3.1.1 Evolution of the patent system
There was a time when, due to the lack of a mechanism to ensure exclusivity for a certain period, inventors preferred to keep their inventions secret. This allowed the inventor to take advantage of their results, it being normal for their inventions and findings never to be known by anyone else. The basic idea of granting inventors temporary exclusivity over the commercialization of their inventions is old, although the most remembered milestone is the institutionalization and internationalization of intellectual property statutes, including for patents, provided for in the Paris Convention for the Protection of Industrial Property of 1883 (Paris Convention).1
However, the idea of granting temporary exclusivity to inventors dates back to the fifteenth century, specifically the year 1449, in England, and was related to the manufacturing of stained glass, especially those that were used in the Catholic churches of the Middle Ages. At that time, King Henry VI gave a Flemish immigrant, John of Utynam, 20-year exclusivity for the manufacturing of a kind of colored stained glass he had invented – which can still be seen in the chapel of Eton College in England. At the time, the inventor had the duty to teach English stained-glass manufacturers the manufacturing process. It is interesting to note that the pressure to grant inventors some kind of exclusivity began in the Middle Ages “corporations.” Also in the fifteenth century, the famous Venetian crystal glassblowers, for example, created a similar system to protect their knowledge.
The topic of intellectual property has been discussed internationally for many decades and has involved political disputes due to unresolved issues, such as the definition of the subject matter and limits of protection, reconciliation of the interests of innovative companies and holders of intellectual property rights with those of society, and even the balance between developed countries (which dominate knowledge and make use of protection mechanisms) and countries that need to promote development to reduce poverty and improve their populations’ quality of life.
Patenting a product or process seems to be one of the most used resources in the country to avoid copies and to guarantee exclusivity in commercial exploitation. Indeed, the patent is a protection mechanism most used by the pharmaceutical industry. The basic premise for the pharmaceutical industry is to achieve a reasonable return on the investment made in research and development. A patent guarantees exclusivity and helps the company charge prices that allow it to cover the costs of research and finance other innovation activities.
The monopoly provided by a patent is essential to make it difficult for competitors – for the period limited by statute – to copy inventions freely. This discourages other companies from entering the technological segment or field of interest. Holding patents can influence investors’ perceptions, especially in publicly held companies, as patents provide investors with confidence and reflect the financing of innovative activities.
Having patents shows – not only to investors but also to other institutions (e.g., competitors and universities) – who these companies are and where they are going in terms of technology and innovation. It also helps to disseminate knowledge of their technological competence, which can help generate different opportunities: licensing, mergers, acquisitions and so on.
Another point of interest for companies in relation to pharmaceutical patents, especially among smaller companies, is the possibility of raising resources through licensing. Smaller laboratories find it difficult to bear development costs and need to collaborate with large companies for this process. Without patent protection, and given the small size of their businesses, these companies can be at a disadvantage in negotiations with large corporations. For larger laboratories, which tend to have global businesses, technology licensing can be a strategy to access certain markets. In any case, patent protection is a fundamental requirement for guaranteeing royalty revenues.
The long development period for new products, including clinical trials and regulatory processes, and the high costs of development, reinforce the importance of patents, especially in the pharmaceutical sector. However, there is a cost in obtaining and maintaining patents, as well as in enforcing against their infringement. We can also raise rhetorical questions about whether the temporary monopoly ensures a return on investments, on the risks of research development activities, on expenses incurred in the general and special registration of medicines, and on the placing of the product in the market.
This incentive given by the State in the form of the patent is made to establish an exchange with the inventor, since the inventor presents a useful invention for society (e.g., machines, medicines, tools and industrial processes), thereby justifying a reward by the State in ensuring this temporary protection and establishing “the right to prevent third parties from exploiting this invention without the inventor’s consent.”2
In Brazil, the patent system is based on Article 5(XXIX) of the Constitution, which provides for this temporary privilege and the protection guaranteed by patents, with a view to promoting social interest and the technological and economic development of the country.3 The patent system is governed, in particular, by Federal Law No. 9,279, of May 14, 1996 (Industrial Property Act; Lei da Propriedade Industrial (LPI)),4 enacted following the ratification, by Congress, of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement),5 incorporated into the Brazilian legal system by Decree No. 1,355, of December 30, 1994.6
While the LPI has substantially innovated the matter of industrial property in national legislation, little progress has been made in defining procedural aspects. Thus, a considerable part of the standards and rules applicable to patent lawsuits derive from general procedural rules and have been adapted by the national case law to the inherent peculiarities of patent litigation. Thus, it is worth noting that the civil procedure in these patent cases is substantially guided by the general procedural rules provided for in Federal Law No. 13,105, of March 16, 2015 (Code of Civil Procedure; Código de Processo Civil (CPC))7 and by court resolutions, while complying with the specific provisions of the LPI itself.
In Brazilian law, intellectual property encompasses copyright and related rights, and industrial property rights. The LPI generally regulates industrial property rights, and, in some specific cases, there is special legislation that has priority over the general law insofar as it is special. This is the case, for example, of Law No. 9,456, of April 25, 1997,8 concerning the reproductive material or vegetative multiplication material of the entire plant.
A patent is granted by the State – in Brazil, it is granted by the National Institute of Industrial Property (Instituto Nacional da Propriedade Industrial; INPI), to inventors or legal entities holding exploitation rights (i.e., a monopoly on the exploitation of an invention or utility model). In Brazil, a patent is granted only if the novelty, inventive step and industrial application requirements are met.
The word “patent” comes from Latin, from the singular nominative word patens, the genitive of which is patentis,9 and means something that is clear, accessible, exposed and, for our study, evident to everyone.
A patent, in simple terms, is a contract between the inventor and society. In this contract, inventors make their inventions public, binding upon everyone (erga omnes) and receiving in return, for a fixed period, the right to exploit the invention commercially and exclusively. This system guarantees the transfer of knowledge from the inventor to others interested in producing and marketing that product because, after the patent term, anyone can copy the product and use the information contained in the original patent application.
With the rights afforded by a patent, patent holders have the right to prevent third parties, without their consent, from producing, using, offering for sale, selling or importing a product that is under the patent – including processes or products obtained directly by a patented process. Conversely, the patent holder undertakes to reveal, in detail, the entire technical content of the subject protected by the patent.