by Ricardo Nunes
In the current Brazilian Patent System, there are two ways for third parties to challenge a patent application by taking administrative action. These are the filing of a post-grant review or through the submission of data and documents to support the examination of pending patent applications (third-party submission, known as “subsidies” in Brazil). These actions are respectively set out in articles 50 to 55 and article 31, of Law # 9,279/96 (Patent Statute). Both mechanisms are frequently used in the Brazilian Patent and Trademark Office (BRPTO), allowing third parties to efficiently oppose the grant of patents or issued patents.
After the grant is issued, patents can also be challenged before the courts. The Patent Statute provides for such a challenge in articles 56 and 57.
Bill #5,402/2013 proposes the adoption of pre-grant opposition for patent applications in Brazil in a way that is similar to the position in other countries and to trademarks procedures in Brazil.
The bill’s sponsors are of the opinion that, since the examination of subsidies is not mandatory for the BRPTO’s examiners, such a mechanism (available before the patent is granted) would be too fragile. In their opinion, this is especially relevant when compared with the post-grant review.
It is necessary to carefully compare possible benefits of such a mechanism for the quality of granted patents and the negative impacts on the system as a whole (without forgetting the circumstances particular to the Brazilian system). Since the BRPTO already struggles with a substantial backlog, such a mechanism would probably bring more harm than good.
In order to analyze the consequences of a pre-grant opposition mechanism, a reliable source is a study published by the University of New South Wales in 20111. This report analyzed all oppositions filed in Australia between 1980 and 2005, when the country adopted a pre-grant opposition model.
According to the Australian report, more pre-grant oppositions were filed against applications in certain fields of technology, disproportionally affecting such technological fields. In fact, the pharmaceutical field was most affected by the change followed by civil engineering, mining and metallurgy. Another interesting conclusion of the report is that national patent applications, filed by Australian residents, were more affected than foreign applications. While the purpose of adopting a pre-grant opposition mechanism is often to favor the national industry over the foreign industry, the Australian report proves that the result can actually be the opposite.
The most relevant downside of a pre-grant opposition system seems to be the increase of time in respect of the examination process. According to the report, the average time for the examination of a patent opposition in the country was more than three years. On the other hand, over 50% of the applications challenged by pre-grant oppositions took at least five years to be decided.
The Australian PTO is well equipped and has a relatively small backlog. In comparison, the Brazilian PTO has a considerably larger backlog and in light of this it is unlikely that it could decide the oppositions in a more efficient and faster way, thereby avoiding an increase on the current backlog of over 10 years.
The study also showed that in most cases the opposition was rejected and the patent granted. As a result, we can see that the pre-grant opposition mechanism creates a considerable legal uncertainty, increases the cost of using the patent system, and disproportionally affects certain fields of technology. As shown, the mechanism can even affect the position of national applicants without necessarily achieving the expected results and increasing the quality of the patents.
It is also important to note that the pre-grant opposition mechanism could be used by competitors as a commercial strategy to delay the grant of the patent and raise doubts about its patentability. This has happened in Israel, for example, which also has a pre-grant opposition system. As a result, many companies have been found liable for the costs incurred by applicants in the defense of abusive oppositions. The opposition model proposed in Bill # 5,402/2013 would not be able to avoid this kind of abuse as it does not have any specific provisions on this matter.
In light of the above, it is hard to believe that the possible benefits of adopting a pre-grant opposition model would overcome the costs of such a mechanism. From a quality perspective, it is clear that the benefits of such a mechanism are uncertain and the existing system already fulfils some of its objectives, by providing interested parties with the possibility of presenting subsidies at any time of the examination without allowing third parties to delay the granting procedures with abusive oppositions.
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1 Weatherall, K. et al. 2011 “Patent Oppositions in Australia: The Facts” UNSW Law Journal., volume 34(1): 93-135. Available at http://www.unswlawjournal.unsw.edu.au/sites/default/files/4_weatherall_2011.pdf.