Supreme Court Patent Decision Has Broad Implications

According to article 23 of the Mexican Industrial Property Law, which was in force until 2020, the life term for all patents, whether PCT, Paris Convention or domestic filings, was 20 years from the date of filing, without the possibility of an extension.

This article was coincident with one of the possibilities established in the text of the now revoked North American Free Trade Agreement (NAFTA), which set forth in article 1709, section 12 as follows:

Article 1709.  Patents

12. Each Party shall provide a term of protection for patents of at least 20 years from the date of filing or 17 years from the date of grant. A Party may extend the term of patent protection, in appropriate cases, to compensate for delays caused by regulatory approval processes.

In December 2018, Bayer Healthcare, LLC. filed a brief before the Mexican Institute of Industrial Property (IMPI), requesting the extension of term for patent No. 238942, covering the pharmaceutical compound SORAFENIB (used as active ingredient in oncology drug NEXAVAR®), from Jan. 12, 2020 to June 26, 2023. 

The Jan. 12, 2020, date was originally set as 20 years from the date of filing of the corresponding PCT application — PCT/US00/00648, filed before the US Patent and Trademark Office on Jan. 12, 2000.

The main arguments in this petition were based on two alternatives granted Mexico — as part of NAFTA — in article 1709 section 12, namely:

• The possibility to set patent life term as 17 years from the date of grant, and
• The possibility to extend the term of patent protection, in appropriate cases to compensate for delays caused by regulatory approval processes.

Bayer argued that prosecution of the patent in Mexico was delayed, and thus the proper life term should be set for 17 years from grant. Bayer also argued that the fact that article 1709 gave the parties to NAFTA alternatives for life term and for extension of patents was unconstitutional, as it hindered the possibilities to obtain compensation from delays.

This petition was denied by IMPI, reasoning that patent life term of 20 years from application was established in the IP Law in coincidence with one of the alternatives set forth in NAFTA.  Bayer appealed this refusal through a constitutional action before the 14th District Court, which in turn confirmed the decision from IMPI, by explaining, among other arguments:

• That the 17 years from grant term in NAFTA was an alternative, and thus article 23 of the IP Law does not go against it.
• That Bayer was not prevented from using the patented invention during patent prosecution, and thus there was no evidence of delays that required compensation.

Bayer appealed the District Court decision and this appeal was studied by the Supreme Court. A decision issued on Oct. 14, 2020, was favorable to Bayer, as it established:

• That the overall patent prosecution process of six years from the PCT filing date unduly affected the patent owner, limiting the possibility to enter the market with known exclusivity,
• That the patent should be extended to compensate for these delays, setting the life term to 17 years from the date of grant (which adds up to 23 years from the date of filing), and
• That article 1709 of NAFTA does not go against the Mexican Constitution by establishing extensions as a possibility and not a right for patent owners.

The Supreme Court also published three jurisprudence theses, which are not mandatory but are relevant to other cases. 

The effects of this decision are very broad, as the same underlying reasons can apply to many patents currently in force in Mexico, regardless of technical area. In other words, any Mexican patent that does not have a term of at least 17 years from grant due to administrative delays during prosecution can be subject to the extension.

Another similar case of patent term extension/adjustment has recently been made public, involving patent No. 249279 covering the pharmaceutical compound VILANTEROL, held by GlaxoSmithKline. The initial petition was denied by IMPI and is now under appeal.

In view of this decision, and considering that many other patents can be impacted by the precedent, companies in Mexico should:

• When holding a patent, analyze whether a similar petition can be filed in order to secure a re-setting of the life term to 17 years from grant.
• When doing a freedom-to-operate analysis, in order to launch a new product, including, of course, generic drugs, ensure not only a review of relevant patents but also whether a similar petition to reset the life term is ongoing.