Brazilian Mailbox Patents: Big Loss for Alexion

On April 20, 2018, Alexion Pharmaceutical Inc.’s (Alexion) patent (PI9507594-1) covering Soliris® (eculizumab) was the subject of an unfavorable decision by the Superior Court of Justice involving the term of mailbox patents in Brazil.  Soliris® (eculizumab) is a humanized antibody targeting complement 5 and is used to treat paroxysmal nocturnal hemoglobinuria (PNH).

The Third Panel of the Court decided that the patent term for mailbox patents should be 20 years from the filing date and not 10 years from the date of grant.  The Court was persuaded by public health interest arguments made by associations representing various generic companies, specifically those citing the high price of Soliris® in Brazil (around 5,000 USD per unit).

The Soliris® patent is what is known as a “mailbox patent”.  Mailbox patents arose in Brazil following the creation of the World Trade Organization (WTO) on January 1, 1995.  When the WTO was created, one of the agreements that came into effect was the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. At the time, most member countries agreed to apply the TRIPS Agreement immediately upon joining the WTO. However, developing countries were permitted certain transitional periods in order to have sufficient time to enact new laws that were TRIPS compliant. One transitional period allowed developing countries up to ten years (specifically, until January 1, 2005) to introduce patent protection for pharmaceutical and agrochemical products. However, Article 70.8 of the TRIPS Agreement provided that developing countries that utilized this transitional period were required to allow patent applications to be filed on pharmaceutical and agrochemical products beginning on January 1, 1995, even though a decision to grant a patent on such applications could be delayed up until January 1, 2005. This provision of the TRIPS Agreement is often referred to as the “mailbox” provision (meaning that a “mailbox” would be created to receive and store such applications) and patents issuing from applications filed pursuant to this provision are frequently referred to as “mailbox” patents.

When Brazil became a member of the WTO, the grant of patents on pharmaceutical and agrochemical products was not permitted. As a result in 1996, Brazil enacted a Patent Statute that provided patent protection for these inventions.  Pharmaceutical and agrochemical product related patent applications filed in Brazil between January 1, 1995, and May 14, 1997 (date of publication of the Patent Statute) received the same treatment as other patent applications filed after 1997. When the Brazilian Patent Office (Instituto Nacional da Propriedade Industrial (INPI)) started to examine and grant pharmaceutical and agrochemical patents, the concept of transitory and mailbox applications no longer became relevant.

The issue involving the Soliris® patent involved the patent term of mailbox patents. In general, the Brazilian Patent Statute (Article 40) provides that the term of a patent is 20 years from its filing date or 10 years from the date of grant, whichever is longer. Specifically, Article 40 establishes:

Article 40 – The term of a patent for an invention shall be 20 (twenty) years and for a utility model 15 (fifteen) years as from the filing date.

Sole Paragraph – The term shall not be less than ten years for inventions and seven years for utility models, as from the date of grant, except where INPI is prevented from carrying out the substantive examination of the application due to pending litigation or for reasons beyond its control.

However, for patents filed between January 1, 1995 and May 14, 1997, Brazil’s legislators decided to establish a limit on the pendency of examination of such applications by INPI (which was already struggling with backlog at the time) until December 31, 2004.

The legislation reads as follows:

Article 229…Sole Paragraph – The patenting criteria of this Law shall apply on the effective filing date of the application in Brazil, or on the priority date, if any, to applications relating to pharmaceutical products and to chemical products for agriculture filed between January 1, 1995 and May 14, 1997, and protection is assured as from the date of grant of the patent for the remaining term, counted from the date of filing in Brazil, such term being limited to the one prescribed in the heading of Article 40.

Article 229-B – Product patent applications filed between January 1, 1995 and May 14, 1997, which were not granted protection under Article 9 letters “b” and “c” of Law No. 5.772 of [December 21,] 1971, whose applicants failed to exercise the right specified in Articles 230 and 231, shall be decided until December 31, 2004 in conformity with this Law.

For many years, INPI issued mailbox patents well beyond December 31, 2004. These patents have been receiving a term of 10 years from grant. For example, Alexion’s patent covering Soliris® was granted on August 10, 2010 and received a 10-year term having an expiration date of August 10, 2020.

In 2013, INPI filed several lawsuits involving mailbox patents against companies like AbbVie, Alexion, Astellas, Bayer, and Merck seeking to reduce the term of mailbox patents from 10 years from grant to 20 years from filing. For a general overview of the cases see infographic here:  MAILBOXLITGATION.

The decision by the Superior Court of Justice involving Alexion’s patent is limited to the arguments balancing the public and private interests namely, that 20 years from is sufficient time for companies to enjoy patent protection over their inventions.  Unfortunately, this decision ignores the incredible backlog of applications pending at INPI.

What are the next steps for Alexion?  Alexion can appeal the case to the Supreme Court.  Alternatively, Alexion can wait for a favorable decision on a mailbox patent by another Brazilian court.  Specifically, as will be discussed in a subsequent post, the Brazilian courts can may still change their opinion regarding the patent term of mailbox patents.

Please continue to watch BRICS & Beyond for updates on litigation involving mailbox patents in Brazil.

This post was written by Lisa Mueller, Roberto Rodrigues Pinho and Brenno Telles.

 

 

Patent Term Extension is Becoming a Reality in China

On April 12, 2018, the state council of China announced that beginning May 1, 2018, a maximum of 5-year patent term extension will be available for innovative drugs (commonly referred to as branded drugs) seeking market approval within and outside China. This decision by the state council will help move the intellectual property protection system for pharmaceuticals in China closer to that of many countries such as, for example, the U.S., Europe, Japan, Korea and Australia, which have well-established patent term extension systems.  Although the details of the patent term extension system have yet to be specified, it is believed that it will be similar to the U.S. system with respect to the types of products and patents that for which the extension will be applicable as well as how the term for extension will be calculated.

This decision demonstrates that China is serious in implementing more stringent intellectual property protection for pharmaceuticals.  As such, this decision by China to permit for patent term extension is good news to foreign investors, especially foreign pharmaceutical companies.

Please continue to watch BRICS & Beyond for further details on patent term extension in China as it becomes available.

This post was written by Lisa Mueller and Xu Li of Chofn Intellectual Property.