Patent Litigation 2021 Comparisons

Last Updated February 15, 2021

Law and Practice

Authors



Kasznar Leonardos Intellectual Property provides tailored solutions to the most complex IP issues, both nationally and internationally, with a deep understanding of different cultures and business industries. Specialised in the management of intellectual assets, the team has 25 partners and more than 240 employees, with correspondents in every state of Brazil and a broad international network. It acts as legal adviser on contractual matters, as industrial property agent with the Brazilian Patent and Trade Mark Office, and its lawyers, arbitrators and mediators act in litigation and extrajudicial dispute resolution. The firm's main areas of practice are patent and trade mark prosecution, industrial designs, regulatory law, life sciences, digital law, marketing and entertainment law, sports law, biodiversity, copyright, unfair competition, technology transfer, geographical indication, trade secrets, franchising and licensing, fashion law, licence compliance and anti-piracy.

The protection of rights relating to inventions in Brazil shall be assured by means of the issue of patents for inventions or for utility models. Both types are based on statutory law, specifically the Brazilian Industrial Property Act (Law No 9,279/96).

According to Sections 8 and 9 of the Brazilian Industrial Property Act, an invention shall be patentable if it meets the requirements of novelty, inventive step and industrial application. On the other hand, an object of practical use, or part thereof, shall be patentable as a utility model if it is intended for industrial use, presents a new shape or arrangement and involves an inventive step, resulting in functional improvement in its use or manufacture.

In both cases – concerning a patent for inventions or one for utility models – the protection of rights relating to industrial property shall be assured by means of the issue of patents by the Brazilian Patent and Trademark office (BPTO).

Length of Grant Procedure

Currently, it takes an average of seven years to have a patent issued. However, the length of the procedure may vary considerably according to the field of the invention. The average length of grant procedure has diminished since 2019, when the BPTO established a programme to fight the backlog.

This programme foresees several actions to expedite granting procedures, including a special procedure by which BPTO can take advantage of the patent searches already carried out by other patent offices. In line with such special procedure, office actions are being published in large numbers; giving applicants the opportunity to adapt their claims. As over 80% of all patent applications filed in Brazil are from foreign applicants that have already had their applications examined abroad, this new procedure is expected to reduce the examination delay in Brazil to four to six years by mid-2021.

Moreover, fast-track procedures are available in several situations, including specific Patent Prosecution Highway programmes with USPTO, JPO and other foreign patent offices.

Representation

The patent application may be filed by the inventor or the right-holder (Brazilian Industrial Property Act, Section 216). As per Section 217, a person domiciled abroad is required to have a duly qualified attorney domiciled in Brazil with powers to represent such a person or entity administratively and judicially — including the right to receive summons.

Fees

Usually, the following fees are due (bearing in mind an exchange rate of approximately USD1 = BRL4).

  • Approximately USD45 when the patent application is filed before the BPTO (for a patent for an invention or for a utility model).
  • Approximately USD150 for a patent for the request for examination of an application for a patent (for a patent for an invention containing up to ten claims).
  • Approximately USD100 for a patent for a utility model.
  • For the annuities within the ordinary term:
    1. for a patent for an invention:
      1. pending application – approximately USD75;
      2. granted patent, 3rd to 6th year – approximately USD200;
      3. granted patent, 7th to 10th year – approximately USD300;
      4. granted patent, 11th to 15th year – approximately USD410; and
      5. granted patent, 16th to 20th year – approximately USD500;
    1. for a utility model:
      1. pending application – approximately USD55;
      2. granted patent, 3rd to 6th year – approximately USD100;
      3. granted patent, 7th to 10th year – approximately USD200; and
      4. granted patent, 11th to 15th year – approximately USD300.
  • Approximately USD75 when the patent application is granted by the BPTO (for a patent for an invention or for a utility model).

Patents are granted for 20 years as from the filing date or ten years as from the date of issue and utility models are granted for 15 years as from the filing date or seven years as from the date of issue, whichever is of greater benefit to the owner.

A patent shall afford its owner the following principal rights.

  • To prevent others from producing, using, offering for sale or importing for such purposes, without his or her consent, a product that is the subject matter of a patent or the process or product directly obtained by a patented process.
  • To prevent third parties from contributing to anyone in carrying out the acts mentioned above.
  • To be indemnified for unauthorised exploitation of the subject matter of his or her patent, including exploitation that occurs between the date of publication of the application and the date of issue of the patent.
  • To be indemnified for the damages in respect to acts that infringe industrial property rights.

In return, the patent owner’s obligation is to pay the annual patent fees and use the patent in a lawful manner within Brazil.

There is no further protection available. At the end of the term of protection the object of the patent enters into the public domain.

Third parties may oppose the granting of a patent by submitting relevant documents and information that would render the invention not patentable. This can be done:

  • between the publication of the application and the end of the examination by the Patent Examiner (Brazilian Industrial Property Act, Section 31);
  • within a period of 60 days after publication of any administrative appeal filed by the applicant from a first instance decision by the Patent Examiner (Brazilian Industrial Property Act, Section 231); and
  • in an administrative nullity proceeding, to be filed within six months counted from the grant of the patent (Brazilian Industrial Property Act, Section 51).

According to Section 212 of the Brazilian Industrial Property Act (Law No 9,279/96), any decision rendered by the BPTO can be challenged through an administrative appeal. In case the patent examiner issues a decision rejecting the patent application, it is possible to present an administrative appeal addressed — to the President of the BPTO — within a period of 60 days after the publication of the decision. If such appeal is not successful, the applicant may subsequently file a lawsuit in an attempt to obligate the BPTO into granting the patent application.

Moreover, the Brazilian legal system also permits any decision of the public administration to be discussed before the courts within a period of five years. This is because all decisions (eg, the decisions rendered by the BPTO) are subject to the doctrine of judicial review, which provides that all legislative and executive actions are subject to review by the judiciary. Thus, a final decision rendered by the BPTO in refusing the patent application may be challenged in the federal courts by way of an appeal for an annulment.

According to Section 84 of the Brazilian Industrial Property Act (Law No 9,279/96), the applicant and patent owner shall be required to pay annual fees as from the beginning of the third year after the date of filing for the patent. The payment of the annual fee shall be made within the first three months of each annual period, but it may also be made, in an extraordinary term, within the following six months on payment of an additional fee.

In the case of a failure to make payment of the annual fee in accordance with the provisions mentioned above, the application will be shelved or, if already granted, the patent will be extinguished (Section 86 of Law No 9,279/96).

Regarding the measures available to remedy such consequences, note that the patent application or a patent may be restored at the request of the applicant or patent owner within three months after notification of the lapse of the patent.

To obtaining the patent restoration, the owner must pay a restoration fee (approximately USD185) as well as any previous fees due. If this procedure is not followed the application will not be valid.

According to Section 50 of the Brazilian Industrial Property Act (Law No 9,279/96), the nullity of a patent already granted by the BPTO can be can be requested through an Administrative Nullity Procedure.

In addition, said provision establishes the circumstances in which a patent is declared null, such as:

  • the absence of any of the statutory requirements;
  • the insufficiency of the description report;
  • the unsupported claims;
  • the extent of the contents of the application as originally filed; and
  • the absence of any of the essential formalities.

The administrative post-grant proceeding must be filed within six months counted from the grant of the patent and can be instituted ex officio by the BPTO or requested by any third parties with a legitimate interest (Brazilian Industrial Property Act, Section 51).

During the Administrative Nullity Procedure, the BPTO will issue a new opinion regarding the granted patent and will notify the patentee and the applicant to reply within a common period of sixty days (Brazilian Industrial Property Act, Section 53). Then the procedure will be decided by the President of the BPTO, finishing the administrative instance (Brazilian Industrial Property Act, Section 54). It is important to clarify that the patent does not have its effects suspended during the procedure, meaning that the patentee has enforceable rights while the nullity procedure is pending.

Finally, it is important to comment that is also possible to seek the annulment of a patent through a judicial nullity action, which can be filed at any time during the term of a patent by BPTO or by any legitimately interested party. Patent nullity actions should be brought before the federal courts and the BPTO’s participation in these actions is mandatory (Brazilian Industrial Property Act, Sections 56 and 57).

It is possible to file a civil action or a criminal action. The right-holder may choose between the two or even opt for both.

As Brazil has state and federal jurisdictions, it is important to stress that enforcement is a matter of state jurisdiction, thus patent infringement actions, civil or criminal, are within the competence of state courts. In general, these lawsuits must be filed before the court of the place where the defendant has his or her main business or where the infringement happened, provided that other civil procedure rules are observed.

The main remedies available are post-grant review, annulment lawsuit and request of a compulsory license.

Post-grant Review

The administrative post-grant review may be instituted ex officio by the BPTO or at the request of any person having a legitimate interest, within six months of the issue of the patent. In this case, a patent is declared null if:

  • any of the statutory requirements have not been met;
  • the description does not describe clearly and sufficiently the object;
  • the claims are not supported on the description report;
  • the subject matter of the patent extends beyond the contents of the application as originally filed; or
  • any of the formalities essential for issuance were omitted during prosecution.

Annulment Lawsuit

The annulment lawsuit may be filed before the federal courts at any time during the term of a patent by the BPTO or by any party having a legitimate interest.

Compulsory Licences

Sections 68, 69 and 70 of the Brazilian Industrial Property Act determine that compulsory licenses may be granted in the following circumstances:

  • lack of local working of the patent, unless local manufacture of the product is proven to not be economically feasible;
  • commercialisation that does not satisfy the market’s demand;
  • abuse of economic power;
  • abuse of patent rights;
  • dependant patents; and
  • national emergency and protection of public interest.

Patent infringement lawsuits fall within state jurisdiction, while nullity actions should be submitted before federal courts (due to the mandatory presence of the Brazilian Trademark Office as a defendant).

Therefore, the courts with jurisdiction are:

  • at first instance, the trial judge (state or federal);
  • at second instance, the board of appeals (state or federal); and
  • at third instance, the Superior Court of Justice (STJ) and the Supreme Court of Justice (STF).

There are federal courts specialised in IP matters in Rio de Janeiro — both of first and second instances — with jurisdiction over validity matters.

There are state courts (with jurisdiction over infringement matters) specialised in IP matters in Rio de Janeiro (first instance), São Paulo (first and second instances) and Rio Grande do Sul (second instance).

As for ADRs, there is one specialised chamber for dispute resolution in Brazil regarding IP matters (including domain name conflicts) named CSD–PI, which is managed by the Brazilian Association of Intellectual Property (ABPI) — the Brazilian branch of AIPPI.

There are no prerequisites to filing a lawsuit. However, warning letters are usually issued by right-holders and have the advantage of defining the date on which the offender was informed of the violation for indemnification purposes in a future lawsuit.

Parties in intellectual property matters must be represented by a lawyer. The parties cannot act as plaintiff or defendant before Brazilian courts without a lawyer.

Interim injunctions are available. An interim injunction may be granted by the judge when there is both a likelihood of success for the complainant and the need for an urgent decision.

The judge must also weigh up the hardship caused by the decision granting the injunction, as opposed to the hardship caused by not granting it. The plaintiff may be required to provide a bond or a fiduciary guarantee, if the judge deems it necessary.

A potential defendant may appeal against an interim injunction. It is also possible to require a bond to be posted by the owner, but it is important to clarify that it will be up to the judge to determine whether the party should submit a bond, and its value.

Additionally, it should be noted that, according to the Brazilian Civil Procedure Code, the party that requests the injunction is responsible for the injury that the enforcement of the injunction causes the other party.

Alternative steps that may be taken by the potential opponent are to:

  • file a non-infringement declaratory action, aimed at obtaining a court decision attesting that there is no infringement; or
  • file a separate patent annulment lawsuit before the federal courts, aimed at obtaining a court decision attesting that the patent is null.

Special limitation provisions do apply in intellectual property matters. According to Section 225 of the Brazilian Industrial Property Act, proceedings for damages suffered because of industrial property rights may not be brought after five years, while the usual deadline for legal action in the Brazilian Civil Code is ten years.

The Brazilian Civil Procedure Code provides for an early production of evidence procedure, by which the interested party can ask the court to determine the search and seizure of relevant documents as well as the infringing products. Such proceedings may also be used to produce expert witness evidence to prove the infringement or even to hear witnesses. The pieces of evidence collected under this proceeding may be used in future lawsuits. However, there is no discovery proceeding in Brazilian procedural law.

There are no special provisions for lawsuits in intellectual property proceedings, the same pleading standards as in other civil litigation apply.

The Brazilian legal system does permit class actions for patent proceedings in certain situations. If damage is caused to the public as a whole or to the honour or dignity of a racial, ethnic or religious group, a civil action may be filed by public prosecutors or by any public group that is affected (Act No 7,347/85). The decision in this civil action will bind everyone, unless the decision is to dismiss the action on grounds of lack of proof, in which case anyone can file an individual complaint.

Section 45 of the Brazilian Industrial Property Act establishes that a person who in good faith benefited from the patent within Brazil, prior to the filing or priority date of a patent application, shall be entitled to continue receiving such benefits under the same form and conditions, without incurring liability. Thus, the owner of the patent cannot prohibit the use of the patent by a third party acting in good faith.

In addition, Section 43 of the Act establishes certain acts and circumstances that the patent owner cannot preclude.

  • Acts carried out privately and with no commercial purpose by unauthorised third parties, provided that these acts do not prejudice the economic interests of the patent owner.
  • Acts carried out by unauthorised third parties for experimental purposes, if related to studies or scientific or technological research.
  • The preparation of a medicine in accordance with a medical prescription in individual cases, and carried out by a qualified professional, or the medicine thus prepared.
  • A product manufactured in accordance with a process or product patent that has been placed on the internal market directly by the patent holder or with his or her consent.
  • Other persons who, in the case of patents related to living matter, use the patented product, without economic purpose, as an initial source of variation or propagation in order to obtain other products.
  • Other persons who, in case of patents related to living matter, use, place in circulation, or market a patented product that has been lawfully placed on the market by the owner of the patent or his or her licensee, provided that the patented product is not used for commercial multiplication or propagation of the living matter concerned.

The complainant can be the owner of the intellectual property or the licensee, when the patent licence agreement expressly foresees it and if the agreement is recorded by the BPTO. The defendant is the alleged infringer.

A direct infringement occurs when all the patent claims granted by the BPTO are violated and an infringement occurs when, although not all claims of the patent are literally infringed, the offender uses equivalent means to the subject matter of the patent. There is no statutory provision dealing with indirect infringement.

The Brazilian Industrial Property Act establishes that inventions shall be assured by two types of patents: for inventions or for utility models.

A process is patentable as a patent for invention when it is susceptible of industrial application and meets the requirements of novelty and inventive step (Brazilian Industrial Property Act, Section 8).

In addition, Sections 10 and 18 of the Brazilian Industrial Property Act determine that the following processes are not considered to be inventions:

  • mathematical methods;
  • methods of a commercial, accounting, financial, educational, publishing, lottery or fiscal nature;
  • operating or surgical techniques and therapeutic or diagnostic methods, for use on the human or animal body;
  • natural biological processes; or
  • processes for obtaining or modifying substances, matter, mixtures, elements or products of any kind, when they result from the transformation of the atomic nucleus.

According to Section 42 of the Brazilian Industrial Property Act a patent confers to its owner the right to prevent third parties from manufacturing, using, offering for sale, selling or importing for such purposes a process or product directly obtained by a patented process or from contributing to the practice of these acts by other parties, without their consent. Therefore, a process patent infringement occurs when a third party uses means or processes that are the subject matter of a patent of invention, without the authorisation of the patentee.

It is important to stress that, in a process patent infringement lawsuit, the burden of proof is shifted to the accused party, which will be required to prove that the process is different from that protected by the patent (Brazilian Industrial Property Act, Section 42).

The scope of protection of a patent is determined by the claims as granted by the BPTO, and is interpreted in accordance with the state of the art at the date of filing, and with the history of the prosecution of the application.

The usual defences involve:

  • prior use rights,
  • products or processes are different;
  • nullity of the patent;
  • own patent rights;
  • compulsory licence; and
  • patent exhaustion.

It is very common that parties request the judge to nominate a court expert to give evidence in patent infringement and invalidity lawsuits. This is because patent claims usually involve complex discussions and it is common to find Brazilian judges who do not have any expertise in the matter.

The court expert will be required to provide the judge with a full report with his or her opinion on any questions raised by the parties (and accepted by the judge) and also on questions possibly raised by the judge him or herself. After the judge nominates the court expert the parties can indicate their own technical assistants, who will co-operate with the court expert to better understand the matter before he or she prepares his or her technical report.

The courts tend to give much credit to the expert’s opinions, although judges are not obliged to follow the expert’s understanding when ruling the case.

In Brazil, there is no separate phase or procedure in order to construe the claims. Instead, it is up to the court and the court-appointed expert to determine which is reasonably within the scope of the patent protection.

In Brazil, claims must be worded using the connective “characterised by”. All features following “characterised by” are within the patent scope. When there is any doubt on the meaning of a word used after the expression “characterised by”, the Judge and/or the court-appointed expert must use the description of the patent in order to properly interpret the scope of the patent.

A patent may be invalidated if granted contrary to any of the provisions of the Brazilian Industrial Property Act, particularly if it lacks novelty, inventive step, or an industrial application or does not disclose the full contents of the invention.

There are two possible ways of obtaining the declaration of nullity of a patent.

  • By way of an administrative nullity action at the BPTO, to be filed within six months of the issue of the patent.
  • By way of a judicial nullity action at the federal courts, to be filed at any time during the life term of the patent.

Partial revocation or cancellation is possible. According to Brazilian Industrial Property Act, Section 47, the nullity of a patent may apply to all the patent claims or to part of the claims. However, in case of a partial nullity it is necessary that the remaining claims constitute patentable subject matter in themselves.

Amendment is possible in revocation or cancellation proceedings, but it is unusual. According to Section 32 of the Brazilian Industrial Property Act, the amendments may be proposed by the applicant until the time of the request for examination of the patent application. However, the amendments may be only reductions of the scope of the claims.

Revocation or cancellation and infringement cases are not heard together, infringement lawsuits should be filed before the state courts while annulment lawsuits are filed before the federal courts. This is because in annulment lawsuits the BPTO must participate as a mandatory defendant together with the patent owner, and in Brazil the competent court to hear cases in which the BPTO is a party is the federal court.

Therefore, it is common that there is a difference in timing between decisions in these actions.

The Brazilian Industrial Property Act lays out certain special procedural provisions for lawsuits in patent proceedings, such as:

  • according to Section 56, paragraph 2, the judge may grant an injunction suspending the effects of the patent as long as appropriate procedural requirements are met upon registration;
  • according to Section 57, annulment lawsuits shall be tried by the Brazilian Federal courts and the BPTO is a mandatory defendant, together with the patent owner; and
  • according to Section 57, paragraph 1, there is a longer term (60 days, instead of the standard 15-day term) for the patent owner to submit its reply to an annulment lawsuit.

A trial judge will preside in a first instance case. He or she is not usually a technical expert. The decisions issued by the trial judge may be questioned before state courts and the superior courts.

The parties have no influence on trial judges, state courts or the superior courts. It is important to mention that the Civil Procedure Code provides that if the party has any personal connection with the judge, the judge must be replaced.

The parties may reach an agreement to settle the case at any time during the course of the lawsuit. Furthermore, according to new Brazilian Civil Procedural Code (in force as of 18 March 2016), after the plaintiff files the complaint, and unless the plaintiff expressly states that there is no interest in a possible conciliation, the defendant will be summoned to appear in a preliminary conciliation hearing/conference, where the judge will try to settle the case.

This conciliation hearing, however, may only take place in infringement cases and not in invalidation lawsuits. Only private parties and not the BPTO are permitted to enter into such agreements.

Pending a validity decision of the BPTO, an infringement proceeding may be suspended, but it is not mandatory. Any of the parties can request suspension and the judge may determine it ex officio.

The same procedure is followed when there is an annulment lawsuit and an infringement lawsuit in progress: the parties may request the suspension of the infringement lawsuit until the final decision of the annulment lawsuit and the judge can determine it ex officio, but it is not mandatory.

The main remedies available for the patentee in infringement lawsuits are search and seizure orders, restraining orders and other kinds of injunctions, plus damages. In Brazil, judges can only order remedies based upon the request of the interested party.

The prevailing defendant is usually entitled to receive court fees and other expenses incurred during the case, including the court-appointed expert’s fees.

All remedies are available for all kinds of intellectual property rights, regardless of type.

If the first instance judge reaches the conclusion that the patent is valid and the defendant has infringed it, the judge will most probably rule in the plaintiff’s favour and will grant an injunction to order the defendant to stop using the product or process covered by the patent immediately. Naturally, the defendant will be in a position to not only appeal against the merits of the decision but also to try to suspend the effects of the injunction while the appeal is pending.

There are no special provisions concerning the appellate procedure for intellectual property right proceedings. All appeals follow the same path and procedure.

The appeal implies a full review of the facts of the case.

In Brazil, lawsuits are usually preceded by warning letters. A party may also take various steps to build a strong case, such as hiring an independent expert and commissioning a technical report confirming the validity of the patent and the infringement perpetrated by the opposite party. All these costs are paid by the interested party and are not recovered in a lawsuit.

Costs are calculated by each court, taking into consideration procedural expenses and other mandatory fees, which also vary by type of action (eg, a nullity lawsuit, an infringement lawsuit, etc). Court fees, even though they might be different in each state, are usually low, and seldom exceed USD2,000.

If the plaintiff is a foreign plaintiff, he or she may be ordered to post a bond in Brazilian currency before the court to secure the payment of judicial expenses. This bond is usually set in the amount of 20% of the value given to the lawsuit. However, if the plaintiff is successful, this bond is returned and duly adjusted according to the official inflation rates in Brazil.

Regarding the court fees and expenses, the losing party is responsible for reimbursing the winner for all the disbursed expenses incurred in the course of the lawsuit by the winning party.

In Brazil, attorneys’ fees are not reimbursed by the losing party.

Alternative dispute resolution (ADR) is not commonly used to settle patent cases or even intellectual property cases.

Through Resolution No 84 of 11 April 2013, the BPTO formally adopted a mediation procedure that was organised jointly with the World Intellectual Property Organization (WIPO) and had, as its main goal, enabling the parties in a trade mark dispute to mediate that dispute. However, the BPTO insisted that after a successful mediation, the settlement agreement would not be binding on it and that it could still reject a trade mark application despite the fact that the opponent had already consented to it. As a result of the lack of effectiveness of the procedure, this form of mediation did not become popular, but it is still possible to use the system.

Domain Name Disputes

ADR is commonly used for domain name disputes, as Brazil has an administrative domain name resolution system (commonly known by its acronym in Portuguese, SACI) that is based on ICANN’s Uniform Domain-Name Dispute-Resolution Policy (UDRP) but incorporates several other causes for action, and a complaint under SACI may be based not only on trade mark rights (as is the case with the UDRP), but also on other intellectual property rights.

Litigation

As for the use of ADR in litigation, one must differentiate between invalidity and infringement lawsuits. Invalidity lawsuits must be filed before the federal courts, where ADR is not allowed because the BPTO understands that only a court of law may decide on the validity of rights. Infringement lawsuits must be filed before the state courts and are disputes between private parties that may be negotiated freely. The new Brazilian Civil Procedure Code that recently (on 18 March 2016) entered into force, created a mandatory conciliation pre-dispute phase and it is now expected that more disputes will be settled at this early stage, before the defendant has even presented his or her defence.

Mediation is only now slowly starting to become more popular in several areas of law in Brazil. Since Brazilian law is based on civil law, legal professionals lacked a statutory basis for mediation, despite the obvious fact that mediation may be solely based on contract law. A Mediation Act was recently passed as Law No 13,140 of 26 June 2015. Nevertheless, in practical terms mediation is still not being used to solve patent disputes.

Arbitration is also not commonly used in patent disputes, despite the development in the use of arbitration in other areas of law in Brazil. However, Brazil’s Arbitration Act was enacted through Law No 9,307 of 23 September 1996, and the past two decades have seen a significant increase in the use of mediation in Brazil.

According to the Brazilian Industrial Property Act, a patent application or a patent may be assigned in whole or in part.

Regarding patents, the BPTO may make the following recordals (entries to the trade marks database).

  • Assignment, stating full particulars of the assignee.
  • Any limitation or condition placed on the application or patent.
  • The changes to the name, headquarters or address of the applicant or the owner; regarding third parties, recordals shall have effect as from the date of their publication in the Official Gazette.

It is important to note that the assignment between a foreign company and a Brazilian company when onerous must be recorded by the BPTO to obtain the corresponding recordal certificate, otherwise the Central Bank of Brazil will not authorise the payment of royalties of remittances abroad.

For the assignment recordal, the following documents are required by the BPTO.

  • A transfer petition, completed with the data of the assignee.
  • Proof of payment of the governmental fee.
  • The assignment document, which should contain:
    1. the complete qualification of the assignor and the assignee;
    2. the powers of representation of the signatories of the assignment document and their signatures (the representatives’ signatures need to be notarised by the Notary Public and the signature of the Notary Public then needs to be legalised by apostille or by the Brazilian Consulate); and
    3. the application number or the number of the patent and the date on which the assignment document was signed.
  • The Power of Attorney of the assignee.
  • A sworn translation into Portuguese of documents that were created in a foreign language.

Once the BPTO has reviewed the relevant documents in accordance with the requirements discussed in 10.1 Requirements or Restrictions for Assignment of Intellectual Property Rights, providing that they are all in order, the notice of assignment is published on the Official Gazette and the certificate of assignment is then issued. The procedure is as follows:

  • the assignment fee is paid;
  • the assignment petition is completed, together with the data of the assignee, the application or the number of the patent and related documents;
  • the petition is sent to the BPTO, which will generate a protocol number;
  • the assignment petition is analysed by the BPTO; and
  • the notice of assignment is published on the Official Gazette.

The Recordal Certificate attesting to the assignment is then issued.

Licence Recordal

It is important to mention that in Brazil a patent owner or applicant may execute an exclusive or non-exclusive licensing contract for exploitation with a third party. To be enforceable against third parties the licence agreement must be recorded at the BPTO.

The recordal of a patent licence agreement by the BPTO is mandatory for the following purposes.

  • To obtain presumption of knowledge of the contract by third parties (Brazilian Industrial Property Act, Section 62).
  • To authorise, when the agreement expressly allows it, the licensee to act by himself or herself before Brazilian courts in defence of the licensed patent.
  • To authorise the remittance of royalty payments to abroad.
  • To allow royalty payments to be deductible for withholding income tax purposes.

Note that, in general, freedom to contract prevails, but the BPTO may provide some limitations.

  • The BPTO only authorises the remittance of royalty payments for a patent registration, not for patent applications.
  • In the case of a patent application, it is possible to deposit the due royalties from the filing date of the agreement before the BPTO into an escrow account in Brazil, but the remittance will only be authorised by the BPTO after the grant of the licensed patent; when the patent is issued, the applicant shall request the up-to-date corresponding certificate of the recordal, asking for payments to apply retroactively to the filing date of the recordal of the agreement.
  • The BPTO limits tax deductions in order to limit the remittance of payments among companies that have any shareholder relationship; if the licensor and licensee have any shareholder relationship, besides taking into consideration the usual rates of the market, the deductibility ceilings established by Law No 4131/62 should be observed and Ordinance of Treasury Ministry 436/1958, as well as Article 50 of Law No 8383/91.
  • Usually, a patent licence agreement will be in force in accordance with the periods of validity of the licensed patents (20 years as from the filing date of the patent application or ten years as from the date of issue).

Regarding improvements, the Brazilian Industrial Property Act determines that an improvement made to a licensed patent shall belong to the person who has made it and the contracting party shall be afforded a preferential right to a licence.

Documentation Requirements

For the licence recordal, the following documents are required by the BPTO.

  • The BPTO’s forms duly filled in by the parties:
    1. the recordal application form (Requerimento de Averbação); and
    2. the entity’s register data (Ficha Cadastro de Entidade).
  • Proof of payment of the government fee.
  • Power of Attorney of either party.
  • Simple translation into Portuguese of documents in a foreign language.
  • The licence agreement notarised and legalised (for apostille or the Brazilian Consulate) - all pages of the agreement must be countersigned.
  • A letter briefly justifying to the BPTO the reasons that led the parties to formulate the patent licence agreement.

Compulsory Licensing

Finally, it is important to mention that patents may be subject to compulsory licences. Section 68 of the Brazilian Industrial Property Act determines that the patent owner shall be subject to compulsory licensing of his or her patent if he or she exercises his or her rights in the patent in an abusive manner, or if he or she uses it to abuse economic power according to the law in force, under the terms of an administrative or judicial decision.

The following also may be grounds for a compulsory licensing request.

  • Failure to exploit the subject matter of the patent within Brazilian territory or failure to manufacture or complete manufacturing of the product, or failure to fully use a patented process, except in case of economic non-viability, in which case imports shall be admitted.
  • Commercialisation that does not satisfy market demand.

This compulsory licence may be requested only by a party possessing a legitimate interest and having the technical and economic ability to effectively use the subject matter of the patent predominantly for the purposes of the internal market, in which case the exception above, to do with economic non-viability, shall not apply.

After execution by the parties and two witnesses, the notarised and legalised licensed agreement must be submitted to the BPTO, which conducts a review and, upon acceptance, issues to the licensee a "certificate of recordal", enabling the licensee to pay royalties (if this is the case). Subsequently, a very short extract with basic information about the contract is published in the BPTO’s Official Gazette but the contract itself remains confidential and the BPTO does not furnish copies to third parties.

Kasznar Leonardos Intellectual Property

Teófilo Otoni St
63/ 5º-7º floor
20090-080

+55 21 2113 1919

mail@kasznarleonardos.com.br www.kasznarleonardos.com
Author Business Card

Law and Practice in Brazil

Authors



Kasznar Leonardos Intellectual Property provides tailored solutions to the most complex IP issues, both nationally and internationally, with a deep understanding of different cultures and business industries. Specialised in the management of intellectual assets, the team has 25 partners and more than 240 employees, with correspondents in every state of Brazil and a broad international network. It acts as legal adviser on contractual matters, as industrial property agent with the Brazilian Patent and Trade Mark Office, and its lawyers, arbitrators and mediators act in litigation and extrajudicial dispute resolution. The firm's main areas of practice are patent and trade mark prosecution, industrial designs, regulatory law, life sciences, digital law, marketing and entertainment law, sports law, biodiversity, copyright, unfair competition, technology transfer, geographical indication, trade secrets, franchising and licensing, fashion law, licence compliance and anti-piracy.