THE "BUSTING" OF PATENTS AND OTHER PATENT
DEVELOPMENTS IN BRAZIL
Rana Gosain
The “Busting” Of Patents
Over a year ago Brazil’s Minister of Health José Serra made a serious commitment to combat
the high incidence of AIDS in Brazil and to reduce the heavy death toll of infected patients. The
strategy to date has been a combination of direct and indirect pressure on the pharmaceutical industry
to lower the prices of medicaments, including a proposal for the mandatory inclusion of generic
versions of brand name drugs in medical prescriptions. Last year the Brazilian Government started a
campaign to lower prices and to make medication available to a greater part of the population.
Following talks directed at price restraints between Government and Industry, Minister Serra accused
foreign research laboratories of excessive price hikes that exceeded annual inflation rates.
Research laboratories were taken by surprise when the current Patent Law was amended to the
effect that the final word on patent approval will be rendered by the Health Ministry’s National
Sanitary Surveillance Agency (ANVISA). Obviously this political manoeuvre has neither pleased IP
practitioners nor the research laboratories, principally because this will mean an increase in
Government bureaucracy. In practice, the Brazilian Examiner will conduct a technical analysis of the
application and having verified that it satisfies the conditions for patentability, the Examiner will turn
over the case to Health Authority personnel who are physically located in the Brazilian PTO’s
premises.
Despite serious threats to bust patents using current IP legislation, research laboratories have
not yet been compelled to grant any compulsory licenses. This is due to satisfactory negotiations
between the Government and pharmaceutical research companies – Merck, Abbott and Roche, for
example, recently slashed the prices for the drugs sold as part of the AIDS treatment.
On account of the success of its AIDS program, Brazil has won much sympathy and support
from developing countries, International Human Rights Associations and from NGO’s. At the recent
WTO Conference in Qatar, Brazil obtained preliminary approval of a declaration to the effect that
essential health policies adopted by developing countries have priority over the provisions of TRIPs.
Foreign pharmaceutical companies doing business in Brazil are concerned by the threats to bust
patents and the Government’s tactics to delay the grant of pharmaceutical patents. It is generally
understood by these companies that, although sound from a social point of view, the political use being
made of these measures is questionable and unfair to them. Furthermore, on a broader level, these
same companies feel that the patent law provisions are too vague, of doubtful legal validity, and
conflict with TRIPS, particularly as regards compulsory licensing and the working of patents.
Additionally, the Patent Office appears to be in desperate need of improvement, particularly with
regard to delays in patent prosecution and a lack of effective Government support to increase the
number of qualified patent Examiners.
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To improve attention to health, rather than using compulsory licensing, pharmaceutical
companies feel Government should be strengthening the patent system. By not doing so, the
companies feel that it is discouraging research or causing research to be switched to areas that would
give a better financial return. This has a detrimental effect on the health of the population which will
be deprived of access to the latest technological developments.
It is true that in countries like Brazil, the cost of medication for the treatment of AIDS is very
expensive and even prohibitive. The solution would appear to be through high level negotiations
between government and pharmaceutical companies. The latter, in return for lowering their prices,
should, for example, be given advantages such as fiscal incentives/benefits that would compensate for
price reductions. In the absence of this, it seems difficult to find a solution that will satisfy both sides.
Traditional Knowledge And Genetic Resources
Brazil, which has the largest biodiversity of the planet, is a member country to the Convention
on Biodiversity (CBD). There is currently a Provisional Measure regulating domestic law on
biodiversity. A Provisional Measure is issued by the Executive branch of the Government and is
immediately effective for all legal purposes, but can be cancelled or approved in a vote by the
Brazilian Congress.
Although TRIPs establishes that member countries may exclude plants and animals from
patentability, but should grant patent protection for micro-organisms, there are borderline cases where
micro-organisms could be interpreted to be plants or animals. For this reason Brazil is insisting on the
revision of TRIPs to preclude biopiracy and to guarantee the sustainable use of genetic resources.
Developed countries such as the United States and European countries that grant patents for plants
apparently do not concur with Brazil’s position. The plausible explanation would be that since the
U.S. and European countries have highly developed industries in this area, their domestic companies
are normally the ones that would commercially exploit Brazil’s biodiversity.
One of Brazil’s recent suggestions is to have a precise definition of a “microorganism” so as to
determine the scope of what is patentable.
Brazil’s legislation on genetic resources establishes that the applicant or patentee of an invention
covering, for example, a microorganism is obliged to identify the origin of such genetic material and to
share the benefits of the commercial exploitation of the product with the Brazilian Government or with
an indigenous community. However, it seems that Brazil wishes to avoid requests for the
establishment of Panels at the WTO in cases where it denies a patent to an industry which fails to
disclose the origin of the product.
India, Africa and China share the same position and, are likely to form a block (with Brazil) to
advocate that TRIPs should be amended to become consistent with the CBD.
The aim is that developing countries will establish control over their genetic resources to
preclude the unregulated plundering by foreigners. This was the issue raised by Brazil in the recent
WTO meeting, namely, that traditional knowledge and biodiversity represent valuable economic and
cultural assets to those that control access to them, and cannot be appropriated without compensation.
The issue is highly controversial as it seems apparent that the goals of the CBD rely on stronger and
more effective systems of IP protection. It is also evident that these systems of protection must contain
adequate mechanisms to provide benefits to the countries which own biodiversity wealth, as well as to
indigenous peoples whose traditional knowledge has allowed for the discovery of matter. Contractual
arrangements and joint ventures between research based pharmaceutical companies and developing
countries, which allow access to their biological resources, are necessary to generate these benefits.
One good example of such agreement was between Merck and the Costa Rican Institute INBIO, which
will generate royalties for INBIO on any drugs that are developed.
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Genoma and Biotechnology
Under the current Brazilian Patent Law, inventions covering recombinant DNA, polypeptides,
DNA sequences, etc. are patentable. ESTs and DNA fragments are patentable subject matter when
functional information is required. Living organisms as a whole, or parts thereof, are not patentable,
with the exception of lab-created micro-organisms, which are patentable. Contrary to most developing
countries, Brazil has chosen to include micro-organisms in its list of patentable subject matter. The
legal definition of transgenic micro-organisms is those organisms, excepting the whole or part of
plants or animals, which express, through direct human interference in their genetic composition, a
characteristic that under natural conditions would normally not be achieved by such species.
With regard to applications directed to biological materials, the Brazilian PTO can request that
samples of the claimed materials be furnished to a depository authorized by the PTO or indicated by
international agreement. This deposit need not be effected, if the applicant considers that there is
sufficient disclosure of the best mode of practising the invention. However, if the examiner
subsequently considers the application to be less than sufficiently disclosed an official action will
ensue. The applicant must then prove, to the satisfaction of the PTO that there is sufficient disclosure,
the deposit of the biological material cannot be made after the priority or filing date of the application.
Therefore, it is advisable to effect the deposit at the time of filing. The Brazilian PTO recently
published Resolution No. 082/2001, dated November 22, 2001 setting forth guide-lines on the
conditions for authorising local institutions as Depositary Centers for biological materials, because at
the present time there are no authorised Brazilian depositaries for depositing micro-organisms. It is
therefore necessary, for the time being, for deposits to be made at internationally authorised
Depositaries. The Institutions that are candidates for Depositary Authority must indicate detailed
information as to their capacities to comply with the requirements established by Resolution No.
082/2001.
Plant Biotechnology
In an effort to honour its commitment to TRIPs, Brazil enacted Law 9456, which provides for
the protection of plant varieties. This law came into effect on November 6, 1997. It grants protection
for the reproductive or the vegetative multiplication material of the entire plant. The terms of the
protection are fifteen years for non-perennials and eighteen years for perennials.
The National Service for the Protection of Plant Varieties has defined the minimum descriptive
data to be disclosed by the applicant when filing an application for the following plant varieties:
cotton; rice; potatoes; beans; corn; soy; sorghum; wheat; sugar cane; apples and tomatoes.
There is a general belief that this protection is insufficient as it does not cover the plant variety
itself and is thus inconsistent with TRIPS.
Inventions related to method of use
No mention of method of use inventions was made in the previous law, and the Brazilian PTO
did not grant such inventions. Since the current law came into force, examiners have been allowing
method of use invention without restriction.
New use inventions
Inventions which find a new use for an already known product, most commonly applicable to
products from the agrochemical and pharmaceutical industry, are now acknowledged by the PTO.
Protection will apparently be granted exclusively for the use claimed and the patentee will require
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a license from the owner of the original patent if the product to be used is under patent. Claims drafted
to refer to the use of a compound for the treatment of a disease, will not be accepted. The correct
manner would be to use the Swiss type claim format.
Conclusion
The issue in Brazil over drug prices in the pharmaceutical industry coupled with the campaign to
bust patents has been a cause for concern. It is hoped that this does not lead to a weakening of the
patent system and that negotiations between companies and government will come to a satisfactory
conclusion. Brazil has clearly signalled its intent of granting patent protection for transgenic microorganisms and has enacted a sui generis statute on Plant Varieties. Brazil’s IP laws are, for the most
part, modern and in great part TRIPS-compliant, trying to achieve that difficult balance between
business interests, medical research, sovereignty and social conscience. The problem lies in the lack of
infrastructure and what appears to be the government’s lack of political interest to improve conditions.
Rana Gosain, Patent Director of the Daniel firm, Rio, Brazil
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