continue to evolve, necessitating constant vigilance and adaptability from stakeholders.

Edith Rivero is the manager of the technical department at Dumont. She can be contacted at: erivero@dumont.com.mx