To address its backlog of patent applications—which totaled 231,184 as of this June—the Brazilian Patent and Trademark Office (BPTO) is proposing a special, temporary fast-tracking procedure. This Legal Update provides background on the proposal, discusses controversy around it and offers considerations for companies.
Background on the Backlog
The average time it takes to obtain a patent from the United States Patent and Trademark Office (USPTO) and the State Intellectual Property Office in China (SIPO) is about three years. The BPTO, however, takes approximately 10 years to issue a patent, to the detriment of Brazilian economic and technological development.
In recent years, the BPTO has launched fast-track programs similar to the USPTO’s Patent Prosecution Highway (PPH) to speed up the process for obtaining a patent in Brazil on inventions such as those involving green technology, pharmaceutical innovations, or applications submitted by science and technology (S&T) Institutions or small and medium-sized enterprises (SMEs). However, these programs have not significantly reduced the severe backlog.
The BPTO has hired many examiners over the past few years to increase productivity. The current total is 326 examiners, and productivity has increased somewhat. In 2015, each examiner handled 35 decisions; in 2016, each handled 45 decisions; and by the end of 2017, it’s estimated that each will handle 55 decisions.
Yet under current conditions (including the number of backlogged cases, number of examiners, and their productivity level), the BPTO says that by 2029 the backlog of patents pending exam would reach a troubling total of 349,080 applications.
And even if productivity were doubled to 110 decisions per year per examiner, the projected backlog in 2029 would rise to 189,312 applications and take an estimated eight years to handle.
The Proposed Rule
To address the current backlog, the BPTO has proposed a rule to implement a simplified, fast-track examination procedure, which would be used for a limited time and only with applications already in the system, and which applicants could opt out of.
The current proposal states that, as a general rule, the new procedure would be applied to all pending patent applications for which examination has been requested and that were published before the formal publication of the rule, except (i) applications for certificates of addition, (ii) split patent applications, and (iii) pharmaceutical product/process patent applications in cases where the merit exam procedure would be used.
The rule proposes putting in place a simple procedure to grant a patent without a merit exam and within 90 days if all of the following conditions are satisfied:
- The patent application or request to enter into the national phase was submitted before the date of publication of the proposed rule;
- The patent application was published or the request for anticipated publication1 was filed within 30 days of the date of publication of the proposed rule;
- The request for examination2 of the patent application was made within 30 days of the date of publication of the proposed rule;
- The applicant’s annual fees are paid and in good standing; and
- The BPTO’s technical opinion report on the patent application has not yet been published.
Additionally, it is important to note that, according to the current proposal:
- The fast-tracking procedure will not be used with any patent application that has been subject to third-party observations or is subject to third-party observations within 90 days from the notice of admissibility.
- The applicant can opt out of the examination within 90 days after the publication of the notice of admissibility that informs the applicant that the patent application is in the fast-tracking queue.
- The patent application will be granted as originally published by the BPTO.
The proposal was open for public consultation until August 31, 2017, providing IP practitioners in Brazil and around the world the opportunity to submit their opinions on this important issue.
Although the BPTO has not commented on its analysis of the suggestions submitted, it recently published a 672-page document containing all contributions received so far, which include criticisms from ABPI,3 ABAPI,4 the AIPPI’s5 Japan group, and other entities.
In reviewing the document, we noted some remarks that indicate that the rule is not yet mature. In addition, points made by the contributors include the following:
- The new rule should not be issued by the BPTO. Because the rule will modify some aspects of industrial property law, even for a short period of time, the rule should be approved by the Brazilian Congress.
- The new rule should only apply to patent applications filed before a specific date (suggestions range from December 31, 2007, to July 31, 2017) to avoid any new patent applications being filed with the sole purpose of receiving the benefits of a patent without an examination on its merits.
- The terms to opt out, submit third-party observations, and request the requirement of an examination of the patent application are overlapping; the BPTO should provide separate terms for each of these actions so that the applicants and their competitors can have adequate time for each action.
- The number of patents granted at the same time should be limited so that competitors can better monitor the publications.
- Instead of granting patent applications as originally published, the BPTO should consider the amendments duly requested by the applicant and/or the decisions rendered in different jurisdictions for patent applications with identical claims.
Of course, these points may or may not be reflected in the next or final version of the proposed rule.
It is important to note that:
- The proposed rule does not abolish the provisions of Articles 10 and 18 of Brazilian IP Law, which state what cannot be patentable (discoveries, scientific theories, mathematical methods; computer programs per se; all or part of natural living beings, etc.). Therefore, a patent, even if issued according to the simplified procedure, would be subject to such limitations.
- Patents granted under this simplified procedure still could be challenged through administrative nullity procedures and judicial nullity actions.
- Given the lower degree of review with this simplified procedure, it will be important to consider the best strategy for each case. For example, filing third-party observations on specific applications of interest could be an effective mechanism to force the BPTO to more closely examine the patentability of the application. Moreover, a patent portfolio and strategy review in Brazil would be highly recommended in order to check—case by case—whether it would be in a company’s best interest to request early publication and examination, to file third-party observations against applications filed by competitors, to request the exclusion of certain applications from the simplified procedure, etc.
- Because the regulation, if adopted as is, will apply only to patent applications filed or entered into the national phase before the date of publication of the rule, a company anticipating the filing or entry of applications in Brazil should carefully consider the timing of those actions and whether its applications would benefit from the proposed simplified procedure.
For Non-Brazilian Companies in Particular
In order to try to take advantage of this proposed rule, foreign companies may wish to consider:
- Having their patents filed in Brazil or requesting the entry of national phase in Brazil.
- Requesting the anticipated publication and requesting the examination of the patents.
- Paying all annual retributions due.
- Closely monitoring competitors’ patent applications in order to evaluate if it would make sense to submit a third-party observation.
While the proposed rule may be advantageous to foreign companies since it would expedite patent granting, we note that patent applications that have been reviewed on their merits will be much easier to enforce against third parties. With this in mind, foreign companies—if the new rule is adopted—should consider waiting for the regular examination, on the merits, to resume instead of having the fast-track exam procedure used for their patent applications.
If and when the rule is published, we expect that the BPTO will grant many patents within a short period; therefore, foreign companies should closely monitor the situation to see if nullity measures should be taken promptly against competitors.
Companies should closely monitor the development of this new rule, as the wording may be amended, making the final rule different from the current proposal. The proposal indicates that the Brazilian government is willing to take radical measures to diminish the current patent application backlog–whether by the proposed new rule, an adjusted version of it, or another approach yet to be introduced.
1 All patent applications are published after a period of secrecy of 18 months, which is counted from the filing date (or priority date). At publication, the main information about the patent application—such as official number, name of the applicant and inventors, description of the invention, and claims—is made public. The applicant may waive the right to the period of secrecy by requesting the BPTO to publish the application earlier than 18 months.
2 Even under the proposed rule, the applicant still would have to formally request the examination of the patent application. According to Brazilian IP Law, the request for examination can be made at the moment a patent application is filed or within 36 months from the filing date.