Patent backlogs fuel efforts to extend pharma patent terms in Thailand and Brazil, AIDS activists say

Excessive patenting in the multinational pharmaceutical sector, along with a huge backlog, works in Big Pharma’s favour. Civil society is pushing back against these ‘TRIPS-Plus’ measures.

Original version first published on IP-Watch. Author: Dugie Standeford.

For a variety of reasons, Thailand and Brazil have huge backlogs of pharmaceutical patent applications. The delay in patent examinations is creating pressure on the countries to extend patent protection terms to the detriment of access to affordable medicines, AIDS organizations say.

Thailand “innovative step examination” creates patent logjam

It takes five to eight years for a patent to be examined in Thailand because of the Department of Intellectual Property’s (DIP’s) ‘innovative step examination’ procedure, said Chalermsak Kittitrakul, from our partner organization, AIDS Access Foundation. When a patent application is submitted to the DIP, the agency makes a formal notification to the public. Patent protection begins from the filing date and extends for up to 20 years. If the application is not opposed, or is opposed but later accepted, the applicant has the option of waiting five years to submit a request to start the examination process, he said.

A study carried out with the support of the DIP and the Thai Food and Drug Administration found that the large patent examination backlog is attributable both to the innovative step examination and to the multinational pharmaceutical industry, said Chalermsak. Since patent protection begins when an application is filed, multinational drug companies will often send threatening legal notices to generic companies seeking to produce a similar drug even if it’s not yet clear that the patent will be granted, he said. Companies also take advantage of the gap in the patent examination process, he said: The study, on evergreening patents on medicines carried out by an academic team covering patents and patent applications in 2000-2010, showed that most innovative step examination requests for drug patents are submitted to the DIP in the fourth and fifth year.

“Big Pharma has nothing to lose by making use of the legal gap in combination with using threatening letters to the generic firms or even to the hospitals considering to purchase the generics,” Chalermsak said. Local drug manufacturers “step back” rather than risking the possibility of having to pay damages if the patent is granted.

AIDS Access Foundation raised these issues two years ago when the DIP asked Thailand’s prime minister to tackle the patent backlog, which consisted of some 20,000 patent applications, 3,000 of which were related to pharmaceuticals, said Chalermsak. When the official proposed an executive order to speed up patent examinations, the foundation intervened to oppose it on the ground that making the patent process faster could harm the public. There was a meeting which was attended by the Thai FDA, DIP, other government agencies, major pharmaceutical companies, civil society organizations and others, after which the matter was suspended for two years, he said.

Patent term extension “must not happen in Thailand”

The slow-moving patent system has led to pressure on Thailand to adopt patent term extension – provisions which extend patent protections beyond the 20 years required by the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement — in the context of free trade agreements (FTAs), said Chalermsak.

Talks on a Thailand-EU FTA began in 2013 but were suspended indefinitely following the May 2014 military takeover, according to the European Union. But negotiations are ongoing on a Regional Comprehensive Economic Partnership (RCEP), an FTA-like pact covering 10 Association of Southeast Asian Nations countries – Thailand, Singapore, Malaysia, the Philippines, Indonesia, Laos, Myanmar, Cambodia, Vietnam and Brunei – and additionally China, Japan, South Korea, India, Australia and New Zealand, said Chalermsak. Japan and South Korea have proposed patent term extension provisions, he said. A reportedly leaked draft of RCEP’s IP chapter is here.

The latest negotiation round took place recently in Singapore and another round is set for Japan on 1 July. The goal is to complete the pact by year’s end but Thai civil society organizations “totally disagree with and oppose” patent term extension, which is a form of TRIPS-plus provision that “must not happen in Thailand,” Chalermsak said. Neither the DIP, Pharmaceutical Research and Manufacturer’s Association or Thai Pharmaceutical Manufacturers Association commented.

Brazilian patent exam system “overwhelmed”

Brazil, too, has a large backlog of pharmaceutical patents, said Pedro Villardi, coordinator of the Working Group of Intellectual Property (GTPI), and executive director of our partner organization, the Brazilian Interdisciplinary AIDS Association (ABIA). There are around 216,000 pending patent applications, of which nearly 24,000 refer to A61K classification (preparations for medical, hygienic or odontological products), he said.

Unlike in Thailand, the cause of the logjam is the lack of patent examiners, with only 326 for all technical fields, Villardi said. Each examiner must deal with around 114 applications at a time, a stark contrast with the US Patent and Trademark Office, where the average is 64 applications per examiner, he said. In addition to the overwhelming number of applications, the government isn’t investing in the examination infrastructure to ensure conditions are right to boost productivity, he said. The most recent attempt at tackling the problem was an “automatic approval” process for all pending patents, which has been blocked so far because it is an extremely controversial measure, has been intensely criticised and wouldn’t eliminate the backlog in the long run, he said.

In parallel, several patent prosecution highway deals have been signed, an artificial way of clearing up the backlog by reducing Brazil’s autonomy to perform its own patent examinations under its own standards, said Villardi. In the end, PPH could increase productivity by lowering autonomy and examination quality, he said. Rather than investing in the patent office, efforts are concentrated on agreements “that undermine Brazil’s capacity to perform rigorous and quality examination, relying on decisions made in other countries that have very different approaches toward patent examination criteria,” he said. It’s a “shot in the foot” for Brazilian sovereignty, he said.

Article 40 creates “extra monopoly years”

On top of all that, Brazil has a law that extends patent protection if the examination process takes longer than 10 years, Villardi said. Under Article 40 of Brazil’s Intellectual Property Law, “any extra time beyond ten years translates into extra monopoly years”. For example: if a patent application were filed in 2000 and a patent granted, protection would last until 2020. If, however, the examination takes 12 years, the patent would be valid until 2022.

“This is considered a TRIPS-plus provision and it is currently the most used provision of Brazilian IP law, given that the average time for a pharmaceutical patent to be examined in Brazil is 12 years,” Villardi said. A large proportion of pharma patents are now subject to the provisions, which favour mostly multinational pharmaceutical companies that have applied hundreds of times for patents, he said.

Article 40 affects access to medicines by extending monopolies over essential drugs, Villardi said. The compensation is not justifiable because the delay in patent examination doesn’t harm the applicant, he said. To the contrary, during the “long wait,” the products are already in the market and face no competition since any rivals that risk entering the market could be forced to pay retroactive damages if the patent is granted, he said.

Applicants benefit twice from the backlog, first with a de facto monopoly and later, if the patent is awarded, extra monopoly years, Villardi said. Moreover, given that for each drug already patented there are on average eight other patent applications filed, the backlog is also the result of excessive patenting in the multinational pharmaceutical sector, he said.

Applicants benefit twice from the backlog, first with a de facto monopoly and later, if the patent is awarded, extra monopoly years.

Bringing “public interest considerations to the core of the patent system”

ABIA/GTPI is the only local public interest group that addresses access to generics via constant interaction with government officials using an approach based on context analysis and strong community representation, Villardi told Intellectual Property Watch. The organization has developed a broad range of strategies to ensure access to medicines, whether branded or generic, he said. The focus is to “bring public interest considerations to the core of the patent system, because many unbalances are created there due to unchecked powers given to private actors”. Those strategies include filing patent opposition or invalidation cases to highlight and contribute to the rejection of unmerited patents, he said. ABIA/GTPI also works to ensure that patent law responds to public health needs, which means improving public health protective measures and removing rules that promote unjustified monopolies and excessive patenting practices, he said.

ABIA/GTPI’s patent law strategy involves not only working with lawmakers but also intervening in legal cases by filing amicus curiae briefs, Public Civil Actions and constitutional challenges aimed at major changes in jurisprudence, Villardi said. The organization, with its core mission to mobilise communities around decisions that affect treatment, always advocates “for access to medicines as a fundamental component of the right to health and for the sustainability of universal access to treatment as a fundamental component of [the] Brazilian public health system approach”.

In 2016, ABIA/GTPI developed a landmark study that assessed the impact of the patent term extension under Article 40. The results showed it to be close to US$300 million, taking into account only nine medicines, Villardi said. The organization also wrote, with the Fundação Getúlio Vargas School of Law, an amicus brief in a constitutional challenge filed by generics companies in the Brazilian Supreme Court, he said.

The proposal by the Ministry of Commerce and the National Institute of Industrial Property (INPI) to award automatic patent grants without examination includes a provision excluding pharmaceutical patents, Villardi said. Nevertheless, there is “intense pressure, especially from transnational pharmaceutical companies, to remove this waiver”. In response, ABIA/GTPI submitted a technical document to the public consultation on the proposal urging that the proposal be quashed and stressing the risks involved in including medical patents, he said. It also engaged with the press and published an opinion piece in a major media vehicle and an article in a publication produced by the public think tank Institute for Applied Economic Research. The organization also participated in public debates on automatic patent approval, including one hosted by the association of patent examiners, Villardi said.

Brazil is also involved in talks on an FTA between several countries in South American trade bloc Mercosur and the EU. In addition to the existing patent protection provided by Article 40, Europe is pushing for Supplementary Protection Certificates that would give pharma companies longer patent terms if there are delays in the market registration process, Villardi said: “This would add a new layer of monopoly extension, creating further obstacles for competition, for price reduction and thus for sustainability of public health programs based on universal access to medicines.”

Neither the Institute of Industrial Property nor InterFarma, which represents national and international drug research laboratories, responded to requests for comment.

This story is part of Make Medicines Affordable supported series on The role of civil society in TRIPS Flexibilities implementation. IP-Watch retains editorial independence over the articles in this series.