COMPULSORY LICENCE
“THE MERE ASSEMBLY OF THE PRODUCT WOULD CORRESPOND TO THE IMPORTATION OF THE PARTS CONSTITUTING IT, AND WOULD BE ADMITTED ONLY IF LOCAL MANUFACTURING PROVES TO BE UNFEASIBLE.”
30 and 31 allows members to provide limited exceptions to the exclusive rights of the patent, including the use of the patented subject matter by the government or third parties authorised by the government. It concludes that the local working requirement is within the scope of the agreement. Historically, the local working requirement
of Brazil’s IP law was challenged at the WTO in the dispute of US v Brazil back in 2000. Te Brazilian government attempted to grant compulsory licences based on the lack of local manufacturing of patented medicines owned by US pharmaceutical companies, in an attempt to threaten these companies to reduce the prices of the medicines used in Brazil’s public health programme to combat AIDS. However, during the discussion, in 2001, the US and Brazil reached an US withdrawing
agreement, with
agreement states that patent rights shall be enjoyed regardless of whether products are imported or locally produced. In fact, TRIPS was the basis for the creation of Brazil’s IP law, which will celebrate its 20th anniversary in 2016. Tis is why the law is not deemed to be TRIPS-compliant. Nevertheless, article 2.2 of TRIPS states that
nothing shall detract from existing obligations that members may have to each other under the Paris Convention. Article 5A(2) of Paris Convention, in turn, corroborates that each member country has the right to take measures providing for the grant of compulsory licences to prevent abuses resulting from the exercise of exclusive rights, such as failure to work the invention. Te Paris Convention entered into force in Brazil back in 1884. TRIPS itself also
corroborates such an assertion, since the interpretation of articles
www.worldipreview.com the its complaint, but the
enforceability of the local working requirement was not discussed. Generally, companies attempt to overcome
such a requirement by voluntarily licensing the patented invention or seeking to license it. One of the most common types of offer for license is ‘nominal’ working, which comprises the placing of advertisements, usually in the Federal Official Journal, offering a licence on certain terms. However, there is no evidence to suggest such
an approach would be effective to prove that the invention was worked or there had at least been an attempt to work it, in order to avoid the grant of a compulsory licence to an interested third party. Unlike in other countries, there are no provisions in Brazil’s IP law on the filing of statements disclosing the status of working. In theory, however,
the law still has a provision in article 69 listing quite general World Intellectual Property Review Annual 2015 81
Fabio Albergaria Dias is a partner at Luiz Leonardos & Advogados. A patent engineer, he specialises in patent
and
industrial design prosecution and litigation, and has been working for 15 years in the intellectual property field. He can be contacted at:
falbergaria@llip.com
situations in which a compulsory licence should not be granted. Tese include, for example, if the patentee justifies its failure to use the invention with legitimate reasons, which is consistent with the provision of article 5A(4) of
the Paris Convention, or if the patentee
proves that serious and effective preparation for exploitation has been made. If all mechanisms to avoid the compulsory licence prove to be ineffective, the patentee must be aware that such a licence is still subject to royalty payments. It should also be emphasised that during almost 20 years of the current IP law’s existence, only two requests for a compulsory licence have been filed and there are no records of a compulsory licence having been granted by the Brazilian Patent and Trademark Office (INPI) due to lack of local working. In fact, only one compulsory licence has
been granted in Brazil, on the grounds of public interest, in a case involving two Merck & Co owned patents encompassing the retroviral efavirenz. In this case, the compulsory licence was regulated by Decree No. 6108, dated May 4, 2007, and not by the INPI in accordance with the provisions of Decree No 3201 of October 6, 1999, which regulates compulsory licences granted on the grounds of public interest or national emergency. In
view of the above, the current
understanding is that in principle the right of the patent owner shall not prevail over the public interest.
LUIZ ROCHA /
SHUTTERSTOCK.COM
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