Brazil: New Brazilian Regulation Encourages Life Sciences Innovation

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

How is the regulation related to R&D?

Extensive research has been conducted using information from access to GH. Among them, there is the prospect of extracts, such as those from plant origin for the development of cosmetics and herbal medicines, and those derived from enzymes that catalyse the cleavage reactions or synthesis of chemical compounds, with applications in different industries. Native or genetically modified microorganisms are used in biotechnological processes and for obtaining 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 great versatility of use of biodiversity in different industrial sectors, it is clear that access to GH is strategic for R&D, providing opportunities for competitive advantages in domestic and international markets, achieved through innovations.

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

With the new regulation, the researches involving access to Brazilian GH and the ATK, as well as product development based on local biodiversity, no longer need to receive grant of prior authorisation for the start of their developments, 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 for registration of access activities to GH and the ATK, in a system called the National System for the Management of Genetic Heritage and Associated Traditional Knowledge (Sistema Nacional de Gestão do Patrimônio Genético e do Conhecimento Tradicional Associado – SisGen), the registration receipt is issued. The new system enables a traceability of such activities for various purposes, such as to grant and guarantee IP rights of the National Institute of Industrial Property. The information on the SisGen is public, except for that which, upon the user's request, is considered confidential.

What impact will the biodiversity regulations have on patents?

For the requirements of any IP rights in Brazil, such as filing of a patent application, where there is access to the GH or the ATK, the registration in SisGen should be performed prior to such filing. However, such requirements or patent licensing are parallel to the registration process and thus they do not remain dormant until the verification procedure is complete. It is noteworthy that the activities resulting from access to the GH and the ATK completed before June 30 2000 are not subject to the requirements of the Biodiversity Law. The activities of access to the GH and the ATK, as well as the economic exploitation of a finished product that occurred from June 30 2000 will have a period of one year from the date of availability of SisGen by the Genetic Heritage Governing Counsil (CGen) to comply with the terms of the Law.

The decree also governs the activities involving the National Fund Benefit-Sharing and the bases of the sharing of benefits resulting from access to the GH and the ATK. The benefit-sharing obligation will be exempt in some cases, for example in the economic exploitation of the 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 GH or the ATK by third parties.

Will the decree regulating the Biodiversity Law faciliate R&D activities?

According to the Global Innovation Index 2016 for the most innovative economies in the world, launched by the World Intellectual Property Organization (WIPO), Brazil occupies the 69th position among the 128 countries assessed. Strategies are being formulated by the Ministry of Science, Technology, Innovations and Communications for Brazil is more prosperous, and the target set by the National Strategy for Science, Technology and Innovation is that, by 2019, the volume destined for science, technology and innovation reaches 2% of gross domestic product.

Indeed, Brazil has an enormous potential for technological development and innovation through the sustainable use of its immeasurable biodiversity. However, there is clearly an inconsistency regarding productivity versus the number of patent application filings with respect to envied Brazilian biotechnological potential. Justifications for this fact reportedly include: the delay in patent application analysis and subsequent granting of patents by the National Institute of Industrial Property, the high bureaucracy in the processes, the decrease in R&D, the lack of incentive and focus on innovation and a policy of economic protectionism.

The decree in question presents a first step to reduce bureaucracy in scientific research based on Brazilian genetic heritage. Therefore, researchers can regularize their researches and advance the technological development processes that may lead to innovations in the areas of biotechnology, pharmaceuticals and chemistry. It is expected that the new decree of the Biodiversity Law will faciliate R&D activities. The path is being travelled and the practical application of the new legal framework will reveal if the decree's measures are indeed friendly prospects for innovation in Brazil.

Article published in Managing Intellectual Property.

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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