Patent Litigation 2024 Comparisons

The protection of rights relating to inventions in Brazil shall be assured by means of the issuance of patents for inventions (new technologies) and utility models (a new shape or arrangement in practical use objects). Patent rights, as well as other IP assets, are guaranteed by the Federal Constitution and governed by the Brazilian Industrial Property Law (Law No 9,279/96 or LPI), in accordance with applicable international treaties.

Invention Patents

A product or a process can be patentable as a patent for invention if (Article 8, LPI):

• it meets the requirements of novelty and inventive step; and
• it is susceptible to industrial application.

An invention patent has a protection term of 20 years from the date of filing.

Utility Models

An object of practical use, or a part of such an object, will be patentable as a utility model if:

• it is susceptible to industrial application;
• it presents a new shape or arrangement; and
• it involves an inventive act resulting in a functional improvement in its use or manufacture.

A utility model has a protection term of 15 years from the date of filing.

Ineligible Patent Subject Matter

Articles 10 and 18 of the LPI determine that the following shall not be patentable as invention or utility model:

• discoveries, scientific theories and mathematical methods;
• purely abstract concepts;
• schemes, plans, principles or methods of a commercial, accounting, financial, educational, or advertising nature;
• literary, architectural, artistic and scientific works or any aesthetic creation;
• computer programs per se;
• presentations of information;
• rules for games;
• techniques and methods for operations or surgery or therapeutic or diagnostic methods, for use on the human or animal body;
• all or part of natural living beings and biological materials found in nature, or isolated therefrom, including the genome or germ plasm of any natural living being and the natural biological process;
• anything contrary to morality, decency or public safety, order and public health;
• substances, materials, compounds, elements or products of any kind, including the modification of their respective physical-chemical properties and the respective processes for obtaining or modifying them, when they result from the transformation of the atomic nucleus; and
• living beings, whole or in part, except for transgenic micro-organisms meeting the three requirements of patentability – novelty, inventive step and industrial application – provided for in Article 8 and which are not mere discoveries.

For the purposes of the LPI, transgenic micro-organisms are organisms, except for plants or animals, whole or part, that due to direct human intervention in their genetic composition, express a characteristic that cannot be normally achieved by the species under natural conditions.

Anyone seeking protection for an invention in Brazil shall apply to the Brazilian Patent and Trade Mark Office (BRPTO). The proceeding is governed by the LPI and the BRPTO’s guidelines. 

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.

Length of Grant Procedure

Currently, it takes six years on average to have a patent issued by the BRPTO. However, the length of the procedure may vary considerably according to the field of the invention. Fast-track procedures are available in several situations, including specific Patent Prosecution Highway programmes with the USPTO, JPO and other foreign patent offices.

Moreover, the average length of grant procedure has diminished since 2019, when the BRPTO established a programme to fight the backlog.

This programme foresees several actions to expedite granting procedures, including a special procedure by which the applicant can benefit from BRPTO patent searches already carried out by foreign patent offices, eliminating the need for a new search by the BRPTO. As over 80% of all patent applications filed in Brazil belong to foreign applicants that have already had their applications examined abroad, this new procedure is expected to considerably reduce the examination delay in Brazil.

According to the BRPTO, there were 149,912 patent applications filed until 2016 which benefited from the programme to fight the backlog pending examination in August 2019. By 4 January 2024, this backlog was reduced to 3,573 patent applications. Of the remaining patent applications, 1,960 are from the chemical field, the one with the greatest number of applications pending examination. Due to the success of the programme, the BRPTO has already started the examination of patent applications filed since 2017 in specific technical areas.

Representation

The patent application may be filed by the inventor or the right-holder (Article 216, LPI). As per Article 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 official fees are due (bearing in mind an exchange rate of approximately USD1 = BRL4.90).

Approximately USD36 when the patent application is filed before the BRPTO (for a patent for an invention or for a utility model).

Approximately USD120 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 USD78 for a patent for a utility model.

For annuities within the ordinary term, the fees are as follows.

• For a patent for an invention:
1. pending application – approximately USD61;
2. granted patent – depending on the age of the patent, between approximately USD160 and USD411.

• For a utility model:
1. pending application – approximately USD41;
2. granted patent, third to sixth year – depending on the age of the patent, between approximately USD83 and USD248.

Patents are granted for 20 years as from the filing date and utility models are granted for 15 years as from the filing date, according to Article 40 of the LPI.

It is important to note that the automatic minimum ten-year term counted from the date of the grant, which used to protect applicants from the excessive delay caused by the BRPTO, is no longer applicable in Brazil. Such provision expressed by means of the sole paragraph of Article 40 was deemed unconstitutional by the Supreme Court in 2021.

As a reaction to the removal of the automatic minimum ten-year term safeguard, a number of owners of Brazilian patents have initiated lawsuits seeking compensation for term unjustifiably lost due to the PTO’s delay. There is still no official stance of the Brazilian judiciary in regard to the admissibility of PTA lawsuits. Currently, there is still no binding interpretation given to the PTA question, nevertheless recent decisions by trial and appellate courts reveal a trend by which plaintiffs seeking term adjustment seem to be fighting an uphill battle. A conclusive answer by a superior court should provide a clear stance either encouraging or dissuading those who wish to adjust the terms of their patents.

A patent shall afford its owner the following principal rights.

• Preventing others from producing, using, offering for sale, or importing for such purposes, without their consent, a product that is the subject matter of a patent or the process or product directly obtained by a patented process, as well as their respective equivalent product or process.
• Preventing third parties from contributing to anyone carrying out the acts mentioned above.
• Licensing the right of use of the patent by third parties and transferring the ownership of the patent.
• Being indemnified for unauthorised exploitation of the subject matter of their patent, including exploitation that occurs between the date of publication of the application and the date of issue of the patent.
• Being indemnified for the damages in respect to acts that infringe industrial property rights directly, by equivalence and/or by contribution.

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

Although it is rare, some of the patentee’s rights can be mitigated and additional obligations can be created, such as occurs by means of the compulsory licence (which, so far, only happened once, since the enacting of the current statute, in 1996).

Preliminary injunctions are available to patent owners in Brazil for immediately ceasing infringement acts (paragraph 1, Article 209, LPI). Such a remedy needs to be requested from the courts, which will grant it upon assessing the existence of prima facie evidence of infringement and risk of irreparable harm.   

Patent owners are not obliged to provide public information, such as patent listings or use codes, in relation to certain products or processes in Brazil. Even though it is not mandatory, public information may be available in relation to products or processes comprised of self-declared standard-essential patents (SEPs) for certain standards within the telecommunications sector. If applicable, such information will probably be available before standard-setting or standard-developing organisations (SDO), such as the Brazilian Association for Technical Standards.

There is no further protection available. Once the patent is expired, the subject matter enters 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 (Article 31, LPI);
• 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 (Article 231, LPI); and
• in an administrative nullity proceeding, to be filed within six months counted from the grant of the patent (Article 51, LPI).

According to Article 212 of the LPI, any decision rendered by the BRPTO can be challenged through an administrative appeal. If the patent examiner issues a decision rejecting the patent application, it is possible to present an administrative appeal to the President of the BRPTO within a period of 60 days after the publication of the decision. If such appeal is not successful, the applicant may challenge that final decision of the BRPTO before the federal courts.

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 (Article 1, Decree No 20,910/1932 and Article 54, LPI). This is because administrative decisions (eg, rulings rendered by the BRPTO) are subject to judicial review. In this sense, a lawsuit against a decision rendered by the BRPTO can be filed during the pendency of the administrative proceeding, even when an administrative appeal is still pending a decision.

According to Article 84 of the LPI, 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 pay the annual fee, the application will be deemed extinct or, if already granted, the patent will be extinguished (Article 86, LPI). It is important to note that in one way or another the patent applicant/holder shall be previously notified by the BRPTO.

Regarding the measures available to remedy such consequences, note that the patent application and the 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 obtain a patent restoration, the owner must pay a restoration fee (approximately USD90) as well as any previous fees due. If this procedure is not followed the application will not be valid.

After being granted, the patentability of one or more claims can be reviewed by the BRPTO.

A post-grant review proceeding begins with the filing of a petition within six months after the grant of the patent. It can be instituted ex officio by the BRPTO or requested by a third party (Article 51, LPI). The BRPTO will issue a new opinion regarding the patentability of the patent and will notify the patentee and the applicant to reply within a joint 60-day term (Article 53, LPI). Then the review will be decided by the President of the BRPTO, finishing the administrative instance (Article 54, LPI). The patent does not have its effects suspended during the proceedings, meaning that the rights derived from the patent are enforceable while the post-grant review procedure is pending.

In a post-grant review, a patent can be voided on the following grounds:

• the absence of any of the statutory requirements;
• the insufficiency of the written description;
• unsupported claims;
• the extent of the scope of the application as originally filed; and
• the absence of any of the essential formalities for issuance were omitted during prosecution.

Patent infringement in Brazil can be tackled by means of a civil and/or a criminal action.

As in Germany and many other countries, Brazil adopts a bifurcated system so that nullity and infringement are ruled on by different jurisdictions. Patent infringement actions, civil or criminal, are within the statutory authority of state courts.

In general, these lawsuits must be filed before the court of the place where the defendant has their main business or where the infringement happened, provided that other civil procedure rules are observed.

The main remedies available for third parties to remove the effects of intellectual property rights are post-grant review proceedings, nullity lawsuits and compulsory licences. In addition, the nullity of a patent can also be argued as a means of defence in the dockets of an infringement lawsuit (paragraph 1, Article 56, LPI).

Nullity Lawsuit

The annulment of a patent can also be sought before the Federal Trial Courts (under the same grounds as a post-grant review – see 1.10 Post-grant Proceedings Available to Owners of Intellectual Property Rights) and the BRPTO’s participation is mandatory (Articles 56 and 57, LPI). The judicial nullity action can be filed at any time during the term of a patent by the BRPTO or any legitimately interested party.

After the filing of the lawsuit, the BRPTO is summoned to answer the initial complaint and can either maintain its opinion on the validity of the patent claims or review its opinion by agreeing with the nullity.   

Nullity argument in infringement lawsuit dockets

Paragraph 1, Article 56 of the LPI states that the nullity of a patent can be argued at any time as a matter of defence in an infringement lawsuit. The eventual removal of the effects of the patent rights ordered by a state judge in an infringement lawsuit are restricted to the parties involved in the infringement proceeding (inter partes effects). Although Brazilian courts are not unanimous regarding the acceptance of nullity as a means of defence in infringement lawsuits, there is no binding precedent on this issue. In this sense, case law remains inconclusive – the Superior Court of Justice, for instance, has issued rulings both for and against this possibility. That said, it is still a mechanism available to (temporarily) remove the effects of patent rights. 

Compulsory Licences

Compulsory licence is a mechanism which allows the use of patent rights without the consent of their owner. It is governed by Articles 68–74 of the LPI.

A patentee will be subject to having their patent licensed compulsorily if they exercise the rights resulting therefrom in an abusive manner or by means of abuse of economic power that is proven under the terms of the law by an administrative or court decision. The following situations may also result in a compulsory licence: 

• non-exploitation of the subject matter of the patent in Brazil, unless local manufacture of the product is proven to not be economically feasible;
• commercialisation that does not meet the market’s demand;
• when the use of a patent depends on licensing another patent, the subject matter of the dependent patent characterises substantial progress from the prior art and no agreement is reached between patent holder and licensee; and
• national emergency and protection of public interest.

Conversely, no compulsory licence shall be granted when the patent owner is able to demonstrate that:

• the lack of use of the invention in Brazil occurred for legitimate reasons;
• there have been serious and effective efforts to prepare for use; or
• the lack of manufacture or commercialisation occurred due to a legal obstacle.

Bifurcated System

Brazil adopts a bifurcated patent litigation system. Patent infringement lawsuits fall within state jurisdiction, while nullity actions must be heard by federal courts (due to the mandatory presence of the BRPTO). Both the state and federal courts have trial and appellate levels.

There are 27 state courts in Brazil (one for each of the 26 states and another for the Federal District) and the State Court of São Paulo is responsible for most of the complex infringement and contractual litigations involving patents. The Federal Court of Appeals for the 2nd Circuit, located in Rio de Janeiro, is the most relevant of the five federal courts in terms of patent litigations involving the BRPTO. 

The Superior Court of Justice (STJ) has nationwide jurisdiction and hears challenges addressing violation of the federal laws (eg, the LPI) from the State Court of Appeals and the Federal Court of Appeals.

The Supreme Court of Justice (STF) is the highest court in Brazil and has jurisdiction over patent cases where they concern constitutional matters.

Therefore, the courts with jurisdiction over patent litigation are:

• at first level, the trial court (state or federal);
• at second level, the Court of Appeals (state or federal); and
• at the highest levels, the Superior Court of Justice (STJ) and the Supreme Court of Justice (STF).

Specialised IP Courts

Although it is not a rule across the country, the courts that hear most patent cases do so using judges/panels specialised in IP to preside over IP cases.

The Federal Court of Appeals for the 2nd Circuit (TRF2) has two specialised panels with four appellate judges, each of which presides over IP cases. At the federal lower courts, five courts are responsible solely for IP and pension law cases.

Regarding specialisation within the state courts, the Sao Paulo State Court of Appeals has one of the most technical bodies of experts in IP matters, counting eight specialised business courts at the trial level (two in the central region and six in other administrative regions) and two business courts of appeals. On the other hand, the State Court of Appeals of Rio de Janeiro has just started the process of having a chamber specialised in IP. Thecourt has nominated the first three appellate judges to take part in the specialised chamber amongst the 180 appellate judges acting at the court. At the trial level, IP cases are heard by seven courts specialised in business matters.

Although the Brazilian Civil Procedure Code (Law No 13,105/2015) encourages parties to settle, and provides that judges, attorneys and other stakeholders shall stimulate ADR proceedings, there is no specialised body in ADR for IP matters within the courts. 

The most prominent and the only specialised chamber for dispute resolution in Brazil regarding IP matters (including domain name conflicts), named CSD–PI, is managed by the Brazilian Association of Intellectual Property (ABPI) – the Brazilian branch of AIPPI.

Patent infringement lawsuits in Brazil can be filed in compliance with the Brazilian Civil Procedure Code and there are no prerequisites (eg, previous negotiations between the parties) to filing a patent lawsuit. However, warning letters are usually issued by right-holders and are important to define 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 plaintiffs or defendants before Brazilian courts without a lawyer.

Foreign companies can sue in Brazil with or without headquarters in the country as long as they are represented by a Brazilian attorney with powers to do so.

Interim injunctions are available. An interim injunction may be granted by the judge when there is prima facie evidence of infringement and risk of irreparable harm (Article 300, Brazilian Civil Procedure Code and paragraph 1, Article 209, LPI).

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.

If an interim injunction is eventually revoked, the plaintiff will be liable for damages possibly supported by the defendant due to the injunction (item III, Article 302, Brazilian Civil Procedure Code). The damages shall be sought in a separate lawsuit filed by the defendant.

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

Additionally, according to the Brazilian Civil Procedure Code, the party that requests the injunction is responsible for any 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 or suspending the effects of the patent at least between the involved parties.

According to Article 225 of the LPI, proceedings for damages suffered due to the violation of industrial property rights may not be brought before the courts after five years, while the usual deadline for a legal action on the terms of the Brazilian Civil Code is ten years.

Actions against the BRPTO in general need to be filed within five years as set forth by Article 1 of Decree 20,910/32.

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 seek a technical opinion from the court-appointed expert to prove the infringement, or even to hear witnesses. The pieces of evidence collected under this proceeding may be used in future lawsuits, if convenient.

During the course of an infringement lawsuit, besides the evidence brought by the parties, the judge shall appoint a court expert to work with the technical assistants named by the parties in order to produce an unbiased technical opinion to provide the judge with the technical grounds for deciding the case. 

There are no discovery proceedings in Brazil.

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

Concerning infringement lawsuits and bearing in mind that a request for an ex parte preliminary injunction is sought, it is essential that the plaintiff presents robust evidence of infringement. In this sense, technical and legal opinions from the most prominent Brazilian and international experts are key.

The Brazilian legal system permits 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 (Law 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. In the last 20 years, there have been several important civil actions filed by ABPI (the Brazilian Association of Intellectual Property) and ABAPI (the Brazilian Association of Intellectual Property Attorneys) regarding the interpretation of several aspects of IP Law and also challenging acts of the BRPTO.

Article 45 of the LPI 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, Article 43 of the LPI establishes certain acts and circumstances that the patent owner cannot oppose.

• 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 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 their licensee, provided that the patented product is not used for commercial multiplication or propagation of the living matter concerned.

The plaintiff 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 BRPTO. In such cases, the defendant is the alleged infringer.

Direct infringement occurs when all the elements of a patent claim granted by the BRPTO are violated and an indirect infringement occurs when, although not all the elements of the claims of the patent are literally infringed, the offender uses equivalent means to the subject matter of the patent.

Although Article 186 of the LPI sets forth that a crime against a patent of invention is committed even if the violation does not affect all the claims of the patent or if it is restricted to the use of “means equivalent” to the subject matter of the patent, the statute does not define what such means would be. In this sense, the parties shall rely on case law and the work of legal scholars to prove the (non)violation by equivalence.

According to Article 42 of the LPI, a patent confers on 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.

In a process patent infringement lawsuit, the burden of proof can be shifted by the trial judge to the accused party, which will be required to prove that the process used to obtain a certain product owned or held by them is different from that protected by the patent (paragraph 2, Article 42, LPI and paragraph 1, Article 373, Brazilian Civil Procedure Code).

The scope of protection of a patent is determined by the claims as granted by the BRPTO, and it 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.

Apart from the non-infringement of the patent, other usual defences against patent infringement include:

• prior use;
• experimental use;
• nullity of the patent; and
• abuse of dominant position/failure in the obligation to offer fair, reasonable and non-discriminatory (FRAND) licensing opportunities related to SEPs and patent exhaustion.

As prescribed by Article 156 of the Civil Procedure Code, judges shall be assisted by experts whenever the facts depend on technical or scientific knowledge.

Experts can be appointed by the court or be appointed consensually by the parties. It is also possible that more than one unbiased expert is appointed, especially when the patent in question involves multiple fields of knowledge. 

The court expert will be required to provide the judge with a full report with their opinion on any questions raised by the parties (and allowed by the judge), as well as on questions possibly raised by the judge. After the judge nominates the court expert, the parties shall indicate their own technical assistants, who will co-operate with the court expert.

Although judges are not obliged to follow an expert’s opinions when ruling on cases, courts tend to rely on technical opinions, which play an important role in patent infringement actions.

In Brazil, there is no separate phase or procedure 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.

As set forth by Article 41 of the LPI, the scope of the protection conferred by the patent shall be determined by the content of the claims and will be construed based on the specifications and drawings. 

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 to properly interpret the scope of the patent.

Depending on the relevance, specificity, or wider social repercussions of a case, third parties can be heard as amici curiae in patent lawsuits. Such participation can be requested by both plaintiff and defendant, as well as by the person or entity seeking to be heard. Judges also have the power to nominate amici curiae ex officio (Article 138, Brazilian Civil Procedure Code). As a rule, amici curiae cannot appeal.

Third-party opinions can also be provided by independent experts or consultants directly to one of the parties, who will be able to file such opinions as documentary evidence, without the need of direct participation by the third party in the dispute.

A patent may be invalidated if granted contrary to any of the provisions of the LPI, particularly if it lacks novelty, inventive step, or 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 (see 1.10 Post-grant Proceedings Available to Owners of Intellectual Property Rights and 2.2 Third-Party Remedies to Remove the Effects of Intellectual Property):

• by way of a post-grant review request before the BRPTO, to be filed within six months of the issuance of the patent; and
• by way of a judicial nullity action before the federal courts, to be filed at any time during the life term of the patent.

Partial revocation or cancellation is possible. According to Article 47 of the LPI, 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 themselves.

Amendment is possible in revocation or cancellation proceedings, but it is unusual. According to Article 32 of the LPI, the amendments may be proposed by the applicant until the time of the request for examination of the patent application. Amendments to broaden the scope of the claims are not allowed.

Revocation or cancellation and infringement cases are not heard together due to the bifurcated nature of the Brazilian system (see 2.3 Courts With Jurisdiction).

The LPI lays out certain special procedural provisions for lawsuits in patent proceedings.

According to paragraph 2, Article 56, the judge may grant an injunction suspending the effects of the patent if appropriate procedural requirements are met upon registration. The injunction request can be filed at any time during the litigation and it is usually decided within a short term due to its urgent nature. The injunction decision rarely requires fact witnesses; however, expert reports are commonly provided by the interested party. The decision on the injunction request is rendered by the trial judge and can be challenged through an interlocutory appeal to the Court of Appeals.

According to Article 57, annulment lawsuits shall be tried by the Brazilian Federal courts and the BRPTO is a mandatory defendant, together with the patent owner, even though it is authorised to agree with the plaintiff’s claims and request that the patent be declared invalid by the judge.

According to paragraph 1, Article 57, 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.

According to Article 210, the amount of damages shall be defined at a later stage (liquidation of damages phase) based on the most beneficial of the following criteria at the plaintiff’s discretion:

• revenue lost by the plaintiff due to the infringement;
• revenue obtained by the defendant due to the infringement; or
• amount of a hypothetical licence agreement between the plaintiff and the defendant for the regular use of the infringed patent.

The plaintiff’s choice shall be made by the beginning of the liquidation of damages phase, which is expected to last around two years after the final decision on the merits becomes res judicata. The liquidation of damages usually requires an accounting expert to assist the judge to determine the amount of damages.

Patent cases are heard by trial state judges or trial federal judges before the courts of first instance. Each trial court usually has one presiding judge and one auxiliary judge, and both have powers to rule over a patent case depending on the local court rules. 

Due to the fact that judges, as a rule, tend to not have a technical background or IP expertise, court-appointed experts are required to provide an impartial and precise technical report. The technical report is evaluated by the trial judge, who can agree with it or not. The decisions issued by the trial judges may be challenged before state or federal courts of appeals and the superior courts, including the Supreme Court.

At the Court of Appeals, the panels are comprised by at least three appellate judges who render a single opinion.

The parties shall have no influence on trial judges, state and federal courts or the superior courts. The Brazilian Civil Procedure Code provides that if the party has any personal connection with the judge, the judge must be replaced.

Regarding the nomination of judges in Brazil, it is important to note that judges at the trial level are individuals who have been approved in a public examination and can develop in their career to become appellate judges. 20% of the appellate judges shall be chosen from a three-name list formed by attorneys-at-law and public prosecutors. The President of the Republic is responsible for choosing the Justices of the Superior Court of Justice (from a three-name list provided by the Superior Court itself) and of the Supreme Court (if approved by the Federal Senate). Justices are not required to be career judges.

The parties may reach an agreement to settle the case at any time during the lawsuit. The negotiations can be conducted before the courts or between the parties directly. Furthermore, according to the Brazilian Civil Procedure Code, 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, when the judge will try to settle the case. Conciliation hearings can be scheduled at any time by the judge ex officio or upon a request by the parties if a settlement agreement is feasible.

Both infringement and nullity lawsuits can be heard in parallel. Although it is not automatic or even mandatory, infringement proceedings can be stayed pending resolution of a validity or invalidity lawsuit before the federal court.

A request for a stay can be made by the parties or ordered ex officio by the judge. Such a decision can be challenged by means of an interlocutory appeal to the Court of Appeals. Anti-suit injunctions are not usual in Brazil and foreign anti-suit injunction decisions hardly have an influence on proceedings in Brazil, considering that Brazilian courts tend to be more open to arguments invoking the constitutional right of access to the courts and to obtain an effective legal remedy.

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 remedies are usually enforced through sanctions, particularly fines, against non-compliant defendants.

Periodic deposits by the defendant to a bank account managed by the courts can be ordered as a form of provisional damages to assure that the execution of final damages will be successful when the litigation is over. The defendant can also be required to post a bond, which shall be updated on a regular basis.

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

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

If a patent is found valid and infringed at first instance, as a rule the injunction granted is immediately enforceable and the appeal by the infringer does not automatically stay the injunction granted by the first instance.

However, staying effects can be requested from the appellate court so that the injunction will be enforced only after the appeal is tried.

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

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, commissioning a technical report confirming the validity of the patent and the infringement perpetrated by the opposite party or obtaining an infringement report by a court-appointed expert within an early production of evidence procedure. All these costs are paid by the interested party and are not recovered in a lawsuit, with the exception of the ones related to the early production of evidence procedure, which can be reimbursed in a regular infringement lawsuit (if the plaintiff is the winning party).

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 or an infringement lawsuit). Court fees, even though they might be different in each state, are usually low, and seldom exceed USD2,000. Fees for the court-appointed expert are usually around USD25,000.

Regarding court fees and expenses for patent litigation in Brazil, 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, as well as for paying an additional amount as attorneys’ fees for the attorneys of the winning party. In the case of a mixed result (ie, if both parties win in different and equally relevant aspects of the dispute), such litigation costs (with the exception of the attorneys’ fees) shall be divided between them. If the losing party wins in a less relevant aspect, it shall still be responsible for all the court fees and expenses.

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

If the plaintiff is a foreign plaintiff, they 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.

According to item I, paragraph 1, Article 83 of the Brazilian Civil Procedure Code, the bond shall not be required when there is a waiver provided by any agreement or international treaty to which Brazil is signatory.

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

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 have lacked a statutory basis for mediation, despite the obvious fact that mediation may be solely based on contract law. A Mediation Act was 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 significant adoption of arbitration in other areas of law in Brazil. 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.

The Brazilian Civil Procedure Code establishes a mandatory conciliation pre-dispute phase before the defendant has even presented their defence.

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 BRPTO 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.

According to Articles 58–60 of the LPI, a patent application or a patent may be assigned in whole or in part.

Regarding patents, the BRPTO will make the following recordals (entries to the patents database):

• assignment, mentioning the complete qualification of the assignee;
• any limitation or onus applied to the application or patent; and
• changes of name, headquarters or address of the applicant or patentee.

The recordals will produce effects regarding third parties 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 BRPTO to obtain the corresponding certificate, otherwise the Central Bank of Brazil will not authorise the payment of royalties of remittances abroad.

For assignment recordals, the following documents are required by the BRPTO.

• 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 BRPTO 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.

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 BRPTO.

The recordal of a patent licence agreement by the BRPTO is mandatory for the following purposes:

• to obtain presumption of knowledge of the contract by third parties (Article 62, LPI);
• to authorise, when the agreement expressly allows it, the licensee to act by themselves before Brazilian courts in defence of the licensed patent; and
• to allow royalty payments to be deductible for withholding income tax purposes.

As of 1 January 2023, as a result of the liberalisation of foreign exchange controls in Brazil (a part of the country’s effort to be accepted as a full member of the OECD), the recordal of the licence agreement with the BRPTO is no longer required for the remittance of royalties abroad to be allowed.

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

• The BRPTO only authorises the tax-deductibility of royalty payments for a granted patent, not for pending applications.
• There are limits for the tax deductions of the remittance of payments among companies that have a controlling shareholder relationship; in that case, besides taking into consideration the usual rates of the market, the deductibility ceilings established by Ordinance of Treasury Ministry 436/1958 (between 1% and 5% of the net sales made by the licencee) should be observed.
• 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).

Regarding improvements, the LPI determines that an improvement made to a licensed patent shall belong to the party who made it and the other contracting party shall be afforded a preferential right to acquire a licence.

Documentation Requirements

For the licence recordal, the licence agreement notarised and legalised (by apostille or with the Brazilian Consulate) must be submitted to the BRPTO, along with other forms. The licence agreement must comply with some bureaucratic requirements as well.

Compulsory Licensing

Finally, it is important to mention that patents may be subject to compulsory licences. Article 68 of the LPI determines that the patent owner shall be subject to compulsory licensing of their patent if they exercise their rights in the patent in an abusive manner, or if they use it to abuse economic power according to the law in force, under the terms of an administrative or judicial decision.

The following may also 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 or appostilled licensed agreement must be submitted to the BRPTO for recordal purposes. Such office conducts a review of the agreement terms and, upon acceptance, issues a certificate of recordal to the licensee, 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 BRPTO’s Official Gazette but the contract itself remains confidential and, as a general rule, the BRPTO does not furnish copies to third parties.