Brazil court reviews patent term extension under TRIPS

The 3rd Chamber of the Superior Court of Justice of Brazil (STJ) issued an important decision last Tuesday (March 17, 2009) after examining Special Appeal no. 960.728 – RJ filed by EI DU PONT DE NEMOUR AND COMPANY against the Brazilian Patent and Trade Mark Office (BPTO). The matter under examination involved essentially the reference date from which the TRIPS Agreement would be enforceable in Brazil. The judges of the 3rd.Chamber determined unanimously that patents granted under the previous IP legislation cannot be extended from the original 15 year term to 20 years from the filing date, as stipulated by Article 70.2 of the TRIPS Agreement.

The dispute was initiated by the controversies derived from the different interpretations of this matter adopted by IP owners and the BPTO. IP owners understood that TRIPS was applicable as from January 1, 1995, due to Decree 1,335/1994. This interpretation is founded on the immediate applicability of the Agreement in Brazil, considering that there was no formal Government application to the WTO to request the delay for the TRIPS entry, as provided by Article 65.2.

BPTO’s examiners were however of the opinion that TRIPS would be enforceable only as from January 1, 2000. Their viewpoint was based on the applicability of Articles 65.1 and 65.2. Thus developing countries have the right to delay the enforcement of TRIPS for an additional five years from the date of the Agreement’s signature. While Article 65.1 of TRIPS determined that no member state is obliged to apply the provisions of TRIPS before one year from execution of the Agreement, Article 65.2 stipulated the possibility for developing countries to delay for 4 years the date of TRIPS application, which would add to 5 years in total.

BPTO’s understanding was the basis for rejections of administrative requests of patent extension and resulted in the commencement of court actions against it before the Federal Court in the city of Rio de Janeiro and the STJ.

The 3rd Chamber of the STJ's decision was based on the argument that the wording of Article 65.2 surely granted the benefit to Brazil (as a developing country) to extend the applicability of TRIPS independently of any written and prior request to the WTO. Further, it considered that TRIPS is not an international agreement with a direct and literal application to private relations. Instead, it is directed to member states, serving solely as guidance to the implementation of a new IP law.

Following the 3rd. Chamber’s rationale, TRIPS would be applicable in Brazil as from January 1, 2000 and the 20 years term would be secured to patents granted after the current IP Law (Law 9,279/96), thus not applying to those patents granted before the current IP Law.

This decision of the STJ interferes substantially with the owners’ rights of patents granted under the previous Industrial Property Law (Law 5,771 of 1972).

The decision is a novelty, especially if one considers previous decisions of the 4th Chamber and the recognition by the 3rd Chamber of STJ that the applicability of TRIPS commenced from January 1, 1995 and, therefore, permitted the extension of the patent term to those granted under the previous IP Law. It is surely a turn-round from the STJ position on the matter of patent extension, which had been long regarded as settled in that court and a matter no longer discussed in Brazil.

This decision will certainly incite new discussions and court motions by patent owners, especially those in the herbicide and pharmaceutical industries.

Source: article by IP Tango team member José Carlos Vaz e Dias