The Bolar exemption: the Latin American case
By Marta Garcia
What is the Bolar exemption?
Some products, typically pharmaceutical products but also agrochemicals and medical devices, cannot be marketed without obtaining marketing approval from a competent regulatory authority, in order to prove that the product is safe and effective.
Even though the requirements for obtaining such regulatory approval differ from country to country, in general the authorization for new chemical or biological entities (innovative products) is much more complex than the authorization for a generic or biosimilar products (generic products). Whereas for innovative products, clinical tests and trials must be conducted in order to prove their safety and effectiveness, generic companies can rely on some of the tests and data submitted for the original medicinal product.
However, since it has to be proven that the generic version of the medicinal product is bioequivalent to the previously approved medicine in order to obtain a marketing authorization, a generic company will usually require the obtaining and testing of samples. Therefore, if the original medicinal product is patent protected, such production and use of the product by generic manufacturers for testing may be considered an infringement of the patent, even if they are not planning to enter the market until after patent expiration.
As regulatory approval can take several years, in order to overcome this problem and expedite the market entry of generic products after patent expiration, many countries have introduced legal exemptions from patent infringement for tests and trials involving patented products necessary to get marketing authorization.
These exemptions are often called “Bolar exemptions”, in reference to a US law enacted to overturn a prior US Federal Circuit’s ruling – Roche Products, Inc. v. Bolar Pharmaceutical Co., Inc., 733 F.2d 858 (1984) – against generic drug manufacturer Bolar, which was using Roche’s patented active pharmaceutical ingredient in order to conduct clinical trials necessary to obtain regulatory approval.
Many countries have introduced similar exemptions, but their nature and scope vary significantly from one nation to another. According to a draft reference document dated November 2017 by the World Intellectual Property Organization (WIPO)´s Standing Committee on the Law of Patents, the applicable laws of more than 65 countries provide for the exception related to acts for obtaining regulatory approval from authorities.
The Latin American case
Regarding Latin America, the following countries have put in place Bolar exemptions: Brazil (Law on Industrial Property 9.279, as amended by Law 10196, Article 43), Chile (Chilean Patent Law, Article 49), Colombia (Andean Decisions 486 and 689, and Decree 0729), Costa Rica (Patent Law 6867, Article 16.2), Dominican Republic (Law on Industrial Property 20-00, Article 30), El Salvador (Legislative Decree 604 on Amendments to the Law on Intellectual Property, Article 116), Mexico (Regulations on Health Related Consumable Goods, Article 167bis), Paraguay (Patent Law 1630, as amended by Law 2593, Article 34), Peru (Andean Decisions 486 and 689, and Decree 1075, Article 39), and Uruguay (Industrial Property Law No. 17.164, Article 39).
Argentina may provide a Bolar-type exemption under Law 24766, which relates to data confidentiality, but this remains to be tested in the courts. Article 8 of this Law states that “In the case of a product or procedure protected by a patent, any third party may use the invention before the expiration of the patent, for experimental purposes and to gather the information required for the approval of a product or procedure by the competent authority for its marketing after the expiration of the patent.”
Regarding the member states of the Andean Community (Bolivia, Colombia, Ecuador and Peru), they have the option of establishing a Bolar exemption in their national legislation (through Decision No. 689 on the adequacy of certain articles of decision 486 establishing the common regime on industrial property, allowing the development and deepening of the industrial property rights across the internal regulation of the members states). However, until now only Colombia and Peru have enacted clear exemptions.
In most of these countries, there is an explicit provision on regulatory review exception in the respective IP or patent legislation. However, in Argentina and Mexico, these provisions are contained in other legislations, e.g., relating to health and/or pharmacy.
In Argentina, Brazil, Colombia, the Dominican Republic, Paraguay and Uruguay, the exception applies to any product that requires regulatory approval. However, in Chile, Costa Rica and Mexico the exception is limited to pharmaceutical products, and in El Salvador and Peru to pharmaceutical and agricultural chemicals.
Regarding the permitted acts in relation to a patented invention covered by the exemption, these also vary from country to country. For example, in Argentina, Costa Rica, the Dominican Republic, El Salvador and Paraguay, the “use” of the patented invention or “acts” necessary to obtain the marketing approval are permitted under the exceptions. However, the respective laws do not specify which uses or acts are included in the exception.
In some other countries, permissible acts within the exemption include “selling,” “offering for sale” (Colombian and Peru), “import” and “export” (Chile, Colombia and Peru).
According to the draft document by WIPO´s Standing Committee on the Law of Patents, the main challenges that countries face when implementing the Bolar exception relate mainly to the uncertainty about the scope of the exception in the national laws and the lack of awareness about the exemption among potential users who might benefit from it.