Intellectual Property in Brazil

Current Issues:

Brazil is one of the fastest growing economies and is considered the eighth largest in the world by nominal GDP.  Though many substantial improvements have been made in recent years in intellectual property laws, Brazil is still encountering issues with counterfeit products.  According to “Counterfeiting and Piracy in Brazil: The Economic Impact” by the U.S. – Brazil Business Council, at least $1.6 billion is lost to counterfeiting and piracy ranging is goods from car parts to software.   To make matters more difficult, there is an application processing backlog.  The patent registration process may take as long as eight years to be resolved.  

According to the 2011 BRIC report by the World Intellectual Property Review, Brazil has the capacity for expanding internal manufacturing goods and services while exerting a dominant position as a global supplier of raw materials.   Brazilian companies have grown in terms of international significance as major players in “highly technical sectors, from oil exploration in deep waters to aircraft manufacturing.”  Brazil has a long history with intellectual property, being a founding member of the Paris Convention of 1883. This enacted patent law for the protection of industrial property and offered recourse for all participating nations.  Other agreements such as the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have helped established standards for Brazilian patent protection.  Brazil is further regulated by the National Institute of Industrial Property (INPI).

General Protection Strategies:

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1096787786&r.l1=1073858796&r.l2=1086109554&r.l3=1096768713&r.l4=1096787905&r.s=sc&type=RESOURCES

The most important way to avoid problems when defending IP rights in Brazil is to be prepared. To make sure that you can anticipate any potential issues, you should:

Patentability Requirements: http://www.patentlens.net/daisy/patentlens/3554.html

Brazil follows a “first to file” patent system where inventions must: 

1.       Be novel. To comply with the novelty requirement, the invention must be new in relation to the world’s body of technological knowledge.

2.       Involve an inventive step. An invention is held to involve an inventive step when it is not obvious to a person of ordinary skill in the relevant art.

3.       Be capable of industrial application. Industrial applicability is satisfied when the invention can be manufactured or reduced to practice in the respective industry.

Definition and Protection Periods: http://www.inpi.gov.br/index.php/english

Industrial Design

The World Intellectual Property Organization states that industrial designs make products attractive and appealing; hence, they add to the commercial value of a product and increase its marketability.  According to the INPI website, Brazil provides the following definition and protection terms for industrial design:

The registration of Industrial Design protects the external ornamental shape of an object or the set of lines and colors applied to a product, as long as it presents a new and original result and it is suitable for industrial production. The registration of Industrial Design doesn’t protect functionalities, dimensions, materials or manufactured processes of an object.

The initial term of the protection is 10 years, which can be extended up to 3 periods of five years (totaling a maximum of 25 years). For this, besides the amount of money of the filling application, five-year extension fees for maintenance and extension shall be paid, the latter only from the tenth year in force.

Process for Applying for Industrial Design Protection (note: application must be in Portuguese):

1.      Application, as per Form No. 1.06;

2.      Description, if the case may be, according to the provisions hereof;

3.      Claims, as per the provisions hereof;

4.      Drawings or photographs, as provided hereunder;

5.      Field of application of the object (i.e. Abstract);

6.      Receipt of payment of the official filing fee.

Crimes Against Industrial Designs: http://www.cbsg.com.br/pdf_publicacoes/industrial_design_brazil.pdf

Manufacturing without proper authorization or any substantial imitation that may lead to consumer confusion is prohibited.  An industrial design crime is committed by anyone who:

1.       Exports, sells, exhibits or offers for sale, maintains in stock, hides or receives for economic purposes, an object that illicitly incorporates a registered industrial design or a substantial imitation thereof that may lead  to error or confusion

2.      Imports a product that incorporates an industrial design registered in this country, or a substantial imitation thereof that may lead to error or confusion, for economic purposes, and which was not placed on the external market directly by the registrant or with his or her consent.

Legal Actions:

1.      Criminal Actions – penalty for infringement is up to one year imprisonment and/or fines

2.      Civil Actions – Jury trials are not available for civil actions and cases are decided by a single judge at the state level. Damages are assessed by loss of profits, unjust enrichment, or reasonable royalties, whichever is highest.

Agriculture

According to the USDA, " Brazil has a substantial risk assessment-based regulatory framework for dealing with both gene technology and agricultural biotech products. The National Technical Commission on Biotechnology (CTNBio) is Brazil's regulatory body responsible for approval of all domestic and imported biotech products. Despite this modern legal framework, agricultural biotechnology continues to be a difficult issue in Brazil as government agencies, consumers, and environmental groups are divided on how to approach, conduct research on, and approve commercial
applications for biotech products. The United States and Brazil share many interests regarding development of and trade in products of agricultural biotechnology. Producers of biotech crop seeds have made progress in addressing intellectual property rights protection."  In  1997, Brazil added a Plant Variety Protection Law. (No. 9.456)  This law protects breeders of non-genetically modified cultivars. 

Pharmaceuticals

Until 1991, there was no patent protection for pharmaceutical products and processes under Brazil’s intellectual property law. Due to this lack of protection, the Pharmaceutical Manufacturers’ Association claimed losses and sought relief under the Trade Act of 1974. This was done on the basis that the lack of laws caused them to have limited opportunities for additional investment in Brazil, impaired exports, and caused their investments to lose value. A petition was filed, and a 100% tariff was placed on $39 million in Brazilian exports to the U.S. The Brazilian government finally decided to create legislation that protected pharmaceutical products. In 1991, the sanction on tariffs was lifted by the U.S. government.

In 1997, Brazil passed legislation stating that a patent owner would be subject to a compulsory license if the owner failed to manufacture it in Brazil within three years. Due to this legislation, more companies began producing drugs within Brazil because production costs were lowered. Pharmaceutical companies in the U.S. reacted, saying that if companies’ patents are broken, those companies will no longer sell their drugs in Brazil. This includes the newest drugs that treat the HIV/AIDS virus, which has a high rate in Brazil. Additionally, the United State is taking this issue to the World Trade Organization. Eventually the U.S. had to withdraw the complaint.

More recently, the Brazilian government threated drugs companies that they would break the patents of four drugs if the country was not allowed to buy the patented drugs at a discount or produce generic versions. Not wanting the patent to be broken, Abbott Laboratories agreed to reduce the cost of one of its drugs, Lopinavir.

So, if a company wants to produce pharmaceuticals in Brazil, the production costs are low and it will keep them from losing patent protection in the country. Otherwise, producing them in the U.S. then selling them in Brazil could potentially be risky.

Arts and Entertainment

Protection Strategies:

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1096787945&type=RESOURCES

In Brazil, a copyright can be obtained to protect one’s work just as it can in many other countries.  As a member of the Berne Convention, Brazil’s copyright laws are very similar to those of the United States, and a copyright is created automatically upon the creation of the work.  Although the owner of the copyright is afforded this automatic protection just by creating the work, it is also recommended to register copyrights with the Brazilian government to ensure further protection.

Copyright Piracy Concerns: http://www.iipa.com/rbc/2009/2009SPEC301BRAZIL.pdf

Just as in the United States, Internet piracy is a major concern in Brazil.  This is the most prevalent form of piracy used to distribute copyrighted works from the music industry.  Using peer-to-peer (P2P) networks each year, 3 million Brazilian downloaders managed to download more than 1.7 billion illegal music files.  There has also been rampant use of these services to download illegal copies of video games.  According to the Entertainment Software Association (ESA), Brazil accounted for 4.9% of video games downloaded in December of 2008.

Copyright Enforcement:

Police in Brazil routinely conduct raids to seize pirated goods, but since they rarely prosecute the individuals, there is no deterrent to continue pirating.  The main government entity in Brazil responsible for the country’s anti-piracy campaign is the CNCP (the National Council to Combat Piracy and Intellectual Proptery).  The goals of this organization are “continued operational coordination, concrete actions, and leadership in legal reform,” as well as an emphasis on educational and public awareness.  In 2008, the CNCP hired a consulting firm to develop a five-year anti-piracy campaign, which includes the following initiatives:

1.   A “Legal Fair” campaign to make sure all product offered by vendors at fairs is legitimate
2.    A “Piracy Free Cities” campaign in which the CNCP supports cities that  promote legalization of all products
3.    A “Business Against Piracy” campaign in which the CNCP gives support to retail outlets that promote public awareness of piracy.