On February 10, 2026, the 4th Federal Court of the Federal District rendered a decision of significant impact on the debate concerning the legal effects of administrative delay in the processing of patent applications. In Case #1028978-18.2022.4.01.3400, the judge issued a new decision on the merits recognizing the unjustified delay of the Government in concluding the examination of the patent application and granting the compensatory claim filed by the plaintiff. The court ordered the Brazilian Patent and Trademark Office (“BRPTO”) to issue a new letters patent with a revised term of validity, proportionally adjusted to the administrative delay.
The case involved an application filed in 2001, whose examination was requested in 2004 and only concluded in 2017, that is, after more than 16 years of administrative processing. The 4th Federal Court of the Federal District found that, throughout this period, the patent owner had acted diligently and had not contributed to the delay, which was attributed exclusively to the BRPTO, which failed to present any plausible legal justification for such delay. The court held that the BRPTO breached its duty to decide and to comply with the principle of reasonable duration of proceedings, unduly prolonging the procedure. This conduct caused damage to the applicant, since, during the pendency of the patent application, the applicant holds merely a legitimate expectation of rights, whereas patent rights arise only upon grant. Accordingly, the court recognized the need to compensate the applicant based on Article 37, Paragraph 6, of the Brazilian Constitution.
In this case, although the processing of the patent application lasted more than 16 years, the patent had been granted while the regime established by the former sole paragraph of Article 40 of Law #9,279/1996 (the “Brazilian Patent Statute” or “BPS”) was still in force. This provision guaranteed a minimum term of ten years from the grant of the patent when the administrative processing exceeded ten years in total. This mechanism partially mitigated the harm resulting from the BRPTO’s delay, which is systematic and has been acknowledged not only by the Judiciary Branch, but also by controlling bodies, especially the Federal Court of Accounts, as well as by the BRPTO itself.
However, following the ruling of Direct Action of Unconstitutionality #5,529 (“ADI #5,529”) by the Brazilian Supreme Court (“STF”) in 2021, and the subsequent administrative review carried out by the BRPTO, this compensatory mechanism was eliminated. As a result, the patent term was significantly shortened, prompting the patent holder to seek judicial relief in order to obtain specific compensation for the damages caused by the administrative delay. The lawsuit thus sought recognition of the unjustified delay and the proportional recomposition of the patent term based on the period of undue delay.
In its decision on the merits, the Court acknowledged the violation of the statutory deadlines applicable to the BRPTO in the conduct of the administrative proceeding. Moreover, it held that, during the pendency of a patent application, the applicant holds only a legitimate expectation of rights, which characterizes the existence of damage resulting from unjustified delay, since the applicant does not enjoy the same means of exploiting patent rights during the examination phase.
For these reasons, the judge concluded that the BRPTO should be held liable. Furthermore, the court emphasized that the ruling in ADI #5,529 did not exclude the possibility of state liability in specific cases, distinguishing the prohibition of automatic extensions (declared unconstitutional) from individualized recomposition based on a case-by-case analysis. In this respect, the STF preserved, even for pharmaceutical patents, the concrete effects of the declaration of unconstitutionality of the former sole paragraph of Article 40 of the BPS.
This new decision by the 4th Federal Court of the Federal District - the third favorable to patent term adjustment out of approximately 39 decisions - provides a starting point for reflecting on the right to in-kind compensation, in the form of patent term adjustment, as a means of redressing administrative delay under contemporary Brazilian law, particularly in light of the STF’s ruling in ADI #5,529.
The right to industrial property and the implications of delay in patent granting
The Brazilian Constitution guarantees, under Article 5, XXIX, the temporary right of ownership over industrial inventions, in view of the social interest and technological development. Furthermore, following the ratification of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) in 1994, by Decree #1,335 of December 30, 1994, and the enactment of the BPS in 1996, it was established that temporary industrial property rights - specifically invention patents - would be protected for a minimum term of 20 years, counted from the filing date of the patent application.
Accordingly, industrial property rights are undoubtedly fundamental rights whose enjoyment essentially depends on the factor of time. Time, in turn, serves a dual function: on the one hand, it enables society to access technology; on the other, it allows inventors to obtain a return on their investment in innovation. The term of protection must therefore balance both sides of this equation, in order to ensure incentives for innovation - the primary objective of industrial property protection - while also serving market interests.
In light of this framework, patent protection is not limited to the formal ownership of an invention but presupposes that the inventor will be able to effectively enjoy such protection throughout the period granted by law. It is therefore necessary for the State to ensure the conditions for the full enjoyment of this right, without which the fundamental right at stake cannot be effectively realized.
This guarantee entails not only the existence of mechanisms that allow the patent owner to enforce its rights against third parties, but also - prior to that - the expeditious conduct of the processing of the patent application. Once again, time is the key factor in ensuring effective protection, especially considering that, inevitably, part of the protection period elapses during the examination of the application itself. This is because the law provides that, once granted, the patent term is counted from the filing date of the respective application (Article 4, caput, of the BPS).
In this context, when a substantial portion of the period during which the patent owner should be able to exercise its rights is consumed by the processing of the patent application due to State inaction, the temporal balance is disrupted. As a result, the owner is left with less effective protection time than is necessary to recover its investments and foster innovation.
This reduction in the effective term of protection manifests itself both in factual and legal terms. Although reference is often made to the retroactive effects of patent grant to the filing date (Article 44 of the BPS), this argument overlooks relevant implications, since, in practice, there is no full retroactivity of protective effects. There are several reasons for this.
A patent grants its owner advantages that go beyond mere licensing. It strengthens the value of the technological portfolio, expands commercial opportunities, enables strategic partnerships, and secures a competitive position in the market. These benefits, however, do not materialize while only a pending application exists, which represents merely a legitimate expectation of rights. Even though patent applications may be licensed as a matter of law, the contractual terms, risk allocation, and economic value of such transactions differ substantially from those associated with granted patents.
Moreover, administrative delay weakens the effectiveness of the legal instruments available to curb unauthorized exploitation during the examination phase. According to a decision by the Superior Court of Justice (“STJ”) in REsp #2,001,226/RS, during the processing of a patent application, the applicant cannot rely on the enforcement mechanisms provided by the BPS to prevent third parties from exploiting the invention, precisely because patent protection arises only upon grant.
Although it is sometimes argued that, after grant, the patent owner may seek damages for unauthorized exploitation during the pendency of the application, two issues must be considered.
The first concerns the statute of limitations applicable to compensation claims. Article 225 of the BPS provides that actions seeking damages for acts of unauthorized exploitation are subject to a five-year limitation period. This means that, in practice, only the last five years of the patent examination process are eligible for compensation. In cases such as that of the plaintiff in the above-mentioned lawsuit, in which the examination lasted more than 16 years, more than two-thirds of the processing period would remain outside any compensatory regime.
The second issue is that industrial property rights encompass more than mere monetary compensation derived from damages for unauthorized exploitation, which ultimately amounts to little more than a “consolation prize.” The premature entry of competitors into the market, even if unlawful, produces deleterious effects on the inventor’s ability to recover its investments.
All these consequences stem from the fact that, during the pendency of a patent application, the applicant remains in a state of expectation, without full access to the prerogatives of ownership. Although legally protected, such expectation is not equivalent to full entitlement. In this respect, the decision on the merits in the above-mentioned case was exemplary.
According to the Court, between the filing date of the application and the date of patent grant, the plaintiff held only a legitimate expectation of rights. The BPS itself provides that protection becomes effective only upon grant, so that the plaintiff’s rights materialized only on October 17, 2017, after 16 years of expectation that protection would eventually be enjoyed. It was therefore reasonable to conclude that the patent term should be adjusted to correspond exactly to the period during which the proceeding was delayed due to unjustified administrative inertia on the part of the BRPTO.
Accordingly, excessive delay in patent granting causes intrinsic harm to the enjoyment of patent rights. When unjustified, such delay constitutes an unlawful omission, since the Government - and, in this case, especially the BRPTO - has a duty to comply with and observe the principles governing administrative action, as established by the Federal Constitution, particularly Article 37, caput, as well as by several statutes governing administrative activity, including the Federal Administrative Procedure Law. From this framework arises a concrete duty of efficiency and of compliance with the principle of reasonable duration of proceedings.
This issue was also thoroughly addressed in the decision on the merits issued by the 4th Federal Court of the Federal District, which held that the BRPTO’s delay, as an unjustified act, violated its duties as a public authority and therefore gave rise to an obligation to compensate. This duty is grounded in Article 37, Paragraph 6, of the Brazilian Constitution.
With specific regard to administrative proceedings, although invoked by the plaintiff and relied upon in the interlocutory decision granting the preliminary injunction - yet not expressly mentioned in the final decision on the merits - Article 27 of the Introductory Statute to Brazilian Law (“LINDB”) also establishes the duty to compensate individuals for abnormal or unjust losses resulting from administrative proceedings. The Brazilian legal system thus does not allow organizational failures to be shifted onto private parties. Inefficiency does not exclude liability, and the decision that serves as the starting point for this article reinforces this understanding by expressly rejecting the normalization of delay as an inevitable phenomenon.
By providing for compensation for abnormal and unjust losses arising from State action, this provision prevents specific individuals from bearing exceptional costs in isolation. In the patent context, the combination of administrative delay and the subsequent suppression of automatic compensation constitutes a typical situation of abnormal harm, which can only be remedied through the grant of an adjusted term of protection.
Distinguishing in relation to the STF’s decision in ADI #5,529
However, one obstacle faced by cases seeking in-kind compensation through patent term adjustment is the (mistaken) understanding that the ruling rendered by the STF in ADI #5,529, which declared unconstitutional the “automatic extension” provided for in the former sole paragraph of Article 40 of the BPS, would have barred any form of patent term compensation.
In ADI #5,529, the STF introduced a significant shift in the legal regime governing patent duration in Brazil by declaring the sole paragraph of Article 40 of the BPS unconstitutional. The Court held that the provision established a mechanism of automatic and generic extension capable of rendering the final term of patent protection indeterminate. Such indeterminacy was deemed incompatible with the constitutional requirement of patent temporariness, as well as with the principles of legal certainty, free competition, and the social function of property.
The STF’s reasoning also demonstrated that the former model, which provided for automatic extension whenever examination exceeded ten years, without regard to the specific circumstances of each case, produced systemic distortions, as it reduced institutional incentives for efficiency within the BRPTO. Moreover, it favored the formation of excessively long monopolies, dissociated from criteria of reasonableness and proportionality. The decision thus reaffirmed that patent protection must be necessarily delimited, predictable, and compatible with the public interest, so as to enable the proper functioning of markets and rational planning by economic agents.
In this sense, ADI #5,529 was specifically aimed at invalidating an abstract normative mechanism of automatic term extension, rather than at examining the legal consequences of administrative delay from the perspective of state liability. The decision did not directly address the issue of compensation for damages arising from unjustified delays in patent processing. Nor did it assert that patent owners should bear, without any form of redress, the losses resulting from administrative inefficiency. The focus of constitutional review was placed on the structure of the legal system, not on the protection of individual concrete situations.
The reasoning of the decision itself allows for the identification of a conceptual distinction between generic extension models and case-specific solutions, since the STF expressly recognized the possibility of adjustments, provided that they are subject to objective criteria, clear limits, and institutional oversight. In the exact words of Reporting Justice Dias Toffoli in his opinion in ADI #5,529:
“It is important to emphasize that I am not advocating a single, uniform term. As demonstrated in the section of this opinion concerning the international panorama, several countries allow extensions of exclusive exploitation of inventions, but they do so in a non-automatic manner, based on clear parameters and for defined periods, elements that bring greater rationality to the system, promoting greater security and predictability.”
Furthermore, in a single-justice decision issued in Constitutional Complaint #53,181, when analyzing the request for preliminary injunction, Justice Dias Toffoli defined what would be required to enable patent term adjustment in Brazil: objective criteria established by law and capable of ensuring predictability.
“The comparative law reasons set forth in the STF’s leading precedent reinforce the understanding that any extension of patent validity requires objective criteria established by law, without conditioning extension solely on delay in examination by the BRPTO or subverting the essence of Article 5, XXIX, of the Brazilian Constitution, so that predictability regarding patent duration enables rational choices by market agents.”
Based on this interpretation, it becomes possible to argue that the STF’s understanding does not conflict with the possibility of case-specific patent term adjustment as a form of in-kind compensation for unjustified administrative delay. Unlike automatic extension, individualized compensation presupposes proof of the delay, verification of its unlawfulness, objective delimitation of the affected period, and the establishment of a definite end date. It constitutes a remedial technique embedded in the general regime of state civil liability - i.e., expressly provided for by law - rather than a structural mechanism for expanding exclusive rights.
From this perspective, patent term adjustment may be understood as an instrument for restoring the essential content of the fundamental right to industrial property when it is unduly undermined by administrative inefficiency. In this context, compensation does not operate as an additional “benefit” to the owner, but rather as a means of reestablishing the violated legal equilibrium.
At this point, the judicial decision analyzed herein illustrates this understanding by developing a distinguishing in relation to ADI #5,529. The judge acknowledged the authority of the STF’s decision and the invalidity of automatic extension, but clearly delimited its scope, stating that the constitutional defect identified lay in the systemic indeterminacy of the term and the absence of objective parameters. At the same time, the Court noted that the STF itself preserved the concrete effects of such indeterminacy, allowing room for case-by-case analysis of administrative delay.
Indeed, the judge emphasized that the specific case involved the determination of a prolonged delay without plausible justification and the definition of a compensatory period calculated on the basis of specific deadlines. The new term would not result from presumptions of administrative delay, but from its concrete demonstration in the individual case.
Moreover, the decision stressed that the patent term, even after compensation, remains fixed, determined, and fully identifiable, thus refuting the argument that compensation would generate instability or unpredictability. The decision therefore reflects a systematic reading of ADI #5,529, giving effect to the regime of state liability by distinguishing between automatic normative extension and case-specific judicial compensation.
Another relevant aspect highlighted in the decision concerns the specific treatment afforded to pharmaceutical patents in the modulation of effects in ADI #5,529. The judge observed that the STF’s choice to exclude such patents from modulation cannot be understood in abstract or decontextualized terms, but must be read in light of the exceptional circumstances in which the ruling was rendered, marked by the public health emergency arising from the COVID-19 pandemic.
In that context, the Court’s central concern was directly related to the need to expand access to drugs, reduce costs for the public healthcare system, and mitigate the effects of the crisis on society. The stricter treatment imposed on pharmaceutical patents therefore did not result from a permanent negative assessment of the sector, but rather from a contextual balancing between innovation protection and public health urgency.
By recovering this background, the decision reinforces that the solution adopted by the STF cannot be automatically transposed to ordinary situations in which the same exceptional factors are absent, thereby opening space for a more contextualized interpretation compatible with the analysis of compensation claims based on unjustified administrative delay.
Conclusion
In light of this context, the decision on the merits issued by the 4th Federal Court of the Federal District represents a significant advance in the understanding of the right to in-kind compensation, through patent term adjustment, as an instrument of state accountability for unjustified administrative delay, including as a means of giving concrete effect to the STF’s decision in ADI #5,529.
This is because the STF’s ruling in ADI #5,529 did not exclude the possibility of individualized recomposition in specific cases. The Court declared unconstitutional a particular abstract normative mechanism of automatic extension, but did not eliminate judicial protection in situations where administrative inefficiency demonstrably compromises the essential content of the right to industrial property.
In this framework, excessive delay in the examination of patent applications produces concrete and relevant effects, insofar as it deprives the owner of the full exercise of its prerogatives for a significant period, reduces the effective time of economic exploitation, and undermines incentives for innovation. A mere legitimate expectation of rights is not equivalent to full entitlement, which is why unjustified delay entails a material depletion of the constitutional protection guaranteed under Article 5, XXIX, of the Brazilian Constitution.
Accordingly, shifting the burden of state inefficiency onto private parties is incompatible with the principles of efficiency, reasonable duration of proceedings, and prohibition of abnormal losses enshrined in Brazilian law. Proportional patent term adjustment, when grounded in concrete evidence of unlawful delay, does not constitute an undue privilege, but rather a mechanism for restoring the violated legal equilibrium.
The consolidation of this understanding by the Judiciary contributes to the institutional strengthening of the patent system and of innovation. It fosters greater administrative efficiency, ensures predictability for economic agents, and preserves the integrity of the fundamental right to industrial property within the framework of the Democratic State governed by the rule of law.