Ecuador: patents, compulsory licences and the Covid-19

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Avelina Ponce
Bustamante & Bustamante
aponce@bustamante.com.ec

The Covid-19 sanitary emergency has challenged patent systems around the world, especially in developing countries. Ecuador is no exception. The new pandemic has highlighted the importance of an efficient and agile patent system that allows new medicines, vaccines and technology to be immediately available to the public and, at the same time, secures the rights of inventors through enforcement processes. Flexible Intellectual Property (IP) legislation and efficient IP Offices are capable of meeting the emergency necessities. Developing countries such as Ecuador, which has rigid IP legislation and highly bureaucratic procedures, face a major challenge when trying to provide society with the latest innovations at reasonable costs and within limited time frames, participating in technology transfer transactions and attracting foreign investment to the pharmaceutical industry, in order to fight the pandemic.

The Ecuadorian population has been one of the most affected in Latin America and the world, with more than 30,000 identified cases and the fourth highest mortality rate of the region.^[1] The response capacity of the health authorities does not match the scale of the disease. Strategic decisions have focused on economic, tax, labour and health regulations. None of these have mentioned IP and innovation processes, which is one of the most important areas that could be used as a tool for the response strategy to the Covid-19 virus. A review of these decisions results in the discovery of only one, non-mandatory policy for the Government, which refers to compulsory licences and experimental data.

On 20 March 2020, as soon as the emergency began, the Education, Science and Technology Commission of the National Assembly issued a Resolution requesting the Government and the Ministry of Health to grant compulsory licences and access to experimental data for medicines useful for treating the Covid-19 virus. The Resolution, in its first two articles, demanded that the emergency state declaration include the following actions:

• the President of the Government and the Ministry of Public Health must include administrative and technical mechanisms to grant compulsory licences; access to experimental data; and access to technologies for the affordable supply of vaccines, drugs, diagnostics and devices that treat and prevent Covid-19; and

• the Ministry of Public Health must grant compulsory licences for the non-commercial use of patents and access to experimental data, in order to promote a large-scale production and importation of medicines and medical devices.

The pandemic crisis and the above-mentioned Resolution, have highlighted two major obstacles in Ecuador’s patent system: the authorities have little or no knowledge about Industrial Property systems and their benefits for society; and the patent system in force is obsolete and has not been designed to overcome necessities derived from emergencies, such as in the present time.

The Organic Code of Social Knowledge Economy, Creativity and Innovation ('IP Law') and the Andean Decision 486 have already established a procedure for granting compulsory licences, which has not been taken into consideration in the Resolution. In fact, the Ministry of Public Health has no authority to grant licenses and access to experimental data, since this is a private power of the Intellectual Rights National Service. The intention of the legislators may have been worthwhile. However, their lack of knowledge about the Ecuadorian IP system makes it inapplicable.

One of the criteria established in the IP Law, for the grant of compulsory licences, is the existence of an emergency. The rules for the implementation of compulsory licences have been correctly designed to benefit the public in case of emergency necessity and, at the same time, respect the rights of the owner by setting a reasonable price and maintaining the licence for specific purposes and only for the duration of the state of emergency. However, this is where our legislation faces a major obstacle: the bureaucratic patent application procedure, and the rigid criteria of the examiners when analysing pharmaceutical patents, means that most pharmaceutical patents are rejected for novelty and the application procedure takes at least seven to eight years. According to the IP Law, compulsory licences due to a state of emergency can only be granted for already patented inventions. Consequently, in order to grant a licence for a medicine or a device for the treatment of the Covid-19 virus, this invention must have already completed the application procedure and the patent must have already been granted. This fact makes the compulsory licensing of new inventions related to the Covid-19 virus unfeasible for the near future. 

Unlike other Latin American countries (such as Brazil, Colombia and Peru), Ecuador has not adopted Fast-Track applications, nor has it applied the Patent Prosecution Highway as a member of PROSUR (a regional cooperation group, composed of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Paraguay, Peru and Uruguay). All applications, no matter the urgency or technology filed, must go through the only available process. For many years, this situation has been questioned by inventors, applicants, industry and patent agents. However, it has not been until the outbreak of this pandemic that we have been so aware of the necessity to reform the patent law, not only to eliminate the obstacles that hinder Ecuador's participation in the technological development and growth of the industry,  but to improve the health system’s response to emergencies.

The Covid-19 emergency (notwithstanding the difficulty the Government is facing) presents the perfect opportunity to reform Ecuador's patent system and, most importantly, to change our views on patents, especially with regard to pharmaceutical products. It is essential that we incorporate Fast Track applications as soon as poosible, not only to face the pandemic, but also to encourage the filing of local and foreign patent applications for strategic technologies, such as green technologies. We must also urgently transform our patent culture from a restrictive system to an agile and open one, viewing patents as an important tool for local innovation, industry, market and health development, rather than a threat. If the Government and professionals do not take this opportunity, Ecuador will isolate itself even more from the world's technological development, in view of this new reality, and dealing with (and overcoming) the pandemic will be even more challenging.