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The end of the trial on the term of protection of Patents in Brazil

Modulation of Effects Approved by the Supreme Court
 
After 10 (ten) sessions debating the matter, on May 12, 2021 the Brazilian Supreme Court finished the trial of DPC 5529, that dealt with the term of protection of patents in Brazil.
 
As explained in our Newsletter # 12, on May 6, 2021 the Supreme Court decided that the provision from Sole Paragraph of Section 40 of the Brazilian Patent Act – Law 9,279/96 (according to which patents should be in force for at least 10 years after issuance) breaches the Brazilian Constitution. Therefore, the term of patent protection shall be of 20 years counted as of the filing of the application before the Brazilian Patent & Trademark Office – BPTO.
 
During the trial held on May 12, the Supreme Court had to decide whether there would be the modulation of effects of the decision, i.e. in what extent the decision will be retroactive (which is the general rule in unconstitutionality cases such as this one), or if it will affect only patents issued from now on.
 
On this topic,  due to a preliminary order granted by the reporting Justice Mr. Toffoli on April 7, all patents issued by the BPTO as of that date and that had as their subject matter pharmaceutical products and processes and equipment and/or materials for health use were already issued with the term of 20 years of protection from the filing date. (See our Newsletter # 8, of April 8, 2021.)
 
As for the modulation, after debates among the Justices, the majority (8 votes against 3) decided that:
 
(a) As of the official publication of the result of the trial by the Supreme Court (something that should happen within the following days), all patents to be issued by the BPTO, in all technological areas, will have their validity limited to 20 years form filing;
 
(b) The unconstitutionality ruling retroacts to shorten the term of already issued patents in two cases:
 
(bi) in relation to patents, in all technological areas, already being challenged in lawsuits that were filed until April 7, 2021, and also;
 
(bii) in relation to patents currently in force and that enjoyed the extension of the term of protection (that shall have such term shortened),  and that have as subject matter pharmaceutical products and processes and equipment and/or materials for health use;
 
(c) With regard to the patents mentioned in “b” that shall be impacted by the decision, the Supreme Court preserved the concrete effects that already happened while such patents were still in force, before their term was shortened.
 
The modulation has the purpose to minimize the harm caused to those who trusted in the unconstitutional provision. The BPTO informed that there are currently 30,648 patents issued with the extension of term. 3,435 patents (or 11.21% of such figure) are having their terms shortened, and 27,213 patents (or 88.79% of such figure) remain untouched by the decision.
 
In other words, there are not being affected by the declaration of unconstitutionality patents already issued in all other technological areas, especially in the areas of telecommunications and electronics, in which there was a large delay in examination by the BPTO, and there are thousands of patents currently in force.
 
Another welcomed decision is the preservation of the concrete effects of patents which have their terms shortened, because royalties already paid will not need to be devolved, and a possible restriction of access to the Brazilian market (due to the risk of infringement) will not give cause to a claim of damages by a competitor against the owner of the patent. Still on this topic, the Supreme Court minimized the harmful consequences of its ruling, upholding the legal certainty.
 
In case of interest, please feel free to approach your customary contact person in our firm, or to write us to mail@kasznarleonardos.com.
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