An Expert Look Into the New IP Law for the Healthcare Sector

USMCA brought many changes to Mexico. As part of the agreement, changes to the Mexican Institute of Industrial Property (IMPI) and the Industrial Property Law, now called the Federal Law for the Protection of Industrial Property, had to be made to comply with Mexico’s responsibilities to the agreement. On July 1, 2020, the new Federal Law for the Protection of Industrial Property was published on the nation’s Official Gazette, which substitutes the Industrial Property Law published on June 27, 1991. This new law is now days away to be enforced and it seeks to strengthen law enforcement on the subject, making its violation a federal crime that can be prosecuted as an offense before administrative authorities.

An EY report exposes the most relevant changes on this new IP law:

• The law recognizes the possibility of submitting procedures through electronic channels managed by IMPI.
• IMPI may order the suspension or withdrawal of digital content that violates trademarks or copyrights. It may also combat illegal domain names.
• It enables the possibility of submitting multiclass application. This protects, through a single application, different products or services of the NICE classification.
• The possibility of requesting a compensatory period in the validity of the patent due to unjustifiably delays in the granting of the patent by IMPI can be up to a maximum of five years.
• The owner of a patent may not exercise legal action against whoever uses, manufactures, offers for sale or imports a product with a valid patent, exclusively to generate tests, information and experimental production necessary to obtain health records of medicines for human health, which will prevent a delay in the development of generic drugs once the patent term expires.
• The possibility of requesting compensation for the violation of industrial property rights regulated by law can be through:
  • IMPI, once the administrative procedure is concluded.
  • The courts, directly, in accordance with the provisions of common legislation and without the need for a prior administrative declaration, as long as some assumptions are met.

According to experts on the subject, this is a long-awaited change for the Mexican industry and a sign of evolution, regardless of the sector. Fernando Becerril, Partner and President of Becerril, Coca & Becerril (BC&B) mentioned in an interview with MBN in January that “this initiative to reform the law is intended to promote and encourage innovation and technological development and thereby boost the economy and our competitiveness globally.” Becerril also explained that the healthcare sector, specifically, has other factors to consider regarding IP law as this a very global ecosystem that depends on rules such as USMCA and CPTPP. “Promotion of a healthy ecosystem to innovate and protect IP will generate benefits for all, not only for those in the pharmaceutical industry,” he said.

Alejandro Luna, Partner Litigation and Life Sciences Co-chair of OLIVARES, explained to MBN in April that this law could use better definitions and clear standards for novelty, inventive step and utility, along with the preparation and issuance of an Examiner’s Manual as it could would benefit the patent law related to the pharmaceutical sector. Luna also mentioned that a specific improvement for the pharmaceutical sector is expected through the establishment of a system of compensation due to delays in the granting of patents by IMPI.

On a more recent comment, Luna explains that these changes will have positive effects, not only for the pharmaceutical industry but for any industry that is committed to innovation. “The scenario is positive for the pharmaceutical industry. The law was responsible for changes in patentable matter, including the rules of the binding system mechanism and the effective claim for damages derived from the violation of industrial property rights.” Moreover, Luna explains that the gaps and shortcomings in the new law that will come into effect soon may well be corrected and perfected through the also expected regulatory means. “The new standards of protection, transparency, digitization and reduction of time will be subject to the rigor of pragmatism and efficiency.”

How will this decision impact innovative pharmaceutical companies and generic companies? “The measure is positive as it provides more information to companies, both manufacturers of innovative drugs and manufacturers of generic drugs,” says Agustín Azcatl, IP and Regulation Leader of Ortiz & Ramírez Abogados. Azcatl explains to MBN that in the case of innovative pharma companies, they know that their rights are recognized as innovators, while generic manufacturers will have information in a more accessible way without falling into an infringement of IP rights. “With these actions, I believe that greater certainty is generated for investments in both industries.”