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Renewed hope for the patent system: a stop to the PTO’s inconstancy

February 12, 2015

by Otto Licks and Liliane Roriz

The Brazilian Patent and Trademark Office (PTO) is notorious for its backlog and the slow pace at which it operates. Despite receiving only a relatively small number of applications, the PTO usually takes more than a decade to issue a patent.

As a safety valve for delays, the Brazilian patent statute guarantees a 10-year term from the date of grant whenever the examination takes more than a decade. This is specifically established by Article 40 of patent statute (Law No. 9,279/96). If patent applications were examined more quickly, the provision would be irrelevant, because the standard 20-year term from filing would always apply.

Instead of revamping the PTO, the current government is supporting the bill No. 5402/2013 to remove the 10-year term from grant provision from the statute. To make things worse, last year the PTO filed 37 lawsuits before the federal district courts of Rio de Janeiro seeking to invalidate more than 200 patents issued with a 10-year protection from grant. Some of these patents cover important inventions. For procedural reasons, some defendants filed motions to sever claims and parties into separate actions, and the lawsuits are now 47 (see infographic).

The PTO claims the 10-year term would not be applicable to patent applications covering pharmaceuticals, and related arts, filed between January 1, 1995 and May 14, 1997, known as ‘mailbox’ patents (article 229, sole paragraph, of the patent statute). According to the PTO, these patents were granted with such term due to a clerical mistake.

The very first decision, issued by Judge Brandão (25th federal district court of Rio de Janeiro), has backfired on the administration. The court clarified that the so-called “clerical mistake” only happened because the PTO itself failed to examine the “mailbox” applications before 2004, as established by the statute.

According to the court, a judicial review of the granting decision as intended by the PTO would not be reasonable because inventors and patent owners trust the public authorities to keep their promises. The PTO published the grant of these patents with the 10-year term from grant, creating a reasonable expectation by the companies. After this first decision, Judge Brandão decided six other mailbox lawsuits in the same way.

Judge Tauk (31st federal district court of Rio de Janeiro) and Judge Netto (9th federal district court of Rio de Janeiro) adopted the same reasoning when deciding other mailbox cases, ruling against the PTO. According to Judge Netto’s decision, published on January 22 of this year, the PTO cannot simply change its interpretation on the term of mailbox patents, acting against the patent owner. The administration’s acts shall respect the legitimate expectation.

These decisions show courts are ready to enforce Brazil’s obligations with the international community in light of the TRIPS Agreement.

Although most federal judges understand the PTO is wrong, Judge Nunes (13th federal district court of Rio de Janeiro) has ruled in favor of the administration in 12 other mailbox cases, limiting patent protection to 20 years from the filing date, allegedly preserving the public interest and benefiting society.

Currently, there are 11 pending appeals challenging mailbox decisions before the Court of Appeals for the 2nd Circuit (see infographic).

 

This article was written with collaboration of Roberto Rodrigues and Alba Cruz.

If you have any questions or need additional information, please contact us at prevail@lickslegal.com.