Héctor Chagoya
Partner, Director of Patents and Technology
Becerril, Coca & Becerril
View from the Top

Patents Protect Innovation

Wed, 09/05/2018 - 10:02

Misconceptions about patents are common, with some people seeing them as a barrier to innovation, especially in the pharmaceutical segment. They are, however, a necessary tool to protect intellectual property (IP) and investment from unfair competition, says Héctor Chagoya, Partner and Director of Patents and Technology at Becerril, Coca & Becerril (BC&B), a law firm specialized in the protection of IP.

“Patents are a tool for generating balance within the pharmaceutical market, which is essential for Mexico’s health and development. For that reason, protecting IP is of the utmost importance to pharmaceuticals to ensure they recover their investment.”

BC&B, which turned 50 years old in March 2018, works mostly with large pharmaceuticals looking to protect their IP in Mexico, including Johnson & Johnson, Pfizer, GlaxoSmithKline and Merck. According to Chagoya, large companies use its services because of the firm’s technical focus instilled by its founders, who were chemical engineers. “While many firms have a technical team, those teams are treated as secondary. We have our technical team deal first- hand with all patent-related issues, except litigation where they team-up with our skilled attorneys.”

A major concern for pharmaceuticals, Chagoya says, is unfair competition from generics manufacturers that must only prove their drugs are the same as the typically patented counterparts. For this reason, there is a constant tug-of-war in which generics producers demand faster access to patented medications, while innovative companies want to maintain exclusive sales rights for as long as possible. How long innovative medicines should be protected is at the heart of the debate, he adds. “Big Pharma is also extremely concerned about approval times for biosimilars, which take much longer to develop, prodding their creators to request more time to see a return on their investment. There is also evidence that biosimilars are not exactly the same as the original medication, thus biosimilars might cause unintended effects in patients.”

Local regulations should prioritize IP protection, explains Chagoya. “It is necessary that public policy fully understands the need for patents both to protect innovation by moderating the effects of unfair competition and thus keeping costs down for the public. If pharmaceutical innovators have a short time frame to recoup the development investment, they will have to greatly raise retail costs. If the window is wider, costs can be kept down.”

Mexico has strong regulations to protect every kind of patent; the problem is enforcing these regulations. “Most countries in the world have an easier system for enforcing patents,” Chagoya says. However, in Mexico patent infringements must first be addressed by the Mexican Institute for Intellectual Property (IMPI), which can take up to four years. The offending party can challenge IMPI’s verdict at the Federal Court of Administrative Justice and the latter’s decision can be further challenged with a second legal protection (amparo). Obtaining a final decision can take up to eight years at least. “These extremely long periods make foreign companies wary. This is a great area of opportunity to improve the legal system,” explains Chagoya. On the other hand, Mexico imposes a minimum penalty of 40 percent of the retail price, which is significantly higher than in other countries.

While many may think that protections extend only to large companies, Chagoya says small research laboratories also benefit. “Patents can also be used to protect innovation at universities or small research centers. If they do not patent their discoveries, it will be easy for others to copy the results.”