1. Background

The protection of a patent in Mexico is limited to 20 years, which cannot be extended, counted from the date on which the patent request was submitted. It is important to clarify, however, that the true protection of an invention arises with the granting of said patent. Nevertheless, given the procedure, some patents are granted before others and, as such, benefit from a longer period of protection than those which granting is delayed. In such cases, the applicant may not apply for time compensation on the patent in question. Discrepancies on the duration of patents exist under our legal system. As such, what can an applicant or inventor do to assure that the patent in question is reviewed by the Mexican Institute of Industrial Property (known by its Spanish initials as “IMPI”) promptly and diligently to take advantage of the monopoly that arises of the granting of said patent?

We have a particular view; following a ruling on two different patent cases as a result of two recently resolved patent cases, we deemed it necessary, and relevant, to share the following ideas, divided into the following sections: (a) the attempt to obtain a favorable ruling with regards to the time restrictions on patents arising from administrative delays; (b) the interpretation of the North American Free Trade Agreement (“NAFTA”); and (c) the stance adopted by our commercial partners although, (d) complaints posed to the Inter-American Commission on Human Rights.

2. North American Free Trade Agreement

This topic is of particular importance now that the North American Free Trade Agreement, between the United Stated of America, Mexico and Canada, is currently being renegotiated. One of the key areas of discussion is intellectual property. It will be interesting to note how Article 1709, paragraph 12 is worded:

“Each Party shall provide a term of protection for patents of at least 20 years from the

date of filing or 17 years from the date of its grant. A Party may extend the term of patent

protection, in appropriate cases, to compensate for delays caused by regulatory approval

processes”.

The article distinguishes the actual period of patent protection: twenty years from the date of application or seventeen from the date that the patent is granted. Furthermore, it states that, in certain cases (not clarifying to which does it may apply), the applicant may be compensated when delays arise as a result of “regulatory approval processes.” This precept allows for compensation for the time lost in the procedure of regular granting of a patent. What good is a patent validity of twenty, or even fifty, years when the time taken to approve its granting is far longer than necessary? Interpreting Article 1709 of NAFTA, the use of the verb “may” suggests that the legislator and officers are entitled to grant time compensation, as the case may be, to the applicant. However, in accordance with Article I of the Political Constitution, its interpretation should be as favorable as possible to the applicant as per the corresponding human rights.

3. Cases

3.1 On June 12, 1992, a Mexican company (the “Company”) filed a patent application for: “A collagen polyvinyl-pyrrolidine based antifibrotic composition that substantially improves tissue structure on hyaline scars and regenerates articular tissue.” After eleven years of administrative procedures, in 2003 IMPI granted the applicant, the patent for a valid period that began in 1992.

In 2004, namely, one year after the granting of said patent, the IMPI notified the title holder of the patent. While the patent was still valid, in the year 2012, the Company requested IMPI to grant a time extension, due to administrative delay, for a period of at least six to eight additional years, as the international standard for granting exclusivity to exploit the patent is five years, not eleven, as experienced by the Company, and which, subsequently, caused it to suffer losses.

In June 2012, the rights protected by the Company’s patent were made publicly available under the terms set out in Articles 23 and 80, Section I of the Industrial Property Law, which reduced the time of protection provided in international treaties, in particular Article 1709, Section 12 of NAFTA, of which Mexico is a signatory.

The IMPI denied the granting of a time extension based on the grounds of administrative delay, as requested by the Company, and confirmed that the patent term would expire on June 12, 2012. The Company decided to appeal the negative ruling (J.A. 1081/2012 – Ninth District Court for Administrative Matters for Mexico City) stating the unconstitutionality of Articles 23 and 80 Section I, last paragraph of the Industrial Property Law, on the grounds that the administrative body did not recognize the benefit granted to it by Article 1709, Section 12 of NAFTA. This breach resulted in damages and losses to the Company, as well as the loss of strategic alliances which would have allowed the Company to exploit its invention and recover its investment costs.

Article 1 of the Constitution states that public bodies have an obligation to respect rights, which are now human rights, as recognized not solely by the constitution but also by international treaties. Article 1, second paragraph of the Political Constitution states that:

“The norms in relation to human rights are to be interpreted in accordance with this Constitution and with the international treaties, granting the broadest rights of protection at all times.”

The preceding paragraph not only implies a constitutional mandate to respect all actionable human rights contained therein, but also a link to the mandates set forth in international treaties of which Mexico is party, favoring at all times “the broadest rights of protection”. The principle of “broadest protection of rights” states a constitutional norm of always favoring individuals which administrative bodies must follow. In the event of non-compliance, the act becomes in itself, unconstitutional.

In the appeal, the Ninth District Court for Administrative Matters for Mexico City stated that Article 23 of the Industrial Property Law goes against the constitutional rights set out in Articles 1 and 133 of the Political Constitution of the Mexican United States, agreeing with Article 1709, paragraph 12 of NAFTA. The Ninth District Court stated that the articles in question contradicted hierarchically higher laws as the term of a patent is of twenty non-extendable years. The sitting Judge decided to protect the rights of the Company under the terms of the Federal Justice and did not apply Article 23 of the Industrial Property Law, upholding instead the norms of international law.

The IMPI, dissatisfied with the favorable ruling against it, decided to appeal the decision (R.A. 125/2013), this time, the Court of Appeals of the First Circuit for Administrative matters, ruled on this matter which was heard by H. First Circuit, Sixth Collegiate Tribunal for Administrative Matters, which stated that NAFTA is commercial, and not in itself to protect human rights and the wording, as such, grants a discretional or optional power to the Member State and, therefore, the previous judgment is revoked.

With regards to Magistrate Clementina Flores Suarez in the Amparo Action in Review R.A. 125-2013 she defended her individual vote and stated that the Judge´s ruling was correct, as Article 1709 of the NAFTA benefits to the title holder of a patent in comparison to Article 23 of the Industrial Property Law.

In view of the above, the Company filed a complaint with the Inter-American Commission on Human Rights -probably the first complaint to the Commission on intellectual property issues-, however, this complaint was rejected on the grounds that the information filed was derived from a legal entity as a victim and not from an individual, which exceeded the Commission´s authority.

3.2 In another similar case, the Supreme Court of Justice decided to add the following court precedent, having four affirmative votes and one dissenting vote issued by Justice Jorge Mario Pardo Rebolledo, in Amparo Action in Review No. 435/2014, the title of which reads as follows: PATENTS. PARAGRAPH 12 OF ARTICLE 1709 OF THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), IS NOT A PARAMETER TO DETERMINE THE VALIDITY OF ARTICLE 23 OF THE INTELLECTUAL PROPERTY LAW. (10th Period; Registration No. 2009865; Court: First Chamber; Type of Court Precedent: Particular Case; Source: Federal Weekly Official Gazette; Book 22, September 2015, Volume I; Case(s): Common, Administrative; Court Precedent: 1st CCLXII/2015 (10ª.), page 313).

For four of the five justices of the First Chamber of the Supreme Court, the verb “may”, set out in paragraph 12 of Article 1709 is not binding for Mexico and, therefore, the compensation of the administrative delay in granting patents – the Justices hold – it is not an argument to be interpreted by Article 1 of the Political Constitution “most favored to a person”, principle. However, it is interesting to analyze the dissenting vote of Justice Jorge Mario Pardo Rebolledo who held an opinion different to the other four justices and that for purposes of this analysis, it is worth reviewing such opinion. As such, I state the following:

(…)

In this sense, in my perspective, the offenses of the petitioner may be groundless, since although it is feasible to consider that the North American Free Trade Agreement is not a human rights treaty, and its interpretation may be according to the Vienna Convention, it is also possible that such international document may have human rights standards and, therefore, be subject to an interpretation according to Article 1 of the Political Constitution.

(…)

Thus, in my opinion, by answering the offenses of the petition and considering that paragraph 12 of Article 1709 of the North American Free Trade Agreement contains a standard related to the human right to intellectual property (a nature that is acquired as it is contained in Article 27 of the Universal Declaration of Human Rights), there would be justification to the reasoning held by the judge, whereby the judge declared the unconstitutionality of the standard, exercising a conventionality control.

(…)”

We deem that such international provision contemplates a personal right which is subject to protection, as the compensation in the term of patents due to bureaucratical delay, the combination of such right in accordance with Article 1 of the Political Constitution should be enough to grant protection to a person instead of creating an interpretative labyrinth to seek options of how not to protect the holder of a patent which saw such holders’ rights damaged, as happened with the First Chamber of the Supreme Court.

4. Conclusions

i) In trade agreements, human rights are similarly included and must be protected according to Article 1 of the Political Constitution. This above as stated in Article 27 of the Universal Declaration of Human Rights.

ii) The term “may” should disappear from the international treaties and the local law, unless there are clear and identifiable guidelines under which the holder of a right may actually has a regulated right or benefit, instead of developing an unattainable right or an expectation of a right arbitrarily used by the authority with multiple procedural and interpretation artifices prior to obtain the benefiting from it.

iii) The compensation of the term of a patent for bureaucratic delay does not imply an extension to the 20 years of the term of a patent, but it is precisely to compensate the time lost due to an administrative delay attributable to the authority and not to the holder of the personal right.

iv) Our commercial partners, instead of taking a position as the one of the Mexican authorities, took advantage of the provisions and interpreted it in favor of the inventor or beneficiary, allowing them to obtain compensation for the time lost during the granting process of a patent. In this sense, it would be advisable that the Mexican law would be homologated to the law of our commercial partners in order to promote the generation of technology in our country.