Brazil: Key Trends for Intellectual Property in Brazil Through 2001-2002

Most people would agree today that over the last 30 years there has been a tremendous shift in the way companies compete, create value and prosper. One of the major forces driving these changes is increasing globalization, and another is the so-called "knowledge economy", where a company’s chief assets are, not so much its physical capital, as its talented employees and flexible processes facilitating the generation of new ideas and the ability to adapt quickly to change.

In the face of these changes, countries worldwide have been forced to adapt both their substantive intellectual property law and administrative proceedings to meet new challenges.

These changes have been reflected in the structures, policies and personnel of the Patent Offices of almost all of the so-called developed countries. Although the future is rarely a straight line running through the present from the past, we can nevertheless glean some interesting insights from these recent developments and risk some projections for the future. With the 1980 US decision to allow living organisms to be patented, and the 1981 decision on patentability of software, precedents were set to allow the technology boom to occur. Stephen Hawking has said "the world has changed far more in the last 100 years than in any other period in history. The reason is not political or economic – it is technological". Worldwide applications for patents in 1985 amounted to a little over 1 million. In 1999 they amounted to 7 million. In Brazil alone we have seen an enormous increase in the filing of patent applications. In 2001 (up to May) more applications were filed in Brazil than during the entire period from 1980 to 1995. This is undoubtedly due to the 1996 IP Law that finally permitted the patentability of pharmaceuticals and of other subject matter not previously patentable.

Companies riding on the crest of the technology wave, be it information technology or biotechnology, probably the two greatest growth areas in the knowledge economy, naturally want to protect their investments on a worldwide basis, especially since "knowledge" today can be copied and transferred quickly, cheaply and easily.

The response by the US to the challenge of protecting patents and new knowledge has been active lobbying with the WTO, and at the same time huge investments in its Patent Office, with some 2400 patent examiners. In the last few years well over 500 new examiners alone have been hired for the technology center that examines software, computer and business methods. In contrast, the Brazilian Patent Office, with only approximately 85 examiners, hired 65 new examiners this year, 30 of whom are specialists in the chemical and pharmaceutical area. The Supreme Court considered the hiring partly unconstitutional and so the under-manning continues. These two very different pictures help us to understand some of the problems that Brazil is going to face over the next few years. One of the concerns is the delay in prosecution and the likely poor quality of the resulting patents. It must be stated, however, that the current Patent Office administration is taking courageous and forceful efforts to improve the situation, notwithstanding the adverse conditions that prevail at this time.

Recent political decisions may well influence future trends in Brazil. The long-debated 1996 IP law has been weakened by a Provisional Measure, a tool that the President can use without the interference of Congress. This Measure, that became law, has intentionally slowed down and adversely affected pending patent applications in the pharmaceutical field. The current Patent Law is also being interpreted in a manner that facilitates the "busting" of patents. It states that whenever patent rights are exercised in "an abusive manner" compulsory licenses shall be granted. Furthermore, it states that in situations of "national emergency or public interest" by an act of the Executive Branch of the Government a compulsory license shall be granted ex-oficio. This has been called the "busting" of patents.

This effort to "bust" patents for social purposes may be a matter of misplaced compassion. The AIDS virus is mutating so quickly that the effective medicines of today may not work a few years from now. Already there is evidence that some research companies are shifting resources from AIDS to cardiac, cancer and other research targets.

If the political leadership in Brazil should take on a more socialist mantle, the chances are that even more patents will be "busted" in the name of social welfare. It is evident that private enterprise, within the present economic model adopted in most parts of the world, requires a return on investment. How much that return should be is a matter for debate, but the trend towards "patent-busting" in so-called underdeveloped and developing countries in the name of social welfare and equality will certainly provoke a re-thinking on the part of those who make research decisions, both abroad and in Brazil. It could also have a detrimental effect on the patent system as a whole.

For this reason, the dichotomy "return on investment – social conscience" is one that governments and companies will be looking at very hard in the next few years, in order to develop an economic model that answers the needs of all involved, not just in Brazil but across the entire global community.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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