Judgement on Direct Unconstitutionality Action – ADI 5529

On May 7, 2021, Brazil’s Supreme Federal Court (“STF”) ruled on the Direct Unconstitutionality Action – ADI 5529, filed by the Attorneys General Office (“PGR”) in 2016, which had as its object the sole paragraph of article 40 of the Industrial Property Law (“LPI”).

According to the LPI, an invention patent is in force for a period of 20 years and a utility model for 15 years, both counted from the date of its filing with the Brazilian Patent and Trademark Office (“BPTO”). However, the sole paragraph of article 40 of the LPI, to remedy the delay in the analysis of patent applications by the BPTO, determines that “the term of validity shall not be less than 10 (ten) years for the invention patent and 7 (seven ) years for the utility model patent, counted from the granting date”.

In general, the reason for the ADI’s filing was because the PGR understands that the wording of the sole paragraph of article 40 of the LPI makes the term of patent protection indefinite.

In response to the ADI, the STF, by a majority of votes, declared the unconstitutionality of the sole paragraph of article 40 of the LPI, arguing that the extension of the term would have an “unfair and unconstitutional” character, for “privileging the private interest to the detriment of the community”.

In the Industrial Property Official Gazette (“RPI”) No. 2627, of May 11, 2021, the President of the BPTO announced that, in compliance with the preliminary decision of ADI, the provisions of the sole paragraph of article 40 of the LPI will not be applicable to patents that have been granted since April 7, 2021 and that are related to pharmaceutical processes and equipment and/or materials for use in health.

On May 12, as planned, the plenary session of the STF concluded the trial regarding the modulation of the effects, which was pending. It was decided that the effects of the unconstitutionality decision will become effective only after the publication of the decision in the Official Gazette.

However, for (i) patents related to pharmaceutical products and processes, equipment and/or materials for use in health; and (ii) patents disputed in lawsuits, filed up to April 7, 2021, whose object is the unconstitutionality of the sole paragraph of t. 40, it was ruled that the decision will have retroactive and immediate effects.

Demarest’s Intellectual Property and Innovation team is available to advise you on this matter.