On February 10, the 4^th Federal Court of the Federal District ruled in favor of the plaintiff in Ordinary Proceedings #1028978-18.2022.4.01.3400. The decision acknowledged the plaintiff’s right to in-kind compensation in the form of an adjustment to the term of patent PI 0112646-6, owned by Gilead Sciences Inc., recognizing the unjustified administrative delay in the examination of the application before the Brazilian Patent and Trademark Office (“BRPTO”).

The patent application was filed in 2001, but the patent itself was only granted in 2017, revealing a delay of over 16 years for which the applicant was not responsible. In its ruling, the Court emphasized that the law establishes a deadline for examination and that the BRPTO, by failing to complete the procedure, provided no justification for the administrative delay lasting more than a decade.

The decision also highlighted that between the filing date and the grant date of the patent, the applicant (i.e. the plaintiff) held only an expectation of rights (Article 6, Paragraph 1, of the Brazilian Patent Statute). Moreover, it noted that the Patent Statute itself stipulates that protection only takes effect upon the grant of the patent, meaning the plaintiff’s rights only materialized in 2017, after 16 years of prosecution. At that time, the plaintiff had a legitimate expectation that her patent would be granted within the then-10-year term provided under the former sole paragraph of Article 40 of the Brazilian Brazilian Patent Statute – counted from the date of grant. However, in 2021, that provision was declared unconstitutional by the Brazilian Supreme Court in Direct Action of Unconstitutionality #5,529 (“ADI #5,529”), resulting in a significant reduction of the patent term.

In this context, the ruling concluded that the BRPTO’s civil liability for the delay cannot be dismissed, pursuant to Article 37, Paragraph 6, of the Brazilian Constitution. Accordingly, the Court recognized the Federal Government’s unjustified delay in concluding the examination of the patent application and upheld the plaintiff’s request for compensation, ordering the BRPTO to issue a new letters patent with an adjusted term, proportionally extended to account for the administrative delay.

It is important to note that, according to the decision, with the declaration of unconstitutionality of Article 40, sole paragraph, of the Brazilian Patent Statute in ADI #5,529, the mechanism providing for automatic and generic extensions due to processing time before the BRPTO was eliminated. However, the Court distinguished the present case from ADI #5,529, recognizing that the Supreme Court, although it did not modulate the effects of its decision for pharmaceutical patents – especially in light of the context involving the COVID-19 pandemic – chose to preserve the concrete effects arising from those patents. This opens the door to state liability for unjustified delay in specific cases.

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