New rules alter use of trademarks on patented medicines upon patent expiry

On January 15 2015 Presidential Decree No 522 amended the Regulations for the Application of the Law on the Import, Commercialisation and Sale of Generic Medicines for Human Use. The New Rules alter the practice in relation to patented medicines after expiration of the patent.

The new wording added to the regulations reads as follows:

“Once the patented invention has lapsed, medicines shall be mandatorily registered and sold as generics, and the label shall primarily contain the International Common Denomination (ICD) and the reference to 'Generic Medicine', above the name of the manufacturer.

Once the patent has lapsed, reference medicines shall be registered as such and shall be sold as generics. Reference medicines are understood to be those which had originally obtained a patent that has afterwards lapsed.

It is prohibited for generic medicines to be sold exclusively with a certain brand.”

In addition, a transitory provision provides for a one-year term (until January 14 2016) to comply with this obligation.

At first sight, the enacted regulations are somewhat confusing. However, based on the authors' analysis and some information unofficially obtained from government officers, the rules can be interpreted as follows:

1. The New Rules will apply only to products for which a patent had previously been granted in Ecuador but which has subsequently lapsed. Based on the principle of territoriality of the law, the rule will not apply to lapsing patents obtained in other countries.

2. Once the Ecuadorian patent has lapsed, the corresponding product shall be treated as generic. However, it is understood that this would not be automatic, since generic products must also be registered and the new wording refers specifically to registration. Therefore, it is understood that it will be for proprietors to re-register the product and, since the new law states that registration as a generic will be mandatory following the expiration of the patent, there will seemingly be penalties for not doing so. There is no guidance as to how such re-registration would take place - that is, whether it would involve converting the product into a generic or obtaining a new registration. However, the current rules in relation to the branding of generic products are similar to what is being introduced by the New Rules, as discussed below at point 3.
   
   It is worth mentioning that, by making the reference product a generic, it will be more straightforward gaining approval for other generic/biosimilar products.

3. The product may carry a trademark but, according to the rules, the labelling must primarily feature the ICD and the designation “Medicamento Genérico”. The New Rules do not define 'primarily', but it is understood that “Medicamento Genérico” must be in red capital letters

These new rules will lead to patent right holders losing all rights in relation to a patented product immediately upon expiry of the patent, creating a further burden as regards re-registration should they intend to carry on commercialising the product.

Maria Cecilia Romoleroux and Ian Wall, Corral Rosales Carmigniani Pérez, Quito