Gustavo Alcocer and Alejandro Luna examine the likely impact of the country joining the Trans-Pacific Partnership and its impact on life sciences IP protection.
More than 20 years were required for Mexico to review its entire IP and regulatory system for pharmaceuticals and other regulated products. These recent reviews and deliberations of both systems derived from the willingness of the Mexican government to be part of the international trade agreement the Trans-Pacific Partnership (TPP). The negotiations about the treaty continue. Although at the date of writing this article, there is no final version of the agreement and its terms are still are under discussion, specifically the intellectual property and regulatory chapters, there is no doubt that the mere exercise of reviewing the proposal for higher standards of IP protection has highlighted the downsides about the current system and the need to renovate the entire IP and regulatory schemes in Mexico.
It is very likely that Mexico will sign up to the TPP, however, we consider that regardless of the outcome of the negotiations the work done will lead to changes in domestic law and regulation.
For instance, the current Industrial Property Law in Mexico was enacted back in 1991 and substantially modified in 1994. The Mexican statutory law for copyright, was published in the Mexican Official Gazette in December 1996. Since then, there have been few amendments and reforms to the IP laws and its regulations.
Needless to say, the law enacted in 1991 and its modifications in 1994 derived directly from the negotiations of the North American Free Agreement with the US and Canada (NAFTA) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). These major but aged amendments to the intellectual property laws showed the willingness of the Mexican Government to reach the minimum standards to protect IP that were being negotiated at that time and that were required to subscribe to the agreements.
When NAFTA was negotiated the internet was incipient and the value and impact of the internet for commerce and business was based on speculation. At that point in time the digital age, biotechnology and nanotechnology started to be considered as a near future, but the implications of those changes were not reflected in NAFTA nor TRIPS at the time.
There is no doubt that the system requires an urgent review. For example, when claiming damages derived from the violation of industrial property rights, especially in patent infringement cases, the enforcement could take from 12 to 15 years of litigation to reach an award of damages.
In part this is a result of the Jurisprudence of the Mexican Supreme Court of Justice, which means that the owner affected by a violation or infringement of patent rights can only claim damages once the request for administrative declaration of infringement is firm and beyond shadow of appeal.
The ruling by the Supreme Court is consistent and coherent with the intellectual property protection system established in our legislation, which decided to pursue such conducts through administrative procedures. However, the application of the mentioned jurisprudence highlights the pitfalls of the IP enforcement system, in time, effectiveness, quality and the expected dissuasive and preventive effects of administrative sanctions.
Due to the time it can take to claim damages some legal instruments have been of high value to prevent the violation of patents and maintain exclusivity, such as the linkage regulation and data protection.
Back in 2003, the linkage regulation was enacted in article 147 Bis of the Mexican Industrial Property Regulations and article 167 Bis of the Health Regulation. Under the cited provisions, the Mexican Patent Office (IMPI) is bound to publish a specific gazette every six months, listing those patents in force that cover allopathic medicines.
Inter alia, COPEPRIS is bound to observe the patents which are listed in the gazette according to the generic name of the active ingredient, prior to granting marketing authorizations to third parties different to the titleholder, and alternatively request additional information to the applicant. In case of doubt of an eventual violation of patent rights, COFEPRIS can request technical support from IMPI, regarding the scope of the patent rights.
The Mexican Linkage Regulation only excludes from the Gazette those patents that cover processes of manufacture and formulation of drugs.
Since the date in which the linkage was in force, under a wrong and limited interpretation, IMPI only published patents covering active ingredients per se, excluding from the linkage gazette patents covering pharmaceutical formulations and medical uses.
Olivares and Cia fashioned a litigation strategy and also handled the majority of the cases, contesting this wrong interpretation through constitutional actions to obtain the publication of patents covering formulations and second uses. The Mexican Supreme Court agreed with this broader interpretation.
It is important to mention that the inclusion of formulation patents in the linkage gazette provides a preventive measure to avoid the Mexican Health Authorities granting marketing authorizations which may fall within the scope of the listed patents. However, due to loopholes in the regulations there is no certainty about the enforcement of the linkage regulation for formulation and use patents.
In addition, we consider that the patent linkage requires already meets its main objective, which was to avoid the profuse violation of pharmaceutical patents that took place in the past. Now, the linkage regulation in México needs to mature in order to become a reliable instrument for the entire health care system in México. The TPP intends to clarify the mechanism of a general patent linkage system.
Data package exclusivity
This is the other legal instrument used by innovators to protect considerable efforts in getting marketing approvals for medicines and agrochemicals. The Mexican domestic law is silent about Data Package Exclusivity (DPE). Actually, the current Health Law allows the indirect reliance on innovators´ dossiers by approving generics through interchangeability tests with no period of protection of the information provided by the innovator.
Based on TRIPS and NAFTA and the hierarchy of the international treaties in our legal system, our law firm fashioned a legal strategy to obtain the recognition of DPE for products that deserve the protection. We obtained the only decisions by a court of law, recognizing and ordering the agency in charge of granting marketing authorizations (COFEPRIS) to observe and recognize DPE for the products of interest.
Now, on June 19, 2012, COFEPRIS published on their official website an internal decree providing guidelines to observe and protect DPE in Mexico with the following main points of interest:
These guidelines demonstrate that the current administration of COFEPRIS is willing to recognize and protect DPE according to NAFTA and TRIPS and there is no doubt that the decree is positive and provides a certain amount of confidence for innovators. However, there are some pending issues as the regulatory agency has mentioned that the guidelines do not apply for biological products. The decree is also silent about the proceedings and measures to enforce and observe the right.
Finally, the main question and test will be the weight and strength of an internal decree versus the lack of domestic statutory law recognizing DPE. Our efforts will continue to focus on obtaining a clear and specific regulation of DPE in the statutory law or regulation.
In addition, there is nothing in the guidelines that would provide certainty about the subject matter of protection (definition of new chemical entity versus biologics, formulations and new indications) and the duration of the different considerable efforts that can be conducted in diverse types of approvals before COFEPRIS. In short, there is nothing that gives interested parties certainty about for how long and which approvals acquire that protection or exclusivity. The wording of the TPP aims to avoid misinterpretations in this regard.
Regarding intellectual property the partners of the TPP remain confident that copyrights, patents and trademarks will be enforced and it appears that there is general consensus within the partners that the standard of protection for the intellectual property should go beyond TRIPS. In the case of pharmaceutical patents and regulation the main topics appear to be that the countries commit to have additional mechanisms of IP protection such as patent linkage, extensions or compensations of the life term of patents due to regulatory delays and data package exclusivity for new chemical compounds and formulation and second uses.
In conclusion, due to the negotiations and eventual integration of the country to the Transpacific-Partnership, Mexico has a new and valuable opportunity to review and change its entire Intellectual Property System and adopt higher, and even more important, efficient standards of IP protection.
The implications of the TPP goes beyond the Mexican IP system as it aims to support the creation of jobs, higher living standards and the reduction of poverty in the country members. To those who are devoted to IP, as well as, the companies and individuals from the innovation and creativity economy, an efficient, enhanced, and improved IP system would be always welcome.
Mr Gustavo A. Alcocer
Gustavo manages the Corporate & Commercial Law Group. Prior to joining Olivares & Cia as a partner in 1999, Mr. Alcocer acted as in-house counsel for Banamex for 11 years in various positions, including Vice- President of International Legal Affairs, Executive Vice-President and Assistant General Counsel for Grupo Financiero Banamex.
Mr Alejandro Luna
Alejandro has proactively participated in cases challenging the constitutionality and inefficiency of certain amendments to the Federal Law of Administrative Proceedings in Mexico, as well as certain amendments of the Federal Copyrights Law. Mr Luna heads Olivares & CIA’s Life Science and Pharmaceutical law Group and he regularly lectures at Universidad Latinoamericana.