Patent Adjustment: Extension or Abuse In Mexico? (Part 2)

(This is the second article in a three-part series on the outcome of the mechanism to adjust the term of a patent in the event of unjustified delays attributable to the Mexican Institute of Industrial Property (IMPI). Read part 1 here.)

NAFTA provides for two possibilities regarding the patents validity term, namely, 20 years counted from the application, or 17 years from the patent granting, which are prerogatives that the state party or member of the treaty may choose in accordance with the examination, proceeding and granting system stated in their domestic laws. In other words, the minimum “patent validity term” will depend on the procedure chosen by Mexico for the prosecution of such patents. However, such validity term is not related to the adjustment of the validity term for unjustified delays. 

In this case, Mexico chose a patent processing system congruent with a 20-year validity term from the application, considering the terms for publication of patent applications, the terms for formal and substantive examination of patent applications, some of them defined in the law, its regulations, or agreements of general observance. 

Notwithstanding the foregoing, and despite the fact that the term of 17 years from the granting date is a term of validity and not of compensation, the court decided that to provide a greater benefit, which according to its guidelines was not originally requested by the plaintiff. The adequate remedy in the event of a possible delay would be adjusted with a term of 17 years from the granting date, a criterion that is totally contrary to the specific international rules of compensation and that, even before the entry into force of the new law, was already known, since the USMCA and other treaties as well as the draft of the Federal Law on the Protection of Industrial Property already contemplated the figure of compensation of patent validity term and, in general terms, already indicated as a delay a term greater than five years from the filing in Mexico and a compensation term of one day for every two days of delay and that, in any case, should never exceed more than five years.

Likewise, the judgment omitted to establish and define the period that must elapse between the date of application and granting of the patent to consider that the Mexican Institute of Industrial Property effectively incurred unjustified delays during the processing of the patent, causing patent holders to abuse the referred precedent, asserting it even when there is no delay of more than five years imputable to the authority. 

An appropriate remedy to the problem would have been to differentiate and distinguish between the minimum terms of validity of patents stated in TMEC and the patent validity term adjustment, which are different and independent, and to consider the Federal Law for the Protection of Industrial Property that was already published at the time of issuing the judgment as well as the text of the USMCA to provide a remedy by analogy and equity, according to the rules that were being introduced by said law and that are currently in force.  

Likewise, the Supreme Court, using analogy and equity, should have concluded that the provisions of the USMCA and the current law on the matter hold that the requests for compensation of patent validity term processed prior to Nov. 5, 2020, must be based on the proven existence of an unjustified delay of more than five years between the filing date of the application in Mexico and the granting of the patent; otherwise, directly applying the remedy and the lack of delay parameters of the Supreme Court’s judgment would lead to the violation of the statutory law on the matter and the contradiction with the Mexican Patent System. By not having made such an interpretative exercise, we have a judgment that, derived from its ambiguities, is generating a paradox in our patent system that does not find harmony with the current law, nor with the international patent system.

The foregoing is not an exaggeration since requests for compensation of patent term before IMPI and the courts have been detected, which request the application of the Supreme Court’s precedent in cases where there are no delays in the processing of the patent by IMPI (with no more than five years), asking for a compensation of 17 years from the granting date, which not only contradicts the rule of one day for every two years of delay, but also exceeds the limit of five years of compensation of the original term, which is a lock and limit imposed by the LFPPI and international treaties, including USMCA, CPTPP and TLCUEM.

The precedent scenario generates legal uncertainty since the remedies provided lack parameters and limitation to the legal figure, which has resulted in the filing of compensation requests in which, as mentioned above, there are not even delays attributable to the authority, thus implying clear abuses of law by patent holders, which have resulted in the illegal constitution of additional rights of patents whose validity has already expired and which, consequently, are in the public domain. 

A clear example of the abuse is that in some cases, it has been argued that the delay period is the result of the sum of the time elapsed from the filing date of the foreign patent application (priority date that applies for the benefit of the patent applicant to recognize novelty) (1) to the date of the granting of the patent. 

In this context, undoubtedly, the criterion of the court, instead of providing a solution to the problem, increased the problem since it opened the possibility that an improper application of the criterion may cause a regime in which expired patent inventions are unduly rescued from the public domain, which is detrimental to public order and the general interest, and which contravenes the fundamental rights of freedom of trade, industry and free competition of third parties as well as the Laws on Economic Competition and Industrial Property and the domestic and the international patent system itself.  

The criterion in question promises the possibility of a disproportionate remedy, which not even countries with a more sophisticated system have, since no other country in the world or member of the PCT or the Paris Convention provides for a term of compensation for delays by the authority of 17 years from the granting of the original term of the patent.

On the other hand, in all systems where there is compensation for unjustified delays, there is a term to account for the delay and a period to adjust it with limits that, coincidentally, in most cases is five years. 

If the syllogism of those who intend to misuse the Supreme Court precedent was correct, it would mean that all patents granted in Mexico before Nov. 5, 2020, should have a term of 17 years from the granting of the patent because, otherwise, all patent holders would be discriminated against by not having applied to them a greater benefit established by the court. This is not the intention of either NAFTA or USMCA and much less of the abrogated Industrial Property Law, nor of the current LFPPI.

The incongruity is even greater when the adjustments are requested without an existing delay (more than five years of prosecution) or indicating the priority date of the foreign application (for the benefit of the applicant to start counting from the term of the patent processing). 

(Next week: Part 3 patent validity term)

Article 4bis paragraph 5 of the Paris Convention for the Protection of Industrial Property. Patents obtained with the benefit of priority shall enjoy, in the various countries of the Union, a term equal to that which they would enjoy if they had been applied for or granted without the benefit of priority, available at: https://www.wipo.int/wipolex/es/text/288515