June 19, 2020
After 70 days of following strict measures to prevent high rates of infection, on June 1, 2020, some of the measures that were announced when phase 2 started were modified in accordance with the reopening plan issued by the Federal Government on May 29, 2020 based on an alert system in cities and regions in the country. The reopening plan has been criticized, as the reported numbers of COVID-19 cases and deaths in Mexico are still increasing.
This is not the first time that Mexico has been through a health crisis as a result of a virus. In 2009, Mexico was battling the AH1N1 disease. In April 2009, the WHO declared that a pandemic was imminent. At that time, there were two patented treatments for the AH1N1 disease, OSELTAMIVIR and ZANAMIVIR. Nonetheless, the requirements for compulsory licenses were not met, as there was nothing that indicated that pharmaceutical companies were unable to supply drugs, that they had set prices too high or that they were blocking distribution. Although the General Health Council (GHC) did declare a state of emergency, it did not publish a final declaration for compulsory licenses in the Official Gazette.
In short, Article 77 of the Industrial Property Law establishes that for emergency or national security reasons, including serious diseases declared by the GHC, IMPI will determine that certain patents can be exploited through a compulsory license for reasons of “public benefit”, when the lack of a license would hinder or overvalue the production, supply or distribution of basic goods to the population. In cases of serious diseases, in order for IMPI to make such a determination, the GHC must publish a declaration of national emergency in the Official Gazette, then pharmaceutical companies may apply to obtain licenses, after a hearing of the parties and in accordance with the opinion of the GHC. Such decision should be issued within a period of 90 days from the date of submission of the application before IMPI.
Within the next two weeks and due to the imminent entry in force of the new USMCA, the Mexican Senate will discuss and eventually approve the new IP Law in Mexico. Notwithstanding the above two relevant and historical precedents, there is not a single proposal for change in the wording of the provisions establishing the process of compulsory licenses in relation to cause of emergency. In addition, the related provisions are ambiguous and include absurd statutory terms for decisions, which is still included within the corresponding provision in the proposals for the new law. Because compulsory licenses should be applied in causes of emergency and only when the extreme conditions are met, as a law firm devoted to IP protection OLIVARES hopes the prerequisites for compulsory licenses are not met. We are, however, eager to have a better law in place for this topic.