The Supreme Federal Court (STF), the highest body in the
Brazilian Judiciary and responsible for defending the Constitution,
will decide whether or not the minimum term of validity for patents
in Brazil is constitutional (10 years for invention patents and
seven years for utility model patents), set forth in the sole
paragraph of Article 40 of the Industrial Property Law (Law No.
9,279/96).
This discussion is being held within the scope of Direct Action
of Unconstitutionality - ADI no. 5529-DF, proposed by the Attorney
General of the Republic in 2015 1, and is extremely
important for any and all titleholders, whether of a patent that
has already been granted in Brazil or of a patent application that
has been filed, regardless of the industry sector.
If the minimum term of validity is considered unconstitutional,
in addition to the risk of patents that have already been granted
being affected, as well as pending patent applications, there is
also a risk to the innovation cycle in Brazilian
industry.
For a long time, the Brazilian Patent and Trademark Office
– BPTO [National Institute of Industrial Property –
INPI] has been incapable of examining pending patent applications
within a reasonable period. Studies show that, in 2015, the average
time until the end of administrative processing was greater than 11
years. In certain technological areas (e.g. smartphones), the
average waiting time for a patent to be granted was 14 years
2. In some extreme cases, the BPTO took more than 20
years to grant a patent. This delay in granting a patent due to the
queue of filed applications is known as a backlog, however,
currently, in a commendable effort by the BPTO, a plan to combat
the delay is being implemented, which has led to a reduction in the
average time to grant a patent to approximately eight
years.
Due to the BPTO's historical difficulty in dealing with the
queue of patent applications, the Brazilian legislator inserted a
minimum term mechanism into the Industrial Property Law, which is
triggered when the Office takes more than 10 years to grant a
patent.
This mechanism is important to ensure that patents are in force
for a reasonable period of 10 years. In other countries (e.g. the
United States, China, Australia and South Korea), where patents are
granted in an average time of less than four years 3,
patent holders enjoy more than 16 (sixteen) years of exclusivity in
the market.
In light of the Brazilian reality, this minimum term of
validity prevents patents from being granted with a term that has
already expired - so-called stillborn patents - or very close to
expiry, which would make the return on investments made in the
invention unfeasible. Without a reasonable term, there will be no
incentive for new inventions and society will be served by outdated
technologies. And this will probably be the worst consequence if
the STF deems the sole paragraph of Article 40 of the Industrial
Property Law unconstitutional.
It is evident, however, that the minimum term of validity does
not violate the Brazilian Constitution. On the contrary, it
actually ensures that inventors will enjoy a temporary privilege,
as expressly guaranteed by Article 5, XXIX, of the constitutional
text. After all, a patent that does not have a reasonable term and,
therefore, is not able to reward the inventor, has no economic
value.
The constitutionality of the minimum term of validity is
defended by legal scholars such as former Justice of the STF Ellen
Gracie and by the Director of the Law Faculty at the University of
São Paulo Prof. Floriano Azevedo Marques 4. It is
also important to remember that the Industrial Property Law -
containing the sole paragraph of Article 40 - was signed by former
Justice of the STF Nelson Jobim, then Minister of Justice for
President Fernando Henrique Cardoso 5.
As the Supreme Federal Court has so far not ruled on the
legality of the sole paragraph of Article 40 of the Industrial
Property Law, it is possible, in theory, that this provision will
be declared unconstitutional. However, in this event, the STF
should modulate the effects of its decision, based on the principle
of legal certainty, so that the minimum term of validity for
patents applies to patents that have already been granted and the
patent applications that have been filed until the date the ruling
is handed down.
The constitutionality of said provision is important not only
for the private sector, but also for public companies and
universities. Petrobrás, for example, has more than 200 (two
hundred) patents granted with a fixed term of validity based on the
sole paragraph of Article 40. The University of São Paulo
(USP) and the University of Campinas (Unicamp), summed together,
have more than 400 (four hundred) patents in the same
situation.
Footnotes
1. This discussion started in 2013, when an association of generic drug manufacturing laboratories filed a direct action of unconstitutionality (ADI) to address the same issue. However, the STF decided that such association is not legitimate to file an ADI (the Constitution affords such legitimacy to few people).
2. Schultz, M.; Madigan, Kevin, 2016. Available at: https://sls.gmu.edu/cpip/wp-content/uploads/sites/31/2016/10/Schultz-Madigan-The-Long-Wait-for-Innovation-The-Global-Patent-Pendency-Problem.pdf. Accessed on 25 September 2020.
3. Schultz, M.; Madigan, Kevin, 2016. Available at: https://sls.gmu.edu/cpip/wp-content/uploads/sites/31/2016/10/Schultz-Madigan-The-Long-Wait-for-Innovation-The-Global-Patent-Pendency-Problem.pdf. Accessed on 25 September 2020.
4. Both legal scholars presented favourable opinions on the constitutionality of the sole paragraph of Article 40 of the Industrial Property Law in the case records of ADI 5529-DF.
5. Which is to say that two former STF Justices endorse the constitutionality of the contested rule.
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