Brazil’s New Appellate Stage Guidelines: Strategies for Efficient Patent Prosecution

In an ongoing effort to reduce the backlog of patent applications, Brazil has introduced new appellate stage guidelines that significantly impact how applicants should respond to office actions and file appeals. These changes emphasize thorough and strategic responses to ensure all objections are properly addressed, paving the way for a more efficient patent granting process. The motives behind the appellate stage guidelines can be traced back to around 2018, when the Brazilian Patent and Trademark Office (BPTO) began publishing new rules aimed at streamlining and expediting the examination and reducing the pendency time of patent applications, for example, of so called “preliminary office actions”. These measures and new rules reduced the pendency time of a patent application from 9.3 years to 4.5 years by 2024.

During the Brazilian examination process, applicants used to commonly follow a specific argumentative line based on publications by the BPTO. Given the lengthy process—taking between 5 to 9 years to obtain a patent—applicants often obtained patents in other jurisdictions like Europe, China, or the United States first. They would then file mirrored claims in Brazil to secure the same/similar scope, thereby avoiding the need for new arguments or claims, typically during the appellate stage. This approach was cost-effective and streamlined for applicants. However, while this method was allowed at times, it was not universally permitted. Examiners viewed it unfavorably, perceiving their previous efforts as wasted when faced with new claim sets and arguments unrelated to the original ones, which also increased evaluation time. Consequently, this method is no longer permitted unless it adheres strictly to the rules of the new guidelines.

Understanding the Appellate Stage

The appellate stage in Brazil’s patent application process is crucial. It occurs after the rejection decision is issued and involves a review of the examination by three new and more experienced examiners. Under the new appellate guidelines, properly replying to Office Actions during the regular stage has become even more crucial due to new concepts and possibilities being introduced.

Administrative Preclusion

The first and most critical change is the introduction of the administrative preclusion concept. This means that all objections raised by the examiner must be thoroughly addressed in the applicant’s response throughout the regular stage office action responses. Failure to do so will likely preclude the applicant from addressing these objections later in the process. It’s imperative to contest objections with well-founded reasons, ensuring that every point of contention is covered.

Filing Amendments

The amendment options available during prosecution are crucial under the new guidelines:

Amendments during the Regular Stage:

• Before filing the request for Examination: Broadening the scope and adding new categories of claims are permitted, along with more generic amendments, provided they are supported by the originally filed application.
• After filing the request for examination: Only amendments that restrict or better define the subject matter are permitted, and these must be supported in the originally filed application.
• Amendments aimed at correcting translation issues can be made at any time during the prosecution.

Amendments during the Appellate stage:

• Under the new appellate guidelines, only restrictive amendments are permitted, and these must have support expressly provided for in dependent claims of the rejected claim set.
• Additionally, these amendments should directly tackle the specific problem or objection identified during the regular stage, providing a solution that effectively overcomes the obstacle referred to in the rejection decision.

Reassessment at the Regular Stage

The new guidelines introduce the possibility of reassessment of the application back to the regular stage. Should an examiner overlook specific arguments during the initial examination, applicants can emphasize these points in subsequent responses to office actions in the regular stage. Highlighting the overlooked details will offer the applicants the opportunity to have the application reverted to the regular stage, potentially allowing them to address unresolved issues anew.

However, if the examiners at the appellate stage determine that they possess all necessary details to render a decision on the application, they will expedite the process by handling it in the appellate stage.

Depending on the strategy, it is advisable to have the opportunity to return the application to the regular stage, since filing a divisional application is restricted to the regular stage. Additionally, during the regular stage, applicants can make amendments to claims more freely. Therefore, continuing examination in the regular stage presents additional opportunities for applicants.

No Defined Deadline for Rejection Decisions

Unlike some other jurisdictions, Brazil does not impose a specific deadline for issuing a rejection decision or release an “intention to reject” notice. There is no indication of when the rejection decision will be published. This highlights the critical importance of treating every office action response as potentially final. Applicants must be diligent and comprehensive in their responses to avoid any inadvertent preclusions.

Responding to Office Actions

In view of the above, when responding to office actions, applicants should:

• Add dependent claims with essential subject matter that can overcome objections related to the patentability. Ensure that every matter you believe would be necessary to address future objections and arguments is fully defined within the claims.
• Add dependent claims that fully comply with or overcome any formal objection raised by the regular stage examiner, ensuring thorough compliance even if the objection is contested. Including a dependent claim that addresses the objection offers an alternative should the examiner reject your arguments or reasons. This approach allows you to potentially use the matter defined in the dependent claim as a restrictive amendment during the appellate stage to amend the claims.
• Always provide reasons in your arguments for not complying with any objections, whether they are formal or related to patentability.

Example of reasons: unnecessary requirement; improper restriction; lack of clarification preventing understanding of the need for the requested restriction; lack of clarity in the objection.

There are objections raised in the regular stage that are not clear. It is better for the applicant to focus on this lack of clarity to avoid preclusion later.

Preparing an Appeal

An appeal should not be understood as an opportunity to continue the examination. The primary claim set to be examined during the appellate stage is the rejected claim set. The claim set filed in the appeal will be understood as an alternative claim set. The applicant must provide arguments on why they disagree with the rejection, as complying with what was stated in the rejection decision will not be accepted based on preclusion. In other words, the applicant needs to present their arguments defending the rejected claim set.

Examples of arguments that may be used to circumvent this situation include:

• When responding to the OA (Office Action), if the applicant included dependent claims that overcome the rejection, argue that there was patentable subject matter in the dependent claims or that said dependent claims overcame the objection and these claims were not considered. This is a solution to disagree with the rejection of the initial claim set and to comply with it in the appellate stage as an alternative claim set.

Additionally, according to a recent webinar presented by the head of the Brazilian General Coordination of Appeals and Administrative Nullity Proceedings (CGREC), the applicant needs to assist the appellate stage examiners and make specific requests in the appeal, such as reformulating the decision or pointing out examination errors made in the regular stage. This approach makes the appellate stage examiners more focused in their examination. The appellate stage examiners will not search for issues that the applicant does not point out. If there is something glaring, they will examine and address it, but for more subtle issues, it is important for the applicant to point them out.

Finally, when an office action is raised during the appellate stage, one valid response is to assert that at the time of the appeal the principle of preclusion was not applied and move on. However, the applicant must be aware that, according to the head of CGREC, only applications that would be finally rejected are receiving this kind of office action in the appellate stage. Therefore, additional amendments and arguments may be filed to try to overcome this understanding. However, this opportunity is only applicable to applications with Office Actions published before April 1, 2024, excluding preliminary office actions.

Retroactive Application of New Rules

The most controversial aspect of the new rules is that they should take effect even for appeals that were filed under different rules. The BPTO should expect to be sued multiple times in view of the retroactive application of these rules. Applicants will seek to have their appeals heard under the old rules, when more permissible amendment rules were in place at the appellate stage. Those claims may be grounded on provisions that prevent any new legislation from modifying acquired rights (Article 5, section 36 of the Constitution of Brazil and articles 6 and 23 of the Law of Introduction to Brazilian Law). One of the provisions is specific to new interpretations and guidelines by the public administration, and it requires a transitional period so that the modifications be “proportional, fair, efficient and not harmful.”

There are good chances that courts will apply those provisions to specific cases and might force the BPTO to apply the old rules. In fact, the 25th Federal Court of Rio de Janeiro issued a decision on the merits last month ordering the BPTO “not to apply PTO’s New Guidelines […] to the Administrative Appeal filed by the Claimant” (Writ of mandamus 5020468-85.2024.4.02.5101, 25th District Court of Rio de Janeiro, Judge Eduardo André Brandão de Brito Fernandes, 20 June 2024).

Judge Brandao de Brito Fernandes reasoned that “to apply the new Guidelines […] would amount to a curtailment of the right to defense”. That was the first decision challenging the new rules issued by the BPTO on following and applying the guidelines at the appellate stage. That decision only relates and is limited to the appeal at hand in that case and does not bind the BPTO in other appeals. Further, the BPTO will probably appeal. However, other appellants are likely to seek similar measures now that it has become clear that resorting to the Federal Court on that matter can provide relief to applicants needing to have their patent applications decided under the previous rules in Brazil. In fact, there have been other writs filed against the BPTO already, showing that, as anticipated, the issue will become a hot topic in courts. With the same claims, those applicants are also now seeking an order for the appeals to be decided under the previous rules.

The BPTO in turn defended the retroactive effects of the new rules by denying its characterization as such. They asserted that applicants mistakenly view certain practices as rights when they are actually “permissive practice” under the previous rules. The BPTO further claimed that it was wrong to consider the rules to have retroactive effect because they will not be applied to proceedings that have been “finally decided”. However, the claim in those actions was that the rules on retroactivity under Brazilian law should apply to the moment when the appeal was filed. In any case, to the BPTO, an acquired right to amend the claims at the appellate stage simply does not exist.

Still, in the same above-mentioned writ of mandamus, the claimant had also requested an order to force the BPTO to decide the appeal within 60 days. It should be noted that the BPTO itself, in the briefs filed for the writs of mandamus, had stated that the idea behind the new rules was to, among other things, prevent situations that run afoul of the principle of reasonable duration of proceedings, which is a constitutional principle in Brazil. The BPTO had argued that the older rules allowed certain strategies that made the prosecution take longer than it should, thus affecting competition.

The 25th Federal Court granted the claimant’s request to have the appeal decided within 60 days, which it considered reasonable. That sort of relief is routinely granted by federal courts. In view of that, if an application has been prosecuted for a very long time, it is possible to obtain an order forcing the BPTO to issue a decision within a specified number of days. Thus, it is an opportunity to combine both requests, one to order a decision in the appeal within reasonable time, and another that the appeal be decided according to the old rules.

The federal courts remain accessible to appellants seeking recourse anytime. Discussing the strategies with your local agent will help illuminate the risks around the new rules in respect of pending appeals and clarify the available measures and the right timing for them to be taken.

Key Takeaways for Applicants

• All objections, whether formal or based on patentability, must be addressed, otherwise the applicant will likely be precluded from doing so in future. This is because the BPTO now understands that the applicant will have waived his or her chance to address such objection.
• Highlight any arguments not addressed by the regular stage examiner in response to any new subsequent OAs, so that the application may go back to the regular stage for reevaluation.
• If not complying with any formal or patentability objections, add arguments asserting the reasons for not doing so.
• Add dependent claims with subject matter that can overcome any patentability or formal objections.
• Retroactive – The new guidelines will be retroactively applied to all pending appeals. However, applicants will have the opportunity to respond to office actions during the appellate stage to align with these updated rules. Legal challenges are emerging regarding the retrospective application of these rules, particularly concerning the types of amendments permitted at the appellate stage under the new guidelines. Courts are evaluating whether the stricter amendment criteria introduced should replace the previous, more flexible rules.

Statistical Insight

The impact of these guidelines is anticipated to be substantial. Statistical data indicates that approximately 7,100 appeals applications will be affected by the new guidelines, underscoring the importance of thorough and strategic responses during the regular stage.

Be Prepared

Brazil’s new appellate stage guidelines demand a meticulous and strategic approach to responding to office actions. By addressing all objections comprehensively and leveraging the opportunities for reassessment, applicants can proceed through the patent application process more effectively. These changes are aimed at reducing backlog and enhancing the efficiency of patent grants, making it essential for applicants to adapt their strategies accordingly.

Image Source: Deposit Photos
Author: Olesha
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