The pharmaceutical sector in Brazil faces a pivotal moment as Brazilian and foreign pharmaceutical companies clash over the extension of 63 pharmaceutical patents. It all began in a 2021, when the Federal Supreme Court (STF) ruled unconstitutional the patent term extension previously granted under Article 40 of the Industrial Property Law (LPI). This decision has broad implications for the Brazilian pharmaceutical market, potentially impacting drug prices, market competition, and innovation incentives.
Historically, LPI stated that patents would have a term of 20 years from the filing date, offering a safeguard, since, if the Brazilian Patent and Trademark Office (BPTO) took more than ten years to approve a patent application, the patent holder could be granted an additional period beyond the standard term. This provision was meant to compensate patent holders for delays in the approval process, ensuring they received a minimum period of protection.
The STF, however, ruled this mechanism unconstitutional, arguing that it would affect public access to affordable medications and stifled competition. The decision was issued with prospective effect, meaning it primarily affected patents granted after the decision, but it also applied retroactively in cases concerning pharmaceutical products. This retroactive application sparked the current dispute, as companies seek clarity on whether their existing patent protections can be preserved.
Retroactive application of judicial decisions in patent law is a complex issue, as it can upend established expectations and business models built on long-standing legal interpretations. The companies argue that patents granted under the previous understanding should not be stripped of their extended protection. Doing so, as they contend, would infringe upon legal certainty and undermine investor confidence in Brazil. On the other hand, critics maintain that public interest in accessing affordable medication justifies revisiting the patent terms.
The pharmaceutical industry relies heavily on IP protections to recoup research and development costs. Drug discovery and testing are costly and time-consuming, and patent exclusivity is often the only incentive for companies to invest in developing new treatments. However, public health advocates argue that extended patent protection delays the entry of affordable generic drugs into the market, limiting access to essential medications for millions of Brazilians.
The BPTO plays a central role in this dispute. As the responsible bureau for patent administration, it must navigate a challenging legal landscape to reconcile the STF’s decision with the pharmaceutical industry’s reliance on patent protections. Since the ruling, the BPTO has been cautious in handling pharmaceutical patents that were previously subject to extended terms, awaiting further judicial clarification.
For the pharmaceutical companies, this dispute will set a significant precedent for IP policies. A ruling favoring retroactive reduction of patent terms could open the door to more generic competition, but it may also discourage foreign investment in the country. A decision favoring patent holders could ensure a stable business environment but risk backlash over drug pricing and access.
As a BRICS member, Brazil often takes a unique approach to balancing IP protections with public health needs, and this case exemplifies it. Global pharmaceutical companies are closely monitoring the handling of this case, as it could prompt similar challenges in other countries where patent term extensions are granted to offset regulatory delays.
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Author: Carlos Roberto Parra e Cesar Peduti Filho, Peduti Advogados.
Source: https://www.jota.info/tributos-e-empresas/saude/farmaceuticas-brasileiras-e-estrangeiras-disputam-prazo-de-63-patentes
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If you want to learn more about this topic, contact the author or the managing partner, Dr. Cesar Peduti Filho.
Se quiser saber mais sobre este tema, contate o autor ou o Dr. Cesar Peduti Filho.
