Lexology Navigator: Patents

Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions. 

Applying for a patent


What are the criteria for patentability in your jurisdiction?

The criteria for patentability are:

  • patentable subject matter (ie, subject matter that is eligible for patent protection);
  • novelty (ie, anything not found in the prior art);
  • inventive step (ie, results of a creative process which are not obvious from the prior art to a person skilled in the art); and
  • industrial application (ie, the possibility of an invention being produced or used in any branch of economic activity).

What are the limits on patentability?

According to Article 16 of the Industrial Property Law, the following subject matter is not patentable:

  • essentially biological processes for obtaining, reproducing and propagating plants and animals;
  • biological and genetic material as found in nature;
  • animal breeds;
  • the human body and the living matter constituting it; and
  • plant varieties.

Further, Article 19 of the Industrial Property Law states that the following subject matter is not considered an invention:

  • theoretical or scientific principles;
  • discoveries that consist of making known or revealing something that already existed in nature, even though it was previously unknown;
  • diagrams, plans, rules and methods for carrying out mental processes, playing games or doing business, and mathematical methods;
  • computer programs;
  • methods of presenting information;
  • aesthetic creations and artistic or literary works;
  • methods of surgical, therapeutic or diagnostic treatment applicable to the human body and animals; and
  • juxtapositions of known inventions or mixtures of known products, or alteration of the use, form, dimensions or materials thereof, except where in reality they are so combined or merged that they cannot function separately or where their particular qualities or functions have been so modified as to produce an industrial result or use that is not obvious to a person skilled in the art.

To what extent can inventions covering software be patented?

Software as such cannot be patented in Mexico, since it falls within the prohibitions of Article 19 of the Industrial Property Law, which provides that computer programs are not considered inventions. Nevertheless, computer-readable claims are eligible for patent protection as long as the methodology and functions involved meet the patentability requirements.

To what extent can inventions covering business methods be patented?

Business methods as such cannot be patented in Mexico, since they fall within the prohibitions of Article 19 of the Industrial Property Law, which provides that business methods are not considered inventions. Nevertheless, computer-implemented inventions are eligible for patent protection as long as they meet the patentability requirements.

The Mexican Patent Office (IMPI) criteria for assessing the patentability of computer-implemented inventions tend to be similar to those of the European Patent Office. For example, it is required that a technical problem be solved in a novel and non-obvious manner using technical means.

To what extent can inventions relating to stem cells be patented?

Inventions relating to stems cells are patentable as long as they do not involve the use or destruction of a human embryo in order to practise the invention, since the use thereof for obtaining human embryonic stem cells is prohibited on grounds of morality.

Inventions involving stem cells derivable from parthenotes or from established cell lines are patent eligible.

Are there restrictions on any other kinds of invention?

Article 4 of the Industrial Property Law excludes from patentability subject matter whose contents or forms are contrary to public policy, morality or proper practice, as follows:

No patent, registration or authorization shall be granted, nor shall any publicity be given in the Gazette in respect of any of the legal devices or institutions regulated by this Law, where their contents or form are contrary to public policy, morality or proper practice, or if they violate any legal provision.”

Grace period

Does your jurisdiction have a grace period? If so, how does it work?

Article 18 of the Industrial Property Law contemplates a one-year grace period for filing an application after disclosure of the invention by the inventor or his or her assignee, as follows:

The disclosure of an invention shall not prevent it from continuing to be considered new where, within the 12 months prior to the filing date of the patent application or, where applicable, the recognized priority date, the inventor or his assignee has made the invention known by any means of communication, by putting it into practice or by displaying it at a national or international exhibition. When the corresponding application is filed, the evidentiary documents shall be included in the manner laid down in the Regulations under this Law.

The Publication of an invention contained in a patent application or in a patent granted by a foreign office shall not be regarded as corresponding to any of the situations referred to in this Article.

In order to claim the benefit from the grace period, it is required to file at the national entry any type of statement or declaration that includes information about the prior disclosure such as means, place, date and the particulars of the exhibition at which it was shown or those relating to the first time that it was disclosed or put into practice.”


What types of patent opposition procedure are available in your jurisdiction?

There is no formal patent opposition system in Mexico. The Patent Law only allows third parties to file information related to the patentability of the invention of a pending patent application within six months of publication of the patent application in the gazette. Such information may be considered at the examiner’s discretion and will not suspend prosecution of the patent application. The person filing the information will not be considered a party and will not have access to the patent file or immediate legal standing to challenge a granted patent. After a patent is granted, anyone can inform the IMPI of causes of invalidity. The authority may consider such information discretionally to initiate an ex officiocancellation proceeding.     

Apart from oppositions, are there any other ways to challenge a patent outside the courts?

No, in Mexico the only way to challenge a patent is through administrative proceedings (nullity or cancellation action) before the IMPI.

How can patent office decisions be appealed in your jurisdiction?

IMPI decisions can be appealed by filling a nullity trial before a single specialised IP court, or before the IMPI itself through a review recourse. The decision issued by the IP court may be appealed before 20 federal circuit courts in Mexico City; however, the case is assigned randomly by a computer system.

Timescale and costs

How long should an applicant expect to wait before being granted a patent and what level of cost should it budget for?

The estimated time to obtain a patent ranges from two to seven years, with an average time of four-and-a-half years. The typical cost of a patent obtained in Mexico ranges from $4,000 to $7,000.

Enforcement through the courts


What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

Any patentee or licensee (unless expressly forbidden from doing so) has the right to file suit against a third party infringing its rights.

The patentee holds the right to carry the invention by excluding others from making, using or selling it. A patent owner is entitled to work its own patented invention as long as it does not infringe patents belonging to third parties. Broadly speaking, infringement occurs when a third party performs any of the abovementioned activities. Infringement can be imputed only to direct infringers, as the law does not recognise contributory infringement. In other words, only persons or entities making, using or selling the patented invention can be held liable for infringement (and not parties that help them to perform the infringing activity).

The prosecution of an infringement claim before the Mexican Patent Office (IMPI) is simple and begins with the filing of a formal written claim. Government fees to commence a proceeding (patent infringement or invalidity) before the IMPI are around $73.

Once the IMPI admits the claim, it serves notice on the defendant. The defendant has 10 days to answer the claim, including any allegations that it deems pertinent, and thereafter the IMPI decides on the merits of the case. Both the plaintiff and the defendant must produce supporting evidence at the time of filing the claim or answering it, respectively.

In accordance with the Industrial Property Law, an act will be considered to be infringing only where it has been committed within the territory of Mexico; infringement will not be considered if the patented invention has been used on a foreign vessel, aircraft or vehicle in transit in Mexico (the Industrial Property Law does not require reciprocal treatment by the laws of the foreign country from which the vehicle departed).

What scope is there for forum selection?

In Mexico, selecting the competent judge and choosing the competent jurisdiction raise few problems. The only way to enforce a patent is through administrative proceedings (ie, an infringement action) before the IMPI, which is not a court of law but rather a federal administrative entity. IP enforcement is regulated under federal law; no state law is available. By territorial jurisdiction, IP matters are mainly decided in Mexico City.


What are the stages in the litigation process leading up to a full trial?

All evidence should be filed or announced with the original infringement claim or with the invalidity action before the IMPI. The applicable regulations do not contemplate a pre-trial stage; therefore, no evidence is produced at this stage, but evidence preparation may be necessary.

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

Legally speaking, it is difficult for the defendant to delay the proceedings; however, the alleged infringer is entitled to post a counter-bond – of the same amount posted by the plaintiff plus 40% – to lift the preliminary injunctions. This may lead to a ‘war of bonds’, where in some cases the amount of the bond becomes more important than the merits of the case.

It is advised that the bond posted by the plaintiff be as high as possible, in order to avoid the lifting of preliminary measures during the administrative proceedings and to stop the infringing activities.

How might a party challenge the validity of a patent through the courts in anticipation of a potential suit for infringement being issued against it?

According to the Industrial Property Law, a defendant can file an invalidity action against a patent as a counterclaim within the same statutory term to file the response to the infringement action. An independent invalidity action can be filed, but if it is not filed along with the brief of response, it may be decided separately from the infringement; when the invalidity action is filed as a counterclaim, the IMPI is legally bound. Both the infringement claim and the counterclaim should be resolved simultaneously to preclude the possibility of contradictory decisions.

An action for invalidity retroactively cancels the patent’s effects to the filing date of the application; therefore, the use of invalidity counterclaims is a typical strategy in the defence against infringement actions.

At trial

What level of expertise can a patent owner expect from the courts?

The IMPI, which is the authority empowered to issue administrative resolutions on patent infringement cases, is staffed by personnel with both the formal education and the technical qualifications needed to perform the tasks entrusted to it.

Moreover, in January 2009 a specialised IP division of the federal administrative courts began operations. This division has jurisdiction to review all cases based on the Industrial Property Law, the Federal Copyright Act, the Federal Law of Plant Varieties and other IP-related provisions. The creation of this division should help to improve the applicable criteria for IP cases, although the three magistrates comprising this tribunal have no technical backgrounds. The last appeal stage is formed by federal circuit magistrates; although they are highly knowledgeable on legal issues, they do not need to have IP or technical backgrounds.

In addition, there are a considerable number of associates and academic institutions – some of which are connected to the judiciary – which regularly organise seminars and lectures to promote, study and discuss IP issues directed to or along with judges and magistrates.

Are cases decided by one judge, a panel of judges or a jury?

The only way to enforce a patent is through administrative proceedings (ie, an infringement action) before the IMPI, which is not a court of law but rather a federal administrative entity.

The IMPI does not publish its judgments in patent infringement trials or any other proceedings until they are final and not subject to further appeal. However, some information relating to the decision remains confidential, especially if the parties request it.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

There are no jury trials in Mexico.

What role can and do expert witnesses play in proceedings?

Expert evidence is not required by law, but it is advisable in most cases to offer expert evidence, considering that the inventions and patents in question usually have characteristics that can be duly clarified only by an expert.

Expert evidence should be offered in the complaint, indicating the points on which the expert will deliver his or her opinion.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

For many years, the existing IP law has been interpreted to the effect that only literal infringement is recognised; infringement under the doctrine of equivalents is not expressly provided for by the law.

However, in a recent ruling on behalf of a pharmaceutical company, a circuit court considered the peripheral interpretation method as part of a non-binding precedent. The circuit court held that according to the relevant rules and regulations, it was clear that the legislature’s intention was to grant claims with a fundamental role in the definition of the patent’s subject matter. Further, these rules allow the state to protect industrial property to a greater extent and to prevent actions which affect the industrial property owner’s exclusivity rights or constitute unfair competition – and to eradicate such practices by imposing corresponding penalties where applicable.

Therefore, the degree to which an action is infringing will be determined on the basis of its identification within or equivalence to the scope of protection of the patented claims.

Although this ruling does not exactly implement the US doctrine of equivalents, it is a step in the right direction.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

The Industrial Property Law provides for provisional injunctions, whereby the IMPI can take certain important measures against infringers. To obtain an injunction, the plaintiff must:

  • prove that it has a valid right to the patent in question;
  • evidence a presumption of the violation of its patent rights; and
  • post a bond to guarantee damages.

If the plaintiff asks the IMPI for a provisional injunction, a bond will be fixed as security against possible damages to the defendant. This injunction must be petitioned in writing and within 20 days of its execution the plaintiff must file a formal written claim of infringement. Failure to do so will cause the plaintiff to lose the bond in favour of the defendant. The defendant has the right to post a counter-bond – amounting to the bond posted by the plaintiff plus 40% – to stop the effects of the provisional injunction. The defendant may submit any allegations that it deems pertinent with respect to the provisional injunction within 10 days of the date of its execution.

As to the scope of injunctions, the IMPI may order the alleged infringer or third parties to discontinue acts constituting a violation of the law, and may also:

  • order the recall or impede circulation of infringing merchandise;
  • order the following to be withdrawn from circulation:
    • articles that have been illegally manufactured or used;
    • infringing articles, packaging, wrapping, stationery, advertising material, signs, posters and other similar articles; and
    • utensils or instruments destined for or used in the manufacture, production or obtainment of any of the abovementioned articles;
  • immediately prohibit the marketing or use of infringing products;
  • order the attachment of the products;
  • order the alleged infringer or third parties to cease all infringing acts; and
  • order a suspension of service or the closure of the relevant establishment when the abovementioned measures are insufficient to prevent or avoid the violation of IP rights.

If the product or service is in trade, the merchants or service providers will be required to refrain from selling the product or rendering the service as of the date of notification of the resolution.

The same obligation is imposed on producers, manufacturers, importers and distributors, which will be responsible for immediately recalling the products that are found in trade.

How are issues around infringement and validity treated in your jurisdiction?

A defendant in a patent infringement action can file an invalidity action against a patent as a counterclaim when filing the response to the infringement action. An independent invalidity action can be filed, but if it is not filed along with the brief of response to the infringement action, it will be decided separately from the infringement; when the invalidity action is filed as a counterclaim, the IMPI is legally bound. Both the infringement claim and the counterclaim should be resolved simultaneously to preclude the possibility of contradictory decisions.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

Cases involving similar issues from other jurisdictions may be used as guidelines by the IMPI, but they are not binding.

Damages and remedies

Can the successful party obtain costs from the losing party?

The Industrial Property Law contemplates claims for damages and lost profits in civil law actions. Damages and lost profits accrue from the date on which the existence of infringement can be proved. Although claims for damages involve lengthy proceedings in addition to the administrative infringement action, the wording of the law intends to provide fair compensation to the affected party.

The Industrial Property Law establishes that the damages award to the plaintiff in infringement cases cannot be less than 40% of the public sale price of each infringing product or service. However, to be allowed to claim damages, the affected rights holder must have a final decision declaring that its rights were violated.

However, the Supreme Court is currently hearing a case that may substantially affect the ability to claim damages in Mexico. In particular, the Supreme Court is reviewing whether the 40% rule stipulated in the Industrial Property Law constitutes an automatic punitive damage derived from the violation of an IP right, or whether the plaintiff must file evidence of actual damages.

What are the typical remedies granted to a successful plaintiff?

The typical remedy is a fine of up to $800,000 and a definitive injunction to stop the infringing activity. Criminal actions for patent infringement are available only for re-offence cases. In accordance with the Industrial Property Law, re-offence is found where a party infringes a patent after a final and unappealable decision of the IMPI confirming infringement. Re-offence is considered a felony that can be pursued ex officio or ex parte through the Federal District Attorney Office. This felony can be punished with up to six years of imprisonment and a fine.

Remedies are available to the plaintiff through civil actions. Civil actions are filed once an administrative action has been resolved and is not subject to further appeal. As a matter of principle, and in accordance with the Civil Procedural Law, the types of monetary relief that can be obtained from the courts are actual losses and lost profits.

How are damages awards calculated? Are punitive damages available?

Monetary damages are at least 40% of the commercial value of the infringing products. This minimum standard provision is known as the ‘40% rule’. Few patent cases have reached this stage and, as mentioned above, the matter is subject to be studied by the Supreme Court.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

Preliminary injunctions are confirmed and become permanent injunctions only once the infringement action has been resolved (if they are not lifted before by a counter-bond).

In accordance with the Industrial Property Law, the IMPI will place the bond or counter-bond at the disposal of the party that prevailed in the litigation when its decision becomes final (ie, not subject to further appeal).

Timescale and costs

How long does it take to obtain a decision at first instance and is it possible to expedite this process?

The initial stage of a patent infringement action before the IMPI usually takes two years. Once the IMPI issues a decision, the following two stages of appeal before the courts usually take at least three further years.

It is not possible to expedite the process other than hastening and lobby efforts.

How much should a litigant plan to pay to take a case through to a first-instance decision?

Government fees to commence proceedings (patent infringement or invalidity) before the IMPI are minimal – around $73.


Under what circumstances will the losing party in a first-instance case be granted the right to appeal? How long does an appeal typically take?

Patent infringement decisions of the IMPI can be appealed by any of the intervening parties, thus bringing the matter before a single specialised IP court or the IMPI itself through a review recourse. The decision of the IP court can be appealed before 20 federal circuit courts in Mexico City, although the case is randomly assigned by a computer system. As to timeframes, for patent cases an appeal will not be decided in less than 15 months in each of the two eventual appeal stages.

Options outside court

Are there other dispute resolution options open to parties that believe their patents to be infringed outside the courts?

Arbitration is rarely used to resolve infringement cases and is considered legally unsuitable for cancellation actions, but there are no legal limitations with respect to a prior out-of-court settlement and the parties can stipulate any clauses they wish, provided that the terms of the settlement are not contrary to legal provisions, custom or proper commercial or moral use. A settlement does not require government approval or registration with the IMPI, but recordation may be necessary when there are ongoing proceedings.

Data Package Exclusivity (DPE)

Mexico intends to pass a new law to fully recognize DPE rights in the domestic law.

by Alejandro Luna

In previous publications regarding Data Package Exclusivity (DPE) in Mexico we highlighted that the domestic law was silent in the recognition of DPE rights. We also commented that in January 2008, the Mexican Health Regulations were amended concerning generic medications, eliminating the requirement to prove safety and efficacy for generics, which was substituted by the need to prove interchangeability.

In short, in 2008 the regulations were modified to implement an abbreviated approval procedure for generic drugs, on the basis of bioequivalence and bioavailability studies, without setting forth any provisions containing a non-reliance period as established in the international treaties such as NAFTA and TRIPS.

Based on the hierarchy of international treaties established in the Mexican Constitution, where international treaties approved by the Mexican Senate supersede Federal Laws, our firm structured a litigation strategy to secure recognition of DPE rights in Mexico.  Although we have obtained valuable preliminary injunctions, ordering the regulatory agency to refrain from grant marketing authorizations relying directly or indirectly in the dossier of the innovator or the so-called product of reference, these cases remain under prosecution and are pending to be decided on their merits by the courts.

The issue has been discussed in many forums, highlighting the limitations of our domestic law, the possibility that the amendments to the Health Law in 2008 disregarding DPE rights could be considered as a contradiction with the international treaties, and that litigating the recognition of these rights is an unnecessary burden for individuals.  In consequence this past February, 2011, a publication was made in the Gazette of the Congress, containing a proposal of amendment to the Health Law to fully recognize DPE rights in the Mexican Health Law.   The proposal reads as follows:

“Art. 376….

For the purposes of this article and concerning interchangeable generics for allopathic medicines, the corresponding marketing authorizations can be only granted after a period of five years running from the date of granting of the medicament considered as innovator or product of reference; unless that the applicant is be the titleholder of the marketing authorization for the innovator or reference product or, applicant has obtained an express authorization from the titleholder.”

The following issues arise from this proposal:

  • The word “interchangeable” referring to generic drugs should be removed from the article, as in 2008 the amendments to the Health Regulations eliminated the previously existing distinction between generics and interchangeable generics.
  • The proposal does not make specific distinctions for protection of new chemical entities, formulations and new indications.
  • The proposal limits the scope of protection of DPE to five years while NAFTA establishes the five year period as a minimum.
  • The proposal seems to be also limited to allopathic medicines of chemical nature, as there is no specific mention to biologic drugs.  In other jurisdictions establishing DPE rights, biologic drugs obtain a longer protection period.
  • The Health Regulations should be also immediately amended and modified to coincide, clarify and accomplish the amendments of the Health Law.


In short, the proposal is highly positive and welcomed, as it would put an end to the contradiction of the domestic law with international treaties and would grant certainty and incentives to investors, companies conducting clinical trials and developers of innovative medicines.   It will be important to monitor lobby efforts before the Mexican Congress, in a scenario close to the next presidential elections in Mexico and facing the opposition to this proposal by some sectors of the pharma industry.

Compulsory licences and swine flu

Mexico is closer than it ever has been in history to granting compulsory licences due to a national emergency.

According to Article 77 of the Industrial Property Law (IPL), the declaration of compulsory licensing by cause of emergency is not automatic, as it requires inter alia compliance with specific conditions:

·        When lack of compulsory license would prevent, hinder or increase expenses related to the supply, distribution or access to the patented product.
·        A declaration of emergency justifying priority attention should be issued by the General Health Council.

·        One the declaration of priority attention is published, third party pharmaceutical companies are allowed to request a compulsory license from the Mexican Patent Office (IMPI).
·        IMPI will call the patent holder and after hearing both parties, IMPI shall grant the licence with a term no longer than 90 days after the filing of the petition.
·        The Ministery of Health will establish the production conditions, quality control, duration and scope of application of the license.

On May 2, the General Health Council published in the Mexican Federal Journal a declaration of priority attention to the outbreak of A(H1N1) human influenza virus.

This publication was the first stage of the process established in Article 77 of the IPL. However, on May 19, a second decree was published specifying that, for the moment, the necessary conditions for granting a compulsory licence were not met.

From this experience emerges the necessity to review the regulation, specifically to ensure that the compulsory licence proceeding is sufficiently rapid and effective to overcome an emergency situation.  It is equally important to avoid the granting of compulsory licences only to fulfil some private interests, especially when the conditions are not met.

The death of business methods

Following a trend in several major patent offices around the world with respect to the protection of business method-related patents, the Mexican Patent Office is shifting more decisively towards summarily rejecting applications seeking to protect such inventions.

This year, the Mexican Patent Office has issued an unusually high number of summary denials directed to applications seeking to protect business method-related inventions. Under Mexico’s patent law and practise, if an applicant is issued a summary denial, the applicant has to fight the rejection in an administrative court of appeal, which can be costly and time-consuming. A summary denial is tantamount, for example, to a final office action rejection issued by the USPTO.

These rejections have arisen despite arguments made during the prosecution process regarding the technical effect of the business method-related invention, such as assertions that the business method is being implemented through technical means representing more than just a simple technical automation of a pure business method.

Considering that a summary denial issued by the Mexican Patent Office may be challenged through a number of costly and time-consuming avenues, the trend is likely to result in a steady decrease in applications directed to business method-related inventions. For this reason, it is generally sound advice not to file business method-related applications.

Regulating grey goods

Although grey goods, also known as parallel imports, are regulated under the Mexican Industrial Property Law (IPL), the IPL treats grey goods bearing trade marks very differently from those involving patents.
In the case of trade marks, the law is very similar to that of the US, defining grey goods as products bearing a Mexican registered trade mark diverted from foreign markets, where their distribution is authorised, to the domestic market, where their distribution is not authorised.
As in the US, in the case of trade marks, grey goods are beyond the reach of any local trade mark actions, provided that they fulfil certain requirements set forth in the Regulations for the IPL.
However, in the case of patents there is no express exemption for products bearing a Mexican patent or design patent registration that have been diverted from foreign markets. Moreover, unlike trade marked grey goods, there is no provision establishing the requirements that must be fulfilled in order for the products to be considered grey goods.
There is only one article in the IPL (article 22) that provides that a patent shall produce no effect against any person that markets, acquires or uses the patented product after such product has been legitimately introduced in commerce.
The fact that Mexico adheres to a Romanist legal system were the cases are decided according to what is strictly and literally provided by the enacted law is very important. While the law mentions how to treat this issue in the case of trade marks, there is no similar guidance with respect to patents.
Therefore, the Mexican Trademark Office and the Mexican courts would likely rule that as if there is no exemption in the case of products falling into the scope of a Mexican patent or design patent that have been diverted from foreign markets.

Innovative data protection

Regulatory authorities in many countries, including Mexico, require the applicant for a marketing authorisation for a new drug to provide data concerning the safety and efficacy of that drug. A company that develops a drug does not have an option, when bringing it to market, other than investing in the generation of all the corresponding data, including clinical trials, with the expenses usually being covered by the developer.
The process of proving that a drug is safe and efficient implies a significant investment of time and money. At the pre-clinical stage, testing is performed on animals in order to determine whether a medication has positive effects on sick animals and whether it lacks secondary effects in healthy animals. Most drugs do not get past this pre-clinical stage.
Based on the pre-clinical results, strict protocols are drafted to perform safety and efficacy testing in humans, which requires authorisation by the regulatory authorities. The studies imply large investments (which in 2007 averaged at $800 million per product) and can take between 10 and 15 months to complete.
As a result of this process, the equivalent of thousands of pages of data on clinical studies is generated, and charts and graphs are necessary to interpret the data. The information package as a whole constitutes a dossier, which is submitted before the health authorities. Even when, occasionally and for promotional purposes, the results of these clinical trials are published, the information package and the bulk of the data generally remain confidential.
In this sense, a very important part of the costs related to obtaining a marketing authorisation for an innovative drug derive from the necessity to undertake clinical studies of safety and efficacy.
The need to make this investment in order to get a drug approved carries a double-sided problem from an economic perspective. On one hand, if the party generating such data cannot recoup the investment made, it would simply not be effective, from a cost-benefit standpoint, to develop or launch a new medication on the market, thus affecting patients who could have been helped by it. On the other hand, forcing each and every applicant for a marketing authorisation for a generic product to repeat every one of the studies made by the innovator would serve no specific technical purpose and would delay entry into the market of competing products, with a corresponding impact on final prices.
In light of this, a balance is needed to ensure the right incentives to bring new drug products onto the market and to encourage fair competition.
On this specific issue, Mexico is part of the TRIPs and NAFTA international agreements, both of which set forth obligations for the signing parties to protect undisclosed data on the safety and efficacy of pharmaceutical products, required by the regulatory authorities in order to obtain marketing authorisations.
Whereas the wording of TRIPs, specifically the obligation to protect data against unfair commercial use, has been subject to different interpretations concerning which actions would constitute unfair use, NAFTA contains different language, specifying the nature of this protection.
Sections 5 and 6 of NAFTA Article 1711 are relevant to this issue. Section 5 sets forth that undisclosed test or other data on the safety and efficacy of a product, which involves considerable effort, will be protected against disclosure, except where such disclosure is necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use.
Section 6 addresses a different concern, setting forth that undisclosed data on safety and efficacy will be protected against reliance from third parties for a period of time no less than five years. Furthermore, upon respecting this non-reliance period, there will be no limitation on any party to implement abbreviated approval procedures for such products on the basis of bioequivalence and bioavailability studies.
The US and Canada have already established legal frameworks to comply with this obligation, understanding that the term reliance refers to both: (i) accessing the information upon studying a third party application (which has been defined as direct reliance); and (ii) drawing conclusions on the safety and efficacy of a second product, which has proven interchangeability without the need to access the innovator’s dossier (defined as indirect reliance), but Mexico seems to be going in the opposite direction.
Until December 2007, the legal framework in Mexico pertaining to this issue was the following.
·        Article 86 of the Mexican IP Law establishes that information required by law to determine the safety and efficacy of pharmochemical or agrochemical products using new chemical compounds will be protected according to the international treaties subscribed to by Mexico. This Article is in the Industrial Secrets chapter of the IP Law.
·        Article 167 of our Health Law Regulations states that all confidential information filed in order to obtain a marketing authorisation must be protected against disclosure (without any mention on reliance).
·        The Information Access Law establishes that information will be considered confidential when a body of law expressly considers that certain information should be protected. Also, this law mentions that industrial secrets will be considered confidential information.
·        There was no specific provision protecting information against reliance and the requirements on safety and efficacy of a product were not differentiated in the Health Law regulations for innovative or generic products. Whereas this differentiation was applied in practice by COFEPRIS (the administrative office in charge of granting marketing authorisations), the applicable provision was the same for all applicants requiring technical and scientific information on safety and efficacy.
Recent provisions
On January 2 2008, a decree was published in the Official Gazette modifying several provisions of the Regulations for Health Consumables of the Health Law to address several aspects relevant to the pharmaceutical market.
These regulations eliminated the distinction between generics and interchangeable generics. Before the regulations were enacted, a marketing authorisation could be obtained for a generic product without the need for bioequivalence or bioavailability studies, in which case the products would be considered as generics, similars or trade mark generics, and those that had proven interchangeability would be included in the interchangeable generics catalogue.
Following the reforms, all generic medicines will need to prove interchangeability with an innovative medication before 2010.
The relevant part affecting DPE rights is that, within the amendments concerning generic medications, the specific requirement to prove safety and efficacy was eliminated and substituted by the need to prove interchangeability.
The Health Law regulations were modified to implement an abbreviated approval procedure for generic drugs, on the basis of bioequivalence and bioavailability studies, without setting forth any provisions concerning a non-reliance period.
Therefore, in addition to possible breaches of DPE rights before January 2008, the Mexican R&D industry is seeing the automatic entry of generic products onto the market, as the COFEPRIS can neither observe the five-year period nor require information from the generic product applicant, other than studies of interchangeability.
Our firm has participated in challenging the constitutionality of the January reforms to the Health Law Regulations, as well as in additional court actions seeking a judicial interpretation of the contradictions that have been summarised here. These actions are still in process, but a stay has been ordered by an administrative court in one of the proceedings forbidding the COFEPRIS from granting an authorisation relying on the innovator’s data until the trial is decided.
The only current initiative of the Mexican Health Authorities is to address the issue through regulations that will apply to the New Molecules Committee, a body that will have jurisdiction in the approval process for new products. The project for these regulations, which was provided to R&D industry participants in Mexico, establishes that only confidentiality concerning data will be observed, and that such confidentiality will be limited to a five-year period, which would constitute an additional breach of the NAFTA obligations. If this project is passed, it is also likely to be subject to a constitutionality challenge.
The current Mexican regulatory framework leans towards the encouragement of generic competition, providing quick access to markets without taking due care to comply with NAFTA obligations, which have as an underlying purpose the establishment of proper incentives to bring new drugs to market.
The second possibility for changing this situation is a proposal to reform the Health Law Regulations in order to correctly implement NAFTA obligations, based on the Canadian example, which has been submitted to our health authorities for consideration and is now under examination.

Patent links hold health authorities to account



Recent developments in Mexico’s legal system address the relationship between health and industrial property-related provisions and now allow owners of certain types of industrial property to challenge marketing authorizations granted to third parties.
On September 19 2003, a Decree was published in the Official Gazette of the federal government, with amendments to the regulations of the Health Law as well as to the regulations of the Law on Industrial Property. The amendments aim to establish coordination rules between the Ministry of Health and the Mexican Institute of Industrial Property, in connection with granting pharmaceutical product registrations for marketing approval when making and/or selling a product might trigger the infringement of a patent.
The reform dictates that applicants of product registrations relating to “substances or active ingredients” are obliged to indicate whether or not they own a patent or have a licence on the product. If applicants do not have a patent or a licence, they will be required to declare under oath that the product (substance or active ingredient) is in “compliance with the patent laws”. In that case, the health authorities will request technical assistance from the Mexican Institute of Industrial Property (IMPI) so that, within 10 working days, IMPI performs a patent clearance. If the search reveals that the product subject to the registration falls within the scope of any patent, the Ministry of Health will give the applicant a chance to show that it has a right to make and sell that product. In the absence of convincing evidence, the application will be dismissed.
A party will be entitled to apply for registration of a product relating to a substance or active ingredient covered by someone else’s patent if the application is filed in the three years before the corresponding patent expires. This provision, supported by the Roche-Bolar exception theory, would allow the applicant to start performing tests and experiments so that it is ready to enter the market as soon as the patent has expired. Obviously, the Ministry of Health will not be able to grant the product registration until the patent’s expiration date.
Similarly, the regulations to the Law on Industrial Property were amended, imposing upon IMPI an obligation to publish a special gazette listing patents relating to allopathic drugs, and their correspondence to a non-proprietary name (INN) for the substance of the active ingredient. The catalogue will consider patents that cover substances or active ingredients, specifically excluding patents covering processes.
Since the Mexican Linkage Regulation was enacted in 2003, IMPI, due to a narrow interpretation of linkage provisions, has been reluctant to include in the Linkage Gazette those patents that cover pharmaceutical compositions and medical use patents, because the regulations are silent on these specific types of patent.
Despite controversial criteria from the Patent Office, the interpretation of the courts in more than 30 litigation procedures regarding the Linkage Regulation has been consistent, as the Patent Office has been ordered to publish patents that cover pharmaceutical compositions, as well as medical use patents.
Practically speaking, the publication of patents in the Linkage Gazette has proven convenient, as the health authorities have used the Gazette to award public bids to the patent owners or their licensees.
More to point, the Mexican Linkage Regulation has been a useful tool and has opened new venues for contesting marketing authorizations granted in violation of patent rights.
Before the creation of the linkage system in Mexico, health authorities did not generally observe patent rights, and rather granted marketing authorizations for pharmaceutical products (compound and formulation), regardless of patent protection.
However, with the creation of the Linkage Regulation, our firm has been able to successfully obtain a landmark court decision annulling a marketing authorization granted in breach of these regulations, in which the court clearly states that health authorities are bound to observe patent rights.
Marketing authorizations granted before the enactment of the Linkage Regulation or in breach of patents that have not been published in the Linkage Gazette:
Even though there is no specific provision forbidding health authorities from granting authorizations in breach of unpublished patents, our firm has assisted IP holders in bringing challenges before administrative courts (these have not yet been decided).
In these cases, the main argument relies on the general obligation by authorities to comply with the provisions of federal laws, and in the understanding that, for an IP system to properly function, the authorities should not authorize applicants to infringe IP rights.
Marketing authorizations granted in breach of data package exclusivity (DPE):
There is no specific body of legislation referring to data protection in Mexico, but several provisions apply to the issue in Mexico’s IP Law, the Health Law Regulations, the Information Access Law and international treaties subscribed by Mexico such as Nafta and TRIPs.
The Mexican IP Law establishes that undisclosed information in applications for marketing authorizations will be considered an industrial secret. It also mentions that information submitted to obtain a marketing authorization for producing or marketing chemical products will be protected according to the international treaties subscribed by Mexico.
Article 167 bis of the Health Law Regulations states that all confidential information filed to obtain a marketing authorization must be protected against disclosure.
The Information Access Law establishes that information will be considered confidential when a body of law expressly considers that certain information should be protected. It also mentions that industrial secrets are considered confidential information.
On the other hand, applicable international treaties such as Nafta and TRIPs state the following regarding data protection:
Nafta: Undisclosed information submitted to obtain marketing authorizations will be protected from being disclosed to, or relied upon by, third parties for at least five years.
TRIPs: Information provided to obtain a marketing authorization must be protected, and cannot be disclosed to third parties.
According to firm jurisprudence, these treaties apply in Mexico above federal and local laws as long as they don’t go against the Constitution.
Regardless of these provisions, the pharmaceutical R&D industry in Mexico is aware of possible breaches to data exclusivity, especially concerning generic companies’ reliance on the innovator’s data, used to prove safety and efficacy of their products.
We have developed a litigation strategy that could be attempted by the affected party in case of a breach of DPE:
a) Actions against the authority in charge of issuing marketing authorizations
The main available venue for enforcement of exclusivity rights against an act of authority is the nullity trial before the Federal Court of Tax and Administrative Affairs. In this trial, the action is brought against COFEPRIS, claiming the breach is a violation of the provisions mentioned above. The object of this trial would be revocation of the marketing authorization.
In this action, the affected party can request the Court to provide a copy of the dossier that is alleged to contain information obtained in breach of data exclusivity, and the Court can take one of the following positions:
·        The Court can decide that the dossier can be accessed by the challenging party, which will have an obligation of confidentiality concerning the corresponding information. This confidentiality will include a prohibition against using this information in an eventual patent infringement action.
·        The Court can determine that the information will not be accessed by the challenging party, but only by the Court and its appointed expert.
If the third party’s dossier indicates that there was a disclosure of information provided in the innovator’s dossier, there would be a clear-cut case for the annulment of the marketing authorization based on existing provisions in Mexican laws.
If there was no disclosure, but only reliance on information that remains confidential, the action would have to be based on a breach of obligations in international treaties, and an eventual constitutionality challenge against the provisions in Mexico’s laws that do not contemplate data exclusivity, specifically those concerning generic applications.
As additional venues, an affected party could bring a specific criminal or civil action against the officer responsible of the disclosure, which should of course be analyzed on a case-by-case basis.
b) Actions against the third party using the information obtained in breach of data exclusivity
Actions against this third party have to be determined on a case-by-case basis, because the use of the information contained in the original marketing authorization in its entirety could provide basis for a copyright infringement action, an action for unfair competition, or a criminal action for the purposeful obtainment or use of confidential information.
The enforcement of data exclusivity has been sought by pharmaceutical companies through these venues but this is a new field in the Mexican legal system and so far no specific precedents indicate any of these venues as correct.
The Mexican legal system has been advancing in its adaptation to modern IP systems, especially through the establishment of linkage regulations establishing coordination between health and patent authorities in Mexico. This has allowed IP rights holders to bring actions, some successful, others yet to be decided upon, enforcing these rights, and questioning the actions of health authorities, which is a clear improvement from the mere possibility of requesting declarations of patent infringement.

The decision obtained by our firm annulling a marketing authorization for breach of the linkage system will surely set a favourable precedent for IP holders in Mexico, for all pharmaceutical patents.

An introduction to the PCT



The Patent Cooperation Treaty (PCT) was conceived with the purpose of responding to a problem that the traditional patent system posed. The right of priority is one of the fundamentals of the Paris Convention, as it grants to patent applicants located in countries that are members of the treaty the chance to file applications in other member states, within 12 months of the filing date, without losing the right to get a patent.

Patent applicants generally claim priority and other rights in the Paris Convention. However, time has revealed the need for the traditional patent system to adapt to new trends and the challenges imposed by globalization. There is simply no doubt that applicants look for more certainty in their expectation of obtaining patents in multiple jurisdictions.

The PCT was designed to improve the rights of the Paris Convention. As its name suggests, the PCT has set a mechanism of international cooperation, coordinated by the World Intellectual Property Organization (WIPO), to rationalize and simplify the filing of patent applications, under the formula of one application and one search and preliminary examination. All the foregoing comes within the framework of an “International Phase” that leads to a “National Phase”. This instance is characterized by the filing of applications before the national or regional offices of the member states.

The National Phase comprises two proceedings that are independent from each other, within a Chapter I and Chapter II and that are different in a technical aspect that is fundamental: Chapter I refers to an International Search (known by its initial ISR), while Chapter II is referenced to a so-called International Preliminary Examination (IPE).

Chapter I starts by the filing of an International Search that would be generally preceded by a priority claimed to the Receiving Office (RO) and by the payment of three fees (international fee, search fee and fee for the transmission to the RO). Patent applicants can choose one Administration of International Search (ISA). The ISA has to perform the search and to report within 16 months of the filing date of the priority application. The applicant can use the ISR to analyze whether to continue with the process, by the filing of applications before the Designated Offices (OODD) and in that event, making whatever modifications that the applicant regards to be appropriate, to overcome the prior art that the ISA has cited in the ISR. Before the amendment of the PCT, the National Phase had to start between the 18th month, corresponding to the International Publication, and the 20th month.

According to Chapter II of the PCT, the applicant appoints an Administrator for the International Preliminary Examination (IPEA), to render an IPE, three months after the ISR and pay the fee for the IPE. Once the proceeding has started, the IPEA generates a written opinion and eventually modifies the application as originally drafted, for adjusting it to the recommendation of the IPEA. The IPER is an official communication of the outcome of a patentability examination, made by the IPEA, that is forwarded to the Designated Offices to begin the National Phase. The National Phase of Chapter II needs to start 30 months after the priority date.

The amendment of Article 22 (I) of PCT
Effective as of April 1 2002, the PCT Assembly increased from 20 to 30 months the term of article 22 (1) for the entrance of an international application to the National Phase in accordance with Chapter I of the PCT. The modification was inspired by the idea to unify the term of entrance to the International Phase, irrespective of which chapter an application has followed. In addition to the convergence of terms, the Assembly promoted the reform, with the purpose of extending the entrance to the National Phase.

Applicants felt satisfied with the amendment, to the extent that the proceedings under Chapter I soon overtook those of Chapter II. The reasons are obvious: the renovated proceeding of Chapter I. The time period to enter into National Phase was extended to 30 months, the same time as in Chapter II, but without an IPE and an examination fee. Accordingly, applicants would have to wait to enter into the National Phase taking advantage of the time to investigate and analyze the state of the art and the commercial expectations of the invention.
The EISPE system

The national and regional offices have noticed that the number of PCT applications that they receive has increased, and as a result so has the need to perform a greater number of patentability examinations without the benefit of an International Preliminary Examination Report. In 2004 the PCT Assembly made changes to the PCT Rules to set a mechanism that it would call International Search and Preliminary Examination Reinforced (EISPE). By virtue of the EISPE, the ISA are required to elaborate an opinion in writing for each ISR, which is called International Preliminary Report on Patentability (IPRP).

The IPRP is an opinion in writing issued by the ISA with comments of the ISR and that can be utilized for both Chapter I and Chapter II proceedings, although in a different fashion. The Preliminary Inform on Patentability of Chapter I gives support to the national and regional offices, and minimizes the workload triggered by the PCT. The Preliminary Inform of Chapter II is the basis to elaborate the IPER and accordingly is used for backing the work of the IPEAS.

The EISPE reduces the differences between Chapter I and Chapter II. However, it does not extinguish these differences as Chapter I continues to be oriented to the search of the ISR, whereas Chapter II relates to the examination by the IPEA. Under Chapter I, there is no dialogue between the applicant and the examiner of the ISA. Modifications can also not be made before the issuance of the Preliminary Inform.

The EISPE triggered some changes in the timing of the proceeding in Chapter II. With the amended rules, applicants can request an IPE within three months after having received the Preliminary Inform and the ISR or 22 months after the priority date, if it happens later.
Some members of the PCT (Switzerland, Luxembourg, Sweden, United Republic of Tanzania and Uganda) notified to WIPO that they would not apply the EISPE system. In these countries the period of 19 months to file an IPE continues to apply. In those cases in which there is no applicant for an IPE within 19 months, the National Phase must commence in 20 months.

Mexico and EISPE
The PCT entered into force in Mexico on January 1 1995, since then the PCT National Phase became the principal source of applications of the Mexican Office, whose official name is the Mexican Institute of Industrial Property (IMPI). According to statistics that IMPI has published, PCT applications have been substantially increasing. In a general context the number of PCT applications that were filed in Mexico in 2005 represented 8.9% of the world total of PCT applications, that is 132,500 filings. Of the total of PCT applications filed in the world in 2005 only 104 pertain to Mexicans, which is proportionally low in regard to the number of applications filed by nationals of other emerging economies.

Mexico subscribed to the amendment of Article 22 of the PCT to receive National Phase applications by Chapter I, since April 1 2002. IMPI was one of the National Offices that resented the increase of applications by Chapter I, mainly because in 1995, the year that PCT came into effect in Mexico, IMPI adapted its structure and internal organization to receive the majority of Chapter II applications. In the year 2004, Mexico welcomed the EISPE system and a little after that, it started receiving the Preliminary Informs elaborated by the ISA. Although it is true that the EISPE system is still young, in the opinion of IMPI the benefit of Preliminary Informs is limited, because they do not reflect the depth and level of detail in the International Preliminary Examination Reports. In any event, IMPI continues to practise the patentability examination locally.