Brazil’s patent backlog days are numbered

The days of one of the world's most severe patent backlogs are numbered. The Brazilian PTO has just implemented a bold new programme to rid itself of its enduring patent backlog problem within the course of the next two years. The groundbreaking project is called the "Preliminary Standardized Office Action Program" and relies on the use of machine-made technical opinions that will simply point out prior art documents to be addressed by applicants. Once the backlog is finally dealt with by 2021, the PTO estimates it will take fewer than 24 months to examine future patent applications.

For the past 15 years, Brazil has been struggling with one of the world's most severe patent backlogs. The problem has grown considerably since the enactment of the 1996 Patent Statute, which made Brazil compliant with the TRIPS Agreement. The amount of patent filings has skyrocketed ever since, as patents became available in fields not previously patentable, such as pharmaceutical technologies. In a 15 year period, the amount of applications rose about 200%, without a correspondent increase in the number of examiners within the Brazilian PTO.

As a result, waiting time averages in Brazil used to surpass the 10 year mark for nearly all technological fields. The overall average consisted of 11.5 years from filing until grant, but some areas had a much more serious backlog. As a matter of fact, the backlog for applications in the telecoms field reached an astonishing 13.74 year average. For pharmaceutical applications, the average waiting time reached 13.27 years for traditional drugs and 12.04 years for biopharmaceuticals.

In recent years, the Brazilian PTO has committed itself to reducing the patent backlog through the implementation of many different strategies, including: (i) hiring new examiners, optimising internal procedures, implementing new technology and IT solutions; (ii) creating several fast-track programmes, that cover green technologies to health-related applications, and signing multiple Patent Prosecution Highway (PPH) agreements with patent offices around the world; and (iii) implementing the "Pre-examination Office Action Program", taking advantage of the examination of foreign counterpart applications that were carried out by other patent offices abroad.

All these recent efforts have meant that the Brazilian PTO was able to reduce the patent backlog significantly, which went down from an average of 11.5 years to a little more than eight years. In addition, it is important to bear in mind that the Brazilian Patent Statute establishes an automatic extension to the term of validity of a patent in cases where the patent office takes more than a decade to grant the application. Accordingly, the protection is granted for 20 years counted from the filing date or 10 years counting from the date of grant, whichever is the longest. Nevertheless, the backlog is certainly still a major problem that has to be addressed.

In late 2017, an emergency measure was the subject of discusson: the past administration introduced a plan to grant over 200,000 patent applications automatically without any examination whatsoever. The proposal consisted of a simplified examination procedure, according to which the patent office would automatically grant applications filed until a date yet to be established, against which no pre-grant oppositions had been filed and that had not yet been examined. Eventually, this highly controversial measure was not adopted, but the new government kept in mind the need to solve the backlog problem.

It is within this context that the recently announced new solution arose. This is heavily based on the mechanism of the previous "Pre-examination Office Action Program" – a programme that allowed the Brazilian PTO to rely on examination performed abroad by foreign offices to speed up the analysis of local applications that had already examined foreign counterparts.

Given the importance dedicated to it, the new programme was announced with pomp and circumstance during an official ceremony by the Brazilian economy minister, Mr Paulo Guedes, and by the president of the Brazilian PTO, Mr Claudio Vilar Furtado, as part of the efforts of the current administration to modernise the Brazilian business environment, which included the country's accession to the Madrid Protocol in early July.

INCLUDED in the new “Preliminary Standardized Office Action Program”
Group IApplications examined abroad (Rule 241/2019)	Group IIApplications not yet examined abroad or without a foreign counterpart (Rule 240/2019)
Filing date until December 31, 2016
No office actions on patentability issued by Brazilian PTO
No request for fast-track examination
No third-party observations (pre-grant oppositions)
No opinion on the merits (patentability) by ANVISA (Brazilian FDA)

Essentially the programme divides pending applications into three different groups:

Group I

Applications for which a respective foreign counterpart was already examined.

Group II

Applications that do not have a foreign counterpart examined abroad

Group III

Applications that were subject to third party observations (pre-grant oppositions), to requests for inclusion into a fast-track programme (PPH or priority examination), that already received a technical opinion from the Brazilian PTO or from ANVISA (Brazilian FDA), or that were filed after December 31 2016, which are not encompassed by this new programme.

Regarding Group I, the PTO will publish a standardised office action simply listing the prior art references identified by a foreign patent office. For applications in Group II, the PTO will carry out a search and publish a standardised office action just listing prior art documents found during such search. In both cases, applicants will have 90 days to present a response to standardised office actions, otherwise applications will be dismissed with no right to appeal.

Group III applications will follow regular examination, as they are not encompassed by this new programme. Accordingly, applications that do not meet the cumulative requirements mentioned above for the other groups will fall under Group III and will not be subject to the standardised office actions created by the new programme. Divisional applications will fall under Groups I and II of the programme only if the parent application also complies with the requirements above.

The key to the programme is therefore the use of standardised office actions that will neither bring specific technical comments on patentability nor formalities regarding the claimed subject matter. They will merely present a list of prior art documents – it will be up to the applicants to address them as they see fit, either amending the set of claims and/or presenting technical arguments in view of the listed prior art. The Brazilian PTO plans to issue an unprecedented 2,000 of these office actions per week, which will significantly increase the workload for both applicants and local IP firms.

Nevertheless, the preliminary standardised office action may not be a final opinion. Further technical opinions may be later issued on patentability or formalities, including clarity, sufficiency of disclosure, and other issues. However, substantive examination taking place after the issuance of these standardised office actions will be limited to prior art documents listed on the standardised office actions, that is, there will be no additional searches at a later point.

One important observation to keep in mind when amending the claims in response to the standardised office action is the necessity to comply with Brazilian rules relating to claim amendments. After the request for examination, the Brazilian PTO does not allow applicants to amend the claims to make them broader or to include new claim categories, that is, applicants can only amend the claims to make them narrower or clearer.

Other important observations include:

• Amend the claims to mirror the ones already allowed by a foreign patent office, remembering to comply with Brazilian rules for claim amendments and patentable subject matter.

• Pay supplementary examination fees if the amended set of claims contains more claims than the one for which the examination was requested.

• In addition to amended claims, present a complete copy of the application containing specification, abstract, drawings, sequence listing etc., in order to make the process easier for the examiner.

There is an inescapable atmosphere of enthusiasm in the industry as a result of the new programme, as it seems to be a game-changer and a major positive development in solving a critical issue for companies doing business in Brazil. The programme is off to a good start as the first standardised office actions have already been issued. Once the goals are fulfilled, the expectation is that the Brazilian PTO will finally stand on an equal footing with its foreign counterparts in the developed world.

Ricardo D Nunes
		Ricardo D Nunes is the head of patents at Daniel Law. Ricardo Nunes is a partner with Daniel Law in its litigation department, and is licensed to practise in Brazil and in the state of New York. Ricardo has been working for more than a decade on high-stakes litigation, with a particular emphasis on complex patent and regulatory disputes. He has experience in different fields, including the chemical, pharmaceutical and biotech areas, as well as the telecoms, software, electronics, oil and gas and mechanical areas.

Rafael Salomão Romano
		Rafael S Romano is a partner in Daniel Law’s patent litigation team. He has worked in the legal department of a major Brazilian media corporation and as a litigator at major Brazilian IP law firms. He holds a master’s degree in regulation law and a postgraduate degree in IP law. He is the author of several papers on IP in renowned local law reviews and magazines.