It's important to say that, despite controversies as intense as they are inconclusive, patents have always been associated with technological innovation. For some, they are essential to stimulate innovations in general; for others, they help, but not so much; and for a few, patents block innovations and have even acted to restrict access to scientific information, previously published in academic articles and disseminated freely and today retained by universities and research institutions to facilitate patent registration requests.
Buainain, Bonacelli and Mendes (2015)* maintain that, regardless of the controversy, intellectual property (IP) titles, among which patents stand out, are relevant because they protect intangible wealth/heritage, which is today much more important than than wealth/heritage materialized in land, factories, buildings, machines. They further argue that the available evidence confirms that in many sectors patents actually play a central role in mobilizing capital to finance R&D, and that the malfunctioning of the IP protection system reduces incentives to invest in innovation: without protection, products /innovative services would suffer unfair competition from copyists and counterfeiters.
The National Institute of Industrial Property (INPI), responsible for registering patents in Brazil, is associated with the piles of patent applications that accumulate, year after year, on its shelves, the so-called backlog. The introduction, in 2013, of digital ordering solved the problem of shelf shortages, but not delays. At the end of 2015, there were more than 231 thousand requests being analyzed. It is estimated that the average time to approve a patent is 10,9 years. Even though precise assessments are lacking, no one disagrees that this delay causes great harm to the country. Given the accelerated pace of technological innovations, some of the applications will have expired when they are approved, and the patents will no longer have any market value nor will they justify investments that generate income, employment and development.
It is not possible to detail here how this situation was arrived at. It is possible that the INPI is more victim than villain: insufficient staff, ill-defined and little stimulating career, technological delay, precarious IT infrastructure and legislation that favors the lengthening of the analysis process are factors that mitigate its responsibility for the situation, although do not exempt him entirely. But the fact is that, even though it is not, the INPI has appeared as the villain, and we all know that in this post-truth world, appearing is often more important than being. Everything indicates that INPI got tired of playing the villain and decided to end the backlog. By decree, approving an extraordinary solution to speed up the granting of patents and thus reduce the number of pending applications. This solution is under public consultation until August 31st. In the corridors of Brasília you hear that everything has already been decided. As trustworthy as I am, I believe that the consultation is worthwhile and that is why I express my opinion here: the solution is truly extraordinary, in the sense of absurd.
The idea is extraordinarily simple: if some basic bureaucratic requirements are met, the patent application would be granted and the patent letter issued without any analysis of merit. Extraordinary! It does not matter whether or not the application meets the three basic principles that give rise to and justify the granting of the patent -- novelty, inventive activity and industrial application. As long as the applicant opts for the simplified procedure, they will receive the patent letter within a few days.
If such a measure were put into practice, the INPI would be creating 1st and 2nd class patents, with differentiated quality and content, but with undifferentiated legal value: both are patents that guarantee the holder a monopoly on the economic exploitation of the protected object. Granting patents without analyzing the merits is a procedure as absurd as granting land titles without knowing, first, whether the area actually exists, and second, whether it is already occupied and whether or not it is already the object of someone else's property. And without analyzing the content of the request, ultimately a land title can be granted without a clear definition of the geographic coordinates that delimit the property itself. In the Western, superpositions were resolved by bullets. Today they are discussed in court. Expensive, slow and therefore unfair! It only serves a few.
The same will happen with patents. It is estimated that today the INPI rejects around 45% of registration requests. Now, with the new procedure, these requests would be approved, and without analysis of merit, nothing would prevent the granting of patents for inventions that have already been granted, vague and comprehensive requests and the overlapping of benefits. Anyone who feels harmed will have to go to court, which is already full of processes and lacks the capacity to judge conflicts in a timely manner. In other words, the INPI will transfer its backlog, democratic because processed by the INPI in a queue organized in order of arrival, to the Court, structurally unequal because only those with resources will be able to afford the long and costly litigation process. A bonanza for offices specializing in intellectual property rights! And part of the backlog will end up returning to the INPI as the Court asks the body responsible for granting the right to specialized manifestation to decide the legal dispute.
Ronald Coase and Oliver Williamson, two Nobel Prize winners in Economics, demonstrated beyond question that poorly defined property rights hamper the functioning of the economy, give rise to social and economic conflicts, increase the transaction costs of companies and burden society as a whole. And any microeconomics manual explains the distortions caused by the difficulty of separating poor quality products (lemons) from good quality products in markets with asymmetric information. Ultimately, “lemons” can make transactions with high-quality products unfeasible, with social losses that can be significant. Legalizing poor quality patents can have the same effect as eliminating good quality patents from the market and the benefits they could bring to society as a whole. The social cost of the extraordinary solution is likely to be much higher than the current cost of the patent backlog.
It's important to say that, with this measure, the INPI will be demoralizing the patent, an institute that it is legally obliged to protect. More or less as INCRA, responsible for registering land ownership, did when encouraging invasions by the MST.
* Buainain, AM, Bonacelli, MBM and Mendes, CIC. Intellectual Property and Innovations in agriculture: inconclusive debates by way of introduction. In, Buainain, Bonacelli and Mendes (org.). Intellectual Property and Innovations in Agriculture. Brasília/Rio de Janeiro, CNPq, Faperj, INCT/PPED, IdeiaD, 2015, 384 p.
