IA TR - December 11, 1998 - Page 2 - National Law Center for Inter-American Free Trade®

Volume 5, Number 25, Page 2

Brazil’s New Industrial Property Law: Patents

by Michael A. Ugolini

On May 14, 1998, Brazil enacted a new industrial property law. The patent provisions of the new law provide protection for chemicals, pharmaceuticals and food products, not patentable under the old law. The provisions increase the period of protection from fifteen years to twenty years, as required by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

In order to be patentable, an invention must meet the novelty, inventive activity and industrial applicability requirements of the new act.

An invention will be considered “novel” when it is not the present state of the art, determined by reference to information publicly available prior to the date of the application, both within and without Brazil.

The second requirement of patentability is that the invention involve an inventive act; it must not be obvious to practitioners in the field of use concerned.

Finally, the invention must have industrial applicability, which means simply that it must be capable of use in some industry, or be capable of being produced by some industry.

Under Brazil’s new industrial property law, only the following are not patentable:

1. Discoveries, scientific theories and mathematical models;

2. Purely abstract concepts;

3. Schemes, plans, principles or methods of a commercial, accounting, financial, educational, or advertising nature, or for games of chance or surveillance;

4. Literary, architectural, artistic and scientific works or any aesthetic creation;

5. Computer programs per se;

6. Data compilations;

7. Game rules;

8. Surgical methods and techniques as well as therapeutic and diagnostic methods having human or animal application;

9. All or part of living beings and other biological substances found in nature, or isolated from it, including the “genome” or “germoplasma” of any natural living being and its natural biological processes.

The following are also not patentable:

1. Inventions which are contrary to morality, decency, or public safety, order and health;

2. Substances, materials, compounds, elements or products resulting from the transformation of atomic nuclei;

3. Living beings themselves, except those resulting from genetic engineering, and which are novel, non-obvious and have industrial application.

Brazil’s new industrial property law also contains provisions for “pipeline” protection for patents on chemicals, pharmaceuticals and food products, which were heretofore not patentable. Under these provisions, a national or resident of a Member country of the Paris Convention for the Protection of Industrial Property who has filed a patent application in another Member country (which Brazil recognizes under that Convention’s priority period), or a Brazilian national or resident who has not filed for registration, has one year from the date of publication of the new industrial property law to file for registration in Brazil.

In order for this provision to be operable, however, the subject matter of the invention may not have been placed on any world market by the owner or others with his consent, nor may others have made serious and effective preparations for exploiting the subject matter of the invention in Brazil prior to the application date. Foreign filings claiming priority under the Paris Convention must provide evidence that the patent was granted in the country in which the first application was filed. Once this evidence is received, the patent will be granted in Brazil.

Additionally, any applications pending on the date the new industrial law was published, seeking registration of inventions involving chemicals, pharmaceuticals and food products, may be withdrawn and re-filed. This is in keeping with the special transitional rules of the TRIPS Agreement for patent applications.

However, Brazil’s National Institute of Industrial Property (INPI) has indicated that, notwithstanding the provisions of Article 70(7) of the TRIPS Agreement and the new industrial property law, it will not permit the registration of patents involving previously excluded subject matter until January 1, 2000.

Normative Act No. 126 of 1996 provides further details on the procedures for filing and processing of pipeline patent applications. A patent registered in Brazil confers on its holder the exclusive right to make, use or sell the patented invention for a term twenty years from the date of filing of the application for registration. This is consistent with the requirements of the TRIPS Agreement.

The new law permits the following uses of patented inventions:

1. Those of a private character done without a commercial purpose;

2. Those undertaken for purposes of scientific or technological research;

3. Those involving the individual preparation of medicine by qualified medical personnel;

4. In the case of living beings created by genetic engineering, inventions involving the use of the patented product as a source for other products, if done without a commercial purpose, are not patentable.

INPI may grant a non-exclusive license to a third party where the patent holder exercises his rights in an abusive manner, or abuses his economic power under Brazilian law.

INPI may also grant a non-exclusive license to a third party where the patent holder fails to work the patent in Brazil within three years of registration, unless doing so is economically unfeasible. A requirement that the patent holder work the patent locally or lose his patent rights clearly runs afoul of the TRIPS Agreement’s provision that patents must be available and patent rights enjoyable without discrimination as to whether the products are imported or locally produced.

INPI may also grant a non-exclusive license to a third party where the patent holder fails to satisfy demand for the patented product in Brazil, within three years of registration.

It is left to the patent holder to show that such failures are justified by legitimate reasons, legal impediments, or that serious and effective preparations for exploitation have been made.

If any of these excuses for failing to work the patent in Brazil or satisfying demand in Brazil are satisfied, importation of the patented product by the patent holder will be permitted. If they are not satisfied, the grant of a compulsory license may give the licensee the right to import the product into Brazil.

The INPI may also grant a non-exclusive license to the owner of a “dependent patent,” defined as a patent which cannot be exploited without infringing the rights of another previous patent holder. In such cases, the dependent patent holder must show that he has been unable to reach agreement with the holder of the earlier patent. If a license is granted to the owner of a dependent patent, the earlier patent holder will be granted a cross-license of the dependent patent.

This is in compliance with the TRIPS Agreement’s provision on the compulsory licensing of dependent patents.

The administrative regulations regarding the patent registration process are contained in INPI’s Normative Ruling No. 127.

Michael Ugolini is an attorney with International Trade Advisors, an association of attorneys concentrating in the field of U.S. and international intellectual property, trade and investment, with offices in Springfield, Massachusetts and Hartford, Connecticut.