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Industrial property

Lever stuck

In the midst of an unprecedented crisis, INPI awaits help from the federal government

The National Institute of Industrial Property (INPI), which ought to be a strategic lever for policies on development and innovation, is experiencing one of its biggest administrative and financial crises. It is operating with less than half its workforce, and 57% of these are to retire by 2007. Since last year, it has been trying to get the authorization of the federal government to carry out a public entrance exam and to hire 108 civil servants, most of them for the position ion of patent examiner. The main task of these new employees will be to unclog a backlog of 45,000 patent register processes and 300,000 trademark registration requests, which have been waiting to be examined for years. The 30% cut in this years budget was a lethal blow for a series of projects like the one that would give access to the European Patent Office, for example and for the dissemination programs of the institute. And the post of president of the INPI has been vacant since March.

The federal government is promising to invest and to redefine the institutes functions. The project for recovering the INPI, in fact, is part of the national program for industrial and technological development, which has the objective of increasing productive efficiency, Brazilian companies capacity for innovation, and exports. The model for the new INPI is now ready. Roberto Jaguaribe, the secretary for Industrial Technology at the Ministry of Development, Industry and Commerce (MIDC), explains that the idea is to transform it into an instrument for technological and industrial qualification. “The institute should no longer work like a notarys office or autarchic body.

It is going to act in a network with the development agencies and research institutes, like FAPESP and the Technological Research Institute (IPT), for example. It should also be integrated with industry and dialog with the universities, so that the theme of industrial property comes to be part of the higher education courses”, he reveals. It only remains to conclude the new administrative design and the forecasts of the funds needed to start the process for the recuperation of the institute. Jaguaribe guarantees that “there is receptivity at the Ministry of the Treasury” for the release of R$ 10 million, before the end of this year. A 30% readjustment in the table of prices of registering trademarks or patents has also now been authorized, which, according to him, will make it possible to generate additional revenues and to expand the workforce. “The shortfall in the prices is actually 90%. We will be recovering only part of this”, he explains.

Financial crisis
The time scale for the recovery of the institute which was once in the vanguard of patent offices in Latin America, at the beginning of the 90s is four years, at the least. In 2003, the R$ 36.8 million budget for investments and running costs underwent a cut of 30%. Adding this to the R$ 6.6 million of unpaid leftovers referring to 2002, the real loss of income comes to 40%. The lack of funds has jeopardized all the activities, from the registration of trademarks and patents to action to disseminate the culture of industrial property. The INPI’s nine units all over the country, for example, have been almost two months without access to the integrated information system (Sinpi).

Access to the system was cut off by Embratel on account of a debt of R$ 800,000 that grows on the basis of from R$ 250,000 to R$ 280,000 every month. Some projects have had to be aborted, like phase 2 of the program for accessing the patents database of the European Patent Office, which was to provide for the installation of 150 terminals at the INPI for public queries, with direct access to the European database, which has over 90 million patents available in an electronic medium. The project was budgeted at R$ 6 million. Also suspended, for lack of funds, were all the events for the dissemination of the culture of intellectual property, with qualification programs and courses, for example. And there is no budget for the publication of the magazine Panorama da Tecnologia – Panorama of Technology , nor for any other material of institutional publicity.

The institute has 560 civil servants at the end of the 1980s it had 1,085. Of the total, 34 should retire this year and the other 289 by 2007. These members of staff are not even able to bring up to date the requests for registration received at the institution. Last year, for example, 24,000 patent requests were deposited and there were 94,900 trademark requests. There are also some technological problems that have to be resolved. Every Tuesday, the institute sends out to patent offices all over the world the patents granted in Brazil, using an obsolete medium: paper.

It receives the documents of patents registered in other countries recorded on CD-ROMs or, in the case of the American patent office (USPTO), on a DVD. The documents for patents granted in Brazil between 1982 and 1998 have now been digitized, but users interested in consulting the records have to look for information in processes, that is to say, on paper. The institute has now acquired ten computers, which are going to work as terminals for queries. They are to come into operation within two months, making it possible to access the computerized information, not only of the INPI’s database but also the patent documents of the offices abroad.

The price of delay
The institute’s problems are not therefore going to be resolved at the stroke of a pen. By the calculations of Luiz Otávio Beaklini, the INPI’s acting president, any change started this year will only bring effective results in 2007. To overcome all this delay, he explains that it will be necessary to take on 600 members of staff, among which 400 trademark and patent examiners. “It so happens that we have no way of training all this personnel at the same time, nor do we have the physical space to house them. That is why the recruitment will have to be done in stages”, he explains. This year he foresees that 108 civil servants will be taken on by means of a public entrance examination that has been requested since last year, but the announcement for which has still not been authorized.

The new recruitment, though, “will only produce an effect”, as he puts it, at the end of the year, since the training period for a patent examiner is six months. From 2004 onwards, between 100and 150 new members of staff will be incorporated every year, until the workforce of 600 new civil servants is completed in 2007. The expectation is that, by then, the INPI will have zeroed its debit with regard to the registration of trademarks and patents. “At that point, we will be close to a situation in which it will be possible to grant the registration of a trademark in one year, and of patents, in less than four years”, he explains.

If these forecasts are confirmed, Beaklini believes that, from 2007 onwards, the institute will be prepared to work like a lever for innovation. Today, this lever is stuck. But the project for the new INPI predicts that, eight months after the registration request and still within the 18 month period of secrecy that protects the registration request it will be able to take decisions with regard to the anteriority of the patent requested, that is to say, to disclose to the interested parties that the patent is original and should be registered. More than this: it may recommend that the patent be filed in certain countries. “This is the real task of the INPI: to facilitate and to offer instruments for companies to decide whether they are going to exploit and invest in, or not, that idea”, says Beaklini.

At the moment, registering a trademark in Brazil takes three years, on average, and granting a patent may take as long as eight years, in the case of more complex technology. This is the case of the patent requests registered by the Nucleus for the Patenting and Licensing of Technology (Nuplitec), created by FAPESP in 2000 to license inventions resulting from research that it had sponsored. In the assessment of Ricardo Bérgamo, Nuplitec’s advisor on patents, this delay can hamper the licensing of the project.

“It is impossible to specify the correct amount of the business done on the basis of patent requests without their being examined, which has to be carried out on the basis of trust”, he notes. The delay also runs the risk of jeopardizing the carrying out of research. “Not knowing whether their work will be accepted for a patent, researchers feel themselves discouraged from going ahead with the research. This is not to mention the misgivings of the interested companies. They may suppose that the delay in granting the patent means that the invention is not a good one, which isn’t true”, notes Ciro de la Cerda, the coordinator of the Technology Dissemination Office (Edistec), of the State University of Campinas (Unicamp).

Expectation of rights
The delay in the assessment of patent requests, though, does not go so far as to prevent the licensing of technology, since the contracts are signed on the basis of expectation of rights, which will be confirmed the moment the INPI formalizes the granting of the patent. “The licensing of technology is done by means of a trustworthiness agreement. It is a risk for the partner”, says Sueli Conceição da Silva, the Protection coordinator of the Brazilian Agricultural Research Corporation (Embrapa), an institution that has deposited 186 patent requests, 56 of which abroad as well. “We only have five patent letters granted”, Sueli concedes. Nor is the delay jeopardizing business at the Technological Research Institute (IPT), according to Angela Azanha Puhlmann, the coordinator of the Intellectual Property Nucleus. To get round the problem, vanguard companies and research institutes move ahead of the INPI’s examiners and carry out the tracking of the originality of the invention, so as not to waste resources on technologies already patented.

But the country pays a high price forthe fact that the INPI does not act as a body that stimulates innovation, says Maria Celeste Emerick, from the patent office at Fiocruz. While the World Industrial Property Organization (WIPO) is starting the debate on global patents, in a scenario in which new technologies are becoming obsolete ever more rapidly, Brazil is still trying to define a policy for boosting innovation and is striving to restructure and to give greater agility to its patent office.

This delay is increasingly jeopardizing Brazil’s competitiveness in the international market. And Fiocruz is a good example of this aspect. It works in one of the most competitive areas of the international market biotechnology and faces up to the giants of the pharmaceutical industry. It has 110 patents requested: 36 in Brazil and 74 abroad. Another 40 patents have already been granted, 13 in Brazil and 27 abroad. “The problem is that the patents registered in Brazil do not generate business”, Maria Celeste comments. The registrations achieved abroad, on the contrary, attract interest from companies, not least because of the rigor with which offices like the USPTO, for example, investigate the originality of the technology. She mentions the example of three patents from one and the same project carried out by Fiocruz, deposited abroad, which are now being negotiated, still protected by secrecy, with a major industrial concern from the veterinary sector.

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