On November 27, 2013 Division 2 of the National Court of Appeals on Federal Civil and Commercial Matters issued an important decision on the term of patents applied for and granted in Argentina during the transition from the old law to the current one (“Bayer CropScience AG et al v. Agrofina S.A.”).

Under section 5 of the repealed patent law (law No. 111, enacted in 1864) patents were issued for a 15-year term from the date of grant.  This system was amended by the current law No. 24,481 (enacted in 1995), where section 35 provides that patents will be granted for a 20-year term from the application date.  Finally, section 97 of the regulatory decree provides that section 35 will be applied only to applications filed after the new law became effective, which in practice means that those applications filed under the old law and granted under the new one are issued for a 15-year term for the date of grant, i.e. the system of the old law.  The constitutionality of this section 97 was challenged here.

In this case Bayer CropScience AG (“BCS”) and Bayer S.A. had sued Agrofina S.A. in February 2010, seeking to enjoin the latter’s use of BCS’s patent and an award of damages.  Said patent, as provided for by section 97 of the regulatory decree, had been granted on November 28, 1997 for a 15-year term, and accordingly it would expire on November 28, 2012.

In its response Agrofina submitted a motion to dismiss, arguing that according to section 35 of the new law the patent at stake had expired, as more than twenty years had elapsed since its filing date: as the application had been filed on December 21, 1978, Agrofina held that it had expired on December 21, 1998

The district court rejected this motion.  It pointed out that in “Unilever v. INPI” the Supreme Court had held that the law applicable to a patent was the one in force when the application was filed (i.e., law No. 111 with its 15-year term from the date of grant).  Furthermore, section 97 of the regulatory decree provided that the new term would apply only to patents applied for after the new law became effective.  To declare that this provision was unconstitutional would lead to the absurd conclusion that the patent would have lasted only one year.

Agrofina appealed from this decision, arguing that the case law cited by the district court was not applicable because the facts were different; that the sentence was arbitrary as it failed to set forth the reasons for ruling that section 97 was constitutional; and that it had applied a repealed provision, instead of the one in force.

The Court of Appeals affirmed the district court’s sentence.  As a preliminary issue, it pointed out that Agrofina’s contention was not abstract, although BCS’s patent had expired in the meantime, because the plaintiffs’ request for damages still stood and this meant that it was necessary to decide exactly when said patent had expired.  Then it went on to distinguish this case from the precedent cited by the defendant, which referred to a different situation (the extension of patents issued under law No. 111 for a shorter term than that provided for in section 33 of the GATT TRIPs Agreement and section 35 of law No. 24,481).

With regard to the central issue at stake, the Court ruled that section 97 of the regulatory decree, which had been challenged by Agrofina, was not unconstitutional because it addresses a situation not foreseen expressly by law No. 24,481, namely that of patents applied for under law No. 111 and granted under law No. 24,481.  In consequence the Executive branch could validly fill that void by way of the regulatory decree, as had happened in other instances.  The Court added that although other interpretations were possible, between two explanations, one leading to the annihilation of the inventor’s rights and the other to its continued existence, the latter was to be preferred.

The significance of this sentence lies in that a contrary decision might affect the situation of some 4,000 patents granted in the same terms as the one involved here.  This judgment is not yet final, as Agrofina has filed an extraordinary appeal requesting that the case be heard by the Supreme Court; at the time of this writing the Court of Appeals had not decided yet whether to accept this appeal.