The convergence of Intellectual Property Rights (IPRs) and Regulatory Affairs1
While it goes without discussion that selling products and rendering services is the most important reason for all companies and individual merchants to exist, serving that goal has become a top priority in order to survive in the current international economy plagued with social and economic restrictions that result in a great level of commercial weakness and uncertainty.
However, a very important difference emerges when dealing with regulated products and services given that, before starting to sell or render them, it is necessary to comply with mandatory sanitary regulations and, less likely but still important, with non-binding industry standards agreed upon by major actors, at least in some industries.2
This need to comply with sanitary regulations in order to enter in new market such as those in Latin America (where the standards of living keeps improving, offering attractive business opportunities for those commercializing new products) poses many challenges, some of which we want to mention in this brief.
1. Products and activities regulated for sanitary purposes
There is a great deal of products and services that due to their sanitary risks are regulated by most governments3, which may incorporate norms agreed upon by international technical agencies and bodies such as the World Health Organization (WTO), the Food and Agriculture Organization of the United Nations (FAO), among others.
The scope of each sanitary regulation varies among different products (for instance pharmaceutical products are heavily regulated), activities (such as conducting clinical trials with human beings) and geographical areas (most-developed countries and regions such as the U.S., Europe and Japan. have enacted stricter sanitary regulations than developing and less-developing countries)
Getting the mandatory approval prior to starting to sell them, or making sure internally that the corresponding sanitary requirements are met when no prior filing is required, in turn demand complying with complex and very technical set of rules codified as laws and administrative regulations as well as certain non-binding norms known as soft law.
It goes without saying that the lack of compliance with these sorts of regulations increases the legal risks for those actors involved in the whole chain of commercialization, which for most kinds of products continues to expand its global structure, as most of these products are not designed, manufactured and sold in the same country but conversely each of these activities are performed in more and more countries due to multiple factors.
These legal risks are not limited to losing the governmental approval for selling a product or for performing related technical activities, which would cause commercial damages, but also include eventual liabilities if the health of consumers and third parties is affected like it may happen, for instance, when consuming a pharmaceutical product having a defect in its design.4
The complexities faced by those individuals involved in the technical, business and legal aspects of each regulated product may be considered more than high enough to keep them away from volunteering to take the responsibility of analyzing the interconnections between those sanitary regulations and the use of IPRs.
Yet, the importance of this last task has been growing since some years ago when certain concepts like “test data protection”, “marketing approval of similar or equivalent products”, “linkage between the patent and regulatory procedures”, “patent term extension due to delay in the regulatory procedure”, among others, were introduced in the pharmaceutical and agrochemical industries of developed countries.
Therefore, herein we want to highlight the importance of considering the need to analyze and, if possible, to establish, common strategies in both fronts (IPRs and regulatory affairs) when defining the legal strategy for selling products or rendering services regulated by sanitary norms.
2. Bearing in mind the respective defensive analysis for avoiding eventual infringement of IPRs and for fully complying with sanitary regulations.
It is worth starting off by pointing out a major conceptual difference between these two legal regimes. While IPRs grant private rights to exclude others from certain activities (thus known as “exclusionary” rights); the compliance with sanitary regulations results in the grant of positive rights to perform certain activities such as conducting clinical trials with humans, manufacturing, selling, importing, exporting and distributing a product within certain geographical market.
From a defensive point of view, it is becoming a standard practice in most industries to detect eventual infringement of IPRs through the use of comprehensive Freedom to Operate (or FTO), which we have addressed in prior articles but here we would like to recall the importance of including in their scope a review of sanitary regulations for measuring and minimizing business and legal risks.
An example of a situation where such a FTO not limited to detecting the potential infringement of patent rights but expanded to cover the interplay with sanitary regulations could be of value arises in those Latin American jurisdictions that grant exclusive marketing rights over the test data used for obtaining marketing approval of a pharmaceutical or agrochemical product, which may either overlap of go beyond its patent protection.
Protection of test data through the grant of “exclusive right” lasting a certain period of time were first set forth in the U.S. and Europe but have been also established in our region after the entrance in force of the Free Trade Agreements (FTAs) signed between the former and certain Latin American countries such as Chile, Colombia, Peru and those in the Central American Region.
3. Bearing in mind the analysis about the interplay between IPRs and sanitary regulations from an offensive point of view.
Owners of IPRs over regulated products are finding more and more important this kind of analysis in order to strengthen the legal protection over their products.
For instance, these sorts of analysis are currently very important in certain countries where there are linkage systems between IPRs and sanitary procedures, as it happens in an increasing number of countries requiring the declaration of existing patents over a regulated product when a marketing approval is filed with the corresponding sanitary agency.
Another important type of procedure relevant in this analysis about the interconnection of both regimes is the one providing patent term extensions due to certain delays in granting the sanitary marketing approval.
Going beyond patents it is worth mentioning the importance of adding sanitary factors to trademark searches and watching services, given the existing differences between the standards applied by the sanitary agency and the patent and trademark office (PTO) for allowing to register and use a sign, particularly regarding their advertisement, which may results in overlapping and conflicting outcomes.
It is our opinion that the strategic relevance of the interplay between IPRs and sanitary regulations is going to keep growing, which will require the development of new sorts of expertise and interdisciplinary work.
For this reason we created our Regional Department of Regulatory Affairs where lawyers and other professionals work together to meet the needs and expectations of our clients.
If you would like to know more about our services in these areas please do not hesitate to contact us at firstname.lastname@example.org
1 Author: Mariano Municoy, IP Lawyer.
2 Concretely speaking, doing R&D, manufacturing, distributing and commercializing products like pharmaceuticals, medical devices, cosmetics, foodstuff, beverages and alcohol, plant seeds, phytosanitary (also known as agrochemical products) dietary supplements as well as other products incorporating biotechnology (and nowadays nanotechnology) technologies may require marketing government approval before or after starting to sell them.
3 Regarding certain products like food and pesticides there may be different overlapping regulations set forth by different levels of the governments (municipal, provincial and federal) in each country
4 While some legislations like that of the U.S. may recognize limited exceptions to product liability based on defects in its design, most legislations in Latin America do not provide such limitation to the scope of the responsibility in the same situation.