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The BRPTO [INPI] and the Brazilian FDA[ANVISA] issue Ordinance #1/2017 on prior approval of pharmaceutical patent applications under art. 229-C of the Patent Law

April 25, 2017

Published on April 13 in the Brazilian Federal Official Gazette, Interagency Ordinance #1/2017 enters into force on June 12th. Anti-patent biased, it establishes: i) ANVISA ́s denials under art. 229-C as basis for BRPTO ́s contructive abandonment of patent applications; ii) special pre-grant opposition track for ANVISA, which will halt examination; and iii) anti-patent harmonization effort between BRPTO and ANVISA; among other violations of federal laws and international treaties.

On April 12, at the Presidential Palace, the BRPTO and the ANVISA signed Interagency Rule #1/2017 establishing new procedures for the interaction between the two agencies regarding ANVISA’s prior approval of patent applications claiming pharmaceutical products or processes under the authority of art. 229-C of the 1996 Patent Statute, as amended. Brazilian associations representing the generic industry selling to the Brazilian Government attended the event en masse.

The applicability of art. 229-C by ANVISA and the agency ́s relationship with the BRPTO have never been simple. ANVISA took over a year from art. 229-amendment into the 1996 Patent Statute (on Dec.1999) to start its activities related to prior approval. It was only on May 21st, 2001, with ANVISA’s Rule #239, that the agency created its Intellectual Property Commission (COOPI) to implement art. 229-C.

ANVISA’s statutory mandate, according to art. 6 of Statute #9,782/1999, is to provide sanitary and health controls to the population. However, once the BRPTO began submitting patent applications for prior approval, ANVISA started to examine patent claims and issue opinions declining its approval based on its views regarding patentability requirements and patentable subject matter.

ANVISA has been taking up to three years to issue a decision on prior approval, which contributes to the 11-year pendency in the BRPTO. The BRPTO has a backlog of 261,000 patent applications of which 31,020 were filed in 2016. The BRPTO granted only 4,771 applications in 2016, a mere 15% of the number of filed applications.

Further, patent applications claiming pharmaceutical products and processes have been left out of recent efforts to expedite examination, such as the PPHs with the USPTO and the JPO.

Brazilian Federal Courts have issued numerous decisions ordering ANVISA to limit its examination to public health issues. However, ANVISA has kept on applying its RDC #45, issued in 2008, under which the agency decided that it could deny its prior approval for patent applications claiming products considered strategic to the public policies of access to medicines and pharmaceutical assistance of the Public Healthcare System (SUS). Interagency Ordinance #1/2017 seems to expand on that.

The new ordinance comes after several Federal Court decisions against ANVISA establishing that ANVISA is not allowed to examine patentability requirements. Cornered, ANVISA is now using political power in an attempt to change the rules of the game, to overrule the precedents, and to revive its ability to participate in the outcome of pharmaceutical patents based on political grounds. The public statements regarding Interagency Ordinance #1/2017 cannot be considered good news for the R&D pharma industry.

First impression of Interagency Ordinance #1/2017

The first article of Interagency Ordinance #1/2017 states that all ANVISA’s prior approvals of patent applications claiming pharmaceutical products and processes under the authority of art. 229-C of the 1996 Patent Statute, as amended, are subject to the new ordinance, effective on June 12, under the 60-day term established by art. 11. This includes the pending applications. Under art. 8, which apparently gives retroactive effect to Interagency Ordinance #1/2017, applications that have already been finally decided by ANVISA will also be subject to the new provisions.

The most significant provision of Interagency Ordinance #1/2017 is art. 9, which has the potential to turn off the pharmaceutical patent system in Brazil, moving away from the rule of law based ministerial decision into a stakeholder-based discretionary decision, common to the ANVISA and the Brazilian Ministry of Health. Art. 9 creates an Interagency Policy Group between ANVISA and the BRPTO to “harmonize” construing and the application of the Brazilian patent law.

The threat appears to be real and concrete. The sole paragraph of art. 9 establishes that the BRPTO and the ANVISA will discuss, within the Interagency Policy Group, common understandings on the interpretation of patentability requirements for the categories of claims listed on the appendix of Interagency Ordinance #1/2017.

We have prepared the following table to show the potential negative impact of ANVISA ́s anti-patent policies being imposed to the patent examiners at the BRPTO:

# Claim category BRPTO ANVISA
1 Compounds – Markush formula Allowed under: items 3.126 to 3.128 of Block I; items 6.1 to 6.14 of Block II of the BRPTO’s examination guidelines; and item 2.3 of the draft examination guideline for chemical related inventions, under public consultation. Currently accepted
2 Selections of compounds and/or composition Allowed under: items 4.19 to 4.25 and 5.31 to 5.34 of Block II of the BRPTO’s examination guidelines; and item 2.8 of the draft examination guideline for chemical related inventions, under public consultation. Restrictive interpretation
3 Usual salts of the compound Restrictive interpretation, but allowed under: Item 2.4 of the draft examination guideline for chemical related inventions, under public consultation. Restrictive interpretation
4 Chemical and pharmaceutical processes Allowed under: item 8 of the draft examination guideline for chemical related inventions, under public consultation. Currently accepted
5 Polymorphs and Co-crystals Allowed under: item 4 of the draft examination guideline for chemical related inventions, under public consultation (polymorphs); and item 5 of the draft examination guideline for chemical related inventions, under public consultation (co-crystals). Restrictive interpretation
6 Enantiomers Restrictive interpretation, but allowed under: item 3 of the draft examination guideline for chemical related inventions, under public consultation (co-crystals). Restrictive interpretation
7 Prodrugs Allowed under: item 2.5 of the draft examination guideline for chemical related inventions, under public consultation (co-crystals). Restrictive interpretation
8 Pharmaceutical compositions, carriers and combinations Allowed under: items 7.1 to 7.23 of Block II of the BRPTO’s examination guidelines, and item 6 of the draft examination guideline for chemical related inventions, under public consultation. Currently accepted
9 Pharmaceutical forms and of modified release Allowed under: items 7.1 to 7.23 of Block II of the BRPTO’s examination guidelines, and item 6 of the draft examination guideline for chemical related inventions, under public consultation. Currently accepted
10 New Uses Allowed under: items 4.18 and 5.40 to 5.45 of Block II of the BRPTO’s examination guidelines; and item 9 of the draft examination guideline for chemical related inventions, under public consultation. Restrictive interpretation
11 Nucleotide or peptide sequences Allowed under: item 6 of the biotech examination guidelines. Currently accepted
12 Antibodies Allowed under: Item 6.4.6 of the biotech examination guidelines. Currently accepted
13 Hibridoma Allowed under: Item 6.4.6.2 of the biotech examination guidelines. Currently accepted
14 cDNA Allowed under: Item 6.3.6 of the biotech examination guidelines. Currently accepted
15 (Biologic) purifying, extraction and isolation processes Allowed under: Item 1.44 of Block II of the BRPTO’s examination guidelines. Currently accepted
16 Microorganism Allowed under: if it is a transgenic microorganism, being limited to bacteria, archaea, fungus, single-cell algae not classified in the Plant Kingdom and protozoaria. Item 5 of the biotech examination guidelines. Currently accepted, if transgenic microorganism, limited to bacteria, archaea, fungus, single-cell algae not classified in the Plant Kingdom and protozoaria.

The Interagency Ordinance #1/2017 establishes in art. 2 that the procedure for ANVISA’s prior approval of patent applications starts after the request for substantive examination (by the applicant or by third parties, upon 36 months from the filing date, as per art. 33 of the 1996 Patent Statute). This seems to lack statutory authority, given that art. 229-C of the 1996 Patent Statute suggests that ANVISA’s participation in the patent system will begin only after the patent application has received a notice of allowance.

Under art. 229-C only applications with a notice of allowance and with the final fees paid should be sent to ANVISA.

Ordinance #1/2017 §1 of art. 2 maintains BRPTO’s procedure to publish the notice of remittance of a patent application to ANVISA at the BRPTO’s gazette (Office Action 7.4) and reinforces the publication of decisions to expedite prosecution of patent applications. However, §2 of art. 2 grants ANVISA a confidential access to the file wrapper of patent applications via FTP that could include information and documents not publicly available at BRPTO’s website. The type of information and documents to be exchanged between the two agencies that is not at BRPTO’s website is a matter of concern. If the contents of ANVISA’s backbone access to the BRPTO via FTP is equal to what is shown by the BRPTO at its website, there should be no reason for a confidential and privileged access, not allowed to the patent applicant.

Another cause for worry is that, under art. 3, ANVISA will continue to examine patentability requirements of pharmaceutical patent applications. Further, under art. 5, applications will only be returned to the BRPTO after ANVISA is done with its patentability examination. This workflow contributes to the delay of patent prosecution in Brazil. Between 2015 and 2017, ANVISA’s pendency grew from an average of 11 months to up to three years. ANVISA has affirmed before Federal Court several times that it currently takes between two to three years to perform an examination of patentability requirements. If the BRPTO keeps defering examination until it hears from ANVISA, the patent backlog in Brazil will only get worse.

Art. 4 establishes that ANVISA’s prior approval of patent applications claiming pharmaceutical products and processes under the authority of art. 229-C of the 1996 Patent Statute, as amended, will be decided in light of public health, supported by a written decision stating the technical reasons. ANVISA’s Intellectual Property Commission (COOPI) is the unit responsible for examining patent applications within the Agency. COOPI is subject to the Agency’s Office of Drugs and Biologic Product (GGMED).

Paragraph 1 of art. 4 defines that an application (not a claim by claim analysis) is against public health when “the product” or “the process” contained in the application offers risk to public health. Paragraph 2 establishes risk to public health when the pharmaceutical product claimed or resulting from the claimed process covers a substance banned from use in Brazil.

The substances banned from use in Brazil are listed in Annex I of the Ministry of Health’s Ordinance #344 of 1998, updated by ANVISA whenever a new substance is banned or cleared for use. ANVISA has already issued 55 amendments to the Lists in Annex I of Ordinance #344. Under the previous regulation (ANVISA’s Rule #45/2008, as amended by Rule #21/2013) only substances in the “F list” were considered banned for the purposes of ANVISA’s prior approval. All substances, its salts and optical isomers, and structures contained in the “F List” are banned in Brazil. There is, however, a double standard to the list. Substances that are, as a rule cleared for use, may be banned when in specific formulation or the other way around.

For example, opium is in the “A List”, for substances that are cleared for use (subject to a special medical prescription), but it is banned if in liquid or syrup formulations for pediatric use. Conversely, tetrahydrocannabinol (THC) is in the “F List” for substances banned from use, but was cleared by ANVISA’s Rule #130/2016 for use in medicines provided it does not exceed a concentration of 30mg/L. This case is interesting, as ANVISA denied prior approval to PI0311867-3 on October 11, 2013, on the grounds that the application claimed TCH, banned at the time. Thus, a patent application can be contructively abandoned at the BRPTO for being temporarily banned by the MoH/ANVISA.

Paragraph 3 of art. 4 presents another relevant change to the prior approval proceeding established by Interagency Ordinance #1/2017, which imposes a new and major sanction of contructive abandonment of an application at the BRPTO if prior approval is denied by ANVISA. The contructive abandonment of the application by the BRPTO finds no statutory support. The 1996 Patent Statute is adamant as to which situations can result in such sanction to an applicant, in articles:

17, §2 – for the senior Brazilian application from which internal priority is claimed by a new filling;
33 – for not requesting reinstatement of an application without request for examination;
36 – for not answering an office action during substantive examination;
38, §2 – for not paying the final fees after the application is allowed; and
36, §2 – for not maintaining a representative with specific powers in a foreign owned application.

This also represents a severe departure from the nature of the applications received and decided daily by ANVISA, where any applicant has unlimited opportunities to seek an approval from the Agency, such as applications for marketing approval of generic products. Some Brazilian companies seek to obtain generic registration of a product over half a dozen times until ANVISA finally grants it. The applications for GMP and different authorizations follow the same rationale.

There is little doubt that this severe restriction imposed to patent applicants without statutory authority will invite review from the Brazilian Federal Courts.

Art. 5 of Interagency Ordinance #1/2017 creates a new type of proceeding to allow ANVISA to seek the denial of a patent application being examined by the BRPTO. The 1996 Patent Statute does not allow any third party to take the application out of the BRPTO, halting examination, in order to file third party observations. When the Interagency Ordinance allows ANVISA to place the prosecution before the BRPTO on hold, it reinforces the lack of statutory authority of this new procedure.

The conflict between art. 4, which establishes that ANVISA’s prior approval of patent applications claiming pharmaceutical products and processes will be decided in light of public health and the procedure created by art. 5 granting preferential treatment above the law might amount to constitutional violations.

First, art. 5 seems to be an attempt to reinstate the pre-grant opposition of patent applications, as they exist today in India, as they existed under the 1971 Brazilian Patent Statute (Law # 5,772), repealed by the 1996 Statute. The decision of the Brazilian Congress to eliminate the pre-grant opposition system has been aparently ignored by the BRPTO and ANVISA.

There are plenty of opportunities for third parties to participate in the substantive examination of patent applications under art. 31 of the 1996 patent statute. Third parties are even allowed to request the substantive examination, regardless of the applicant, as per art. 33 of the 1996 patent statute.

The BRPTO acknowledges every single third party observations with information and/or prior art. when examining patent applications. This does not slow down prosecution and does not worsen productivity of the BRPTO examiners. It is understood that many third-party observations filed are just hundreds of pages printed out of PudMed (https://www.ncbi.nlm.nih.gov/pubmed) or search engines, or even pages scanned from text-books. Often, they are filed in paper just to slow down prosecution of applications.

While other government entities, such as Fiocruz and Farmanguinhos, find no problem in using the current system based on art. 31, ANVISA and the BRPTO just created an elaborated procedure that goes back and forth between the two agencies, staying the examination of patent application while the procedure last. It still unknown if ANVISA will do any work before the “list” established by art. 5, §1 is made. It is also unknown if such list will ever be made public.

Worse, art. 5, §2 now requires a formal publication by ANVISA at the Federal Official Gazette of every submission the agency makes to the BRPTO before the electronic docket of the patent application is “released” back to the BRPTO, so the examination can be resumed. Everything before the BRPTO itself makes another publication, this time at the BRPTO Gazette, informing that ANVISA has decided to file third-party observation in a patent application and that it has received the “electronic” docket from ANVISA. Apparently ANVISA is now allowed to interfere in the patent applications queue, making the BRPTO and the applicant to unduly wait for it.

As another raw demonstration of political power, art. 6 of the Interagency Ordinance #1/2017 requires the BRPTO to make a formal determination when it does not agree with ANVISA, by means of an opinion with technical support, specifically stating the reasons for not following ANVISA ́s arguments in its third-party observation. Further, §1 of art. 6 instructs the BRPTO to send a specific communication to ANVISA informing the facts as well as to publish at the BRPTO gazette. ANVISA is treated with a deference that is unheard of. No user of the Brazilian patent system, not even the applicants, receive such special treatment. Again, this is only for third-party observations filed by ANVISA. The determination of prior approval under art. 229-C has nothing to do with that.

ANVISA’s disregard of the timing established for its acts during the patent prosecution is made clear again by art. 7, when the BRPTO is required to make an official communication to ANVISA of each and every patent applications with a notice of allowance. Again, under art. 229-C of the 1996 Patent Statute ANVISA’s role should only start after the notice of allowance of applications is published by the BRPTO and the final fees are paid by the applicant.

The prima facie review of the Interagency Ordinance #1/2017 requires in-depth analysis of its constitutionality and legality. Implementation will also raise issues. For further information, please contact info@lickslegal.com

For an overview of the entire process of the prior approval, please refer to the step-by-step flowchart available here.

The original Portuguese version of Interagency Ordinance #1/2017 can be downloaded here
and the English translation can be downloaded here.