New regulation encourages life sciences innovation

Decree 8,772 of May 11 2016 regulates the Biodiversity Law (13,123 of May 20 2015), which provides for access to genetic heritage, protection and access to associated traditional knowledge and the sharing of benefits for the conservation and sustainable use of biodiversity.

Impact of regulation on R&D
Extensive research has been conducted using information accessed from genetic heritage. This includes extracts, such as those from plants for the development of cosmetics and herbal medicines, and those derived from enzymes that catalyse the reactions or synthesis of chemical compounds, with applications in different industries. Native or genetically modified microorganisms are used in biotechnological processes and to obtain different products. Substances extracted from animals and insects can be used in the formulation of chemical compositions for the manufacture of cosmetics and drugs.

In view of the versatility of using biodiversity in different industrial sectors, it is clear that access to genetic heritage is strategic for R&D, providing opportunities for competitive advantage in domestic and international markets.

In the context of research, technological development and technological exploitation of a product, a possible innovation brought by the regulation of the Biodiversity Law is the reduction of excessive bureaucracy and consequent delays in the issuance of approval of research authorisations by the competent offices, which used to discourage, technically and monetarily, researchers from academia and industry. This scenario was compounded by fines for not complying with requirements to obtain authorisation for research, and thus activities related to R&D and the potential subsequent resulting patent applications remained stagnant until obtaining such authorisation.

Under the new regulation, research involving access to Brazilian genetic heritage and associated traditional knowledge, as well as product development based on local biodiversity, no longer needs prior authorisation before commencing (with some exceptions). The intention is to make the authorisation process for R&D activities more dynamic, given that after the electronic filing of a specific form to access genetic heritage and associated traditional knowledge in the National System for the Management of Genetic Heritage and Associated Traditional Knowledge (SisGen), the registration receipt is issued. The new system enables a traceability of such activities for various purposes (eg, to grant and guarantee IP rights of the National Institute of Industrial Property). The information on the SisGen is public, unless the user requests it to be confidential.

Impact on patents
When any IP right involves access to genetic heritage or associated traditional knowledge, the SisGen registration should be carried out before filing for the IP right. However, the IP process runs parallel to the registration process, and thus the registration does not remain dormant until the IP rights process has been completed. Activities resulting from access to the genetic heritage and associated traditional knowledge completed before June 30 2000 are not subject to the requirements of the Biodiversity Law. Such acitivities, as well as the economic exploitation of a finished product that occurred after June 30 2000, have one year from the date on which the Genetic Heritage Governing Counsil (CGen) makes SisGen available to comply with the terms of the law.

The decree also governs activities involving National Fund benefit sharing and the bases of the sharing of benefits resulting from access to genetic heritage and associated traditional knowledge. The benefit-sharing obligation will be exempt in some cases, for example in the economic exploitation of a finished product or reproductive material developed by micro and small enterprises, and individual micro entrepreneurs, as well as in licensing transactions, transfer or use permission of any form of IP rights on the finished product, process or reproductive material derived from the access to the genetic heritage or associated traditional knowledge by third parties.

How will this faciliate R&D activities?
According to the Global Innovation Index 2016, launched by the World Intellectual Property Organisation (WIPO), Brazil occupies the 69th position among the 128 countries assessed. The Ministry of Science, Technology, Innovations and Communications is formulating strategies to make Brazil more prosperous, and the target set by the National Strategy for Science, Technology and Innovation is that by 2019, 2% of gross domestic product will be spent on science, technology and innovation.

Indeed, Brazil has enormous potential for technological development and innovation through the sustainable use of its immeasurable biodiversity. However, there is clearly an inconsistency between productivity and the number of patent application filings with respect to Brazilian biotechnological potential. This is reportedly due to:

• the delay in patent application analysis and granting of patents by the National Institute of Industrial Property;
• the high bureaucracy in the process;
• the decrease in R&D;
• the lack of focus on innovation; and
• a policy of economic protectionism.

The decree presents a first step towards reducing bureaucracy in scientific research based on Brazilian genetic heritage. Therefore, researchers can regulate their research and advance the technological development processes that may lead to innovation in the areas of biotechnology, pharmaceuticals and chemistry. The new decree under the Biodiversity Law will faciliate R&D activities. The practical application of the new legal framework will reveal whether the decree's measures will benefit innovation in Brazil.