[Guest Post] Brazil: Bill No. 12/2021 on compulsory licensing of patents

IPTango is pleased to publish a guest post by Pedro Matheus and Leonardo Cordeiro (Gruenbaum, Possinhas & Teixeira), discussing the Brazilian bill No. 12/2021 on compulsory licensing of patents in cases of national or international emergencies, public interest or public calamity nationwide.

On 11 August 2021, the Brazilian Senate approved the Bill No. 12/2021 to amend the Brazilian Industrial Property Law and regulate the compulsory licensing of patents in cases of declaration of national or international emergencies or public interest by the Executive, or recognition of a state of public calamity nationwide by the National Congress.

The Bill No. 12/2021

The Bill establishes “rules and deadlines compatible with the urgency of the situation”, as well as a “power-duty of action by the Executive when facing the declaration of a National Interest Emergency”.

However, despite the alleged noble purposes, it seems the Bill does not imply significant changes to the compulsory licensing procedure already set forth via decree No. 3.201/1999. Likewise, it’s difficult to foresee how it will objectively solve the problems concerning the acquisition of COVID-19 vaccines in Brazil.

The Bill establishes some new rules and sets deadlines regarding the compulsory licensing procedure, such as a duty of the Executive to issue a list of the patents and patent applications that could be potentially useful during an emergency or exceptional situation (article 71, §2), as well as the participation of public organizations, research, and education institutions (such as universities) and other entities in the procedure (article 71, §3). However, it is not yet clear which patents could theoretically be subject to compulsory licensing since no previous studies point out which patents could be listed to be licensed due to the new Bill.

Moreover, Brazil is not a producer of Active Pharmaceutical Ingredients (API), mainly imported from India and China. Thus, it is also not clear how to license pharmaceutical technologies to “manufacturers with proven technical and economic capability”, according to article 71, §6 of the Bill, especially considering that the vaccines currently being produced in Brazil are already subject to transnational contracts, such as the ones between Instituto Butantã and Sinovac, and Fundação Oswaldo Cruz and AstraZeneca.

In this sense, even if there are patents regarding COVID-19 vaccines to be potentially licensed, Brazilian manufacturers would still depend on importing foreign APIs and know-how, which is one of the bottlenecks of the Brazilian COVID-19 vaccination program.

The logistics of importing foreign vaccines and APIs is the main bottleneck of Brazil’s vaccination and not the exclusivity of certain products due to the issuance of patents. It is important to note that Brazil has an exemplary vaccination program due to the capillarity of its system. According to the data of the National Plan for the operationalization of the vaccination against COVID-19, there are approximately 38 000 vaccination locations around the country and a population that, majority, responds positively to the call to receive their vaccine jabs.

As mentioned above, the licensing of any patent does not seem to tackle this issue since merely licensing a technology does not necessarily provide the means to reproduce such technology immediately.

In the view above, the Bill may also have an electoral connotation. Indeed, 2022 will be an electoral year in Brazil, and one of the main criticisms of the current Brazilian government has been the acquisition of vaccines and the handling of the pandemic.

The Bill became Law No. 14.200/2021 on 2 September 2021. However, the President used his veto to override a few provisions, such as the requirement for a patent owner to transfer know-how and provide supplies of medicines and vaccines, which, according to the veto’s text, would be challenging to implement and could discourage investments in technology and the formation of strategic commercial partnerships, such as the ones already mentioned above.

Comments

The new Law aims to clarify and establish rules for a procedure that already existed in Brazilian Law (the compulsory licensing of patents), and which has been reserved for moments of crisis when a patent holder is unable to properly provide the object of a patent that is strictly necessary to tackle and overcome such situation. Nevertheless, it is not yet clear how such a procedure would apply to the current COVID-19 pandemic and if it was indeed necessary to face the current situation since compulsory licensing was already established and could have been used if it was indeed essential.

On a final note, it is necessary to highlight that the Brazilian Congress opted to establish these new rules and regulations through amendments to the Industrial Property Law. In contrast, the previous regulations were set forth via presidential decree No. 3.201/1999, following a proper legislative technique.

Thus, if there is a need to establish new rules and deadlines in the future or to amend any other provision of the regulations, such amendments would require a new bill to be approved by the Congress (Federal Senate and the Chamber of Deputies), which could take more time than the issuance of a new presidential decree.

The Law has already entered into force, but the Brazilian Congress can still maintain or overrule the Presidential decision regarding the vetoed provisions.

Credits:

First image by Alexandra_Koch from Pixabay.