On May 6, 2021, the Brazilian Supreme Court determined that the minimum ten-year patent term set forth in Article 40 of the Brazilian Intellectual Property Statute (Law No. 9,279) was unconstitutional (ADI 5529), and, on May 12, 2021, retroactively reduced the terms of granted pharmaceutical and medical device patents that are valid only due to the ten-year patent term provision to 20 years from the filing date. The terms of granted patents in fields other than pharmaceuticals and medical devices did not have their terms retroactively reduced, i.e., they maintain their ten-years from grant date terms.
Historically, patent applicants before the Brazilian Patent and Trademark Office (BRPTO) experienced some of the longest pendency times in the world. In 2015, the average pendency of a patent application was eleven years with some applications taking more than twenty years to grant as a patent. This meant that some Brazilian patents were granted only after their 20-years from filing date term had already expired. Due to the extremely long pendency periods, the Brazilian legislature enacted the minimum ten-year patent term.
In the Brazilian Supreme Court’s May 6 decision, nine of the eleven Justices issued opinions stating that the ten-year patent term, even in view of a backlog of patent applications, violated the Brazilian Constitution. The reasoning underlying the decision included the fact that the extension was automatic, could be subject to gamesmanship by the applicant, and was not sufficiently limited to prevent evergreening.
The Justices decided that the general provision of twenty years from the date of filing provided a sufficient term of protection for patent owners, and the minimum term constituted a “term extension” that undermined the temporary nature of a patent as provided by the Brazilian Constitution. The Justices highlighted that the term extension finds no parallel in any other country’s patent framework and automatically extends the patent’s life without considering the applicant’s responsibility for contributing to the delay. Furthermore, the Justices emphasized that the minimum term increased pharmaceutical prices in the Brazilian market by creating monopolies and impacted the country’s access to pharmaceuticals.
After the May 6, 2021 decision, several generic companies in Brazil filed lawsuits targeting patents held by pharmaceutical companies. Specifically, 46 identical lawsuits were filed against 79 patents, including patents directed to Repatha® (evolocumab), Nucala® (mepolizumab), Entyvio® (vedolizumab), Xvega® (denosumab), Brilinta® (ticagrelor), Xarelto® (rivaroxaban), Vyvanse® (lisdexamfetamine), Xalkori® (crizotinib), Latuda® (lurasidone), Ibrance® (palbociclib).
The Brazilian Supreme Court estimated that 11% of patents granted with the extended term are in the pharmaceutical field. With approximately 36,000 total patents granted with the benefit of the patent term extension, the retroactive application of the Brazilian Supreme Court’s May 6, 2021 decision appears to shorten the patent term of approximately 4,000 granted pharmaceutical patents, likely including the 79 patents directed to the major pharmaceutical products noted above.
This decision will have an unprecedented impact on pharmaceuticals in Brazil because many generic and biosimilar manufacturers will be able to launch years before previously anticipated. It will be interesting to observe the ripple effects of this decision on drug pricing and availability, public health, and patent examination resources and procedures in Brazil in coming years. Given the Supreme Court’s scrutiny of the limitless and automatic aspects of the provision, it is possible that the Brazilian legislature will consider enacting an alternative framework akin to the patent term extension or supplementary protection certificate regimes employed by the United States and European Union, respectively.