Brazil: Navigating patenting challenges in the pharmaceutical landscape

This article attempts to provide a summarised guide on intellectual property protection in Brazil for pharmaceuticals, particularly patents of invention, shedding light on the complexities and challenges faced by stakeholders in the Brazilian pharmaceutical landscape.

Legal and regulatory framework

The dynamics of the Brazilian pharmaceutical market are directly related to the health regulatory landscape, the patent system and the means of access to healthcare. Drugs are known for providing innovative solutions to improve efficacy in the treatment of many diseases. To ensure that increasingly effective therapies continue to be developed and that inventors of innovative pharmaceuticals can be rewarded for the large investments in R&D, it is essential that such inventions be protected by a reliable patent system. Pharmaceuticals are governed by a comprehensive and complex regime of legislation and regulations spanning many different areas of law. The legislative and regulatory landscapes are also very active, as patent laws are constantly under review and government authorities constantly update regulatory processes and policies.

Intellectual property (IP) rights are considered to be fundamental rights and entrenched clauses in the Constitution of Brazil, whereby the authors of industrial inventions are guaranteed temporary privilege for their use, as well as protection for industrial creations, taking into account the social interest and the technological and economic development of the country (article 5 (XXIX) of the Brazilian Constitution of 1988).

The Brazilian patent system is ruled by the Brazilian Patent and Trademark Office (BRPTO), which was created by Law 5,648/1970. The BRPTO is the only autarchy legally entitled to receive, examine and grant IP rights, an authority established by Brazilian IP Law 9,279/1996, currently in force.

Brazil is a strategic market for many local and foreign pharmaceutical companies due to its demographics and protective legislation regarding access to healthcare. In the past decade, the Brazilian market has witnessed the expiration of patents for many relevant drugs and the entry of competitors. Also, due to recent and significant changes in patent laws, some companies are facing a scenario of uncertainty regarding the patent term of relevant products, which may raise concerns for both patent holders and new competitors.

The protection of rights relating to IP is effected by means of the grant of patents of invention, utility model patents and industrial design registrations (article 2 (I and II) of the IP Law). The following chart summarises the corresponding patentability requirements and scope and terms of protection (articles 8, 9, 40, 42 and 108 of the IP Law):

Patent term adjustment, patent term extension and supplementary protection certificates

The IP Law does not provide for patent term extension, patent term adjustment (PTA) or a supplementary protection certificate. Until 2021, article 40 of the IP Law provided a 20-year term from the filing date or a 10-year term from the granting date, whichever is the longest. In 2021, the Supreme Court declared the sole paragraph of said article that provided for the 10-year term as unconstitutional. The main interpretation for the declaration of unconstitutionality was the alleged lack of definition of the final term of a patent in Brazil, which was allegedly uncertain until it was granted.

Regarding the pharmaceutical sector, the Supreme Court decision – issued during the covid-19 pandemic – stated that commercial leverage provided by patents for very long periods has an impact on the population's access to public health services, since it would burden the system by eliminating competition and imposing the acquisition of pharmaceutical items at a price unilaterally stipulated by the patent holder. Due to this perception, a different treatment has been established for the effects of the decision on pharmaceutical patents, which is clearly against the Trade-Related Aspects of Intellectual Property Rights Agreement. Non-pharmaceutical patents granted with a 10-year term until the decision are to be considered valid until the original term. In the case of pharmaceutical patents, the terms were automatically changed to 20 years from the date of filing and, as a result, many patent holders lost a significant amount of time in the patent exclusivity period, regardless of whether the delay in analysing the patent was attributable to the patent holder or the BRPTO. Here, it is important to remember the huge backlog of examination faced by the BRPTO in the past, due to its enormous delay on examination.

Consequently, many patent holders initiated legal actions against the BRPTO seeking recognition of the administrative delay and the returning of the period of exclusivity unduly taken from the patent holders to the extent of the delay caused by the BRPTO. Up to this moment, an estimation of 57 actions – usually addressed as ‘PTA actions’ – has been lodged so far and is currently under the analysis of the judiciary.

Skinny label

On 11 December 2023, the Brazilian Health Regulatory Agency (ANVISA) issued new rules to authorise skinny labelling in Brazil, which came into force on 6 February 2024. ANVISA's previous rules established that labels of generic medicines should have all and the same therapeutic indications and uses of the reference-listed medicine, with no exceptions permitted, being in line with Law 9,787/1999 that created the generic drugs system in Brazil. This law establishes that a generic medicine must ‘have the same . . . therapeutic indication as its reference drug’. Once ANVISA's new rules entered into force, skinny labeling should be authorised in Brazil, meaning that pharmaceutical companies should be able to market their generic medicines with labels with one or several – but not necessarily all – of the therapeutic uses of the corresponding reference medicine when there is a Brazilian patent or patent application covering the excluded uses.

The new rules establish that (1) ANVISA’s approval is not necessary for the carving out a therapeutic use from the generic medicine’s labels; (2) any skinny label under the new rule must contain a note informing that patented therapeutic uses have been carved out; and (3) once the patent expires or if the application is rejected, the carved-out use must be included in the label. The new rules, besides encouraging off-label use, could be used by infringers to undermine the enforceability of medical use patents. Pharmaceutical companies could argue that their generic medicines would not infringe a medical use patent because they have carved out from the label the patented therapeutic use.

Before the new rules, generic companies could not use this argument to avoid infringement of a medical use patent as they had to include all therapeutic uses of the reference medicine (including the patented therapeutic use). However, it is most apparent that skinny labeling alone is insufficient to avoid infringement of a medical use patent. Based on constitutional principles, such as good faith, a pharmaceutical company (1) has the burden of proving that they only marketed the generic medicine for non-patented uses; and (2) must take solid actions to discourage off-label use for the patented therapeutic indication or use. Without these actions, exploiting a generic medicine with an excluded label infringes a medical use patent.

As a further option to secure exclusivity, a patentee can challenge a skinny label before the courts, grounded on the argument that ANVISA's new rules authorising skinny labeling are illegal. This is because (1) Law 9,787/1999, which created the generic drugs system in Brazil, establishes that a generic medicine must ‘have the same therapeutic indication as its reference drug’ and (2) the Brazilian Constitution states that a governmental entity – such as ANVISA – is entitled to issue internal rules provided that they comply with the federal laws.

Strategies for protection or pre-enforcement

Patentability issues

Among other matters, the following are not considered to be inventions or utility models or not patentable (articles 10 (I, VIII and IX) and 18 (III and Sole Paragraph) of the IP Law):

• discoveries, scientific theories;
• operating or surgical techniques and therapeutic or diagnostic methods, for use on the human or animal body;
• natural living beings, in whole or in part, and biological material, including the genome or germ plasm of any natural living being, when found in nature or isolated therefrom, and natural biological processes; and
• living beings, in whole or in part, except transgenic micro-organisms complying with the patentability requirements of novelty, inventive activity and industrial application, and which are not mere discoveries.

Moreover, the claim languages disclosed below are usually objected by the BRPTO, although their official regulations foresee interpretations and possibilities to attempt acceptance thereof (BRPTO’s Resolutions 124/2013, 169/2016, 208/2017 and 118/2020):

• Markush formulae;
• selection matters (selection patents);
• new medical uses;
• dosage regimen;
• polymorphs;
• product-by-process claims;
• omnibus claims;
• salts, N-oxides, esters and ethers;
• prodrugs;
• stereoisomers;
• solvates, clathrates and co-crystals;
• product defined by the results to be achieved;
• product-for-use claims; and
• sequence identity percentage and homology.

The following exemplified embodiments usually find no bar in the IP Law:

• compounds;
• compositions or formulations;
• kits;
• processes of manufacture;
• ‘Swiss-type’ uses; and
• equipment and devices.

Backlog of examination

The initiative implemented by the BRPTO from 2019 to 2022 to address the backlog of examination yielded favourable outcomes and it is still reducing it. The average time from effective filing to grant in Brazil has decreased from about 10 years (2018) to approximately five years (2023). In this regard, the BRPTO offers possibilities to expedite examination of patent applications (BRPTO’s Normative Instruction 02/2020 and Ordinances 78/2022 and 79/2022) as, for instance, the Patent Prosecution Highway – PPH and inventions related to cancer, AIDS and neglected and rare diseases, ‘green’ technologies and subject matter reproduced by third parties without authorisation, among others, which are quite effective; it takes about five to seven months to have a first official action issued. The following could be applied to pharmaceutical inventions:

• patent applications covering a subject matter considered patentable and allowed or granted by a partner Patent Office – Patent Prosecution Highway (PPH) – and patent application having at least one claim considered patentable in the International Preliminary Report on Patentability (IPRP) by the partner Patent Office acting as the PCT international Authority (PPH-PCT) in Austria, Canada, China, Denmark, Finland, France, Europe, Japan, Portugal, Singapore, South Korea, Spain, Sweden, the UK, the US and PROSUL (Chile, Colombia, Dominican Republic, El Salvador, Ecuador, Nicaragua, Panama, Paraguay, Peru and Uruguay);
• patent applications covering a therapy to the following diseases: cancer, AIDS and neglected and rare diseases;
• patent applications to be used in public health emergency of national or international importance according to Law 7,616/2011 and the WHO;
• patent applications covering a technology available in the Brazilian market;
• patent applications covering subject matter reproduced by third parties without authorisation;
• patent applications covering an invention derived from activities funded by the government and applications filed by governmental-supported entities;
• patent applications claiming a Brazilian priority;
• patent applications containing subject matter of interest to drug policies of the Ministry of Health and the Sistema Único de Saúde; and
• patent applications containing a subject matter of interest to national emergency or public interest.

Checking local portfolio including subsequent innovation patents

Subsequent innovation patents (SIPs – sometimes also referred to as secondary patents) are important for a comprehensive strategy of IP protection. Brazilian courts accept SIPs for enforcement purposes and they tend to be respected locally.

Pre-emptive measures

Once a generic drug obtains regulatory approval, and there exists third-party ownership of a patent that restricts the drug’s manufacture and sale, the exclusivity rights of this third party become vulnerable. Even before a publicised infringement takes place, this third party has the legal right to take pre-emptive judicial action to safeguard their IP rights through what is known as an inhibitory lawsuit.

Requesting information from authorities

Considering that article 5 (XXXIII, XXXV) of the Constitution establishes that all people are entitled to receive information concerning their private, collective or general interest from government bodies, except for that information whose secrecy is essential to the security of society and of the state and that the law shall not exclude any injury or threat to a right from review by the judiciary, respectively, and article 42 of the IP Law states that the patent confers on its proprietor the right to prevent third parties from manufacturing, using, offering for sale, selling or importing for such purposes without their consent a product that is the subject of a patent, the patentee is allowed to request authorities to provide information to support full protection of patent rights.

Information related to possible (1) M&A applications submitted by third parties to ANVISA and (2) possible importation of patented products is very important for patentees to assess potential threats to patent rights and to take actions seeking to prevent patent infringement.

Until 2019, ANVISA disclosed information about M&A application submitted by pharmaceutical companies, including the name of the active pharmaceutical ingredients (API) related to the relevant application. However, after some questions raised by part of the pharmaceutical sector – mainly arguing that the disclosure of such information could result in unfair competition actions by third parties against the applicants – ANVISA refrained from disclosing ex officio any information that could connect M&A applications to API names.

Although it seems that ANVISA does not have a firm position that information relating M&A applications to their API names could not be disclosed – ANVISA submitted a formal consultation to the Brazilian Competition Authority in 2023 questioning it on whether disclosing such information could or not allow unfair competition, which is still pending analysis – requests for information concerning the matter tend to be denied by ANVISA.

The Customs Authority also considers that information regarding importation is confidential – protected by the tax secrecy established by article 198 of the National Tax Code – and therefore could not be provided to third parties, including the patentee, even in the case of importation of patented products by third parties. Similarly to ANVISA, the Customs Authority tends to deny requests for information concerning the matter.

In both cases, the patentee is allowed to file writ of mandamus before the federal courts seeking to compel ANVISA and the Customs Authority to provide the requested information. For reference, the following timeline reflects the expected course of the referred writ of mandamus at the first judicial instance before the federal courts:

Even though there is no consolidated position of the federal courts about the matter, most decisions rendered – mainly by the Federal Court of Brasília – granted a patentee’s claims in order to compel the authorities to provide them with the requested information.

DJ validity action

Pursuant to article 51 of the IP Law, administrative nullity request (ANR) may be filed by any interested party or ex officio by the BRPTO within six months from the date of a patent’s granting. Furthermore, a patent may be challenged during its term before the federal courts by means of an invalidity action, which has erga omnes effects, or before the state court, as an argument of defence in a patent infringement action, which has inter partes effects.

Whenever an allegation of patent invalidity is raised, the patentee is allowed by the aforementioned article 5 (XXXV) of the Constitution to file a declaratory judgment validity action requesting a federal court to deny such invalidity allegation.

Considering that Brazil applies the principle of unicity of jurisdiction, according to which (1) court decisions prevail over administrative decisions and (2) only court decisions become res judicata, declaratory judgment validity action should be considered by the patentee as an important measure to obtain a definitive decision dismissing invalidity allegations through a court proceeding that allows the performance of a technical examination by an independent court-appointed expert.

For reference, the following timeline reflects the expected course at the first judicial instance of the referred writ of mandamus before the federal courts.

The most common venues for declaratory judgment validity actions are the Federal Courts of Brasília (the legal domicile of the BRPTO) and Rio de Janeiro, where the main headquarters of the BRPTO are physically located.

Strategies for enforcement

Brazil is a civil law country with no jury trial for patent litigations and has an effective legal system to guarantee IP protection and enforcement, mainly because of a highly effective preliminary injunction (PI) system. Requests for PI in Brazil are typically processed approximately 7–15 days after submission.

The IP Law foresees literal or direct patent infringement, infringement under the doctrine of equivalents and contributory infringement. Said law also establishes that the patentee is entitled to recover damages due to any unauthorised exploitation that occurred while the application was pending. The Brazilian judiciary’s independence empowers judges to take swift action to prevent patent violations, including granting an ex parte restraining order to immediately stop the patent infringement. The Brazilian legal system not only safeguards the right of individuals to pursue legal action when they have suffered actual harm but also extends this protection to situations where there is a threat of harm, as stipulated in Federal Constitution (article 5, item XXXV).

In Brazil, there are no discovery proceedings and specific procedure for claim construction. Patent rights are fully enforceable in Brazil. Measures aimed at preventing or ceasing infringements of pending patent applications and granted patents are available through both extrajudicial means and the judicial system.

In possession of pieces of evidence that indicate that a competitor is taking concrete measures to launch a product in the Brazilian market while a related patent is in force – such as confirmation of the importation of an API or finished product in an amount that goes beyond the necessary to support the preparation of an M&A application dossier or in the case an M&A is granted by ANVISA – the patentee is allowed to file an inhibitory action with PI request before a state court, requesting an urgent court order to prevent the competitor from launching the infringing product in the market.

If patent infringement has already occurred, the patentee may request (1) the infringing party to be compelled to recall infringing products from the market and (2) compensation for damages caused by patent infringement, which should be calculated by the most favourable to the patentee of the following criteria:

• the benefits that would have been gained by the patentee if infringement had not occurred;
• the benefits gained by the infringing party; or
• the remuneration that the infringing patent would have paid to the patentee for a granted licence.

For reference, the following timeline reflects the expected course of the inhibitory or infringement action at the first judicial instance before the state courts.

Patent inhibitory or inhibitory actions must be filed before the state court where the infringing party is located or where patent infringement takes place. The most common venues are the state courts of São Paulo and Rio de Janeiro, which have specialised IP courts at the trial and the appellate levels.

The statute of limitations for filing an action seeking to collect damages is five years as of the occurrence of patent infringement (article 225 of the IP Law).

Conclusion

Navigating the Brazilian pharmaceutical landscape requires a comprehensive understanding of the legal framework governing intellectual property protection. Stakeholders in this complex ecosystem, from drug manufacturers to patent holders, must be fully aware of the legal prohibitions, patent litigation and the current discussions on PTA. This comprehensive analysis aims to equip those operating within the Brazilian pharmaceutical market with an enhanced understanding of the legal processes and intellectual property considerations that shape the industry. This understanding contributes to the delivery of safe and innovative pharmaceutical products to the Brazilian population, fostering public health and pharmaceutical innovation in the region.