As previously reported (see here “The case of Intacta RR2 Pro soy royalties”), in its landmark ruling on May 6, 2021, the Brazilian Supreme Court addressed the constitutionality of automatic patent term extensions. This ruling, which declared the sole Paragraph of Art. 40 of the Industrial Property Law of Brazil (Law 9.279 of 1996 hereafter LPI) unconstitutional, is of significant importance. The provision in question resulted in automatic extensions beyond the standard 20-year term if patent examination exceeded ten years. The Supreme Court found that this practice violates constitutional rights such as free competition and legal certainty.
The Supreme Court decided that the ruling on the unconstitutionality would not have retroactive effects, meaning the decision would be valid as of the publication of the sentence.
However, the Supreme Court exempted patents whose validity was already being judicially questioned before April 7, 2021, based on the unconstitutionality of the sole paragraph of Art. 40. For those patents, the decision has retroactive effects.
The exemption also applies to patents for pharmaceutical products, devices, and/or materials for use in field of health. This means that these patents no longer have the term calculated based on as in the sole paragraph of Art. 40, even though they were granted before the present ruling. In practice, patents in this particular technological field that have been granted based on the sole paragraph of Art. 40 will have their term of protection reduced to 20 years from the filing.
However, and on the grounds of legal certainty the Supreme Court stressed that concrete effects produced by valid patents during the term that exceeds 20 years form filing will be preserved.
The case rivaroxaban
Bayer´s drug rivaroxaban is an anticoagulant used to treat and prevent blood clots.
The Brazilian generic company Grupo EMS (hereafter EMS) manufactured and imported the drug rivaroxaban in April 2021, before the Supreme Court decided on the constitutionality of sole paragraph 40 LPI, while the company Bayer’s patent was still in force.
Following the ruling on the unconstitutionality, the Supreme Court decided that in the case of pharmaceutical products, its decision would have retroactive effects from the judgment onwards. As a result, patents for medicinal products that had already exceeded the 20-year term lost validity. Therefore, Bayer's patents on rivaroxaban had expired in December 2020.
EMS started producing the generic anticoagulant rivaroxaban in April 2021, i.e. before the Supreme Court's decision. EMS began commercializing the medicinal product directly after the Court's decision.
Bayer filed a lawsuit against the Brazilian generic manufacturer, arguing that the drug rivaroxaban infringed its patents.
In the first instance, EMS was sentenced to destroy the batches produced before the Supreme Court ruling and compensate Bayer for patent infringement.
EMS filed a complaint with the Supreme Court seeking to overturn this decision. In October 2023, the Supreme Court issued a preliminary injunction accepting the request of EMS.
Bayer appealed the decision for reconsideration, arguing that it was not seeking an extension of the patent but protection, as the Supreme Court had expressly ensured that concrete effects produced by valid patents during the term that exceeded 20 years from filing would be preserved.
On March 15, 2024, the Supreme Court stated that this exception aimed to prevent judicial disputes over contractual matters related to extended patents and shield patent holders from civil liability. It wasn't meant to allow unconstitutional patent holders to extend the patent protection beyond the legal term.
Although the ruling in the case of rivaroxaban does not have a binding effect on other proceedings, it has the potential to establish a precedent for similar cases. This is particularly important, as global pharmaceutical corporations have initiated around 50 comparable lawsuits seeking to extend the term of their patents despite the decision of the Supreme Court.
We are keeping a close eye on this development and will keep you informed about any further updates on this matter.
