Brazil's pharmaceutical patent landscape underwent a seismic shift following a landmark 2021 Supreme Court ruling that eliminated automatic patent term extensions, fundamentally altering how companies approach intellectual property protection in Latin America's largest market. The decision has triggered widespread litigation, legislative reform efforts, and strategic repositioning across the industry.
Supreme Court Decision Eliminates Patent Extensions
The Supreme Court's 2021 ruling in ADI 5529 declared Article 40's sole paragraph of Brazil's patent law unconstitutional, removing the automatic mechanism that compensated for delays in patent prosecution at the Brazilian Patent and Trademark Office (BRPTO). Previously, any application granted after 10 years of prosecution—which was unfortunately very common—would receive 10 years of protection from the grant date.
Justice Rapporteur Dias Toffoli modulated the decision to determine that pharmaceutical patents would be impacted retroactively, resulting in approximately 100,000 patents in force having their terms reduced, with some expiring immediately. The ruling established that all patents are now granted with a 20-year term of protection counted from filing, eliminating the previous safety net for prosecution delays.
Industry Response and Litigation Wave
The pharmaceutical industry's response has been swift and multifaceted. Nearly 70 lawsuits have been filed seeking Patent Term Adjustment (PTA) compensation, arguing that delays caused by both the BRPTO and the Brazilian Health Regulatory Agency (ANVISA) should justify restoration of protection periods lost due to the removal of the automatic extension mechanism.
"The impact on the industry was enormous, with companies rethinking their strategies for operating in Brazil," noted Juliana Neves, partner at Licks. "That said, we didn't see companies leaving or refraining from entering the Brazilian market, which is a positive point."
Instead of market withdrawal, companies are pursuing multiple strategies to strengthen portfolios and obtain patents as quickly as possible. This includes an increase in litigation over fast-track examination, as applicants seek judicial intervention to overcome administrative delays and secure timely patent protection for strategic technologies.
Legislative Reform and Congressional Action
The Supreme Court decision created significant pressure in Congress to amend Brazilian Patent Law and on the BRPTO to revise internal guidelines to expedite examination. The most important pending legislation is Bill 2210/2022, which proposes eliminating the 36-month deadline for requesting examination in favor of automatic examination upon filing.
Under this proposal, examination would be requested automatically when applicants file applications, or the PTO would assume applications are ready to proceed after 18-month publication. However, this creates challenges by limiting the period during which applicants can amend claim sets and refine applications, as amendments would only be permitted until the examination request.
Industry associations have strongly advocated for including a PTA mechanism in the bill that would allow up to five years of compensation for unjustified delays by the BRPTO. This provision is viewed as essential to restore legal certainty and competitiveness in Brazil's innovation landscape.
The Critical Role of Subsequent Innovation Patents
Despite ongoing debates, subsequent innovation patents (SIPs) remain fundamental to pharmaceutical innovation in Brazil. These patents protect incremental improvements that often deliver significant patient benefits, challenging narratives that characterize them as mere "evergreening" tactics.
The case of Vonau Flash® exemplifies how formulation patents can result in innovation relevant to public health. Developed by the University of São Paulo in partnership with Brazilian pharmaceutical company Biolab Sanus, Vonau Flash® created an ondansetron formulation capable of dissolving directly in the mouth without water. This innovation brought objective gains in practicality and comfort for patients with difficulty swallowing tablets, particularly children and elderly patients.
The incremental innovation, protected by Brazilian Patent PI 0403668-9, brought financial and reputational benefits to USP by transforming academic research into a viable commercial product. This case demonstrates that SIP applications are not limited to large multinational companies, with numerous filings made by generic drug manufacturers indicating growing interest across different market segments.
Strategic Adaptations and Market Positioning
Companies are implementing proactive portfolio management strategies to navigate Brazil's evolving IP landscape. The most common strategic mistake identified is delaying filing decisions in Brazil, particularly given that the country lacks linkage between ANVISA and the BRPTO, meaning regulatory approval doesn't depend on patent status.
"A smart strategy would be to coordinate filings with both agencies, taking into account the timelines for marketing approval and patent prosecution," Neves explained. Companies receiving marketing authorization long before patent grants can end up operating without IP protection for extended periods, significantly reducing effective protection periods.
The BRPTO is pursuing ambitious targets to examine and decide all patent applications within four years, compared to the current average of eight to nine years. This streamlining effort includes reviewing guidelines to eliminate steps contributing to examination backlogs.
Judicial Enforcement and Specialized Courts
Brazil's specialized IP courts in states like São Paulo and Rio de Janeiro play crucial roles in complex pharmaceutical patent cases. A recent noteworthy decision saw the São Paulo Federal Court rule in favor of Novartis AG in a patent infringement lawsuit involving Brazilian Patent No. PI9708624-0, related to MYFORTIC's pharmaceutical formulation.
The court applied the doctrine of equivalence, recognizing that despite the defendant's use of different polymers, the infringing formulation replicated the same enteric properties and therapeutic outcomes as the patented version. This decision reinforces that minor technical changes cannot circumvent patent rights and affirms the judiciary's willingness to uphold pharmaceutical innovation integrity under Brazilian patent law.
Future Outlook and Recommendations
For patent holders navigating this dynamic environment, experts recommend embracing proactive judicial measures, including inhibitory actions to prevent anticipated infringements and writs of mandamus to compel information disclosure from authorities. Companies should strengthen applications early, making amendments as soon as possible to ensure applications reach examination in optimal condition for grant.
The recommendation to patent holders is maintaining filing and monitoring strategies in Brazil, with persistence and proper use of administrative and judicial appeals essential for effective intangible asset protection. This approach reinforces the legal certainty crucial to fostering continued innovation in Brazil's pharmaceutical sector.
