Mexico: Bill That Amends Several Articles Of Industrial Property Law And General Health Law // Patents List And... ¿Damages And Lost Profits?

On April 29, 2019, a Bill that amends section V of article 6; sections I, II, III, V and VI of article 22, articles 217 and 221; adds section VII to article 22 and article 80 Bis of Industrial Property Law; and amends article 15 of the General Health Law, proposed by Senator Miguel Ángel Navarro Quintero, from MORENA, was published in Senate's Gazette. In these lines, the essential aspects and motives of the proposed bill will be punctually explained.

Firstly, the mentioned bill exposes what apparently should be understood as the normativity that motivates the proposed amendments, which includes several articles of the General Health Law ("GHL"), the Health Supplies Regulations; and the Industrial Property Law ("IPL"), provisions that in general terms refer to the distribution of jurisdiction in patents matters -Mexican Institute of Industrial Property ("MIPI")-, health registrations -Federal Commission for the Protection against Sanitary Risks ("COFEPRIS")-, and that describe the system of intergovernmental consultation that exists to determine if an application for a health registration violates existing industrial property rights.

The bill highlights the relationship that exists between MIPI and medicines, as it is the authority in charge of granting patents for formulations of medicines, as well as in charge of monitoring the respect for the exclusive exploitation of said patents, providing, as stated in the bill "reliability, certainty and tranquility to the owner of the information". Therefore, the bill proposes that MIPI should be part of the General Health Council, precisely in attention to this close relationship between said institution and patents related with health matters.

In addition to the foregoing, in order to give certainty and objectivity to those involved in the medicines market, the bill points out that the creation of a National Registry of Validity of Patents is needed, which would include data in regard with application initiation, duration and validity of patents, providing information in real time and available for everyone. This is supported, according to the bill, in the dimension of patent issues that prevails in our country nowadays, mainly focused on the medicines sector, and more specifically that of generic medicines, being essential that companies in said sector have a full knowledge of the state of the patents.

Furthermore, the bill highlights the results of a study of the medicines market in Mexico, where in general terms it has been concluded that there are competition problems due to failures, both in the government and in the market, highlighting mainly the delay that exists between the moment in which a patent expires and the entry of correlative generic medicines to the market, as well as the fact that said medicines do not represent true competition, situation that would motivate the proposed amendments.

However, notwithstanding what is described above, the bill does not propose any reform that addresses directly the problem described, since despite being mentioned, it does not include any amendment that proposes the creation of the National Registry of Validity of Patents, proposing only:

  1. an amendment to article 22 of IPL, to state that a patent will not produce effects against whoever carries out studies, tests and experimental production to request a health registration of a generic or biosimilar medicine within three and eight years prior to the expiration of the patent, respectively; and
  2. the addition of article 80 Bis to the IPL, to state that MIPI will publish in the Gazette those applications for patents, patents and utility model and industrial design registrations, for which the industrial property right requested was not granted (public domain), the technological information that is in the state of the art or has been incorporated into the public domain, and that in the case of patents granted in regard with inventions to be used in allopathic medicines, MIPI will publish a list of those protecting production processes and that are in the periods referred to in paragraphs a. and b. of section I of article 22 described above. The mentioned list will not include patents for drug formulations.

It could be understood that the reform described in point (ii) above, would be related to the aforementioned National Registry of Validity of Patents, however, its text is not clear enough to affirm it.

Surprisingly, the proposed amendments include a major importance proposal, in regard with amendments to the compensation for damages and lost profits figure. The bill exposes the need for MIPI to go beyond just punishing violations of the law, also providing a compensation regime for the damages caused to the owners of rights.

In this regard, the bill mentions the need to legislate in two senses: (i) punish violations of intellectual property rights from an administrative point of view, through the imposition of sanctions; and (ii) indemnify/compensate the damages caused to the holders derived from the violations of their rights.

Thus, the bill proposes major amendments to articles 6, 217 and 221 of the IPL, where "powers"/"faculties" would be granted to MIPI to determine the corresponding compensation in case of violations of intellectual property rights. This is of great relevance because at present, the holders of intellectual property rights must exhaust the administrative route to obtain a res judicata determination on the existence of violations to their rights, to later initiate civil proceedings to try to obtain compensation for the damages derived from said violations, procedures that take years and that have very few chances of success.

It will be of major importance to follow the legislative process of the bill described herein, because, although highly questionable the sufficiency of it to achieve its objective, it would imply a major change of paradigm in the matter of compensation for damages.

Originally published May 2019

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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