Despite the difficult political situation, the Brazilian Patent and Trademark Office (BRPTO) and the judiciary have adopted measures to minimise the impact of COVID-19 on their operations.
The Brazilian judiciary is organised in a multifaceted system, with state and federal levels. Each state’s judicial body has autonomy to enact rules for its operation. Most of the judicial bodies have adopted electronic systems for the filing of documents, allowing judges and lawyers to keep working remotely.
Major issues impacting the whole country regarding administrative and procedural control and transparency are addressed by the Brazilian Board of Justice (“CNJ”), a board of the Brazilian judiciary.
On March 19, the CNJ issued a resolution that suspended all court deadlines until April 30 and set the minimum guaranteed services during that period. According to the resolution, basic services such as the analysis of injunctions are to be provided by the courts.
The worsening of pandemic forced the CNJ to extend the deadline to May 31 and update its resolution, including an automatic suspension of deadlines on all actions before courts in locations where lockdown measures are imposed. Lawsuits following electronic proceedings are not affected by the CNJ resolution, even if some courts adopted specific rules to maintain the suspension of deadlines. For instance, the deadlines at the Federal Circuit Court of Rio de Janeiro, the main court for the validity of IP rights, are suspended until May 31.
Undoubtedly, the courts and legal professionals have quickly adapted to this new reality of limited personal contact. Federal and state courts enacted rules allowing remote working for judges, interns and civil servants. Meetings in chambers between attorneys and judges are now conducted via teleconferencing platforms.
On April 1, the CNJ announced an emergency digital platform that enables courts and tribunals to hold virtual hearings to ensure the continuity of services. The continuity of the work at the Supreme Court is also guaranteed by the adoption of new internal rules establishing procedures for submitting oral arguments.
The new reality brought by COVID-19 is driving the Brazilian justice system to change, and the measures implemented are working properly. Data shows that productivity remains at the same level as before the pandemic. Since the beginning of the pandemic, more than six million interlocutory decisions and over four million judgments have been issued by Brazilian courts.
IP-related lawsuits have not stopped. Decisions on preliminary and permanent injunctions have been issued, and important cases follow its due course. For instance, the most important patent case before the Supreme Court was scheduled to begin on May 22. The case is a constitutional challenge of Article 40 of the IP Law (sole paragraph), which provides for a minimum of a 10-year patent term from grant. This is the first time that a direct constitutional action based on the IP statute is to be heard by the Supreme Court. The hearing was nevertheless postponed due to a brief filed on May 15.
The BRPTO also seems to have not been badly affected. Despite the suspension of deadlines until May 30, all electronic systems are fully operational, and parties can access them for filing new applications and prosecution proceedings.
The Office recently announced that its activities would continue by electronic means. All its employees have been working from home since March 20. The BRPTO also published an amendment to Rule 239/2019 to fast-track examination of patent applications relating to COVID-19.
Even without the pandemic, any topic about the patent landscape in Brazil would begin with criticism of its patent backlog. With 10 to 14 years in average to decide patent applications, the BRPTO was considered one of the slowest in the world.
In July 2019, the Brazilian Ministry of Economy and the BRPTO announced a plan to deal with this. The plan seeks to reduce the backlog by 80% by 2021, allowing the Office a maximum of two years after an examination is requested instead of 12 years to complete the procedure. The main solution implemented by the BRPTO was to rely on a foreign search report when the Brazilian patent application is part of a patent family. More than 80% of the pending patent applications in Brazil are in this situation.
Until the outbreak of COVID-19, the BRPTO was doing an extraordinary job, bringing hope to patent applicants and putting Brazil back on the map for filings. Filings during the first six months of the project increased in comparison with the same period in the previous years.
A great concern now is how the pandemic will affect the BRPTO’s goals. According to the Office, the goal is to examine 149,930 patent applications before July 2021. Before the pandemic, decisions were made within three months, a situation which impressed applicants used to an average of more than 10 years pendency. During the pandemic, the BRPTO kept issuing about 1,500 office actions under this plan. Decisions increased during the last two months, and more than 4,400 patents were granted.
No of preliminary office actions per weekly gazette
The BRPTO has shown its capacity to maintain the pace of work as planned, and it seems COVID-19 will not have a huge negative impact on its backlog plan. The BRPTO expects that after clearing the backlog, a patent application can be examined within 24 months from the request for substantive examination.
Under Brazilian law, a national emergency declared by the executive branch can lead to the issuance of a compulsory licence over a patent. The Brazilian government has used compulsory licensing as an instrument to address public health in the recent past.
Considering the impact of COVID-19 on the Brazilian health system, members of the Brazilian National Congress filed three new bills for the grant of compulsory licensing during the pandemic (Bills 1184/20, 1320/20 and 1462/20).
Bill 1184/20 (filed by Jandira Feghali, Federal Deputy of the Brazilian Communist Party) does not seek the amendment of the existing provisions on compulsory licensing, but rather seeks to allow the compulsory licensing of patents by the Federal Government during the state of health emergency established by Law #13.979 of February 6.
On the other hand, Bill 1320/20 (filed by former Health Minister Alexandre Padilha) and Bill 1462/20 seek to amend the compulsory licensing provisions of Article 71 of Law 9.279/1996 (the IP statute). These bills aim to include a new framework for cases of national or international emergency status.
The provisions included in these bills provide for an automatic compulsory licence when a public health emergency is declared by the World Health Organization or by the competent national authority. The compulsory licence would apply to granted patents as well as to patent applications identified by the BRPTO as covering inventions capable of addressing specific emergencies such as vaccines, drugs and diagnostic devices. According to the proposed amendments, the BRPTO shall identify ex officio and publish a list of granted patents and patent applications falling within the scope of the compulsory licence.
Following the proposed legal framework, the compulsory licensing would be in force for the duration of the emergency, and the patent holder would be entitled to receive royalties in the amount of 1.5% of the public sale price. Such amount would have to be paid by the manufacturer of the patented product. Moreover, according to these bills, the patent holder must provide to the public authority all information and the know-how needed for the production of the patented product. The data submitted to public authority shall be protected against use in situations other than the manufacturing of products under the compulsory licence. These bills were filed more than six weeks ago and have not yet been put to a vote.
COVID-19 has certainly changed the dynamics of businesses, government and public institutions in Brazil. For the time being, the IP Office and the judiciary seem to be more prepared than the government in terms of dealing with the pandemic. Considering the political situation Brazil is currently facing, the three compulsory licensing bills are likely to never reach a plenary vote session. However, it does not mean that compulsory licences are excluded from the current COVID-19 pandemic because under Article 71 a presidential decree may declare a public interest over a specific invention.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. The article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.
Karlo Fonseca Tinoco (Attorney at law)
Roberto Rodrigues Pinho (Attorney at law)
Rafael Tögel (Patent engineer)