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Federal Government enacts Law No. 14,200 with new rules for compulsory license of patents.

On September 2, 2021, the Federal Government enacted Law No. 14,200, which amends Law No. 9,279/96  the Brazilian Industrial Property Law (BIPL), as to compulsory licensing in cases of national or international emergency, and in case of public interest or recognition of public calamity nationwide.

The compulsory licenses will be made on a case-by-case basis upon (a) payment of an indemnity to the patent owner; and (b) Government determination in the exceptional event that the patent holder refuses or is unable to meet the local needs.

The main differences of the new rules from the mechanism already provided by the BIPL are:

(a) patent applications may also be subjected of compulsory licenses;

(b) royalties are fixed at 1.5% over the net sales price to compensate the patent holder, but may be adjusted on a case-by-case basis; and

(c) the new rules bring more transparency to the compulsory licensing process, by determining, for instance, that the Government must previously present a list of patents/patent applications that could be object of compulsory licenses.

Additionally, it must be highlighted that art. 71 of the BIPL already foresees the compulsory licensing in case of national emergency or public interest. The new rules expand the legal hypotheses for compulsory licenses, which may also be adopted in cases of public calamity nationwide, in addition to art. 71-A, which provides for the licensing of patents or patent applications related to products intended for export to countries with insufficient or null production capacity in the pharmaceutical sector.

It is important to point out that, in principle, such compulsory licensing will not be used at the current moment to face the coronavirus pandemic, since the vaccines are being provided by international partners.

Due to public interest reasons, president Jair Bolsonaro vetoed some of the proposals, such as the provision that would oblige the patent owner to transfer know-how and provide the active ingredients of medicaments and vaccines.

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