The Brazilian pharmaceutical sector: a year in review

Brazil had no patent protection for pharmaceutical inventions until 1994. The TRIPs Agreement, incorporated in 1995 and the Patent Law, approved in 1996, provide patent protection for pharmaceutical inventions.

Despite this positive background and a strenuous patent examining procedure, the Brazilian Patent and Trademark Office (INPI) has a backlog of approximately 11 years, and there is uncertainty concerning INPI and the Brazilian Food and Drug Administration’s (ANVISA) roles in the prosecution of pharmaceutical patents. While the situation at INPI deteriorates, the courts have provided a means to obtain effective patent protection.

The courts are getting less intolerant and more welcoming to assess IP demands, and patent owners should seize the opportunity to look forward to future decisions applying the rule of law.

Non-obviousness

On October 26, 2010, the Federal Court of Appeals for the 2nd Circuit upheld a lower court decision, which nullified INPI’s decision reconsidering the grant of a patent alleging its obviousness and declared the patent valid.

The core of the litigation was whether the simple reduction of the molecule in question would impair non-obviousness (since merely reducing the size of the molecule would be a procedure that is known in the state of art) and whether the judges would have to rely on the court-appointed expert’s opinion or could challenge it.

The panel established by majority that the nonobviousness was not related to the reduction of the molecule per se, but to its unexpected result. One of the appellate judges said that although the molecule was known and successfully marketed, there was a technical problem to be addressed concerning the adverse reactions of some patients. This problem, then, made the company seek to improve its safety and efficacy, which was achieved by an unpredictable reduction of the molecule.

Furthermore, Judge Roriz said that, in her opinion, INPI should not reconsider its own opinion on the non-obviousness requirement in light of the same set of prior art documents. According to her, unless there is new evidence or a clear error, the administrative authority should not have to change its opinion.

ANVISA prior approval

For the last 12 years, a controversy has developed concerning the role of ANVISA in the patent examining procedure of pharmaceutical products. Back in 1999, ANVISA’ s prior approval requirement was established for patent applications claiming “drugs of any kind, and the respective process for obtaining or modifying them”.

Since then, there have been controversies about: (i) for which kinds of patent applications (ordinary, pipeline or both) prior approval is mandatory; (ii) from when it is mandatory; (iii) the objective standards that should guide ANVISA’s examination; (iv) possible overlaps between ANVISA’s and INPI’s examination; (v) the procedure to be adopted when those agencies’ opinions conflict; and (vi) whether ANVISA’s role should be limited to public health concerns, among others.

In the past 12 months, relevant case law has clarified a few points. On April 27, 2010, the Federal Court of Appeals for the 2nd Circuit rendered a landmark ruling on an appeal challenging ANVISA’s opinion analysing patent requirements. In that decision, the panel decided that despite ANVISA’s mandatory participation in pharmaceutical patent examination, it would be unreasonable or inefficient to believe that the legislator would have established that ANVISA should assess the existence of patent requirements already examined by INPI, as set forth in the IP law.

It also states that the reasonable interpretation of the provision suggests that ANVISA should render its opinion concerning public health concerns. Nonetheless, according to the decision, ANVISA should be able to provide INPI with relevant information related to the patent requirements of an application. In general, the decision concluded that the agencies’ roles are complementary, since they must focus on different aspects.

On June 21, 2010, the Federal Court of Appeals for the 1st Circuit issued a decision on this matter. At the lower level, the federal judge denied the injunction requested against ANVISA’s opinion analysing patent requirements, which prevented the granting of the patent in spite of INPI’s favourable decision. In its decision, the court panel ordered ANVISA to re-examine the application, restricted to its legal responsibilities, i.e. public health concerns.

It is also worth mentioning three favourable rulings of federal courts in Brasilia concerning the issue. The first, issued on August 26, 2010, ordered ANVISA to grant its prior approval to a patent application if it has no public health concerns to raise on that case.

The second, issued on January 12, 2011, went further and declared the unconstitutionality of the prior approval provision, since it establishes an unnecessary re-examination of pharmaceutical patent applications, breaching Article 4 of the Paris Convention. The third, related to the first, declared ANVISA in contempt of court and established a fine of approximately $125,000.

Data package exclusivity (DPE) enforcement

Brazil explicitly infringes DPE rights, in spite of the legal framework providing protection by Article 195, XIV of the IP Law and Article 39.3 of the TRIPs Agreement. Although the first provision established that the disclosure, use and exploitation of a human drugs data package presented to ANVISA by the originator company by unauthorised third parties is an act of unfair competition, it does not indicate a term for such an exclusivity.