Uruguay and the PCT: A Strategic Step towards Global Patent Protection

 

Carlos Casado

IP advisor at Latin America IP SME Helpdesk

 

On 5^th October 2023, the Uruguayan government, led by President Luis Lacalle Pou, submitted a bill to the Parliament for the accession to the Patent Cooperation Treaty (PCT). This initiative reflects Uruguay's commitment to the protection of intellectual property and is in line with the president's strategy to expand the country's presence in international markets. Joining the PCT is seen as an important step towards the ratification of the Trans-Pacific Partnership Agreement, a top priority for Uruguay.

 

What is the PCT?

The Patent Cooperation Treaty (PCT), administered by the World Intellectual Property Organization (WIPO), is a key international instrument by simplifying and economizing the global patent application process. The treaty allows applicants to file a single application for protection in multiple countries, significantly streamlining the process and reducing costs.

 

How can an EU SME benefit from the PCT?

In the complex intellectual property landscape, small and medium-sized enterprises (SMEs) in the European Union face the challenge of protecting their innovations effectively in international markets. In this sense, what are the key benefits that position the PCT as an essential tool for enhancing patent protection on a global scale?

Streamlining international protection

The PCT simplifies the process for entrepreneurs by allowing them to secure patent rights in multiple markets simultaneously (up to 157 contracting states– December 2023–), avoiding the need to file individual applications in each country.

Facilitates international alliances

By making it easier to obtain patent rights, entrepreneurs can collaborate with business partners, suppliers, and investors in other countries through licensing agreements, joint partnerships, or research and development collaborations.

Deferring significant costs:

One of its key features is the ability to defer significant costs associated with filing international patent applications for up to a total of 30 months, which is particularly useful for entrepreneurs with limited resources who are seeking funding, business partners, or evaluating the market.

Identifies prior technologies:

Through an international search report, the PCT makes it easier for applicants to identify pre-existing technologies, providing important information on the patentability of their technology, the freedom to operate in specific markets, and other data useful for business decisions.

Create licensing opportunities

By allowing applicants to indicate their willingness to license their invention, the PCT creates licensing opportunities. This free service, administered by WIPO, is particularly useful because companies using PATENTSCOPE, WIPO's global patent database, may be interested in licensing these inventions even before a patent is granted.

Fee reduction through the SME Fund

The SME Fund is an initiative of the European Commission, implemented by the European Union Intellectual Property Office (EUIPO), which provides financial assistance to small and medium-sized enterprises (SMEs) in the European Union for the protection of their intellectual property rights. The Fund offers reimbursement of fees charged by European countries for various IP products and services, which may vary depending on the country in which the company is located.

Regarding patents, the SME Fund offers a Boucher of 75% off national and EU patents, and 90% off an IP scan.

 

PCT and Latin America

In the context of Latin America, it should be noted that not all countries in Latin America have joined the PCT.  Argentina, Bolivia, Paraguay, Uruguay, and Venezuela are not yet part of the system (check the full list of members). This absence raises challenges and doubts about intellectual property strategies in these countries, as well as their position in the global context of innovation. As intellectual property remains a key driver of economic development, participation in the PCT could be a tool for these countries to facilitate the internationalisation of their inventions and attract foreign investment.

PCT statistics

The participation of the rest of the countries in Latin America in the PCT reflects the growing importance of intellectual property protection in the region. According to the PCT Yearly Review 2023, the total number of patents filed at IP offices in Latin American countries is 755. Brazil stands out as one of the leaders, with 541 PCT applications filed in 2022, demonstrating its commitment to innovation and increasing its presence on the international stage. Chile, with 151 applications, also shows a strong interest in protecting its inventions worldwide. Other Latin American countries such as Mexico, with 138 applications, and Peru, with 31 applications, also contribute to the regional momentum in PCT applications.

 

Will Uruguay become a PCT member?

The dispute over Uruguay's accession to the Patent Cooperation Treaty has been subject to intense debate in the country. It is argued that, given Uruguay's status as a technology importer and the disparity between the number of patents generated domestically and those obtained by foreigners, joining the treaty would mainly benefit technology-exporting states. Similarly, concerns have been raised about the capacity of Uruguay's patent examination authority (DNPI) to handle the potential increase in patent applications that would result from accession to the PCT, which would pose a logistical and financial challenge in the event of a flood of PCT applications.

Going back to 2017, the proposal to join the PCT was already debated in the Uruguayan parliament under the Frente Amplio government, but without success, partly due to the influence of the pharmaceutical lobby. A similar case is Argentina, where the pharmaceutical sector opposes entry into the PCT because of its alleged negative impact on public health in the country. They argue that accession would favour foreign companies to the detriment of local producers, threatening the national production of quality medicines at more affordable prices. They also warn of a possible extension of the term of pharmaceutical patents under the PCT, which would pose a challenge to ensuring access to medicines and public health.

Despite the obstacles, some experts point out that Uruguay's participation in the PCT is necessary to promote an economy based on biotechnological innovation applied to agriculture and livestock, areas in which the country is known for its success. However, there are still warnings that this accession will hurt the availability and accessibility of generic medicines, affecting the public domain and potentially delaying access to pharmaceutical innovation.

Digging a little deeper, we find that accession to the PCT is a requirement in free trade agreements that Uruguay could be subject to, such as the agreement between MERCOSUR and the European Union. This agreement establishes measures to encourage the incorporation of MERCOSUR countries, including Paraguay, Uruguay, and Argentina, into the treaty. However, the ratification process of the agreement is facing difficulties in the parliaments of these regions, which complicates the situation.

More recently, in December 2022, Uruguay submitted its letter of accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which opens the doors to a market that represents approximately 13.4% of the world economy. By joining this alliance, Uruguay would gain access to privileged trade opportunities with member countries, promoting the expansion of its exports and contributing to economic growth, all of which would facilitate its entry into the TPP.

Until Uruguay joins, due to its lack of PCT membership, citizens and foreigners should carefully consider the country's patenting policy, considering conventional methods of protection, such as the Paris Convention, and the deadlines and priorities established in the international intellectual property context.

 

Will Argentina become a PCT member?

Argentina has been discussing the accession to the PCT since 1998 but has not yet decided. The main reasons for the delay are the restrictive patentability criteria, especially in the chemical-pharmaceutical sector, and the lack of political consensus among different parties. However, some sources suggest that Argentina is moving towards joining the PCT as part of its negotiations with the EU and other Mercosur countries.

As for President Milei's stance on IPRs, he is a right-wing libertarian economist who advocates a radical transformation of Argentina's welfare state and a free market approach.

There is no doubt that for any nation to progress, it is necessary to play an active role in the global economy and maintain a constant level of investment. In Argentina's case, a real change in perspective is needed to make it an attractive destination not only for other countries in the economic community but also internally. Local industries must make substantial investments in research and development (R&D), as well as increasing efforts to promote science and technology education. This change will, among other things, lead to an improvement in the competitiveness of industries.

 

In a nutshell: advantages of the PCT

Simplified Application

The main advantage of the PCT lies in the simplification of the international patent application process. Applicants can file a single application with a single patent office, drafted in a single language, eliminating the complexity of dealing with multiple jurisdictions. This unified approach reduces administrative costs and promotes efficiency by establishing predefined form requirements.

Global Protection & Entry into Uruguay

This strategic step allows for the efficient pursuit of global patent protection and notably streamlines the process for obtaining protection in Uruguay, paving the way for the internationalisation of businesses and lowering the barriers to entry into the Uruguayan market.

International Preliminary Examination

Based on the international search report and the non-binding written opinion on novelty, inventive step, and industrial applicability, the applicant can assess the feasibility of obtaining protection for its patent. Optionally, on receipt of this report, the applicant may request an International Preliminary Examination, also non-binding, accompanied by a Written Opinion, which provides an opportunity to amend the application before entry into the national phase.

International Publication

International publication under the PCT provides the centralised dissemination of PCT applications by the International Office approximately 18 months after the priority date. This process promotes worldwide access to information on innovations, promotes transparency, and helps applicants prepare for subsequent stages of the procedure.

Cost Reduction

During the international phase of the PCT, various fees must be paid to the receiving Offices and, where applicable, to the authorities responsible for the international preliminary examination. These fees include the transmittal fee, the search fee, and the international filing fee, which covers various tasks performed by the International Office, such as international publication. In addition, discounts are available, such as a 90% reduction in certain PCT fees and a 75% reduction in international search and international preliminary examination fees at the Spanish Patent and Trademark Office.

 

In a nutshell: challenges of the PCT

Associated Costs

The process of obtaining a patent through the PCT presents financial challenges. Despite the streamlined process, the associated costs are considerable and present a particular difficulty for small inventors and companies. The transition to the national phase involves additional costs and multiple examination procedures. In addition, language and translation are an obstacle, as although filing in one language is allowed, some countries require translations.

Lengthy process

Although the PCT contributes to efficiency, the process of obtaining a patent can last several years. Moreover, potential delays can significantly extend the process. These delays can be due to several factors, including the complexity of the invention, the workload of the patent office, and other administrative issues.

Lack of a Global Patent

The PCT, while facilitating the search for protection in different countries, does not grant a global patent, which means that applicants need to manage protection individually in each desired jurisdiction. Additionally, despite the harmonisation sought by the PCT, differences in patent laws and practices between countries can be a challenge during the national phase of the process. These differences underscore the importance of careful understanding and strategic adaptability by applicants when dealing with legal systems.

 

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