Pharmaceutical innovation in Brazil

Brazil: the critical role of subsequent innovation patents in safeguarding pharmaceutical innovation amid ongoing debate

THE LIFE SCIENCES IP LANDSCAPE IN BRAZIL AND THE ROLE OF SUBSEQUENT INNOVATION PATENTS

As a prominent emerging market in the health and biotechnology sectors, Brazil presents a complex and dynamic scenario for innovation protection, crucial for attracting investment and fostering development in the life sciences industry. Robust intellectual property (IP) protection is fundamental for pharmaceutical and biotechnology companies, encompassing everything from patents for new molecules to incremental innovations in formulations and processes. It is within this context that subsequent innovation patents (SIPs) gain particular relevance in the current landscape.

There is a recurring discourse in Brazil that the subsequent innovation patents are an artificial way of extending exclusivity over a given drug and are intended to prevent generic drugs from entering the market. This statement, however, is deliberately unspecific and designed to create a political environment that is opposed to the granting of patents in the pharmaceutical area. The terms ‘secondary patents’ and ‘evergreening’, as these innovations are often called, are even used in a derogatory way, suggesting that these patents would be less valuable or irrelevant.

However, anyone who understands innovation in the pharmaceutical field knows that the various advancements incorporated into a particular drug do not come about all at once. In fact, the process begins with the creation of the molecule – the drug’s active ingredient. This molecule must then undergo the expensive and time-consuming clinical trial process, which is crucial for proving its safety and effectiveness. It is estimated that 90 per cent of new molecules fail these tests (Sun, D, Gao, W, Hu, H, Zhou, S. Acta Pharmaceutica Sinica B, 12(7), 3049–3062).

Only after going through this – it must be said – costly and long process, the entities that own the intellectual property rights to the molecules will invest in the subsequent innovation, which will certainly be the subject of one or more SIPs.

Only after a reasonable indication that the clinical trials will be successful can the equally arduous process begin; for example, to identify the most suitable manufacturing processes for large-scale production and establishing the most efficient formulations, which excipients will provide better absorption of the molecule, with fewer daily doses and, consequently, more comfort for the patient.

With a consistent indication of future success in clinical trials, investments will be made to, for example, identify the crystalline or isomeric forms of molecules that are most effective, what other therapeutic uses the same molecule could have, which groups of patients are most responsive to treatment, which particle size is most suitable, which dosage forms are best, how to make the drug have a longer shelf life or how to remove the need for refrigeration, etc.

In short, it is only after a sign of success in clinical trials and future approval for use by the Food and Drug Administration (FDA), European Medicines Agency (EMA), Brazilian Health Regulatory Agency (ANVISA) and other important regulatory agencies that any subsequent innovation will emerge and will naturally be the subject of the respective SIPs.

This article delves into the critical role of SIPs in safeguarding pharmaceutical innovation in Brazil, illustrating their significance through recent litigation and demonstrating their tangible benefits to public health. Moreover, it aims to provide essential recommendations for rights holders, guiding them on how to navigate the Brazilian IP landscape effectively, secure their patents and strategically enforce their rights amid the ongoing debates and evolving legal interpretations surrounding these crucial innovations.

CONCRETE EXAMPLES: HOW SIP PATENT PROTECTION STIMULATES INNOVATION IN BRAZILIAN INDUSTRY AND BENEFITS SOCIETY

Numerous cases show that these patents often result in significant innovations – whether by improving drug formulations, creating new methods of administration or expanding therapeutic applications.

The case of Vonau Flash® is a concrete example of how a formulation patent can result in innovation relevant to public health. Developed by the University of São Paulo (USP) in partnership with the Brazilian pharmaceutical company Biolab Sanus, Vonau Flash® consisted of the creation of a type of ondansetron (to prevent nausea and vomiting) capable of dissolving directly in the mouth, without the need for water. This innovation brought objective gains in practicality and comfort for patients with difficulty swallowing tablets (mostly children and elderly patients). The incremental innovation, protected by the Vonau Flash® patent (Brazilian Patent PI 0403668-9), brought financial and reputational benefits to the USP by transforming academic research into a viable commercial product.

The case of Vonau Flash® confirms that improvements in formulations – even if they are based on already known substances – have the potential to generate concrete benefits for patients and added value for the pharmaceutical industry.

Also, this case demonstrates that SIP applications are not limited to large multinational companies. In fact, numerous filings have also been made by generic drug manufacturers, indicating a growing interest across different segments of the market in protecting incremental improvements that deliver therapeutic, commercial and social value to known medicines.

This reality challenges the reductionist narrative that SIPs are merely a way to unjustifiably extend market exclusivity. On the contrary, such patents reflect a continuous innovation process – often undertaken only after early clinical success of the original molecule – that aims to overcome technical hurdles and enhance the safety, efficacy and convenience of treatments for patients.

To further illustrate the tangible impact of SIPs on patient quality of life and the economic landscape, consider the broader spectrum of benefits. For instance, SIPs often cover innovations that improve drug stability, allowing for storage in less restrictive conditions, which is crucial for distribution in a country with continental dimensions like Brazil. They can also protect advancements in drug delivery systems, such as sustained-release formulations that reduce dosing frequency, thereby significantly enhancing patient adherence to complex treatment regimens. This not only improves therapeutic outcomes but also reduces the burden on healthcare systems.

It is important to say that SIPs do not necessarily prevent generic drugs from entering the market because the regulatory standards allow, for example, another formulation to be developed and used, with different excipients, as long as the bioavailability is compatible, of course.

Imagine the following scenario: a pharmaceutical company develops an unprecedented molecule (molecule A) to treat a certain disease – which could result in a compound/molecule patent – which is administered intravenously. After 20 years of patent protection (article 40 of Brazilian IP Law 9279/96), the exclusivity on the molecule administered intravenously expires, allowing the manufacture and marketing of generics.

Later, the same company develops an innovative formulation with the same molecule A, but which makes it possible to replace the injection with oral capsules. In this hypothetical situation, the generic drug made from injectable molecule A remains available on the market, but the new formulation in capsules could be protected by patent, encouraging continued innovation.

Therefore, SIPs do not represent an artificial extension of exclusivity. On the contrary, they play an essential role in the balance between innovation and access to medicines, as they have the possibility of (1) improving patient adherence to treatments; (2) increasing quality of life; and (3) stimulating research and development in the pharmaceutical sector.

For example, if it were true that the creation of new formulations for known compounds would be obvious to technicians in the field, then a formulation patent claiming an incremental innovation such as Vonau Flash® could never have been granted, and the academic research at the USP would lose its financial return, as well as there being a disincentive to incremental innovation within the national pharmaceutical industry. Not to mention the obvious benefits this innovation has brought to patients.

Moreover, SIPs encourage a continuous cycle of investment in domestic R&D. By allowing companies, including local generic manufacturers, to protect their own incremental improvements, these patents foster a competitive environment focused on enhancing existing therapies. This not only strengthens the national pharmaceutical industry but also directly contributes to a more robust healthcare ecosystem, where patients have access to increasingly better and more convenient treatment options. The long-term societal benefit of such continuous innovation far outweighs the narrow view of SIPs as mere exclusivity extensions; they are, in fact, catalysts for progress in public health.

BRAZILIAN LAW AND REGULATION ON SIPS: A COMPARATIVE PERSPECTIVE

Restricting the patentability of such inventions would not put the country on the road to development but, on the contrary, would align Brazil with countries such as India and Argentina that have adopted an extremely restrictive policy in this area, which ends up deterring investment in innovation.

In the case of India, article 3(d) was incorporated into its 1970 Patent Law, limiting the granting of patents for new forms, new properties and new uses of known substances, unless they demonstrate a significant increase in therapeutic efficacy. Similarly, Argentina, through Joint Resolution 118/2012, restricts secondary patents in the pharmaceutical sector, such as new forms, dosages or therapeutic uses of known substances. However, these restrictions have generated controversy, with criticism about the impact on innovation and on encouraging the development of new treatments.

In other words, under the justification of preventing anti-competitive practices and promoting access to medicines, the measures adopted by these countries end up deterring international investment in the sector and, consequently, depriving the population of the most advanced treatments available in the pharmaceutical field.

In Brazil, Bill 5402/2013, authored by Congressman Newton Lima (PT/SP), proposed the inclusion of provisions in the IP Law that sought to limit the granting of patents for new forms, new uses or new properties of known substances, similar to article 3(d) of the Indian Patents Act and the text of Joint Resolution 118/2012 from Argentina. The Bill's text suggested the prohibition of patents for any new property or new use of a known substance, as well as for new forms that did not result in an enhancement of efficacy, considering salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers and derivatives as the same substance, unless there was a significant difference in efficacy. This attempt at legislative change aligned with restrictive policies, such as those adopted by India, with a potential negative impact on the encouragement of incremental innovation in the national pharmaceutical sector. Although presented in 2013, Bill 5402/2013 was never brought to vote in the Brazilian National Congress.

This comparison highlights a critical policy divergence among developing nations regarding pharmaceutical IP. While some jurisdictions, like India and Argentina, have explicitly legislated against certain types of incremental innovations, often citing concerns about ‘evergreening’ and access to medicines, Brazil has, to date, largely resisted such statutory prohibitions. This legislative choice reflects a nuanced understanding of innovation dynamics in the pharmaceutical sector, where incremental improvements, often protected by SIPs, play a crucial role in enhancing patient outcomes and stimulating research and development.

Although there is no restriction on SIP provided for by law, through Resolution 208/2017, the Brazilian Patent and Trademark Office (BPTO) imposes limitations on the patentability of claims for new uses of medicines. According to the BPTO, claims for new uses of medicines that use generic terms (eg, ‘gastrointestinal disorders’), that are based on mechanisms of action, related to therapeutic regimens (eg, dosage regimen), or to groups of patients, should be rejected for lack of clarity and precision in the claims. Also, through that Resolution, BPTO establishes that for novel medical use claims, the applicant must provide evidence (eg, tests) demonstrating the unpredictability of the invention at the time of filing the patent, otherwise enablement and support of disclosure will not be recognised:

It must be understood that the protection of the new medical use claim is given to the use of the known substance to manufacture a drug for a new therapeutic use. Therefore, the report must clearly and sufficiently describe the claimed new use. The specification must provide evidence of the new use claimed at the time of filing. In the absence of evidence of such use, it will be considered that this essential technical feature of the claim is not supported in the specification and that the matter is therefore not sufficiently described.(Item 9.1.3.)

This internal BPTO resolution, while not a statutory limitation, effectively introduces a stricter examination standard for certain types of SIPs, particularly those related to new medical uses. It places a significant burden on applicants to demonstrate unforeseen efficacy or unexpected technical effects, rather than just novelty and inventive step in the context of the new use. This approach, while distinct from the explicit legislative bans seen elsewhere, nonetheless creates a challenging environment for securing such patents in Brazil.

Many developed jurisdictions, such as the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), generally adopt a more objective stance towards incremental innovations, provided they meet the standard patentability criteria (novelty, inventive step, industrial applicability/utility). These offices often grant patents for new forms, new uses or improved formulations of known substances, recognising the substantial value these innovations bring to patient care and the overall healthcare system. The differing approaches highlight the ongoing global debate between promoting innovation through broad patent protection and ensuring access to affordable medicines.

The Brazilian scenario, therefore, occupies a middle ground. While avoiding a blanket legislative ban on SIPs, the BPTO's administrative guidelines present hurdles that, at times, echo the spirit of restriction found in other jurisdictions. This complex interplay between the absence of statutory prohibitions and the presence of restrictive administrative interpretations shapes the patenting strategies of pharmaceutical companies in Brazil and underscores the crucial role of the judiciary in interpreting these guidelines and upholding the broader principles of the Brazilian IP Law.

THE JUDICIARY'S ROLE IN REVIEWING ADMINISTRATIVE DECISIONS

This current context of patent protection in Brazil calls for a strategic analysis by holders of industrial property rights. The stance of the BPTO is at times restrictive in granting patent applications, particularly in certain technological fields or due to specific interpretations of patentability requirements. Nevertheless, this scenario should not be viewed as an unbeatable obstacle or a deterrent to filing new inventions in the country.

Indeed, a deeper analysis reveals that the Brazilian judiciary has played an increasingly significant role in reviewing administrative decisions issued by the BPTO. There is a growing record of judicial reversals of rejections or administrative nullity acts, demonstrating an effective appeal mechanism for validating patent rights that initially failed in the administrative review. This dynamic between administrative litigation and judicial oversight underscores the importance of not relying solely on the initial decision by the BPTO when seeking protection.

The Brazilian legal system provides a robust framework for challenging BPTO decisions. When a patent application is rejected by the BPTO, or a patent is declared null through an administrative process, the applicant or patent holder has the right to seek judicial review before the federal courts. This judicial avenue is not merely a formality; it represents a fundamental safeguard against potentially overly strict or incorrect administrative interpretations of patent law.

Judicial review offers a crucial opportunity for a fresh assessment of the technical merits of an invention and the legal application of patentability requirements (novelty, inventive step and industrial application). In these cases, judges often rely on independent technical expert opinions, which can provide a different perspective from that of the BPTO examiners. This process ensures a more comprehensive and impartial evaluation of complex scientific and technical arguments, which are particularly prevalent in life sciences patent disputes.

Furthermore, a key factor supporting the recommendation to continue filing patent applications is the increasing specialisation of courts in intellectual property matters. The existence and consolidation of business courts and arbitration-related dispute courts, with specific jurisdiction over patent litigation in various regions of the country, have contributed to a remarkable development in case law. Judges with greater focus and technical understanding of complex patent issues tend to deliver more thorough and nuanced rulings, fostering a legal environment with greater security and predictability for inventors and innovative companies.

The establishment and strengthening of these specialised courts signal a growing sophistication within the Brazilian judiciary regarding intellectual property rights. These courts foster a deeper understanding of patent law complexities, including specific industry practices and technological advancements, which can be critical for fair and informed judgments. This specialised knowledge is particularly beneficial in the pharmaceutical sector, where patent cases often involve intricate scientific principles and significant economic implications.

JUDICIAL STRATEGIES FOR PATENT ENFORCEMENT IN BRAZIL: SECURING AND PROTECTING RIGHTS

Proactive litigation serves as a cornerstone of effective intellectual property protection in Brazil. Even before a public infringement occurs, patent holders and applicants can leverage pre-emptive judicial actions. These actions are designed to achieve several critical objectives:

• Safeguard patents against unlawful or insubstantial administrative nullity decisions: This ensures that patents, especially SIPs, are not unduly invalidated by administrative rulings that may be based on restrictive interpretations or errors.
• Obtain legal certainty regarding a patent's validity status: By seeking judicial confirmation of a patent's validity, rights holders can fortify their position and deter potential infringers, creating a more predictable enforcement environment.
• Secure vital information from regulatory authorities on importations (customs) and marketing authorisation applications (ANVISA): This crucial access to data allows patent holders to identify potential infringements early, enabling timely and strategic intervention before significant market damage occurs.
• Expedite an independent technical report prepared by a court-appointed expert: This report then supports a preliminary injunction request for the court to grant the patent provisionally and urgently. This approach helps bypass lengthy administrative processes, securing early judicial recognition of a patent's validity and enabling swift enforcement.

There are two primary types of judicial actions for patent enforcement in Brazil:

• Inhibitory actions: These are pre-emptive lawsuits filed when there is a threat of infringement but actual infringement has not yet occurred. For example, if a patentee gathers evidence that a competitor is preparing to launch an infringing product (eg, through importations or M&A application approvals), they can file an inhibitory action with a preliminary injunction(PI) request before a state court. The goal is to obtain an urgent court order to prevent the competitor from launching the infringing product altogether. This emphasises the judiciary's power to prevent harm.
• Infringement actions: These lawsuits are filed after patent infringement has already occurred. In such cases, the patentee seeks remedies for the harm suffered. These remedies typically include compelling the infringing party to recall infringing products from the market and demanding compensation for damages. Damages are calculated based on the option most favourable to the patentee: either the profits they would have gained, the profits gained by the infringer or a reasonable royalty for a hypothetical licence.

Both inhibitory and infringement actions are filed before the state court where the infringing party is located or where the infringement takes place. Specialised IP courts in states like São Paulo and Rio de Janeiro, with their advanced technical understanding, play a crucial role in these complex cases.

Recently, the São Paulo Federal Court issued a noteworthy decision in favour of Novartis AG in a patent infringement lawsuit involving Brazilian Patent No. PI9708624-0, related to the pharmaceutical formulation of MYFORTIC.

In this case, Novartis prevailed against EMS S/A – a leading generic manufacturer in Brazil – along with its affiliates Germed Farmacêutica Ltda and the Brazilian Army’s laboratory, LQFEx. The dispute centred on the unauthorised use of a patented enteric-coated mycophenolate salt formulation, valid until 10 April 2017. A pivotal aspect of the judgment was the application of the doctrine of equivalence, whereby the court recognised that despite EMS's use of a different polymer, the infringing formulation replicated the same enteric properties and therapeutic outcomes as the patented version. The court held this as sufficient to establish infringement.

This decision reinforces that minor technical changes cannot be used to circumvent patent rights and affirms the judiciary's willingness to uphold the integrity of pharmaceutical innovations under Brazilian patent law.

RECOMMENDATIONS FOR PATENT HOLDERS IN BRAZIL

For patent holders to navigate this dynamic environment, a proactive and comprehensive strategy is essential:

• Embrace proactive judicial measures: Leverage tools like inhibitory actions to prevent anticipated infringements and writs of mandamus to compel information disclosure from authorities (ANVISA, customs), gaining crucial insights for early intervention. Consider precautionary measures to expedite expert reports and provisional patent grants.
• Affirm patent validity: Utilise declaratory judgment validity actions before federal courts to definitively counter invalidity allegations, establishing legal certainty for your IP rights through independent technical assessment.
• Implement robust enforcement: Be prepared to initiate infringement actions to stop ongoing violations and seek comprehensive damages. Rely on Brazil's effective preliminary injunction system for swift relief and leverage specialised IP courts for nuanced and informed rulings.
• Invest in specialised expertise: Partner with experienced Brazilian IP counsel and patent agents who possess deep technical and legal knowledge in the life sciences to navigate complex regulations, draft robust patent applications, and execute effective litigation strategies.
• Monitor and adapt: Continuously monitor the evolving legislative and regulatory landscape, as well as judicial precedents, to adapt your IP strategy accordingly. Given the persistent discourse from competitors regarding ‘evergreening’ deliberately linked to SIPs, cultivating strong relationships with pharmaceutical industry stakeholders and gathering robust market intelligence are excellent predictors of the political climate that will influence decision making. This foresight allows for more informed strategic planning and adaptation.

The recommendation to patent holders is to maintain their filing and monitoring strategies in Brazil. Persistence and proper use of administrative and judicial appeals are essential for the effective protection of intangible assets within the country – reinforcing the legal certainty crucial to fostering innovation.