The Costs of Patenting in the MERCOSUR Member States: A Tale of Three Countries

Published on 13 February 2018

In our previous article, How Much Does it Cost to Obtain a Patent in the Andean Community?, we discussed the various types of costs that may be incurred across the lifecycle of a patent for the countries of Bolivia, Colombia, Ecuador, and Peru. In this article, we shall discuss the costs of patenting in the member states of "MERCOSUR", which, like the Andean Community, is another South American trade bloc.

MERCOSUR

MERCOSUR, also referred to as the "Common Market of the South", was established in 1991, with the signing of the Treaty of Asunción, by Brazil, Argentina, Uruguay, and Paraguay. Though the initial objective of the Treaty was the setting up of free-trade zones between member countries, the objectives have subsequently expanded to customs unification and common market for the free movement of manpower and capital (http://www.lni.unipi.it/stevia/Organizzazioni/page03.html).

The organization is the most significant regional trading bloc in South America and "accounts for almost three-fourths of total economic activity" on the continent. It is also the fourth largest trading bloc in the world, after the European Union, the North American Free Trade Agreement, and the Association of Southeast Asian Nations (Hem Basnet and Gyan Pradhan; 2017).

Venezuela, which withdrew from the Andean Community in 2006, became the fifth member in 2012 (https://globaledge.msu.edu/trade-blocs/mercosur/history). However, its membership was subsequently suspended in August 2017 (Andres Schipani; 2017).

Intellectual Property Legislation

Unlike the Andean Community, in which the framework for the harmonization of Intellectual Property/Industrial Property legislation is contained in Decision 486, no such framework for harmonization exists across the member states of MERCOSUR.

Though the organization has adopted two Industrial Property protocols (i.e. one on trademarks and the other on industrial models and designs), neither protocol has been unanimously ratified by the member states to date, which is a prerequisite for their entry into force (Carlos Adrián Garaventa and Pablo Wegbrait; 2017).

Patenting in MERCOSUR

In the year 2015, close to 35,000 patent applications were collectively filed in the MERCOSUR member states, with 85% of the patent applications being filed in Brazil, the most influential economy in South America (World Intellectual Property Indicators 2016; 2016). When compared to its counterpart, the Andean Community, this figure represents more than a ten-fold increase in patent applications.

The Costs of Patenting in MERCOSUR

Let us now study the costs involved in obtaining and maintaining a patent through to expiry in the MERCOSUR member states. Typically, there are three categories of costs involved: official fees, attorney charges, and translation costs.

For the purposes of this article, we shall consider a 40-page PCT National Phase patent (including five pages of drawings) with 15 claims, which is to be filed electronically by a company (i.e. large entity) in Brazil. Further, we shall consider a Paris Convention application in Argentina and Uruguay, since they are not members of the PCT. The National Phase applications and the Convention applications claim priority to an earlier application filed in the U.S. We have excluded Paraguay from our analysis since the patent filings in the country are negligible.

The total estimated costs over the lifecycle of the PCT National Phase patents and the Convention patents amount to $64,664. The costs are inclusive of Value Added Tax, which has been added to the attorney charges and the translation costs in Argentina and Uruguay, and are based on 1.5 to 2 office actions being issued in each of the three jurisdictions. The costs in each of the three countries are more or less similar, and range between $20,700 and $22,900 (Figure 1).



Official Fees - Filing

The approximate official fee to be paid at the time of filing an application (basic filing fee) in Argentina ($279) and Uruguay ($269) is around five times greater than the basic filing fee in Brazil ($54). Both Argentina and Uruguay also charge an official fee for each claim in excess of 10 claims.

Official Fees – Substantive Examination and Grant

The approximate official fee to be paid for requesting a substantive examination ranges from $162 in Uruguay to $233 in Argentina. In each of three jurisdictions, an additional official fee is charged for the examination of each claim in excess of ten claims.

Both Uruguay and Brazil charge an official fee at the grant stage, with the fee in the former being based on the number of granted claims in the specification.

Translation Costs

Translation costs would be incurred both at the time of filing the application and during prosecution. The estimated costs to translate 35 pages of the specification (drawings have been excluded) at the filing stage vary between $1,575 in Brazil to $1,922 in Uruguay. When expressed as a % of the total estimated filing costs, the costs vary from 33% in Argentina to 56% in Brazil.

Likewise, the estimated translation costs at the prosecution stage vary between $675 in Brazil to $1,098 in Uruguay. The estimate is based on 10 translation pages per prosecution action. When expressed as a % of the total estimated prosecution costs, the costs vary from 17% in Argentina to 25% in Uruguay.

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Venkatesh Viswanath (Senior Analyst, Quantify IP) contributed to this article.
Exchange Rates Used: 1 US Dollar = 17.61 Argentine Pesos, 29.18 Uruguayan Pesos, and 3.26 Brazilian Real