Summary: This article describes the evolution reflected by Chilean legislation, once a position had been taken of absolute respect for Industrial Property rights. Law 19.039, which was passed in 1991, and the signing of the Paris Convention that same year, confirms this commitment. Beginning in the decade of the '80s, the country had already begun to experience significant economic growth, a stimulus to foreign investment and a drive for the national economy. Free Trade Treaties signed with several countries in the last few years continue along these same lines. The treaty signed with the United States is decisive, showing a commitment to forming part of the PCT and raising our standards of internal regulation and protection of industrial property.

The concept of innovation as part of the agenda for growth became part of country policy, independent of the dominant ideologies. The creation of the Copper Royalty and the drive given by the state to projects supported by CORFO showed the need for an offset for domestic and foreign private companies. The amendments to law 19.039 of the year 2005, fruit of the TLC with the United States and the need for alignment with modern economic activity, led us as a country to develop a modern and efficient legislative framework, which prioritizes respect for Industrial Property from a legislative and judicial perspective. We will mention practical examples that illustrate this progress.

The steps taken by the Ministry of Health and the Chilean Institute for Public Health in implementing the regulations requiring Bioequivalence studies, also the signature of the application of Good Manufacturing Practices in the Pharmaceutical Industry, in relation to ensuring quality and effectiveness of medication, are no small examples. On the other hand, the work on disclosure and improvements made by our country's National Industrial Property Institute are examples worthy of imitation. There are yet many steps to take, but there is no doubt that the progress undergone must be considered to be a manifestation of growth.

As players involved in the protection of innovation, we cannot be mere observers of the unstoppable progress of technology. We have a moral obligation to the society in which we live, to facilitate and provide the means to extend to all and improve living conditions and the quality of life. Notwithstanding this, for this process to remain valid and be validated, it must cover in an efficient manner on one hand, the rights of those who invest and conduct research on innovation. In turn, the consumer protection must be respected in its fair equilibrium.

Globalization on Industrial Property issues has favored efficient integration worldwide. Our country, within South America, has been in agreement with the trends that seek economic development, and has signed several Free Trade Agreements and International Agreements. In fact, the policy of the last twenty years has considered in this scenario the drive of innovation and entrepreneurship as a transversal axis for growth. Chile has an economy with recognized stability in a democratic framework free from populism.

In this sense, the importance given to Intellectual Property regulations, already incorporated as part of our legislation, shows a clear commitment to the protection of innovation. These are lengthy processes that are often the subject of deep political, ideological and also cultural debates, but they constitute a road without return as they pervade and form part of an increasingly solid and permanent cultural background.

I. LEGAL REGULATIONS AND PUBLIC DRIVE

This article will set out the progress undergone by our regulations on the issue of Industrial Property in Chile, beginning when the Law on Industrial property 19.039 was passed in 1991. We will make timely and specific reference to the benefits generated for the protection of the pharmaceutical area.

From the entry into effect of the aforementioned regulations and to this date, the number of patent applications submitted each year to the Industrial Property Institute (INAPI) has increased since the implementation of the PCT and as a consequence of its vacancy period. The files corresponding to the Chemical and Pharmaceutical area always represent the highest percentage of applications submitted, with 90% of the total being foreign in origin.

In accordance with this growth, during the last few years a series of government programs have been implemented, focused on promoting innovation nationwide. From among them doubtless stands out the creation of a Mining Royalty, which was introduced in 2005. It is based on using part of the taxes paid by companies associated with the exploitation of copper, to finance innovation projects. This seeks to increase expenditure on research and development (R&D).

On the other hand, the work done by CORFO (Production Development Corporation), currently manages a huge number of initiatives used to promote the development of technology and research. It seeks in some way to transform Chile into a pole of innovation and global entrepreneurship. As an example we recall the project on "Technological Consortiums for Innovation", which finances business innovation activities that allow lines of scientific - technological research to be generated in the medium and long-term with an impact on the market.1

In turn, and answering to the Ministry of Education, CONICYT is the advising entity of the Presidency on matters of scientific development, and is the basis and traditional support of the initiatives to strengthen science and technology in our country. In time, the National Fund for Scientific and Technological Development (Fondecyt) was created, as a perfect complement. It is the main public fund for the support of individual research in Chile. Finally, the Fund to Promote Scientific and Technological Development (Fondef) was created, which seeks to promote the relationship between research institutions and companies, to develop applied research projects and technological transfer, among others.

II. INTERNATIONAL TREATIES

1.- Free Trade Agreement with the USA (2004).

Without a doubt, and as part of the policy to open international markets, the effects of signing the Free Trade Agreement with the USA (2004), generated the largest drive to legislative change undergone by our country in decades in the area of Industrial Property. As an example only, we see the requirement to implement measures focused directly on strengthening the protection of the Intellectual Property rights. Specifically, its article 17.10 2 states that regarding pharmaceutical products covered by patents, each party must:

  1. Grant an extension of the patent period to compensate its titleholder for the unreasonable reduction of the patent period resulting from the commercialization authorization process;
  2. Make available to the patent holder the identity of any third party that requests authorization for effective commercialization during the patent period; and
  3. Deny authorization for commercialization to any third party prior to the expiry of the patent period, unless the patent holder consents or acquiesces".2

In order to comply with these statutes, in the year 2005 the first amendment was made to the Law on Industrial Property (Law 19.996), incorporating Paragraph II "Supplementary Protection", whose Article 53 Bis 1 establishes that within the six months subsequent to a patent being granted, the title holder will have the right to request a supplementary protection period in those cases where an administrative delay has occurred during processing that is longer than five years counted from the date of request or when this delay has been of three years counted from the preliminary examination, whichever is later. Furthermore, Article 53 Bis 2, in relation to the sanitary registration of pharmaceutical products, instructs that in cases where the processing of an application incurs unjustified delays greater than one year, the applicant may request supplementary protection, which in all the cases mentioned herein must be granted for a period accredited as an administrative delay. In both situations, no time limit is imposed for the extension requested, which has been acknowledged as a significant advantage that safeguards the right of invention patents.3

The reform implemented in 2005 furthermore establishes that the protection period of a patent will expire 20 years after the date of the application instead of 15 years counted from the date it is granted, as it had been until then.

Another amendment incorporated corresponds to that described in Article 89 of the same legal body, which alludes to business secrets, establishing that non-divulged information that is submitted as part of a sanitary registration application for a new chemical entity to the ISP will be confidential in nature, so the pertinent authorities may not disclose or use this information for a period of five years when dealing with pharmaceutical products. In accordance with these regulations, Supreme Decree 153 of the Ministry of Health determines the mechanisms that the ISP must apply to comply with the obligation imposed by law 19.039, amended by law 19.996. In order to make this right effective, the registration holder must include in the presentation to the Public Health Institute, as part of the sanitary registration application for the new chemical entity, a statement that specifically indicates the data that must be considered to be confidential, after having ensured that they are not of general knowledge or easy access. Furthermore, Article 52 of Law 19039 states that wrongful use of a patented invention will lead to the payment of fines to the government, and also payment of the court costs, damages and detriments caused to the patent holder.4

However, despite the aforementioned progress in matters of protection of intellectual property, the current year's version of the well-known Special Report 301 issued by the USA keeps Chile within the Priority Watch list that includes countries that do not provide appropriate protection to intellectual property, according to the standards of the US Authorities. In relation to the pharmaceutical area, the arguments contained in that document state that Chile must implement am effective system that links patents and sanitary authorizations (linkage), in this way avoiding the commercialization of products that violate IP rights.

This situation is due to the fact that all pharmaceutical products commercialized in the country need a valid sanitary registration, which is granted by the Sub-Department of Sanitary Registration and Authorization of the National Medication Agency (ANAMED) of the Chilean Public Health Institute, as established in Supreme Decree no. 3 of 2010, Regulations of the National System for the Control of Pharmaceutical Products. This is carried out independently of the patent application process, which is done under the mandate of the National Intellectual Property Institute. Therefore, it may be inferred, from this analysis, that the current situation requires a link to be established between both institutions that grants this process greater transparency, named "Linkage".

However, this link could be considered to have been achieved by assuming that the Law on Industrial property establishes legal measures that favor the suspension of the processing of a sanitary registration, avoiding the violation of the patented rights, in virtue of which the title holder of the invention is responsible for vigilance and for demonstrating the violations detected before the judicial system, being able to file an injunction to suspend this process.

Even so, and with the objective of establishing the mentioned link, the Linkage Project was sent to the Congress in January 2012, which was the result of the joint work of a governmental commission comprised of the Treasury, Economy, Health and Justice Ministers. This project establishes a patent information managed by the ISP, consisting of a public book in which the patent numbers will be registered, associated with the active ingredients for which new registrations are applied for, establishing an injunction that suspends the sanitary registration of medication that violates the rights of the titleholder. Also, to avoid the bad use of this instrument, the project establishes sanctions for those that commit violations as well as those that lie.

Despite the fact that this project received countless criticism, fundamentally based on the fact that, as was set out previously, Chilean legislation already has regulations that allow patent rights to be exercised, and in a contradictory manner, it was indicated that its implementation would have a negative impact on the value of the medication.

However, the importance of legal certainty in intellectual property issues with respect to the internal development of the country, as well regarding future international relationships, has been fully divulged. Despite the importance of this issue, we can still not consider ourselves to be in the home straights for the approval of these amendments to the Law on Industrial Property.5

2.- Patent Cooperation Treaty (PCT)

On March 2, 2009, and after filing its membership document with the WIPO, Chile became a new member State of the Patent Cooperation Treaty (PCT), which entered into effect on June 2, 2009.

The signature of the PCT Treaty was also the consequence of the TLC with the USA, which already set out as part of its negotiation on subjects of Industrial Property, that the standards of protection would be raised according to requirements considered to be insurmountable by this country, which could be said to be similar to those in effect in its own nation.

In this scenario, it was required to sign a series of International Treaties within a specific period, which included the Patent Cooperation treaty (PCT), the International Convention for the Protection of New Varieties of Plants, 1991 text; the Trademark Law Treaty; and the Agreement on the Distribution of Program-Carrying Signals Transmitted by Satellite.

It must be noted indicated that the expected effects and benefits as was widely disclosed, almost exclusively due to signing this treaty, have not been such in our country. In fact, after the waiting period for the decrease in submission of new patent applications, their number is currently again reaching the same level as prior to the year 2009. In fact, we see that it involves practically the same companies applying for patents but now using a new legal tool. The assumed increase in the number of applications submitted in Chile has not undergone a substantial variation.

III. ACHIEVEMENTS IN THE CHILEAN SANITARY REALITY: BIOEQUIVALENCE

The Pharmaceutical area represents an area in which we have continued to see significant progress regarding the protection of Industrial Property. We see that on one hand Chile has implemented significant sanitary policies with a marked social emphasis. We highlight the Explicit Health Guarantees (GES) plan, one of the fundamental pillars of which has been the promotion of access to medication. On the other hand, we see that although the domestic industry, as expected, is based on the development of generic products, ASILFA or the Chilean Industrial Association of Pharmaceutical Laboratories, has shown certain resistance and little acceptance regarding measures that limit the entry into the market of multisource products.

From another perspective, our modernizing drive has achieved great progress on the subject of regulations. One of the most important is the entry into effect of Technical Standard 131, which defines the Criteria Used to Establish Therapeutic Equivalence in Pharmaceutical Products in Chile (Exempt Resolution no. 727 of 2005).

The resolutions in a series of decrees has gradually increased the number of active ingredients for which Bioequivalence studies must be submitted as part of the Sanitary Registration application, and have also established deadlines for those products currently on the market.

There is no doubt that the legal framework described has promoted a clear decrease in the uncertainty associated with the possible lack of effectiveness of medication whose sanitary registration had been granted without the due empirical support shown by its possible interchangeability with innovating formulae. In this scenario and faced with the new requirements, the investment associated with the mentioned tests, as well as the modifications to the manufacturing processes required in order to comply with these standards, limit the offer of generic medication. Furthermore, non-compliance with the regulations derives in sanctions of fines and the cancellation of the sanitary registration.6

In parallel, the validation of the production processes at the pharmaceutical industry level and compliance with Good Manufacturing Practices represent fundamental aspects to ensure effectiveness of the medication, since in the absence of such evidence, we cannot guarantee that the characteristics of the products are maintained between the different lots. So, one of the tasks carried out by the Chilean Public Health Institute (ISP), through the Sub-department of Biopharmacy and Bioequivalence of the National Medication Agency (ANAMED) has been the supervision of 100% of the production processes, verifying compliance with the aforementioned standards on the basis of the inspection guides that contain the recommendations made by the World Health Organization.

The Chilean government, through the work of the ISP, has promoted training courses directed towards professionals linked to the area, in order to have a solid theoretical platform that favors understanding and acceptance of the measures implemented. It also promotes the technical support and certification of national research centers for the realization of interchangeability studies in vivo as well as in vitro, which has resulted in a gradual increase of these units, which currently cover the industry requirements, along with other international institutions that have been recognized and authorized by the ISP.

IV. IMPROVEMENTS OBSERVED IN THE ADMINISTRATIVE WORLD (INAPI)

The National Industrial Property Institute constantly holds outreach activities along with international experts, centering its attention on the Universities. Not only has it become the administering entity par excellence for the processing of all patent applications, but it has also made an effort to fulfill a role in the disclosure and teaching. The promotion of patenting within institutions that have historically worked mainly in the development of basic science has been a huge institutional challenge.

With the objective of being transparent and facilitating the processing of patent applications, in 2013 INAPI prepared and delivered for public use the document "Guidelines for examination and patent registration procedure". Its contents point to facilitating the processing of the patents, making information available to the public, such as the regulations applied by experts in relation to the Divisional Patent Applications. This document also goes into depth regarding explanations and interpretation of the "patentability exclusions". It has made a valuable contribution, clarifying the regulations involved in the acceptance of the processing of uses, new uses, Markush structures, compositions, among others. This marks a clear position of flexibility and a decided support of patent protection.7

Unfortunately, the regional trend is different, with restrictive local regulations and/or long waiting periods to obtain a first expert analysis. It is sufficient to consider for example the at times incomprehensible regulations contained in the Andean Patent Treaty with respect to the guidelines it contains for the patentability examination.

Despite the many aspects that must still be improved, we see that the processing periods in Chile have become shorter. Since the entry into effect of the PCT treaty in the year 2009, the processing of a patent application, for example in the pharmaceutical area, now takes 4 to 5 years, versus the 8 to 9 years that a case could take previously. The modernization of the digital platform, the update of the regulations and the increase in experts explain in a great measure the achievements described herein.

Finally, and maybe what should most make us think is how the result of the disclosure of the intellectual property, added to the alliances generated between the University study houses along with the private companies, local private companies themselves and the increase of projects with state R&D&I financing, as we have outlined, has meant a significant percentage increase in the number of domestic origin patent applications in the last few years. Without a doubt, a source of great pride for our country.

Footnotes

1. Maria Jose Abud & Carsten Fink & Bronwyn Hall & Christian Helmers, 2013. "The use of intellectual property in Chile," No. 11, World Intellectual Property Organization (WIPO). Economics and Statistics Division.

2. Free Trade Agreement between Chile and the United States. Article 17.10 (2)

3. Industrial Property Law N° 19.039, Article 53, Bis 1, Bis 2.

4. Industrial Property Law N° 19.039, Articles 89 and 52

5. Draft law: "Linkage" (amendment to Law 19.039 on Industrial Property). Ministry of Economy, Development and Tourism. Available at: http://www.economia.gob.cl/proyecto-de-ley-linkage-modificacion-ley19-039-propiedad-industrial/

6. Technical Standard no. 131 "Standard that defines the criteria to be used to establish therapeutic equivalency in pharmaceutical products in Chile"

7. Guidelines for examination and procedure for the registration of patents. National Industrial Property Institute (INAPI) 2013.

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