Social cost of pending the patent examination in Brazil

An analysis of the deleteric effects of the sole paragraph of Art. 40 of law No. 9.279/96 in the post-patent segment

Abstract

In Brazil, the general rule is that the invention patent has a duration of 20 years and that of a utility model, 15 years, counted from the filing date of the patent application. However, if the examination of a patent of invention or utility model is not completed within 10 or 8 years, respectively, the sole paragraph of art. 40 of Law nº 9,279/96 - Industrial Property Law (LPI) determines a differentiated methodology for the calculation of the validity of the right. The standard in question provides that, in this case, the patent will be valid for at least ten years in the case of IP and seven years in the case of MU, counting from the date of the granting of patent (and not the file). The present paper deals with the problematic involved in the extension of the term of validity of patent in the hypothesis of administrative slowness of Brazilian Office (INPI) in the appraisal of the application. As the vast majority of patents are granted using the benefit provided in the sole paragraph of art. 40 of the LPI, it will be analyzed the social cost of the automatic extension of the term of validity of the patent in the post-patent segment (pharmaceuticals and agricultural pesticides). It was found that the accumulated loss of the public coffers only taking into account nine medicines purchased by public health system (SUS) in regular centralized purchases up to January 2016 was over R$ 2 billion. As for agricultural pesticides, there was an annual cost of approximately R$ 318 million for the group of eight patents that were extended with the application of the legal safeguard.