Renewed hope for the patent system
November 10, 2017

The Brazilian patent and trademark office is notorious for its backlog and the slow pace at which it operates. Despite its receiving only a small number of applications, a first decision there takes at least a decade. It has always been like that, undermining the Brazilian patent system. One of the few compensations is that patents, if and when granted, have a ten-year term from the date of grant. This is specifically established by Article 40 of the Brazilian patent statute. If patent applications were examined more quickly, the section would be irrelevant, because the standard patent term is 20 years from filing, laid down in the same section of the statute. Thus, but for the current Brazilian administration, the statutory patent term of ten years from grant would never be seen. Instead of revamping the INPI, the current government is supporting a bill (#5402/2013) to have the ten years from grant term deleted from the patent statute. Further, the INPI sought last year to invalidate more than 200 patents granted with the minimum term by filing 37 lawsuits, akin to a US-style declaratory judgment of invalidity. Some of these 200 patents cover important inventions. The reason stated by the administration is a clerical mistake when granting patents that afforded a patent term of ten years from grant, instead of 20 years from the filing date, to patent applications covering pharmaceuticals, and related arts, filed between January 1, 1995 and May 14, 1997, known as ‘mailbox’ patents. The first trial court decision on the 30-plus lawsuits filed by the INPI seeking to invalidate the patents issued by the INPI itself backfired on the administration. The Brazilian federal court system has issued a decision as sophisticated as the ones from other countries where magistrates have already mastered the refinements of patent law. Hon. Eduardo Brandão, federal trial judge of the 25th Federal District Court, decided the first of the 37 mailbox lawsuits. He decided that the violation of the law that the INPI calls a mistake started when the INPI failed to comply with the statute by not examining applications before 2004's statutory limitation to examination of mailbox applications. Brandão also stated that the INPI project to invalidate the patents is a violation of the administrative principle of legitimate expectation, grounded in the Brazilian Constitution. According to the decision, a judicial review of the administrative act of grant would not be reasonable in view of the fact that inventors and patent owners trust the public authorities to keep their promises. The INPI granted and published in its official gazette the ten-year term for the patents, creating a reasonable expectation by the companies in the administration. [blockquote]"THE FIRST TRIAL COURT DECISION ON THE 30-PLUS LAWSUITS FILED BY THE INPI SEEKING TO INVALIDATE THE PATENTS ISSUED BY THE INPI ITSELF BACKFIRED ON THE ADMINISTRATION".[/blockquote] The judge showed no mercy on the INPI’s backlog and its non-compliance with the provision established in Article 229-B regarding the fact that it expressly ordered the INPI to examine mailbox applications up to December 2004. Brandão criticised the INPI’s opinion that supported the invalidity litigation, saying that the administration cannot change its mind and cause irreparable damage to inventors’ interests. This criticism deserves highlighting: the behaviour of the INPI against the mailbox patents is surprising compared with when it has changed its mind before. Previously, the INPI has formally informed those affected that their patents granted under the old rules—by mistake—would be maintained. No invalidity lawsuit was ever filed by the INPI against patents granted contrary to its interpretation of Article 32. The decision shows the disposition of the Brazilian courts to enforce the obligations that Brazil has with the international community of members of the World Trade Organization, grounded in the TRIPS Agreement. Brandão’s decision has a caveat. The general understanding is that invalidity lawsuits are limited to patentability requirements and patentable subject matter. This was further established by cases relating to pipeline patent terms of protection granted without consideration of supplementary protection certificates. The pipeline patents were never at risk of being invalidated while the parties litigated the correct patent term. However, Brandão decided to take the view that an invalidity lawsuit due to a wrong patent term was not forbidden by Brazilian law. At first glance, Brandão’s decision should have a positive impact on other cases. However, the INPI might appeal against the decision, taking the case to the Federal Courts of Appeal.

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This article was originally published in “WIPR”, World Intellectual Property Review. For further information, please access the following website: http://www.worldipreview.com/article/renewed-hope-for-the-patent-system

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