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Hepatitis C: Divergent Public Opinion and Industrial Property Law in Brazil


By Karina Daiha and Patrik Gandara

On September 18, 2018, the National Institute of Industrial Property (INPI) published its approval (9.1) of the patent application for the active pharmaceutical ingredient Sofosbuvir. The ingredient is used in the production of the drug Sovaldi® (Gilead) in the treatment of Hepatitis C.

After publication of the approval, numerous public and private institutions opposed the INPI’s decision, since the final rejection of the application would have allowed the entry of the generic drug in the Brazilian market. The argument is that allowing entry of the generic drug would reduce the costs paid by the government for its purchase. By decision of the Federal Court of first instance in Brasilia, signed on September 23, 2018, an injunction requesting the suspension of the patent was deferred.

The INPI is a federal authority created in 1970 under Law No. 5,648, with the main purpose of regulating industrial property in view of its social, economic, legal and technical functions under Article 240 of the Industrial Property law (LPI).

The general understanding is that:

  1. “technical function” relates to the merit of the object for which protection is sought;
  2. “legal function” relates to legal provisions applicable to interested parties;
  3. “economic function” relates to the rights and duties of the commercial exploitation of the protected object; and,
  4. “social function” closely relates to the public interest.

However, the social function attributed to INPI does not include aspects related to public health. Instead, its function is the dissemination of knowledge and promotion of technological development. With regard to patents, the INPI should only analyze the presence of the legal requirements foreseen in the LPI (the most prominent being novelty, inventive activity, industrial application and descriptive sufficiency). If a filed patent application meets all legal requirements and administrative procedures, the respective patent must be granted regardless of any public outcry.

In the case of Sofosbuvir, there were various public protests shortly after the INPI’s decision granting the patent, demanding that the Brazilian government “break” the patent. Although widely used in the context of intellectual property, the term “break” is a poor choice, as it gives scope for the interpretation that the invention would no longer enjoy patent protection. The mechanism provided by law that allows the entry of generics in the market – the compulsory license – does not extinguish the patent holder’s rights, which are honored in the form of royalties, as defined by law.

Compulsory licensing is a comprehensive subject. It is used worldwide and recognized by the World Trade Organization (WTO) as an instrument to promote the public interest and protect against abusive practices.

Brazil was the first country in Latin America to use compulsory licensing on May 4, 2007. The compulsory license for Efavirenz (MSD), an antiretroviral drug used in the treatment of AIDS, was devised following the Ministry of Health’s failure to negotiate a reduction in the cost of treatment based on more accessible international offers. The motive for this move to use compulsory licensing was to guarantee the viability of the National Program of STD / AIDS. Thus, the Brazilian President signed a decree declaring the drug of the public interest and issuing a compulsory license for non-commercial public use valid for 5 years and renewable for the same period. Moreover, the license expedited the importation of Efavirenz from India and subsequently its national production at the official Farmanguinhoslaboratory (the Osvaldo Cruz Foundation).

Using this above historical context as a basis, if the government declares the treatment of Hepatitis C as a public interest, Sofosbuvir’s patent may fall under the current LPI provisions governing compulsory licensing – Decree No. 3.201, of October 6, 1999.

Although compulsory licensing is the most media driven procedure when it comes to contesting the rights granted by a patent, this is not the only possibility established by LPI. The INPI itself or any person with a legitimate interest may request the nullity of a patent (both through administrative and judicial procedures). In administrative proceedings, the administrative nullity process (PAN) can be filed within 6 months from the date of granting the patent and will be judged by the INPI. Further, a nullity action can be filed at any time during the validity of the patent and is the jurisdiction of the federal court.

In this article, we discussed the role of public bodies and the limitation of their powers under current legal provisions in Brazilian Industrial Property Law (LPI). If you would like more information regarding the above subject or regarding our work with patents in Brazil, please do not hesitate to contact us here.

English version by Julian Cornelius