[Ip-health] ADIN pipelines- IP-Watch

[Renata Reis]

Intellectual Property Watch

22 January 2008
Challenge Raised To Constitutionality Of Brazilian Pipeline Patents

Posted by William New @ 10:37 am
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By Claudia Jurberg for Intellectual Property Watch
RIO DE JANEIRO - Doubt about the constitutionality of an aspect of the
Brazilian
Industrial Property Law has been raised by civil society institutions to
Attorney General Ant=F4nio Fernando Barros e Silva e Souza.

Articles 230 and 231 of Brazil's Law 9.279/96 created the mechanism known a=
s
the
pipeline, which allowed patent claims to be accepted and approved for
technological fields that had not been recognised previously, such as
pharmaceutical and food products, based on the date of first foreign filing=
.
The
rule effectively created monopoly situations in some cases where items had
already entered the public domain, sources said.

Some in civil society argue that this kind of patent violates the principle
that
asserts the supremacy of the public interest and the pursuit of national
technological and economic development over intellectual property rights.
The
Brazilian attorney general may decide on the challenge in the coming days.
If
Barros accepts the question, he will send it to Superior Federal Court, the
next
level, which will judge it on merit.

By the end of 1990s, 1,182 pipeline patents had been requested in Brazil,
about
45 percent from the United States followed by the United Kingdom with 13
percent, Germany 10 percent, Japan 9.6 percent and France 7.7 percent,
according
to Lia Hasenclever, an economist at the Federal University of Rio de
Janeiro.

The pipeline mechanism exists in Brazil through its implementation of the
1994
World Trade Organization (WTO) Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), which contains a clause requiring
recognition of pharmaceutical and food patents. Article 27, paragraph 1,
states
that any invention, product or process in all technology sectors, is
patentable
if it is new.

Brazil could have used the period of transition for developing countries to
adopt TRIPS by the year 2005, but under pressure it implemented the
agreement in
1997.

In this case, the pipeline mechanism was adopted and the country allowed
patent
claims to be accepted and approved for previously unrecognised technologica=
l
fields, such as pharmaceutical and food products. The applications for
pipeline
patents do not undergo any technical analysis by the Brazilian patent
office,
the National Institute of Industrial Property (INPI). INPI normally could
have
analysed novelty, inventiveness and industrial application.

According Mauro Maia, an attorney at INPI, the pipeline mechanism has
provided
unusually high profitability for pharmaceutical companies through high
prices
and royalties. "The situation is a scandal," he said.

Has Investment Followed Pipeline?

By its early acceptance of TRIPS, Brazil agreed to recognise pharmaceutical
and
food patents before the required time of 2005. At the time, the government
believed that multinationals would invest in research, as they promised. Bu=
t
the
reality has been very different, according to some observers. Investments b=
y
multinationals have been disappointing and the pipeline patents are imposin=
g
a
high cost on society, they said. Hasenclever said that pipeline mechanism i=
s
an
"aberration" because it favours multinationals to the detriment of the
national
industry.

However, a spokesperson for the Merck, Sharp & Dohme pharmaceutical company
contested the negative assessment and told Intellectual Property Watch that
the
company has invested approximately US$10 million per year in research in
Brazil
in recent years.

"This value represents one of the biggest in comparison with other
pharmaceutical companies in Brazil and one in five from Merck in the world,=
"
she
said.

But NGOs insist that pipeline patents remain problematic. "The concession o=
f
pipeline patents also violates the acquired right of the collectivity by
removing from the public domain knowledge belonging to everyone, which once
again goes against society's interest," said Renata Reis, an attorney at th=
e
non-governmental Brazilian Interdisciplinary AIDS Organization.

The case of anti-retroviral drugs (ARVs) for patients with HIV/AIDS may
offer a
good example of the prejudice inherent in the mechanism of pipeline, critic=
s
said. Brazil has a highly touted national AIDS programme, providing a model
for
many other countries. Until 1990, there was a policy ensuring access to
drugs
and the country had national production of ARVs. After 1997, with the
pipeline
mechanism, this process was interrupted prematurely, said Hasenclever.

In Brazil, there are around 600,000 people infected with HIV/AIDS. More tha=
n
200,000 receive drugs without cost from the government. Attorney Maia
explains
the pipeline situation related to HIV/AIDS with an equation. The AIDS drugs
cost
the Health Ministry around US$750 million for 18 medicines to treat
patients,
and 80 percent of this budget goes toward only four medicines which are
protected with pipeline patents.

A study by economists at the Federal University of Rio de Janeiro calculate=
d
the
hypothetical financial loss caused by the adoption of the pipeline mechanis=
m
in
the case of government purchases of five ARVs, during the period 2001-2007.
The
results showed that, due to the granting of unmerited patent protections fo=
r
these medicines, the Brazilian state paid an additional $420 million when
prices
paid were compared to the World Health Organization's minimum prices, and a=
n
extra $519 million when compared to the minimum prices of nongovernmental
M=E9decins Sans Fronti=E8res.

Hasenclever calculated that the margin with 5 percent royalties on five ARV=
s
during 2001-2007 would be $35.3 million.

Of the ARVs, Merck now produces only efavirenz and indinavir. Although thes=
e
drugs are on the list of the Health Ministry, the company currently does no=
t
sell them to the government.

The efavirenz ARV, for which the Brazilian government recently issued a
compulsory licence, is protected by a patent obtained under the pipeline
mechanism (the first patent claim was filed in 1992). Now, generic efaviren=
z
is
imported from India.

When the patent claim was filed in Brazil, it no longer met the country's
novelty requirement, as the information on the invention had already been
published five years earlier. Had the pipeline patent not been granted, thi=
s
active ingredient could have been produced generically in Brazil, as it has
been
in India. Without the pipeline, patents would not protect these products,
even
though Brazil started granting patents in 1997.

Other medicines fundamental against the AIDS epidemic, such as
lopinavir/ritonavir, abacavir, nelfinavir, amprenavir, also were protected
by
pipeline patents, removing them from the public domain without an evaluatio=
n
of
the national interest. A pipeline patent also was granted for cancer
medicine
imatinib (brand name Glivec), and for Hepatitis B.

The alleged harm inflicted upon public health by pipeline patents does not
refer
only to the increasing amount of costs, but also to other problems such as
preventing local production of medicines, risks of supplies running out
(such as
the case of abacavir in 2007) and the poor quality of products offered by
companies holding the patents.

On civil society's charge to the Brazilian attorney general, Merck said it
could
not speculate on the outcome. But it did say the laboratory believes that
the
law of patents is an important tool to ensure the capacity for innovation
and
investment in research in a country.

Claudia Jurberg may be reached at info@ip-watch.ch.

Articles in Brazilian Law (unofficial translation):

* Art. 230, Law 9.279/96. An application for a patent, related to
substances,
materials or products obtained by chemical means or processes, and food
products
or chemical-pharmaceutical substances, materials, mixtures or products, and
medications of any kind, as well as the respective processes for obtaining
or
modifying them, may be filed by a party who enjoys protection guaranteed by
a
treaty or convention in force in Brazil, in which case it is assured the
date of
the first patent application filed abroad, provided that its object has not
been
introduced on any market by direct initiative of the titleholder or by a
third
party with his consent, and that no serious and effective preparations to
exploit the object of the application or of the patent have been made, in
this
country, by third parties.
(1) The filing must occur within a period of 1 (one) year from the date of
publication of this Law, and must indicate the date of the first filing
abroad.
(2) A patent application filed on the basis of this Article shall
automatically
be published, and any interested party may submit comments, within a period
of
90 (ninety) days, as to whether it satisfies the provisions in the caput of
this
Article.
(3) When Articles 10 and 18 of this Law have been observed, and once the
provisions established in this Article have been satisfied and the granting
of
the patent in the country where the first application was filed has been
proven,
the patent shall be granted in Brazil, just as it was granted in its countr=
y
of
origin.
(4) The patent granted on the basis of this Article is assured the period o=
f
protection remaining in the country where the first application was filed,
calculated from the date of filing in Brazil and limited to the period
established in Article 40, not applying the provisions of its Sole
Paragraph.
(5) An applicant who has filed a patent application that is still pending,
related to substances, materials or products obtained by chemical means or
processes, and alimentary or chemical-pharmaceutical substances, materials,
mixtures, or products, and medications of any kind, as well as the
respective
processes for obtaining or modifying them, may submit a new application
within
the time limit and under the conditions established in this Article,
attaching
proof of having abandoned the pending application.
(6) The provisions of this Law apply, where applicable, to the application
filed
and the patent granted on the basis of this Article

Art. 231, Law 9.279/96. An application for a patent related to the subject
matter dealt within the preceding Article may be filed by a national or a
person
domiciled in this country, in which case it is assured the date of
disclosure of
the invention, provided that its object has not been introduced on any
market by
direct initiative of the titleholder or by a third party with his consent,
and
that no serious and effective preparations to exploit the object of the
patent
have been made, in this country, by third parties.
(1) The filing must occur within a period of 1 (one) year from the date of
publication of this Law.
(2) The patent application filed on the basis of this Article shall be
processed
pursuant to this Law.
(3) The patent granted on the basis of this Article is assured the remainde=
r
of
the 20 (twenty) year protection period calculated from the disclosure date
of
the invention, beginning on the filing date in Brazil.
(4) An applicant who has filed a patent application that is still pending,
related to the subject matters dealt with in the preceding Article, may
submit a
new application, within the time limit and under the conditions established
in
this Article, attaching proof of having abandoned the pending application.

Dispon=EDvel em http://www.ip-watch.org/weblog/index.php?p=3D893

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