Source: Casimir Jones SC

In 2021, the Brazilian Supreme Court ruled that the country’s patent term adjustment (PTA) provision that guaranteed a minimum patent term of ten (10) years was unconstitutional.  Since that time, there has been uncertainty whether patent owners of life science inventions can obtain an extension of term when there has been a significant delay by the Brazilian Patent and Trademark Office (BRPTO) in examining and granting their patents.  Because the Supreme Court’s decision threatens to shorten the term of thousands of pharmaceutical and medical device patents, 48 lawsuits have been filed in which patent owners have asserted their right to an extension of their patent term.  The outcome of this litigation will have significant ramifications in Brazil, which has the largest economy in Latin America.

To date, two different legal theories have been advanced in these lawsuits to support a patent owner’s right to an extended patent term.  The first legal theory is based on Article 4 of the Introductory Statute to the Norms of Brazilian Law (LINDB).  The LINDB states that when the legal order is silent regarding a matter, the judge “shall decide” the case according to analogy, customs, and general principles of law (e.g., normative gap).  The parties pursuing this theory argue that there is a normative gap in Brazilian law regarding PTA.  According to their argument, foreign law should be applied along with customary rules used by courts and that PTA should be calculated based on a generalist perspective.

The second legal theory is based on Administrative Law.  The parties pursuing this theory argue that since the granting of patents is governed by Administrative Law, federal procedural rules apply.  According to Brazilian Federal Administrative Procedure, the use of the efficiency principle is the basic rule for any procedure.  Additionally, Article 27 of the LINDB provides a right of compensation for any abnormal or unfair losses that result from an administrative procedure, meaning that hypothetically, if an administrative delay occurs, the delay constitutes “…a behavior capable of giving rise in theory, to indemnifying liability”.  This hypothesis is confirmed in Brazil’s Constitution (Art. 37, §6) and Article 27 of the LINDB.

In a lawsuit filed by Celgene involving patent PI 0315315-0 (Celgene Corp v. BRPTO and Brazilian FDA) on April 11, 2023 asserting the second legal theory, a Federal Judge found that the Brazilian Regulatory Agency (ANVISA) unjustifiably delayed the examination and granting of Celgene’s patent (an administrative procedure) by 358 days.  As a result of this delay, the judge issued a preliminary injunction suspending the BRPTO’s order reducing the term of Celgene’s patent.  Specifically, the judge held that the injunction was appropriate because Celgene was not seeking automatic patent term extension which would be in conflict with the Supreme Court’s decision.  Rather, the relief requested by Celgene was a determination of what, in terms of liability, would be the best protection to be provided by the judiciary to protect Celgene’s rights.  According to the judge’s decision, it was customary for the Judicial Branch in Brazil to deal with cases involving public administration delays and that the inefficiency (by the BRPTO) in performing an administrative procedure created a loss for a private party (e.g., Celgene).  This decision aligned with the understanding that Brazilian public law provides a proper recourse for the BRPTO’s delay in examination and, ultimately, its liability.   As a result, Celgene’s patent remains in force until April 5, 2024.  The lawsuit is not over, as ANVISA challenged the decision through an interlocutory appeal.

In contrast to the cases asserting the first legal theory which argued that the calculation for term adjustment should be based on a generalist perspective, the calculation for term adjustment under the second legal theory is based on consideration of each step in the prosecution process and the legal deadlines for administrative response (by the BRPTO).  Under this theory, a delay by the BRPTO was identified if: (1) the BRPTO did not comply with a response deadline set by law; (ii) there was no possible action required to be taken by the applicant; and (iii) ANVISA failed to comply with the response deadline set under the law for applications subject to a prior approval requirement.

Additionally, a decision by the Supreme Court on the related pending Constitutional Complaints is also pending.  These complaints challenge the decisions issued by the Federal Court of Appeals in decision ADI #5529.  The 2nd Panel of the Supreme Court has not yet ruled on this matter.

Given the complex legal issues being discussed, a full en banc hearing on this matter by the Supreme Court might be required.  The outcome of this litigation is extremely important for the life science industry in Brazil given that currently, the average pendency for the BRPTO to examine and grant a patent is about six years and three months.  However, the pendency is even longer, specifically, eight years plus in technologies such as molecular biology, pharmacy, food and plants, and telecommunications.  Given this, the discussion around compensation rights and PTA are critical given that delays in examination and granting of patents remain in Brazil.