New Law Regulates Patents and Utility Models

Pharmaceutical Products
Maintenance Fees
Patents Granted Under Previous Law
Compulsory Licences and Other Uses
Infringement Actions

On January 29 2001 the new Patent Law entered into force, regulating all aspects of patents and utility models. The law adopts standards that have been set by comparatively up-to-date legislation and incorporates recent issues. For example, the law accords with the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

Inventors of new products and procedures may apply for patentability, provided that the inventions involve an inventive activity and could be susceptible to industrial application.

Pharmaceutical Products

One of the novel features of the new Patent Law is the patentability of pharmaceutical products. Applications for pharmaceutical products may be filed retroactively as of January 1 1995, but patent may not be granted before January 1 2003. Patents will have a duration of 20 years from their filing date.

The new Patent Law contemplates the possibility of obtaining exclusive commercialization rights over a pharmaceutical product before January 1 2003. This could be accomplished by complying with the provisions set by the Patent Law which accord with the norms set by the TRIPS agreement.

The law provides for the exclusive right of the patent owner over the invention upon the granting of the patent.

Maintenance Fees

The new law calls for the payment of annual taxes in order to maintain a patent's validity. These fees will be payable on the third year from the date of application of the patent (a six-month grace period is available). This payment obligation includes patents granted under the previous law. The fee depends on the years of duration of the patent (eg, if a patent endures for eight years, assuming validity from the date of filing, then the amount of taxes corresponding to the eighth year must be paid).

Patents Granted Under Previous Law

Patents that were granted in accordance with the previous law will continue to be effective for the length of time provided for by the previous law. However, in terms of use, enjoyment, duties and licences, the provisions of the new Patent Law will apply. The duration of the patents granted under the previous law will not be extendable to the 20 years' duration provided for in the new Patent Law.

Compulsory Licences and Other Uses

The law provides for the granting of compulsory licences by means of an administrative proceeding before the Industrial Property Office in any of the following circumstances:

• where an individual has not been granted a licence with reasonable terms and commercial conditions;

• where a patented invention is not being utilized three years after the patent was granted (or four years from the date of application), or where its exploitation has been interrupted for more than one year;

• where, for emergency reasons national security, socio-economic and technological development in certain strategic areas authorize the Executive Branch to grant such licences; and

• in cases of antitrust practices or patent dependency.

In addition the law provides for the revision, revocation and amendment of the compulsory licence by means of judicial authority. Precautionary measures that could effect the nature of the granted licence may not be issued during the revision period.

In relation to compulsory licences, when the patent involves raw materials from which the final product is created the licensee must acquire the raw materials directly from the patent owner. However, if another supplier makes an offer of such raw materials at a price which is 15% lower than the price being offered by the owner, the licensee can acquire the lower-priced raw materials provided that they were legally introduced onto the national or international market by the patent owner, or by a third party with the consent of the patent owner, or by a third party that was legally entitled to do so.

Infringement Actions

The law provides for the following:

• civil action for the return of the patent right;

• civil action for patent right infringement; and

• criminal action for patent right infringement, considering the breach of a patent right as a privately prosecuted type of action.

Regarding indemnification, the law sets forth the obligation to pay damages on behalf of the infringing party.

For further information on this topic please contact Susana Casal at Berkemeyer Attorneys and Counselors by telephone (+595 21 446706) or by fax (+595 21 449694) or by e-mail ([email protected]).