PCT vs. National Sovereignty: The Issue of Local Counsel

PCT vs. National Sovereignty: The Issue of Local Counsel

The PCT (Patent Cooperation Treaty) Working Group of WIPO (World Intellectual Property Organization) has been debating for some time the procedures of this international system, which facilitates the protection of inventions in several countries through a single application.

At its 19th Session, held this month, the Group’s agenda includes proposals for amendments to rules on the national phase of the process, when an international patent application enters specific countries (such as Brazil/INPI) for final examination, following local laws. Noteworthy on this agenda is the proposed amendment to Rule 49.4(b), which requires a member country to provide an online filing system that waives the requirement for a non-resident applicant to appoint a local attorney.

In the following interview, engineer Ivan Ahlert, who participated in several meetings at WIPO, representing ABAPI, ABPI, and FICPI as an observer, clarifies, with the authority of someone who knows the subject, what is effectively at stake in these debates.

Currently, what is the most important point discussed by the WIPO PCT Working Group?

Ivan Ahlert: First, I would like to highlight the fact that at the recent 19th Session of the PCT Working Group in Geneva, the proposed amendments were not even discussed because there was no consensus to approve the work agenda. Therefore, all the proposals on the agenda remain pending until the Group reconvenes. In my opinion, currently the most important item on the agenda is the proposed amendment to the PCT rules (Rule 49.4(b)(ii)), which requires a member country to provide an online filing system that does not require a non-resident applicant to appoint a local attorney when entering the national phase of a PCT application.

What does the approval of this proposal imply?

IA: There are several issues here: first, under Article 27(7) of the PCT, the Treaty does not limit the application of national law regarding the requirement of representation and other formal requirements after the start of national processing, and the LPI requires, in its Article 217, that a depositor residing abroad appoint and maintain a duly qualified attorney domiciled in the country. Second, there is already a PCT rule that provides that the applicant must be given an opportunity to comply with the requirement to appoint a local attorney. This, of course, is provided that national law allows it. Third, the text of the proposed rule stipulates that the waiver of the appointment of a local attorney is an attribute of the electronic filing system, which is an unorthodox way of regulating the issue, to say the least. Therefore, even if the LPI authorized the practice of acts directly by non-residents, the implementation of this rule would require the INPI to create an exclusive petition channel for entering national phases. Currently, e-PCT is used exclusively for the international phase of the PCT, not for the practice of acts before the INPI in the national phase.

Is there any consideration, in this sense, of interference in the rules and sovereignty of the country in question?

IA: The Paris Convention guarantees national sovereignty so that member countries can decide independently on the granting of patents and on the obligation to appoint a local attorney in exchange for the applicant’s exemption from providing a residence address in the country. The same principles are enshrined in the PCT in its Articles 27(5) and (7), which guarantee the autonomy for each country to establish its own substantive conditions for patentability and regulate the issue of appointing an attorney. By relativizing the sovereignty of PCT member countries on the issue of local attorneys, a dangerous precedent is set for a possible relativization of patentability conditions as well, since the basis for both is found in the same article of the treaty. In this regard, I recall that in 2001 the US delegation submitted a proposal to the PCT committee to make the IPER, the international preliminary examination report, binding. Therefore, a decision today limited to the issue of local agents may have other undesirable and serious ramifications in the future.

Is the amendment to Rule 49.4 of the PCT, which gives foreign applicants the option of not using a local agent to enter the national phase, mandatory?

IA: In theory, if approved, the rule will apply to all member countries, as there is no reservation clause regarding its application. However, as is already the case with other PCT rules, in practice it may not be possible to implement it in some jurisdictions, as I believe is the case in Brazil. This is not only because the rule as suggested conflicts with our law, but also because, in practice, it is unfeasible for an applicant who does not have a CPF or CNPJ to generate and pay an INPI form. In addition, a foreign applicant will likely have difficulty filling out the INPI form in Portuguese.

What is the role of the national representative at this stage?

IA: To facilitate entry into the national phase and guide the applicant in complying with the requirements of Brazilian law and INPI regulations, as well as advising them on substantive issues of the LPI, such as non-patentable matters.

Will the foreign resident be able to comply with all the requirements of the national phase without assistance? Is there a risk of delay?

IA: It is unlikely that a foreign resident will be able to meet all the requirements for entry into the national phase without the support of a local attorney who is familiar with the rules and the respective filing procedure. It is worth remembering that, under the terms of Article 216 of the IPL, if the act is not performed by an attorney, only the applicant himself can perform it. In other words, the applicant cannot use the services of a non-resident service provider. Entering the national phase without the assistance of a local attorney may, in fact, result in a delay in the processing of the national application, but the most serious risk is the irreversible loss of the applicant’s rights in Brazil. This is especially true because, in my view, the INPI has been overly strict in applying PCT Rule 49.6, implemented in Brazil through Article 22 of Ordinance 39/2021, which allows for the restoration of rights when the acts for entry into the national phase were not performed within the deadline involuntarily.

Is the national electronic system – INPI – prepared to meet the requirements for entry into the national phase if the proposed amendment is approved?

IA: I understand that it is not. As I mentioned above, there are practical and legal issues to be overcome. Every year, the INPI receives thousands of national phases of PCT patent applications and processes them normally. In addition, the INPI also acts as the PCT International Authority for international search and preliminary examination purposes, which means that it also receives international applications. I do not believe that the legal requirement to appoint a local attorney is an obstacle to the proper functioning of the system. Quite the contrary!