The Attorney General’s Office (AGO) questioned by a Direct Action of Unconstitutionality (ADI) No. 5529 filed at the Supreme Court the sole paragraph of Article 40 of Law No. 9279 of 1996 - Industrial Property Law (IP Law).

ADI 5529 originated from ADI 5061, authored by the Brazilian Fine Chemicals, Biotechnology and Specialty Industries Association (ABIFINA), in which the AGO stood by its non-acceptance because of the applicant’s illegitimacy, however, recognized the unconstitutionality of the sole paragraph of Article 40 of the IP Law.

Article 40 of the IP Law defines the term of protection of patents in Brazil. According to the caput of said Article the patent of invention shall be valid for a period of twenty (20) years and a utility model patent for a period of fifteen (15) years from the filing date. However, the term of protection shall not be less than ten (10) years for patents of invention and seven (7) years for utility model patents, as from the date of grant [Article 40 (single paragraph)].

In practice, most of the patents granted in Brazil have their term of protection corrected due to the delay in the administrative procedure of patent applications (backlog) by the Brazilian PTO, thus granting more than twenty (20) years of protection for the holders of such patents. The Attorney General argues in said ADI 5529 that the sole paragraph of Article 40 of the Brazilian IP Law would violate the temporariness of patent protection foreseen by the Brazilian Constitution for causing uncertainty regarding the term of protection of the patent. In addition, according to the Attorney General said term of protection would considerably extend the patent protection and would also violate the postulates of legal certainty, free competition and consumer protection.

Bill No. 3944 of 2012, which is being conducted in the Chamber of Deputies so as to revoke the sole paragraph of Article 40 of the Brazilian IP Law was highlighted in ADI 5529 for also having the principle of free competition cited in its text.

The AGO further alleges in ADI 5529 that the sole paragraph of Article 40 would transfer to the society the onus resulting from the slowness of the Brazilian PTO in analyzing administrative procedures under its jurisdiction and would violate the principle of isonomy, considering that economic players in identical situations would be handled differently, the term of protection varying according to the time spent on the examination..

Lastly, the AGO alleges that sole paragraph of Article 40 would also be contrary to the principles of the administrative efficiency and reasonable duration of the process, since instead of promoting the swift and efficient conduction of the administrative procedures, it would admit and, also, stimulate the excessive extension of the examination processes of patent applications.

Said ADI 5529 will be judged by the Supreme Court. Minister Luiz Fux was designated as the rapporteur and will request information to the authorities that developed the Brazilian IP Law, such as the President of the Republic and the National Congress, in order to establish the right to the contradictory, in addition to the Attorney General that should manifest itself in the records.

In view of the importance of the matter and representativeness of the applicant, the rapporteur of ADI 5229 can hear other agencies or entities, such as the Brazilian PTO itself, and indicate technical experts, in case it deems necessary for clarification purposes.

It should be highlighted that the decision about the ADI can only be issued if at least eight (08) ministers of Supreme Court attend the judgment session. There is no possibility of any appeal against the decision, except declaratory embargos.

Moreover, what should be noted is that the correction of the term of protection foreseen in the sole paragraph of Article 40 of the Brazilian IP Law is an exception to the general term of protection proposed in the caput of this same article and has the intention of compensating patentees whose patents were granted with excessive delay caused by the inefficiency of the administrative system. Said exception maintains applicants of patent applications interested in the Brazilian market since it ensures at least a minimum term of protection as from the date of grant of the patent in Brazil.

Our office Clarke, Modet & Co. will remain committed to closely monitor said ADI, keeping our clients updated about any development.

In the event of any doubt, please do not hesitate to contact us at brj@clarkemodet.com.br