Recordal of license agreements: recent groundbreaking changes you should know about

by , | Jan 9, 2023 | Business Transactions, Client Alert

On December 28, 2022, through a meeting of directors, the Brazilian PTO approved the adoption of important changes in the process of recording technology agreements, and in previously established understandings of this Office. These changes not only simplify the recordal process, but also modify the manner of entering into technology agreements in Brazil.

The changes aim to attract new business and investments in innovation and technology in the country, expanding opportunities for commercialization of IP assets, and leveraging Brazilian economic, technological, and scientific growth.

  • Licensing of unpatented technology (know-how) will be accepted

In the past, the Brazilian PTO’s position was that know-how could not be licensed since knowledge would be permanently absorbed by the Brazilian party. The new position of the Brazilian PTO is that know-how will not necessarily be acquired by the Brazilian party, which may now only license it and cease its use at the end of the agreement.

It is not yet known what impact this will have on the agreement term, which until now was limited to 5 years, extendable by a further 5. Therefore, it will be necessary to evaluate the Brazilian PTO’s position during the course of this year.

  • The payment of royalties on applications for patents, trademark registrations, design patents and other IP assets will be considered

Until now, the Brazilian PTO did not consider the payment of royalties for patent applications, and applications for trademark registrations or design patents provided for in a licensing agreement. In a move that is more aligned to the principles of economic freedom and contractual autonomy of the parties, the Office will now lift such obstacles in the recordal process, so as not to hinder such payments. In this way, the recordal certificate will reflect the provisions of the parties to the agreement with regard to the term and royalties on applications.

Nevertheless, the Brazilian PTO is still studying the legal nature of such requests and examining the effect of this remuneration on the assets of the parties and before the Public Administration.

The Brazilian PTO also brings the following formal changes in the registration process:

  • Digital signatures without the ICP-Brazil certificate will be accepted;
  • It will no longer be mandatory to notarize and apostille/legalize foreign signatures made in digital format (this also applies to the e-notarization and e-apostille);
  • It will no longer be mandatory to initial the agreement pages and annexes;
  • It will no longer be mandatory for two witnesses to sign agreements containing a Brazilian city as a place of execution; and
  • It will no longer be mandatory to present the company documents (articles of association, bylaws, etc.) of the Brazilian licensee.

Note that the effective implementation of these updates will depend on adjustments in the electronic process and changes in regulation, such as those contained in Normative Instruction 70/2017 and Resolution 199/2017 of the Brazilian PTO. Therefore, it will be necessary to await further measures by the new management of the Brazilian PTO in 2023.


Subscribe to our newsletter