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Refreshment of the Mexican patent system at risk if TPP dies

The current Mexican Patent System

The existing Mexican patent legal framework was enacted in the early 1990's mainly as response to Mexico entering into the North American Free Trade Agreement (NAFTA) and TRIPS. No doubt, law and regulations at that time signified major changes for the industry and were considered appropriate to put the country in line with the trends in the global arena. Now, after more than twenty years, the system calls for renovation. Amendments introduced along these years for addressing particular issues have not been enough to really update the patent system so as to respond to current reality and necessities.

The TPP, a vanishing opportunity

As it is broadly known, for many years some economies in the Pacific Rim negotiated and eventually issued a final draft of the TPP in February last year. Countries within the treaty included USA, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei. The corresponding economies account for about 40% of the global Gross Domestic Product. After the TPP was signed, ratification by members remained pending along 2016, so that entering into force became uncertain as elections in USA approached. The republican candidate at the time plainly announced withdrawal of his nation from the Treaty if he won the election, a promise he accomplished last January 23, 2017, putting the whole treaty in danger. As many experts have said, without USA, the treaty has lost most of the potential advantages and benefits for many of the countries despite efforts seem to be done by some countries to push the treaty by even thinking in inviting other nations to join, which does not seem feasible under the current international circumstances.

As most of contemporary Free-Trade Agreements, the TPP text contemplates an Intellectual Property chapter, wherein several dispositions regarding IP rights are set for traditional figures such as patents, trademarks, copyrights, industrial designs, plant variety rights, and other perhaps less heard topics such as geographical indications, trade secrets, data protection, internet service provider liability, traditional knowledge and folklore.

During negotiations and while ratification has been pending the TPP has been considered not only by practitioners but officially by the local government as the best opportunity not only to update but actually renew the old Mexican patent system currently in force. Harmonization of patentability requirements with countries like USA, Japan or Canada have been seen a positive aspect of the treaty, although there are fields for which Mexico has a tradition of not allowing patents e.g. patents for animals; diagnostic, therapeutic and surgical methods for the treatment of humans or animals; methods of doing business, and pure software. Anyhow, it was envisioned that even for this topics there might have been at least a discussion when adopting local regulations to comply with the TPP provisions.

Prosecution of patent applications is open for public inspection in various countries but not in Mexico. The TPP text compels countries to establish public inspection of patent prosecution. At least the following information is requested to be publically available:

a) Search and examination results, including details of, or information related to, relevant prior art searches;

b) As appropriate, non-confidential communications from applicants; and

c) Patent and non-patent literature citations submitted by applicants and relevant third parties.

Patent public file inspection might signify a big change in the domestic system as currently only bibliographic data and the abstract of the invention is officially made public before a patent is granted. Particularly, divisional applications remain confidential until grant, bringing great uncertainty for players in the Mexican market, especially within the pharma, biotech and chemical sectors, in which more than one divisional from a parent application is not rare.

Perhaps one of the hottest topics in the TPP has been patent term adjustment. Currently Mexico grants patents with a non-extendable term expiring twenty years after the filing date. The TPP text includes a provision to compensate unreasonable delays that occur in the granting of the patent, at the patent owner request, by means of adjustment of the patent term, unless the delay is attributable to the applicant. An unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later. In the pharmaceutical field, TPP also would compensate curtailment of the effective patent term as result of the marketing approval process, e.g. sanitary registration of medicaments. Currently, there are no legal basis for adjusting patent term in Mexico. Entering into the TPP should prompt the discussion of the topic locally, or at least make the country establish faster patent examination and marketing approval processes if the official policy was to avoid granting patent extended protection. The mentioned discussion on the matter is anyhow needed so as Mexico clearly defines its profile as an attractive market for investors because of either the promise of quick patent and regulatory processes or complementary protection. Without the TPP, the discussion would have to go back on firstly deciding whether any provision for patent term adjustment or fast processes is suitable or not.

Another patent related issue in the TPP has been data protection for sanitary approval of pharmaceutical, biotechnological and agricultural chemical products. The innovative industry seems to be strongly pushing dispositions for preventing other parties to use data generated to obtain or renew registration of their products without consent. Mexico has agreed to provide protection for such data in the pharmaceutical field in at least a previous free trade agreement (NAFTA-1994). Sometimes this protection is only reached by litigation. The TPP would have resulted in Mexico actually modifying its Law to specifically include the five-year protection, eliminating the need for litigation on the matter. For new clinical information submitted in support of a marketing approval of a previously approved product covering a new indication, new formulation or method of administration, the protection under TPP would have been at least three years. As to biological products, data protection has been established within the Treaty to be at least eight years, or at least five years from the first marketing approval in other country. Very likely, Mexico would have chosen the first option.

Conclusion

The above and many other topics related not only to patents but intellectual property in a more general sense were about to be included basically in a single package bill to be discussed in congress with the focus of complying with an international obligation, which certainly would have facilitated approval. Now, with the TPP facing disappearance the probability of having all those provisions included in the legal framework, whether urgently needed or not, has dramatically diminished unless participating countries really manage to continue with the treaty without the USA. Mexico and other Parties have independently talked about the possibility of bringing the TPP dispositions to bilateral trade agreements in case the TPP eventually fails. Nonetheless, it is questionable that all dispositions can be upheld as compromised during the TPP secret negotiations in bilateral treaties. Information leaked from said negotiations showed that consensus in topics such as patents was very difficult to reach, meaning that each country had not only its position regarding the provisions but also its own agenda on patent matters, which certainly would impact bilateral discussions, if any, not to say the evident delay the new negotiations would imply for putting domestic law amendments in congress. A still more complicated scenario is depicted if nor the TPP neither bilateral agreements work. Twenty years without seriously amending the domestic legal framework indicates that patent law amendment has historically proven difficult in Mexico.