Post-grant review in Brazil: how statistics can help choosing the winning strategy

>> ARTICLES Post-grant review in Brazil: how statistics can help choosing the winning strategy by Rodrigo Maior and Luiza Cotia In 2011, the US enacted a post-grant review system for patents 1, raising awareness to the strategic relevance of such procedures in different jurisdictions. Brazil, as many other countries, has a similar procedure, which has been in force uninterruptedly since 1971 2 with little change. The number of post-grant reviews filed before the Brazilian Patent Office (BRPTO) is still scarce when compared to the amount of oppositions filed before the EPO and even in comparison to the post-issuance challenges filed before the USPTO. Nevertheless, a close examination of the BRPTO s practice shows a consistency in the decisions of post-grant review proceedings, allowing both patent owners and challengers to build a fair expectation on the outcomes thereof, upon which strategic decisions can be based. The proceedings of post-grant reviews in Brazil Law #9,279/96, the Brazilian Patent Statute, currently regulates post-grant review proceedings. According to this statute, any third party with legitimate interest or the BRPTO itself may challenge a patent within 6 months from grant 3. If the challenge succeeds, the patent is invalidated with retroactive effect to the date of filling. After the filing of the post-grant review request, the BRPTO publishes the corresponding notice, after which the patentee has 60 days to reply. The reviews are sent to the BRPTO s General Coordination of Appeals and Post-Grant Reviews 4 for the issuance of an intermediate opinion regarding the merits of the case. Following this intermediate opinion, the parties have another opportunity to file comments within 60 days counted from the notification thereof 5. The Director of the BRPTO then analyzes the matter, issuing a final decision 6, which ends the post-grant review procedure and can only be challenged through judicial review. It is worth noting that courts can review the merits of the final decision and the intermediate opinion, as well as compliance with due process. A workflow of patent prosecution in Brazil can be accessed here. 1 Leahy-Smith America Invents Act, Pub. L. No. 112-29, Sec. 6, 125 Stat. 299-313 (Sep. 16, 2011) 2 The first version of a post-grant review procedure in Brazil was enacted in 1919 by Law 8.764 and, over the years, different pieces of legislation have successively excluded and reinserted this mechanism in the Brazilian patent law. The 1971 Patent Act (Law 5.772/71) was the last one to reintroduce this procedure in Brazil. 3 The proceedings of post-grant reviews before the BRPTO are shown under #8.1 to #8.9 at the Licks Patent Prosecution Workflow. 4 In Portuguese, Coordenação-Geral de Recursos e Processos Administrativo de Nulidade (CGREC). 5 Published at the BRPTO s official gazette as decision # 205 (please see Licks Patent Prosecution Workflow # 8.4). 6 Published at the BRPTO s official gazette as decision # 200 for the nullity of the patent, as decision # 201 for the maintenance of the patent or as decision # 204 for the maintenance of the patent in an amended form (please see Licks Patent Prosecution Workflow # 8.5 to #8.9). 1 / 10

Statistics of post-grant reviews in Brazil As seen above, although post-grant review procedures have been in force in Brazil for over 40 years, the challenges presented to patents before the BRPTO are still infrequent. Under the 1996 Patent Statute, the BRPTO has issued 39,044 patents, but only 556 post-grant review procedures have been initiated in the same period, with an average of 30 procedures filed per year. Figure 1 shows the number of post-grant review requests filed per year. Of those 556 post-grant review requests7 filed under the 1996 Patent Statute, only 213 (38%) had been decided by the BRPTO until February 2015. In most cases (79%), the BRPTO upholds the patent, either in full or in amended form. 7 Electronic search carried out at the BRPTO s database, encompassing patents granted as of May 15, 1997. These post-grant review proceedings were examined under the Brazilian Patent Statute currently in force. 2 / 10

On the other hand, as per the analysis of the file wrapper of the post-grant reviews made available to the public at the BRPTO website, 95% of the decisions issued by the BRPTO Director are consistent with the intermediate opinion. In other words, the BRPTO Director will almost certainly follow the conclusions of the intermediate opinion when deciding a postgrant review procedure. Brazilian companies tend to file the great majority of post-grant review requests. In the pharmaceutical field, for instance, Brazilian generic pharmaceutical companies are usually the ones challenging patents. The five most frequent challengers in Brazil are Petrobras, Semeato, Marchesan, Sogefi and Indeplast. Figure 2 shows the challengers profile in Brazilian post-grant review proceedings. As for the technology fields affected, most post-grant reviews are filed against patents covering agricultural technologies. There is also a relevant amount of filings against patents in the electrical and telecommunication, mechanical, chemical and pharmaceutical arts. 3 / 10

Figure 3 shows the technology fields most affected by post-grant reviews according to the International Patent Classification (IPC). Important lessons to patent owners and challengers Patent owners and challengers must keep in mind that the fate of post grant review procedures will most likely be sealed by the BRPTO intermediate position. The party expecting an imminent unfavorable decision has little to gain by waiting for a final decision by the BRPTO Director. Hence, the parties should always consider acting promptly after such opinion is published, by preparing either an invalidity lawsuit or a declaratory validity lawsuit. Brazilian federal courts will hear such cases even when post-grant review proceedings are pending before the BRPTO, and the possibility of obtaining preliminary injunctive relief staying the post-grant review proceedings makes this strategy particularly useful, especially concerning sensitive technology. Our team has been using this strategy successfully since the mid-2000s, obtaining important victories and avoiding unfavorable final decisions in post-grant reviews to clients in industries such as mechanical, medical devices, pharmaceutical and chemical. This article was written in collaboration with Guilherme Coutinho. Brazilian Patent Statute under attack: an overview of what may change (Part I) by Liliane Roriz and Viviane Trojan The IP community has been following with expectation the legislative process of the bills for the reform of the Brazilian Patent Statute (Law #9,279/96). Over the past two years, the pro-reform movement has gained strength, but these challenges are not new. 4 / 10

The first bill seeking to amend the Patent Statute, Bill 2920 ( PL 2920/1997 ), was proposed on April 1, 1997, less than one year after Law #9,279/96 had been approved and before most of its provisions had entered into force. Such bill intends to change provisions on the remuneration system of inventions made by employees, entitling these workers to 50% of the net profit resulting from the commercialization of inventions made with their personal contribution. In 1999, bill 139 ( PL 139/2009 ) introduced changes in articles 43 (international exhaustion of patent rights) and 68 (compulsory license) of the Patent Statute. According to the proposed changes, the rights conferred by a patent would not extend to a product manufactured in accordance with a process or product patent that has been placed on the internal or external market directly by the patentee or with his consent. The current Patent Statute only refers to the national exhaustion. With regard to compulsory licenses, the Patent Statute currently does not allow their granting in case of non-exploitation of the subject matter of the patent in Brazil due to economic infeasibility, when importation is admitted. If bill 139 is approved, compulsory licenses can be granted even in such cases. Currently, there are more than 30 bills aiming at modifying the Patent Statute pending before the House of Representatives ( Câmara dos Deputados, also known as Chamber of Deputies). A timeline with all the bills for the reform of the Patent Statute is available at the end of this document. Such amount of bills may wrongly convey the impression that the current Patent Statute is outdated. However, it is important to note that Law # 9,279/96 was approved after intense debate in both Chambers of the National Congress. Originally conceived in the House of Representatives as bill 824/91, the Patent Statute faced more than 1,300 amendments until being finally approved in 1996. A timeline with the legislative process of Law #9.279/96 is available at the end of this document. The debates on the reform of the Patent Statute have ignited within the IP community mainly after the proposal of bill 5402 in 2013 ( PL 5402/2013 ). Resulting from a study commissioned by members of the House of Representatives, this bill intends to implement important changes to the Brazilian Patent System, such as: revoking the provision that guarantees a 10-year term from the date of grant whenever the examination takes more than a decade, limiting the protection to 20 years from filing; prohibiting second medical use patents and new forms of substances; increasing the standard of inventive step; adopting a pre-grant opposition mechanism, allowing third parties to participate in patent proceedings before the patent is granted; strengthening ANVISA s powers to deny pharmaceutical patents in the prior approval examination; avoiding data exclusivity and establishing that the use, by government bodies, of test results or other undisclosed data, for market approval of products equivalent to the product for which the tests were submitted, is not a crime of unfair competition (article 195); and 5 / 10

adopting the non-commercial public use, giving the State the right to use, or authorize the use by third parties in their name and for specific non-commercial ends, any patent granted, after communicating the patent holder and fixing proper remuneration. According to the justification submitted to the House of Representatives by the sponsors of the bill, the suggested changes would aim at promoting innovation towards national competitiveness, which would be possible through a series of limitations to the patent rights under the current patent statute. At this point, it is very important to remember that foreigners have the same rights that Brazilians, as regards the protection of industrial property. According to Article 2 of the Paris Convention for the Protection of Industrial Property (CUP), enacted by Decree 1.263/94, nationals of any country of the Union have the right to be treated as a national, having the same legal treatment granted by the law to Brazilian companies. Moreover, Brazilian Courts frequently decide and maintain IP rights, thus, even if the patent statute faces all these amendments, which is not expected, eventual abuses or violations to patent rights can be discussed before the Brazilian Courts. The above-mentioned bill, and all others that intend to restrict patent rights without considering the drastic consequences it may cause, received severe criticism from patent attorneys in Brazil. Limiting the patent term to 20 years, banning patentability of second medical use inventions, increasing the standard for inventive step and strengthening ANVISA s powers to deny pharmaceutical patents in the prior approval examination may not be the most appropriate way of promoting innovation in the national landscape. It is important to clarify that restrictions will also affect national inventors and not only foreign competitors. Any issue related to a reform of the current patent statute shall be treated from the most diverse standpoints. All the IP community shall be heard and, specially, representatives from scientific and technology sectors not only selected representatives of sectors with commercial interests in the reform. In our next newsletters, we are going to discuss the changes proposed in the bills for reforming the patent statute in detail. Do not miss our next issue. Brazilian healthcare and pharmaceutical markets: changes regarding foreign participation in hospitals and clinics and the validity terms of marketing approvals and licenses to operate by Eduardo Hallak and Ricardo Campello On January 20, 2015, the Brazilian Congress enacted Law #13,097, significantly changing the rules governing tax benefits, air transportation, energy supply contracts and the food and drug sector. The first important change relates to Law #8,080/1990 and the possibility of foreign companies to own or be shareholders 6 / 10

in hospitals and clinics in Brazil, which is now allowed. Law #8,080/1990 formerly barred foreign companies from directly participating in the healthcare sector. Participation was limited to donations from international entities connected to the United Nations ( UN ); setting up entities of technical cooperation; and holding non-profit healthcare services to support its own employees in the country. Now, foreign companies can be shareholders or directly operate hospitals and clinics, as well as provide research and services relating to family planning. However, these changes are already being challenged before the Brazilian Supreme Court ( STF ). On February 11, 2015, the National Confederation of College Liberal Professionals (CNTU) commenced a constitutional challenge before the STF, arguing that these changes violate article 199, paragraph 3rd, of the Brazilian Constitution, which would bar foreign companies to participate in the Brazilian healthcare sector. CNTU requested a preliminary injunction to stay the corresponding provisions of Law 13,097/2015, but the STF is yet to render a decision in this regard. The second important change brought by Law 13,097/2015 concerns the validity term for marketing approvals ( MAs ) issued by ANVISA. Law 6,360/1976, in its article 12, previously provided for a 5-year term for MAs granted to drugs, medical devices, cosmetics and hygiene products, subject to successive renewals. Now, the validity term for each type of product will be defined by ANVISA, on a case-by-case basis, taken into consideration the product s nature and sanitary risk, as well as limited to a 10-year term. There is no minimum validity term set forth by the new Law, a situation that can lead to judicial discussions in case ANVISA fails to provide reasonable periods for the applicants. A third significant change is the creation of the Drug Marketing Approval Abbreviated Renewal, an alternative procedure that aims at expediting MA s renewals before ANVISA. The new system will apply to drugs that have been registered before ANVISA for more than 10 years, with no reported cases of inefficacy or relevant side effects, and that are fully compliant with the food and drug legislation. However, the newly created abbreviated renewal is not in force at this very moment, since its proceedings will be defined in future regulation to be issued by ANVISA. Further important changes relate to the streamlining of the regulation on Licenses to Operate, issued by ANVISA and by the Local (State or County) Sanitary Surveillance Authority. Previously, article 50 of the Law 6,360/1976 established that changes on the company s activities or legal representation should be followed by the issuance of a corresponding License to Operate renewal before being in force. Now, companies with a valid License to operate no longer need to wait for ANVISA to issue a renewal mirroring the changes; it suffices to record before ANVISA any alteration on activities or legal representation. Regarding the License to Operate issued by the Local Sanitary Surveillance Authority, the 1-year validity term has been lifted and now each local unit will set an applicable term taking into consideration the sanitary risk related to the company s activity. 7 / 10

In view of the above, we expect a handful of new, specific, regulations by ANVISA in the upcoming months, further ruling on the matters that are now in its hands to define. Accordingly, there is no doubt that a good portion of it will be soon brought before courts for judicial review. >> NEWS IP litigation before Federal district Courts of Rio de Janeiro Most lawsuits against the Brazilian Patent and Trademark Office (BRPTO) are filed before the federal district courts in Rio de Janeiro, where the Office is headquartered and four courts specialized in IP law are in charge of handling such cases. So far this year, at least 46 lawsuits regarding intellectual property rights were filed against the BRPTO before the Federal Court System of Rio de Janeiro. Twenty-two IP lawsuits were filed against the BRPTO in January and 24 in February. The numbers below show that most of lawsuits address trademark related issues. The BRPTO s omission and unreasonable delays were addressed to the Court in two writs of mandamus in January and two in February. In general, IP owners request the Court to compel the BRPTO to examine their applications, administrative appeals and other petitions in the file wrappers and to do so in a reasonable time. Federal trial Judges have frequently ruled in favor of the plaintiffs. BRPTO releases report of activities for 2014 The Brazilian Patent and Trademark Office has recently published its 2014 activities report. According to the disclosed numbers, patent examination output was 40% higher when compared to 2013. Nonetheless, the backlog increased 6% in 2014 which is still better than the 11% growth rate seen in 2013. The good news is that the office will hire 95 new examiners this year. 8 / 10

In trademarks, output was 76% higher as compared to 2013. For the first time in four years, backlog has decreased (1%), reversing the prior yearly increase trend of 22%. Moreover, 36 new trademark examiners are to be hired. It is to be stressed that, even though productivity has increased, the number of filings of new patent applications has experienced a drop of 3%, while trademark filings decreased 4%. President Dilma Rousseff may sanction the new CPC in the next few days On February 24, 2015, the new Brazilian Civil Procedure Code ( CPC ), approved by Congress in the last days of 2014, was sent to President Dilma Rousseff for sanction. From that date on, the President has 15 days to approve or to veto, partially or entirely, the draft law. After that, if the President remains silent, the bill will be considered approved. Once approved, the new Code will be published in the Official Gazette and will enter in force after one year. If President Rousseff vetos any provisions, the bill will be sent back to Congress, where the reasons for the rejection will be analyzed and it will be decided if the veto will be maintained or not. In the next edition of Prevail, an analysis of the main changes on preliminary injunction provisions will be presented. New rules for cosmetics to accelerate their launch in the Brazilian market The Brazilian Food and Drug Administration (ANVISA) has recently modified the rules concerning the technical requirements for marketing approval of cosmetics, personal care products and perfumes (Resolution RDC #07/2015, published on February 11, 2015). In accordance with the new Resolution, only products classified as tanners, straightening products, sunscreen, insect repellent, antiseptic hand gel and children s products are subject to the analysis and registration proceeding before the ANVISA. The safety parameters are unchanged. All the remaining products mentioned by the new Resolution are now exempted from registration and only subject to an electronic notification to the ANVISA and payment of a fee prior to commercialization. The safety control of such products is carried out through periodic and random verification of the documents presented with the notification, as well as the verification of good manufacturing processes, and analysis of the products available to consumers on market shelves. The new Resolution entered into force on February 26, 2015, simplifying the procedure before the ANVISA and accelerating the launch of products in the Brazilian market. 9 / 10

Reinstatement of bills to amend the Brazilian Patent Statute On February 6, 2015, the Brazilian House of Representatives reinstated bill #139/1999 and 15 other bills attached thereto 8, all seeking to amend the Brazilian Patent Statute. These bills had been previously shelved due to the end of the 2014-2015 legislature. Some of these bills seek to limit patent rights, modifying provisions concerning different aspects of the statute, such as the scope and duration of patent rights, patentable subject matter, and compulsory license. Another sensitive topic addressed by these bills is the role of the ANVISA (Brazilian equivalent to the FDA) in the examination of pharmaceutical patent applications. 8 Bills #3562/2000, #5176/2009, #3945/2012, #303/2003, #7066/2002, #2846/2011, #3944/2012, #5402/2013, #2511/2007, #3995/2008, #3709/2008, #7965/2010, #3943/2012, #8090/2014 and #8091/2014. If you have any questions or need additional information, please contact us at info@lickslegal.com LICKS ATTORNEYS MONTHLY NEWSLETTER 002 March, 2015 Editorial Board: Rodrigo Souto Maior, Ricardo Nunes and Viviane Trojan Contributing writers for this edition: André Venturini, Eduardo Hallak, Guilherme Coutinho, Juliana Neves, Liliane Roriz, Louis Lozouet, Luiza Cotia, Luisa Gonçalves, Ricardo Campello, Rodrigo Souto Maior and Viviane Trojan Design: Bruna Capurro Programming: Helton Brito Marketing Analyst: Lilian Ponciano 10 / 10

Bills to amend the Brazilian Patent Statute, Federal Law 9,279 of May 14th, 1996 All the bills included in the timeline seek to amend the patent statute. This timeline does not include bills removed by their sponsors or already approved and signed into laws. Current as of March 2, 2015

1996 1997 1999 2000 2001 MAY 14TH APRIL 1ST MARCH 2 AUGUST 22 SEPTEMBER 13 DECEMBER 13 The Brazilian Patent Statute enters entirely in force. Law 9,279/96, which regulates rights and obligations relating to industrial property, was approved after intense discussion in Congress. During the legislative process of the Patent Statute, which lasted nearly five years, more than 1,300 amendments were submitted. 1. Bill 2920 H Introduced by Rep. Jovair Arantes (PSDB/GO) 9,279/96 to ensure the employee fifty percent of net profit from commercialization of inventions resulting from its personal contribution. Status: Reinstated on Feb. 2, 2015. 2. Bill 139 H Introduced by Rep. Alberto Goldman (PSDB/SP) 9,279/96, modifying provisions on the rights conferred by patent and on the grant of compulsory license. Status: Reinstated on Feb. 2, 2015. MARCH 18 4. Bill 3478 H Introduced by Rep. Paulo Paim (PT/RS) Summary: Provides new wording for item II of article 202 of Law 9,279/96 to destine seized counterfeit goods to non-profit social assistance agencies. Status: Shelved in the end of the legislature in 2014. 5. Bill 3562 H Introduced by Rep. Raimundo Gomes de Matos (PSDB/CE) 9,279/96 to include provision on the compulsory license for the exploitation of pharmaceutical patents. Status: Reinstated on Feb. 06, 2015. Attached to Bill 139/1999. 6. Bill 282 S Introduced by Senator Carlos Bezerra (PMDB/MT) Summary: Changes article 12 of Law 9,279/96, specifying the cases in which the previous disclosure by the inventor does not affect the patent application. Status: Shelved in the end of legislature in 2002. 3. Bill 333 H Introduced by Rep. Antonio Kandir (PSDB/SP) 9,279/96 to increase the penalties for crimes against trademarks and for unfair competition crimes. Status: Awaits discussion of the Senate s substitute amendment by the Plenary. Bill pending in the House of Representatives Bill pending in the Senate Bill currently shelved H S President s political party (PT) and political parties supporting the Administration Bill originated in the House of Representatives Bill originated in the Senate Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 2/12

2002 2003 MARCH 12 JUNE 13 JULY 1 FEBRUARY 18 MARCH 12 DECEMBER 10 7. Bill 48 S Introduced by Senator Carlos Bezerra (PMDB/MT) 9,279/96 to establish the registration of advertising expression or sign before the BRPTO. Status: Shelved in the end of legislature in 2006. 8. Bill 172 S Introduced by Senator Carlos Bezerra (PMDB/MT) Summary: Changes articles 57 and 175 of Law 9,279/96 to include the BRPTO as defendant in invalidity lawsuits. Status: Shelved in the end of legislature in 2006. 9. Bill 7066 H Introduced by the Participative Legislation Committee Summary: Changes article 207 and 208 of Law 9,279/96 regarding the possibility of the aggrieved party file civil lawsuits and compensation resulting from infringement of industrial property rights. 2015. Attached to Bill 139/1999. 10. Bill 22/2003 H Introduced by Rep. Roberto Gouveia (PT/SP) 9,279/96, including the invention of medicine for prevention and treatment of Acquired Immunodeficiency Syndrome AIDS and its process of obtaining as nonpatentable subject matter. Status: Awaits decision on 11. Bill 303/2003 H Introduced by Rep. Dr. Pinotti (PMDB/SP) Summary: Changes article 68 of Law 9,279/96, providing for compulsory licensing in case of no manufacturing of the patent subject matter in national territory. 2015. Attached to PL 139/1999. 12. Bill 2729 H Introduced by Leonardo Picciani (PMDB/RJ) 9,279/96, among others, to aggravate the punishment of the crime of counterfeit and other crimes against industrial property. Status: Referred to the Senate after the approval of the substitute amendment in the the appeal submitted to the House. Presiding Officer of the House of Representatives. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 3/12

2004 2005 2006 2007 APRIL 15 MAY 19 MARCH 29 NOVEMBER 21 APRIL 4 NOVEMBER 29 13. Bill 3378 H Introduced by Participative Legislation Committee 9,279/96 to establish rules on the private criminal prosecution in crimes against industrial property. Status: Ready for consideration by the Plenary. 14. Bill 3609 H Introduced by Participative Legislation Committee 9,279/96 to set forth that lawsuits for trademark adjudication will be filed before the Federal Court, with the intervention of the INPI. Status: Shelved on Jan. 31, 2015. 15. Bill 4961 H Introduced by Rep. Antonio Carlos Mendes Thame (PSDB/SP) Summary: Amends article 10 of Law 9,279/96, establishing that substances or materials extracted from natural living beings and biological materials found in nature, which comply with the patentability requirements, will be considered an invention or utility model and can be patented. Status: Shelved on Jan. 31, 2015. 16. Bill 308 S currently in the House under No. 3074/2011 Introduced by Senator Antonio Carlos Valadares (PSB/SE) 9,279/96 to restrain parasitic competition. Status: Awaiting Opinion by the Rapporteur of the Constitution, Justice and Citizenship Committee (CCJC). 17. Bill 654 H Introduced by Rep. Nazareno Fonteles (PT/PI) 9,279/96, prohibiting the patenting of genetically modified organisms. Status: Attached to Bill 4691/2005. 18. Bill 2511 H Introduced by Rep. Fernando Coruja (PPS/SC) Summary: Amends Law 9,279/96, establishing that the therapeutic indication of pharmaceutical products and processes is not patentable. 2015. Attached to Bill 139/1999. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 4/12

2008 2009 JULY 9 SEPTEMBER 3 MARCH 24 APRIL 22 MAY 6 OCTOBER 27 19. Bill 3709 H Introduced by Rep. Rafael Guerra (PSDB/MG) Summary: Changes article 229- C of Law 9,279/96, establishing that the grant of patents for pharmaceutical products and processes, in accordance with articles 230 and 231, will depend on the prior approval by the ANVISA. 2015. Attached to Bill 139/1999. 20. Bill 3995 H Introduced by Rep. Paulo Teixeira (PT/SP) and Dr. Rosinha (PT/PR) Summary: Changes article 10 of Law 9,279/96 to restrict patentability of the second medical use and new forms of substances, also known as polymorphs. Status: Reinstated on Feb. 6, 2015. Attached to Bill 2511/2007, which is attached to Bill 139/1999. 21. Bill 4890 H Introduced by Rep. Carlos Bezerra (PMDB/MT) Summary: Changes article 125 of Law 9,279/96 to establish the highly renowned trademark registration at the request of interested. 2015. 22. Bill 5088 S Introduced by Rep. Carlos Bezerra (PMDB/MT) 9,279/96 to establish the imprescriptibility of trademark invalidity lawsuit when the registration is obtained in bad faith. 2015. APRIL 22 23. Bill 156 S currently in the House of Representatives under No. 8045/2010 Introduced by Senator José Sarney (PMDB/AP) Summary: This Bill modifies articles 199 and 210 of Law 9.279/96. It also modifies several other laws, aiming more specifically at reforming the Penal Procedure Code, revoking Decree-Law No. 3.689. Status: On March 23, 2014, the President of the House of Representatives determined the creation of a Special Committee to analyze Bill 8045/2010. The members of such committee were not appointed yet. 24. Bill 171 S currently in the House of Representatives under No.7241/2010 Introduced by Senator Valdir Raupp (PMDB/RO) 9,279/96, aggravating the penalty for the crime of unfair competition and including a new paragraph in article 195. Status: Waiting for the assignment of a Rapporteur in the Constitution, Justice and Citizenship Committee (CCJC). MAY 6 25. Bill 5176 H Introduced by Rep. Rodrigo Rollemberg (PSB/DF) 9,279/96, providing for compulsory licensing of patents in the lack of continued use medicine in the market. Ensures non-exclusive compulsory license and for an indefinite time. Status: Reinstated on Feb. 6, 2015. Attached to Bill 3562/2000, which is attached to Bill 139/1999. 26. Bill 6287 H Introduced by Rep. Carlos Bezerra (PMDB/MT) 9.279/96 to regulate the registration of technology transfer contracts. 2015. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 5/12

2010 2011 2012 JUNE 29 NOVEMBER 30 FEBRUARY 10 NOVEMBER 17 DECEMBER 6 MAY 16 27. Bill 194 S Introduced by Senator Valdir Raupp (PMDB/RO) Summary: Changes article 128 of Law 9,279 to compel the legal entity of private law to prove the use of the trademark for obtaining its registration and for its renewal. Status: Shelved in the end of the legislature in 2014. 28. Bill 7965 H Introduced by Rep. Moreira Mendes (PPS/RO) Summary: Amends article 229- C of Law 9,279/96, establishing that the grant of patents for pharmaceutical products and processes, in accordance with articles 230 and 231, will depend on the prior approval by the ANVISA. Status: Reinstated on Feb. 6, 2015. Attached to Bill 3709/2008, which is attached to Bill 139/1999. 29. Bill 357 H Introduced by Rep. Júlio Lopes (PP/RJ) Summary: Aggravates the penalty of crimes against patents, modifying articles 183, 184, 196, 199, 202 and 207 of Law 9,279/96. Status: Shelved in the end of the legislature in 2014. 30. Bill 689 S Introduced by Senator Vital do Rêgo (PMDB/PB) 9,279/96 to establish the progression of the annual fee for patents. Status: Bill with the Rapporteur (Economic Affairs Committee). 31. Bill 2846 H Introduced by Rep. Manato (PDT/ES) Summary: Amends articles 68 and 74 of Law 9,279/96, regarding the compulsory licensing of patents, and revokes article 69, which establishes the cases in which the compulsory license will not be granted. 2015. Attached to Bill 139/1999. 32. Bill 158 S Introduced by Senator Ciro Nogueira (PP/PI) 9,279/96 to give priority to the examination of green patents applications. Status: Waiting for public hearing in the Environment, Consumer Rights, and Inspection and Control Committee. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 6/12

2013 MAY 24 JUNE 28 DECEMBER 18 APRIL 18 AUGUST 6 33. Bill 3943 H Introduced by Rep. Jandira Feghali (PCdoB/RJ), José Linhares (PP/CE), Elcione Barbalho (PMDB/ BA) and others Summary: Changes article 229- C of Law 9,279/96, establishing criteria for examination and grant of patents in the chemicalpharmaceutical field. This Bill also and sets forth ANVISA s statutory authority to analyze patentability requirements during the prior approval examination. 2015. Attached to Bill 3709/2008. MAY 24 34. Bill 3944/2012 H Introduced by Rep. Jandira Feghali (PCdoB/RJ), José Linhares (PP/CE), Dr. Paulo César (PSD/RJ) and others Summary: Revokes article 40 s sole paragraph of Law 9.279/96, which guarantees a 10-year term from the date of grant whenever the examination takes more than a decade. 2015. Attached to Bill 139/1999. MAY 24 35. Bill 3945 H Introduced by Rep. Jandira Feghali (PCdoB/RJ), José Linhares (PP/CE), Dr. Paulo César (PSD/RJ) and others Summary: Changes articles 18 and 68 of Law 9,279/96, establishing the nonpatentability of drugs used in the diagnosis and therapy of neglected diseases; and determining that the patent of such drugs is not subject of remuneration in case of compulsory license. Status: Reinstated on Feb. 6, 2015. Attached to Bill 3562/2000, which is attached to Bill 139/1999. 36. Bill 4139 H currently in the Senate under No. 118/2014 Introduced by Rep. Benedita da Silva (PT/RJ) Summary: Changes article 202 da LPI, allowing the donation of counterfeit goods to cooperatives or customization ateliers. Status: Awaits the assignment of a Rapporteur in the Economic Affairs Committee in the Senate. 37. Bill 461 S currently in the House of Representatives under No.6292/2013 Introduced by Senator Valdir Raupp (PMDB/RO) 9,279/96, extending the term of secrecy of the industrial design application during its prosecution. Status: Waiting the end of term for submission of amendments to the substitutive proposed by the Rapporteur of the Economic Development, Industry and Trade Committee. 38. Bill 5402 H Introduced by Rep. Newton Lima (PT/SP) and Dr. Rosinha (PT/PR) Summary: Intends to implement important changes in Law 9,279/96, such as revoking article 40 s sole paragraph, establishing the non-extension of patent term in Brazil; prohibiting second medical use patents; adopting a pre-grant opposition mechanism; strengthen ANVISA s powers to deny pharmaceutical patents in the prior approval examination. 2015. Attached to Bill 139/1999. 39. Bill 316 S Introduced by Senator Paulo Paim (PT/RS) 9,279/96 to establish the maximum term of 180 days for the examination of trademark and patent applications by the BRPTO. Status: Waiting for public hearing in the Environment, Consumer Rights, and Inspection and Control Committee. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 7/12

NOVEMBER 12 40. Bill 8090 H Introduced by Social Security and Family Committee. Summary: Changes article 68 of Law 9,279/96 to set forth the compulsory license of patented goods for manufacturing and exportation to countries that have insufficient or inexistent capacity of production in the pharmaceutical field, in accordance with TRIPS Agreement. 2015. Attached to Bill 139/1999. NOVEMBER 12 41. Bill 8091 H Introduced by Social Security and Family Committee. Summary: Changes articles 43 and 184 of Law 9,279/96 to apply the exhaustion of patent rights to goods put in the external market. 2015. Attached to Bill 139/1999. Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 8/12

Rua da Assembleia, 10/4108 Rio de Janeiro Brazil 20011-901 T + 55 21 3550 3700 F + 55 21 3550 3777 info@lickslegal.com Level 28 Shinagawa Intercity Tower A 2-15-1 Konan Minato-Ku Tokyo 108-6028 Japan T + 81 3 6717 2842 F + 81 3 6717 2854 japan@lickslegal.com Bills for the reform of Law 9,279 of May 14th, 1996, the Brazilian Patent Statute Timeline of events as of March 2, 2015 9/12

LEGISLATIVE PROCESS OF THE PATENT STATUTE Introduction of Bill 824/91 Committee on Constitution, Justice and Citizenship +51 Amendments Favorable opinion with substitute +689 Amendments Special Committee approves new opinion 246 Amendments Special Committee Rapporteur Rep. Reynold Stephanes Rapporteur Rep. Ney Lopes +316 Amendment New substitute Bill passed in the House of Representatives 05/02/1991 05/17/1991 06/20/1991 10/30/1991 Nov/Dec Sem. P.I. Feb/1992 05/25/1992 April/May 06/16/1992 06/23/1992 INPI, ONG s, June Chile, Argentina CNBB, M.J. 04/30/1993 06/02/1993 1991 1992 1993 House of Representatives House of Representatives 2 years of processing ± 1.300 Amendments 2 Committees (1 Special) 2 Rapporteurs Rua da Assembleia, 10/4108 Rio de Janeiro RJ 20011-901 Brazil T + 55 21 3550 3700 F + 55 21 3550 3777 info@lickslegal.com Chiyoda Kaikan Bldg. 6F 1-6-17 Kudan Minami Chiyoda-Ku Tokyo 102-0074 Japan T + 81 3 6256 8972 F + 81 3 6735 8982 japan@lickslegal.com 1/2

LEGISLATIVE PROCESS OF THE PATENT STATUTE Senate Committee on Constitution, Justice and Citizenship Rapporteur. Sen. Ney Suassuna Committee on Economic Affairs Rapporteur Sen. Fernando Bezerra Passed in the House Favorable opinion + Amendments Passed in the Senate Patent Statute Law n 9,279 01/05/1995 05/15/1995 05/26/1995 03/05/1996 04/10/1996 05/14/1996 1994 1995 1996 01/01/1995 TRIPS in force Senate House of Representatives Presidency Senate Almost 3 years of processing Several Amendments 2 Committees 2 Rapporteurs Rua da Assembleia, 10/4108 Rio de Janeiro RJ 20011-901 Brazil T + 55 21 3550 3700 F + 55 21 3550 3777 info@lickslegal.com Chiyoda Kaikan Bldg. 6F 1-6-17 Kudan Minami Chiyoda-Ku Tokyo 102-0074 Japan T + 81 3 6256 8972 F + 81 3 6735 8982 japan@lickslegal.com 2/2