Law, Business & Policy Thursday, May 12 Washington, DC Scan to - PowerPoint PPT Presentation

BRAZILIAN HIGH-TECH LITIGATION: Law, Business & Policy Thursday, May 12 – Washington, DC Scan to download this presentation or to receive link via e-mail

Litigation in Brazil Against the Government on Behalf of Foreign Companies Otto Licks, Partner at Licks Attorneys Thursday, May 12 – Washington, DC

Overview of the BRPTO • Patent system started in 1809, but the BRPTO was created only in 1970. • PCT in force since 1980. Brazil is ISA and IPEA under PCT. • TRIPs in force since 1995. • TRIPS compliant Statute passed in 1996. • 90 patent examiners circa 1980. • First time the BRPTO hired more examiners was in 1998 (large gap) • Now: 328 examiners; 322 at the BRPTO (6 are working in other government entities); 237 are at the Office of Patents (DIRPA), while 85 have been assigned to other activities unrelated to patent examination; 191 actually examine patents. • 34,000 patent filings per year • Less than 10,000 patent decisions per year 3

1995 – 14,000 patent filings per year 2015 - 35,000 patent filings per year 35,000 * Figures may change slightly due to the 30-month PCT filing 30,000 period 25,000 20,000 15,000 10,000 5,000 0 4

Patent filings go up, staff goes down… 191 patent examiners working in 2015 500 34,000 450 32,000 400 350 30,000 300 28,000 Patent Filings 250 Total Examiners 26,000 200 150 24,000 100 22,000 50 20,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 5

The ever increasing Backlog: A snowball in Rio de Janeiro 70,000 60,000 50,000 Request for examination 40,000 Office Actions Abandonment 30,000 Patent backlog Linear (Patent backlog) 20,000 10,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6

The BRPTO’s Backlog per Technical Division - average time (years) Agriculture (DIPAE) Metallurgy and Materials (DIMAT) Utilidty Models (DIMUT) Mechanics (DIMEC) Inorganic Chemisty (DINOR) Medical Devices (DIPEM) Civil Engineering (DICIV) Oil and Chemistry (DIPEQ) Packaging Technologies (DITEM) Human Needs (DINEC) Polymers and Corretates (DIPOL) Textile (DITEX) Agrochemical and Correlates (DIPAQ) Pharmacy Division 2 (DIFAR-2) Pharmacy Division 1 (DIFAR-1) Software and Electronics (DICEL) Biochemistry and Correlates (DIBIO) Physics and Electricity (DIFEL) Molecular Biology and Correlates (DIMOL) Food, Plant and Correlates (DIALP) Telecom (DITEL) 8 9 10 11 12 13 14 15 7

Number of examinations per patent examiner (per month) Productivity 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2010 2011 2012 2013 2014 2015 Average considering all examiners Average considering examiners actually examining Linear (Average considering all examiners) 8

Number of grants/denials per examiner 9

Comparing productivity JPO/USPTO/EPO/BRPTO Average # of applications examined per examiner in 2012 250 239 200 150 100 77 51 50 19.2 0 JPO USPTO EPO BRPTO 10

Comparison of the total # of examiners with the patent filings in a given year Brazil 2010 2011 2012 2013 2014 2015 Patent filings 28,099 31,881 33,569 34,050 33,182 33.043 Patent examiners* 270 237 228 237 226 191 Ratio 8.7 11.2 12.3 12.0 12.2 14.4 Japan - JPO 2010 2011 2012 2013 2014 2015 Patent filings 353,277 350,594 350,908 336,058 325,989 318,721 Patent examiners 1,703 1,711 1,713 1,701 - - Ratio 17.3 17.1 17.1 16.5 - - Korea - KIPO 2010 2011 2012 2013 2014 2015 Patent filings 170,101 178,924 188,915 204,589 210,292 213,694 Patent examiners 712 711 726 732 724 741 Ratio 19.9 21.0 21.7 23.3 24.2 24.0 United States - USPTO 2010 2011 2012 2013 2014 2015 Patent filings 520,277 535,188 576,763 609,052 618,330 617,216 Patent examiners 6,420 6,652 7,808 8,013 9,302 9,161 Ratio 6.7 6.7 6.2 6.3 5.5 5.6 Europe - EPO 2010 2011 2012 2013 2014 2015 Patent filings 235,731 244,995 258,500 265,918 274,174 278,867 Patent examiners 3,967 3,961 3,994 4,112 4,221 - Ratio 4.9 5.1 5.4 5.4 5.4 - 11

Patent filings per examiner BRPTO vs. JPO 20.0 18.0 17.3 17.1 17.1 16.5 16.0 14.0 12.3 12.0 12.0 11.2 10.0 8.7 8.0 6.0 4.0 2.0 0.0 2010 2011 2012 2013 Ratio BRPTO Ratio JPO 12

Fast-track From 14 years to 11 months • The BRPTO provides for early harvest and fast-track examination. • Usually a fee is required. • In addition, applicant must fulfill requirements established in the rules. • If approved, application that benefit from a fast-track procedure will be decided in about 11 months. 1. Early harvest: 1. Preliminary opinion – (Rule #123/2013) 2. Fast-track: 1. Green patents – (Rule #131/2015) 2. Priority BR – (Rule #153/2015) 3. PPH (Rule #154/2015) 4. Pharma fast-track (Rule #80/2013) 5. Small entities fast-track (Rule #160/2016) 6. Other cases of Fast-track (Rule #151/2015) 13

Fast-track From 14 years to 11 months Early harvest 1 Fast-track 2 Fast-track 3 Fast-track 4 Fast-track 5 Fast-track 5 Preliminary opinion Priority BR PPH Pharma Small entities Other cases of Fast- (Rule #123/2013) (Rule #153/2015) (Rule #154/2015) (Rule #80/2013) (Rule #160/2016) track (Rule #151/2015) • Applicant older than Applications claiming Applications first filed First step towards a full Fast-track examination Fast-track examination Brazilian priority in Brazil, which were PPH. of applications related of applications filed by 60 years old; • Applicant suffers (first filed in Brazil) also filed abroad, such Highly restricted. to the diagnosis, small entities. as a national phase of a Might be challenged in prevention or from functional or PCT first filed in Brazil. courts to include non- treatment of HIV-AIDS, mental disabilities or US priorities and all cancer or neglected other severe fields of technologies. diseases; diseases; • To obtain funds or • Search report plus a • Started January, • US or BR priority. • Started March, 2013 • Started February, credits from Brazilian • Only in the field of oil • Applicable to written opinion. 2016. 2016 fostering or credit • Not a full • Closed in February • During the pilot and gas. products and agencies; • Application filed in examination. 2016 when the Office processes, as well as phase, which will last • Applications dealing • Produces a report accepted the 100th Brazil from January devices and materials a year, the BRPTO will with subject matter • Possibility of similar to PCT’s application. 1st, 2013. accept up to 300 declared relevant for • Application not under WOISA. prioritized patents. national emergency • Small entities, as examination. examination of or public interest; patent applications defined by law, • A third party’s covering products, generate annual application claiming process and medical gross revenues of up the same subject devices considered to 3.6 million. matter of your patent • Foreign companies strategic to SUS (art. or application; 3 of the Rule). Only cannot qualify as • Third parties are the Ministry of Health small entities. using or working the can ask for a patent subject-matter of a application to be pending patent prioritized under art. application. 3 of the Rule. 890 (USD 250) 1,775 (USD 500) 1,775 (USD 500) No fee No fee No fee 14

Recent/noteworthy developments in fast-track programs • Green patents 1. The third phase of the pilot program ended last April 16, 2016. 238 requests have been filed; 99 application grants; 95 application denials. 2. In average, applications take more than 1 year to be decided counting from the filing of the request for priority examination. • Priority BR 1. On February 23, 2016, the Priority BR pilot program received its 100th request for priority examination; 2. Representatives of the BRPTO have announced that the second phase of the pilot program will be launched in the second semester of 2016. 3. 113 requests were filed. 42% of the requests were granted; 20% were denied; 38% are pending. 4. 59 companies are participating. 15

Recent/noteworthy developments in fast- track programs (cont’d) • PPH 1. 9 requests have been filed to date; 7 companies are participating. 2. First examinations and decisions are taking less than 80 days counting from the filing of the priority examination request. • Pharma fast-track 1. As of February 23, 2016, 25 requests for pharma-fast-track were filed. • Small entities fast-track 1. 38 requests for priority examination have been filed. 2. 28 companies are participating in the pilot phase of the program. 16

Judicially induced fast-track: The basics • The lack of appropriate actions by the Public Administration to solve the backlog problem led some companies to challenge the BRPTO before federal courts. • Several companies obtained temporary restraining orders forcing the BRPTO to examine the patent in reasonable time – less than 60 days. • Applicants request Federal Courts to issue an order imposing a ‘judicially induced fast- track’ examination of a pending application. • The grounds for the lawsuit is the statutory 60-day term provided by the Administrative Procedure Law for the administration to conclude the analysis of an administrative proceeding. • Cases where the BRPTO is applying strict patentability standards for some arts such as pharma, biotech, and telecom also trigger potential challenges prior to a final decision. 17