New Decision From The Brazilian Supreme Court In Favor Of Patent Term Adjustment (PTA) Cases

A new decision from the Brazilian Supreme Court on November 16^th brought some hope to patent owners seeking the term adjustment for patents in Brazil. Justice Luiz Fux stated that the Supreme Court’s decision in the Direct Plea of Unconstitutionality (“Ação Direta de Inconstitucionalidade” ou “ADI”) 5,529 “does not prevent the Judiciary from authorizing the extension, for a determined and reasonable timeframe, of the patent privilege, should there be present, in the concrete case, circumstances which demonstrate unreasonable, unjustified, and exceptional delay of the Brazilian Patent and Trademark Office (BPTO) in granting the patent application”[1].

Such decision was rendered in the Constitutional Claim[2] (“Reclamação Constitutional” or “RCL”)  56,378/DF filed by Bristol-Myers Squibb (BMS) against the rejection of its preliminary injunction request to keep patent PI 0212726-1 (“726”) alive. The Reporting Appellate Judge presiding over the company’s interlocutory appeal to reverse the rejection denied the preliminary injunction with grounds on the reasoning that the grant of such preliminary injunction would violate the Supreme Court’s reasoning in the ADI 5,529. Brazilian patent 726 has expired in Sep. 17, 2022.

In the following paragraphs, we provide a short-notes timeline of the ADI 5,529 background and the impact of its trial for Brazil’s patent system:

1. the sole paragraph in article 40 of Brazil’s Industrial Property Law (Law no. 9.279/96) allowed for an automatic adjustment for patents if the BPTO took more than 10 years to grant a patent; in this sense, if the BPTO granted a patent within 10 years, the usual term of 20 years from filing would apply – if the PTO took more than 10 years, the term would be automatically adjusted to 10 years from the date of granting.

2. Brazil’s Attorney General filed a request for judicial review of this automatic extension in a Direct Plea for Unconstitutionality ( “ADI” in its Portuguese acronym).

3. the Brazilian Supreme Court decided that this automatic extension did, indeed, go against the Constitution’s stipulation that patents should be temporary (per article 5, item XXIX, of Brazil’s Federal Constitution) as the automatic extension of patent terms brought forth an undue unpredictability as to when patent terms would expire.

4. as a means of adjusting the effects of this decision, the Supreme Court additionally stipulated that the effects of this unconstitutionality declaration of the sole paragraph of article 40 should be applied as a rule from the date of publication of the opinion onwards (i.e., 1 September 2021; prospective effects). However, the patent term must be immediately reduced to 20 years from filling regardless of this modulation of effects (retrospective effects) in (i) lawsuits filed until April 7^th, 2021 (date in which the preliminary injunction was granted in the ADI 5,529); and (ii) patents for pharmaceutical products and process; as well as for (iii) patents related to medical devices or materials.

The judgment issued in the ADI 5.529 case was, unsurprisingly, detrimental to the interests of the holders of Brazilian patents, as the PTO’s delay is a well-known fact of patent prosecution in Brazil – especially in the pharmaceutical and telecom sectors.

In response to the removal of the safeguard contained in the sole paragraph of article 40, a wave of litigation started in Brazilian Federal Courts. Many holders of Brazilian patents brought complaints to the Judiciary asking for the adjustment of their patent terms due to the BPTO’s unreasonable delay.

As of this time, 41 PTA cases are underway in Federal Courts. From this collection of complaints, only 4 decisions on the merits were already issued – all of which denied the adjustment sought by patent holders and, thus, are currently awaiting to be reexamined by an Appellate Federal Court. The cases which were denied on the merits at the District level refer to patents covering pharmaceutical products, namely: Stelara®, OFEV®, Ozempic®, Rybelsus®, and Sutent®.

Regarding the preliminary injunctions to keep the patents alive, as of today, there are 4 in force. They refer to patents PI 0113110-9 (Simponi®); PI 0113109-5 (Stelara®); PI 0209249-2 (Uptravi®); PI 0212733-4 and BR 12 2012 023120 (Brintelix®).

After this quick recap, we turn our attention, once again, to Justice Fux’s decision from last Wednesday (November 16, 2022) which marks an important step in the PTA battlefield: a Supreme Court Justice has taken a clear stance admitting the possibility of Courts to adjust patent terms in a case-by-case manner based on unreasonable delays by the BPTO.

Such decision is a great counterpoint to Justice Toffoli’s decision from June 22, 2022 which ruled favorably to EMS S/A in the RCL 53,181/DF to revoke Hypera’s preliminary injunction to keep Alektos® patent alive (PI 0215703-9). Justice Toffoli’s decision stressed that the granting of a preliminary injunction to extend the temporary privilege of the patent goes against the reasoning of the opinion from the Supreme Court in the ADI 5,529, in which the Supreme Court affirmed the need of an objective criteria not related to the eventual delay in the prosecution of the patent to eventual extension of the patent term.

Even though Justice Fux’s decision is encouraging for patent holders, the matter is far from settled. Such decision is still bound to undergo a referendum by a panel of five justices. Moreover, a series of case-by-case decisions shall follow in the next few months.

While the PTA issue in Brazil is far from resolved, patent holders are now expected to be emboldened by the emergence of a Supreme Court stance which, in the very least, admits the discussion of a case-by-case adjustment of patent terms.

Should you wish to be informed on the updates related to this matter and/or need any help or clarification, do not hesitate in contacting us through the e-mail address: mail@kasznarleonardos.com.