Effects of the constitutional challenge of Brazilian patent term protection

After lengthy discussion, on 12 May 2021 the Brazilian Supreme Court handed down its judgment on the constitutionality of Article 40 of the Brazilian Industrial Property Law.

The expiry date of a patent in Brazil is 20 years from filing of the patent application, which cannot be less than 10 years from the patent grant. Therefore, if a patent application takes 12 years to be granted, its term of protection will be 22 years. This provision was introduced in 1996 to compensate for the Brazilian National Institute of Industrial Property’s (INPI’s) delays in examining patent applications. 

The constitutionality of this legal provision has been the subject of discussion before the Supreme Court for more than five years. In brief, it was argued that Article 40 would lead to a lack of definition in the patent term, which would violate several constitutional principles (eg, free competition, equal treatment and legal certainty).

On 14 April 2021 the Supreme Court convened to discuss the constitutional challenge to Article 40. On the same day, Reporting Justice Dias Toffoli partially granted a preliminary injunction requested by the attorney general for the federal government to suspend the 10-year patent term for pharma-related patents with immediate effect until the Supreme Court’s final decision.

Consequently, INPI published in its weekly Official Gazette the patents related to pharmaceutical products and processes, as well as equipment and/or materials for health use, that were affected by the injunction. They were thus granted with a 20-year protection term from filling instead of a 10-year term from grant.

The criteria for selecting these patents were as follows:

• applications sent to the Brazilian Health Regulatory Authority (ANVISA) and granted prior approval (Article 229(c)) – any applications considered by ANVISA as not subject to Article 229(c) would be submitted for manual review;
• applications related to medical technologies, according to International Patent Classification (IPC) A61B, A61C, A61D, A61F, A61G, A61H, A61J, A61L, A61M, A61N, H05G, G16H in any position; and
• applications with classifications relevant to human health (A61k 6/00 – preparations for dentistry; A62B – covid-19 masks; C12Q – diagnosis involving enzymes; G01N 33 – relating to diagnosis) would undergo manual review.

On 12 May 2021 a majority of the Brazilian Supreme Court ruled in favour of the unconstitutionality plea. The effects of this decision have been set out in the following terms:

• All patents granted as of the publication of the court’s decision will not take the term extension into account (ie, they will be strictly valid for 20 years from the filing date).
• A first exception will apply to granted patents covering drugs, processes and equipment used in public health, which will have their terms revised retroactively so as to observe 20 years from the filing date.
• A second exception will apply to granted patents in all technology areas subjected to a lawsuit contesting their term extensions. These patents will also have their terms revised to observe 20 years from the filing date.  

In both exceptions, the rights produced by the term extensions will be preserved (eg, a licence agreement that considered the extended date of validity).

Based on the Supreme Court’s final ruling, INPI published the following key points in its 18 May Official Gazette:

• All patents granted from the date of the decision will be valid for 20 years from the filing date.
• Term adjustments will be applied to patents related to pharmaceutical products and processes, as well as equipment and/or materials for health use (retroactive effect from the outset of the Supreme Court’s final decision).

For the purpose of this term adjustment, all granted patents with a 10-year term from grant, and still in force on 14 May 2021 were taken into consideration. These were divided into the following groups:

• patents that have not yet exceeded 20 years from the filing date will be republished to adjust the term; and
• patents that exceeded this 20-year term will be republished to adjust the term and declared extinct.

The criteria for selecting these patents were the following:

• applications sent to ANVISA for the purpose of prior approval;
• applications with IPCs A61B, A61C, A61D, A61F, A61G, A61H, A61J, A61L, A61M, A61N, H05G;
• applications with IPCs A61k/6, C12Q/1, G01N/33, G16H;
• patents, for which the term of protection was being judicially challenged before 14 May 2021; and
• granted certificates of addition related to patents subject to term adjustment.

The 18 May Official Gazette also published an initial list of 3,341 patents with granted prior approval from ANVISA, which will be subject to term adjustment through the rectification of the letter patents, and possible extinction. Complementary lists will be published in the coming gazettes as INPI completes the analysis of the cases.

Given that patent-term adjustment is no longer possible, it is recommended that Brazilian applicants review their patent portfolios to ascertain which cases could be affected and check pending applications where an existing fast-track routes might apply.