Recent Developments in the Law Governing Intellectual Property In

National Report

Recent Developments in the Law Governing Intellectual Property in

MEXICO

I.Recent Amendments to the Mexican Patent System and Pharmaceutical Patents.

II.Amendments to the Mexican Copyright Law.

III. New Mexican Legislation Limiting Trademark Use and Advertising Associated to Tobacco Products.

Horacio RANGEL-ORTIZ

Professor of Law, Doctor of Laws

Past President of ATRIP (1997-99) Past President Mexican Group AIPPI (1992-95) Facultad de Derecho, UNAM and U.P. Partner in the Mexico City IP law firmUhthoff, Gómez Vega & Uhthoff, S.C.

I.RECENT AMENDMENTS TO THE MEXICAN PATENT SYSTEM AND PHARMACEUTICAL PATENTS.

A.- Genetic Resources, Indigenous Knowledge and Proprietary Indigenous Rights on Subject Matter (i.e. a Local Variety) Involved in a Mexican Patent Under the New Law on Sustainable Forestal Development.

B. Circumstances in Which a Party other than the Patentee May legally Apply for the Health Registration of a Medicament Comprising a Patented Substance or Active Ingredient. New Regulation 167- bis of the Mexican Regulations on Health Substances.

C.- IMPI Must Publish a List of Patents Involving Allopathic Medicaments Including the Pertinent Terms. New Regulation 47 bis of the Regulations to the Mexican Industrial Property Law.

D.- Circumstances in which a Third Party May apply for and Obtain a Non-voluntary Public Benefit License for a Patented Pharmaceutical Product. New Article 77 of the Mexican Industrial Property Law.

Three sensitive issues of contemporary patent law are addressed for the first time in Mexican law applicable to patent rights. Some of them appear in the patent statute, but others show up in other bodies of law where the average practitioner normally would not look for answers to questions that have to do with patent law. We are talking about legislative changes that have an impact in patent law but that have been introduced through legislation and regulations dealing with health issues on the one hand, and environmental issues on the other, two sources of law that the patent person will have to take into consideration when discussing the way patent rights are obtained, exercised and enforced in this country as far as pharmaceutical patents are concerned. The changes have to do with i. Proprietary indigenous rights on subject matter contemplated in a patent, ii. Health registrations for patented subject matter applied for by a party other than the patentee and iii. Non-voluntary licenses.

In the course of the year 2003 various legal instruments have been approved or amended through legislative action as well as by presidential action in the form of regulations. I am talking about four actions of this nature, all of which have in common the impact that each of them has in the way patent rights are enjoyed and exercised in Mexico with particular emphasis in pharmaceutical patents. These legal instruments are represented by the Mexican Industrial Property Law, the Mexican Regulations on Health Substances, the Regulations of the Industrial Property Law and the New Law on Sustainable Forestal Development.

Earlier this year, the Mexican Congress approved a new Law on Sustainable Forestal Development LSFD (Ley General de Desarrollo Forestal Sustentable), which was signed into law by President Fox on February 21, 2003 and published in the Official Gazette of the Federation on February 25, 2003, effective 90 days, i.e., 90 working days, after publication, namely as from July 3, 2003.

The new Law is a complex legal instrument difficult to read, drafted in a way that the reader is often confronted with sources of doubt and imprecision as to what exactly intended the Mexican legislator with the adoption of some of the provisions contained in this new statute, particularly in the statutory provision addressing patent rights. Expressed differently, in all what concerns patent rights, the new law is not a model of legal drafting with all the potential consequences that may follow this poor way of drafting a legal document particularly at the time the reader is involved in a situation requiring legal interpretation of a specific statutory provision. As far as patent law is concerned, the law has been drafted in rather rough and vague terms as if the drafters did not know they were drafting a legal instrument that one day would have to be applied to specific situations. This is not the raison d'être of this commentary, but rather the potential consequence contemplated in the new statute for patent owners that fail to meet the rare requirements contemplated therein consisting in the nullity of the patent. Bearing this in mind, for purposes of this Newsletter, one should call the readers’ attention to what appears to be the provision of main interest to patent owners, namely Article 102 of the new Law the text of which is as follows:

“Article 102.- Activities consisting in gathering, assembling, collecting or using forestal biological resources, whether for commercial or scientific purposes, must include the acknowledgement of the rights of the indigenous communities on the property, knowledge and use of the local varieties. Unless international treaty law on this subject establishes otherwise, the absence of this acknowledgement, shall be followed by thenullityof the registration and certifications of forestal genetic resources involved or the modified forms thereof, as well as of the patents obtained by natural or juridical persons.
When, in addition to the above, the parties involved intend to take advantage of the indigenous knowledge of native peoples and communities with respect to the forestal biological resources involved, such parties shall be compelled to acknowledge the proprietary rights over such knowledge as pertaining to the native peoples. Additionally, an agreement executed between the applicant of the authorization referred to in Article 101 herein and the community who is the titleholder of the knowledge must be submitted. The agreement must include an express indication in the sense that the applicant of the authorization has the prior, explicit and informed consent of the community.
Failure to meet the requirements referred to herein may be followed by the revocation of the corresponding permit.”

In turn, Article 101 of the Law reads as follows

“Article 101.- Activities consisting in gathering, assembling, collecting or using forestal biological resources with a view to using such resources in activities involving research or biotechnology, require the authorization on the part of the Ministry of the Environment and Natural Resources.
The authorization referred to herein shall only be granted after the applicant of the authorization substantiates to have the prior, explicit and informed consent in writing granted by the proprietor or possessor of the land where the forestal biological resources is located.
When gathering, assembling or collecting activities are performed by public entities pertaining to the Government whether Federal, State or Municipal, or by the owner of the resources involved, it will suffice to give notice in writing to the Ministry of the Environment and Natural Resources, including compliance with the applicable Official National Standards (Norma Oficial Mexicana). The applicant must substantiate to have the consent of the forestal proprietor.”

Ideally, any change in the way Mexican patents have been applied for, prosecuted and granted, should have been incorporated in the patent statute and not elsewhere. The fact is that the LSFD is a statute passed by the Federal Congress and published in the Official Gazette, and thus the provisions contained therein are the law in Mexico at this time. This includes compliance with the requirements contemplated in the new LSFD including those of Article 102 consisting in submitting an express statement in the sense that the applicant of a Mexican patent acknowledges the proprietary rights of native communities in the situations addressed in Article 102, first paragraph, which are far from clear, but that include the presence of a local variety in a Mexican patent application, whether simply disclosed or actually claimed, for the statute does not address this issue. The statute merely refers to a local variety in the context of Article 102, LSFD, this meaning a Mexican variety, presumably because the original source of the variety should be sought in the Mexican territory.

The statute contains an indication in the sense that failure to meet with certain conditions stipulated in Article 102, first paragraph may be followed by the nullity of the patent. Conceivably the statute may be interpreted in more than one way. One of these interpretations easily leads to the conclusion that failure to submit the acknowledgement of the rights of the indigenous communities on the property, knowledge and use of the local varieties is penalized with the nullity of the patent. Article 102 is not explicit as to the manner in which the applicant of a Mexican patent should meet this requirement whether at the time the application is filed with the patent office or elsewhere.

It goes without saying that the new provisions are far from clear and precise. The way such provisions have been drafted leaves ample room for argument, discussion and speculation on the way in which same should be interpreted and applied. Clearly, this is not the place to expand on these complex questions. Advice should be sought in decision-making proceedings involving these issues, particularly in those situations involving patent applications filed in Mexico after July 3, 2003 that include or may include the subject matter recited in Article 102, first paragraph of the new Law that may qualify as a local variety under the rare criteria broadly and vaguely contemplated in Article 102, first paragraph above quoted. It is submitted that in such cases, applicants should seek legal advice as to the actual or potential impact of the new provisions on the question of the validity of the patent addressed in Article 102, first paragraph of the new LSFD, and more specifically on the question of how to comply with the requirements contemplated in this provision, if it appears that the applicant is in a situation involving the obligation to meet Article 102, LSFD requirements.

B.- Circumstances in Which a Party other than the Patentee May legally Apply for the Health Registration of a Medicament Comprising a Patented Substance or Active Ingredient: New Regulation 167- bis of the Regulations on Health Substances.

i.- General Rule: Third Parties May Apply for the Health Registration of a Medicament Comprising a Patented Substance or Active Ingredient While a Patent is in Force Only with the Consent of the Patent Owner.

ii.- Exception: Third Parties May Apply for the Health Registration of a Medicament Comprising a Patented Substance or Active Ingredient Without the Consent of the Patent Owner Within the Last Three Years of the Patent Term.

The Amendments to the Regulations on Health Substances (Reglamento de Insumos para la Salud) address two basic issues of Health Law and Patent law. First, the question of whether or not a party other than the patentee or a licensee is legally entitled to apply for and obtain a Health registration for a drug comprising a substance or active ingredient covered by a patent without the patentee’s consent, on the one hand; and second, the time within which interested parties may apply for the Health registration of a product while a third party’s patent is in force without the consent of the patentee.

The first of these two questions is answered in the sense that third parties other than the patentee are entitled to apply for the Health registration of a medicament comprising a substance or active ingredient only with the consent of the patent owner. New Regulation 167 bis sets forth a procedure for such purpose including the way in which the Health authorities and the Patent Office must proceed and coordinate themselves in such cases. If, however, the application for the Health registration is filed by third parties within the last three years of the term of the patent, then the patentee’s consent is not required. The Health Registration, however, would be granted only after expiration of the patent. The question of whether this three-year term is compatible with international precedents in the context of the dispute settlement mechanism of WTO-TRIPS-GATT is beyond the aim of this Newsletter. Suffice it to say that, in the past, when a WTO panel has addressed not totally dissimilar issues in a situation involving Canadian patent law, all what the panel said was that it was all right to apply for the Health registration within the six-month period prior to the expiration of the patent. New Mexican Regulation 167 bis indicates that it is all right to apply for the Health registration within the three-year period preceding the expiration of the patent.

On September 15, 2003 President Fox signed a Decree whereby the Regulations on Health Substances are amended including the adoption of a new Article 167 bis, which for the first time addresses these two issues. The Decree dated September 15, 2003 was published in the Official Gazette of the Federation on Friday, September 19, 2003. The text of new Regulation 167 bis is as follows:

“Regulation 167 bis.- The applicant for the registration of an allopathic medicament must attach to the corresponding application the documents attesting that such applicant is the titleholder of the patent for the substance or active ingredient, or that the applicant is the beneficiary of the corresponding license. The patent or the license must be recorded with the Mexican Institute of Industrial Property (IMPI).
Alternatively, and pursuant to the list of products contemplated in Article 47 bis of the Regulations to the Industrial Property law, the applicant may proceed by stating under oath that the applicant meets the requirements set forth in applicable law with respect to the substance or active ingredient identified in the application. In this case, the Ministry of Health will immediately request the technical cooperation of IMPI in order for IMPI to determine whether or not third party rights are infringed. This determination must be made by IMPI within a ten-working day after the date on which the request for technical cooperation is received by IMPI. In case IMPI finds that that there are third party rights in force for the substance or active ingredient where the applicant of the Health registration is neither the titleholder of the patent nor the licensee, IMPI shall advise the Ministry of Health accordingly, in order for the Ministry of Health to warn the applicant of the Health registration who should be granted a term to be set by the Ministry of Health which may not be shorter than five working days as from the date when the respective papers are served upon the applicant, in order for the applicant to produce evidence in the sense that the applicant is either the titleholder or the licensee of the patent. If the applicant does not produce the necessary evidence within the term provided for such purpose, the Ministry of Health shall reject the application and shall advise the applicant accordingly including the reasons thereof, in order for the applicant to combat the rejection with the competent authorities if that is the applicant’s will. IMPI’s failure to answer within the ten working day period referred to herein shall be construed as an answer in favor of the applicant of the Health Registration.
Bearing always in mind the criteria contemplated in the two preceding paragraphs, a third party will be entitled to apply for the Health registration for a generic with respect to a medicament whose substance or active ingredient is covered by a patent, with a view to performing the pertinent studies, tests and experimental production, within a three-year period prior to the expiration of the patent. In this case, the Health registration will be granted only after expiration of the patent.
The information referred to in Articles 167 and 167 bis herein regarded as confidential information or reserved information pursuant to applicable law including treaty law, shall be protected against any disclosure to other private parties.”

C.- IMPI Must Publish a list of Patents Involving Allopathic Medicaments Including the Pertinent Terms. New Regulation 47 bis of the Regulations to the Mexican Industrial Property Law.

Applicable law both domestic (Article 8, IPL) and international (Article 12, Paris Convention) already contemplates the obligation of the Mexican Patent Office, i.e., of IMPI, to publish certain information with respect to patents in general. The latter notwithstanding, the same Decree signed by President Fox on September 15, 2003 referred to above, provides for the obligation of IMPI to publish in the Industrial Property Gazette a list of issued Mexican patents the subject matter of which involves allopathic medicaments that should be the subject of patent protection in Mexico pursuant to the respective substance or active ingredient. The Decree provides that the list should also include the term of each of the patents included in the list. This has been done by inserting a new Regulation 47 bis in the text of the Regulations to the Industrial Property Law, specifically the first paragraph thereto.