PATENT
PATENT ENFORCEMENT
Before what tribunals can a patent be enforced against an infringer? Is there a choice between tribunals and what would influence a claimant’s choice?
Can the parties be required to undertake mediation before commencing court proceedings? Is mediation or arbitration a commonly used alternative to court proceedings?
Who is permitted to represent parties to a patent dispute in court?
What has to be done to commence proceedings, what court fees have to be paid and how long does it generally take for proceedings to reach trial from commencement?
Can a party be compelled to disclose relevant documents or materials to its adversary either before or after commencing proceedings, and if so, how?
The plaintiff is required to attach to the brief or complaint the documents which support his case, and to allow for further evidence which he intends to adduce in the proceedings. The defendant then does the same when filing the defense, challenging the plaintiff’s arguments and evidence.
What are the steps each party must take pre-trial? Is any technical evidence produced, and if so, how?
In patent litigation, where almost every case involves technical issues, an outcome on merit will often depend on the knowledge of an expert, or sometimes several experts. It is important to note, however, that the judge has the right to decide notwithstanding the conclusions of the court-appointed expert. In other words, the court expert’s report is not binding on the court’s ruling.
How are arguments and evidence presented at the trial? Can a party change its pleaded arguments before and/or at trial?
Plaintiffs cannot change pleadings or causes of action (arguments) once the defendant is served with a summons, unless the defendant consents. The plaintiff cannot, under any circumstances, change his pleadings or causes of action after the judge renders a decision defining the issues in the case and the scope of the evidence production phase.
How long does the trial generally last and how long is it before a judgment is made available?
Are judgments made available to the public? If not as a matter of course, can third parties request copies of the judgment?
Are courts obliged to follow precedents from previous similar cases as a matter of binding or persuasive authority? Are decisions of any other jurisdictions of persuasive authority?
Are there specialist judges or hearing officers, and if so, do they have a technical background?
At state level, all major Brazilian cities have courts specialized in commercial and corporate law, including IP. For instance, Rio de Janeiro has seven state courts with jurisdiction to hear commercial law cases, including IP cases, and São Paulo recently created two such courts.
What interest must a party have to bring (i) infringement, (ii) revocation, and (iii) declaratory proceedings?
If declarations are available, can they address (i) non-infringement, and/or (ii) claim coverage over a technical standard or hypothetical activity?
Can a party be liable for infringement as a secondary (as opposed to primary) infringer? Can a party infringe by supplying part of, but not all of, the infringing product or process?
Can a party be liable for infringement of a process patent by importing the product when the process is carried on outside the jurisdiction?
Does the scope of protection of a patent claim extend to non-literal equivalents?
Can a defense of patent invalidity be raised, and if so, how? Are there restrictions on such a defense e.g. where there is a pending opposition? Are the issues of validity and infringement heard in the same proceedings or are they bifurcated?
Since Brazil has a bifurcated system, a separate lawsuit must be filed in order to invalidate a patent with erga omnes effects. In this kind of lawsuit, the BPTO is a mandatory co-defendant, together with the patentee, and because the BPTO is a federal entity, the invalidity proceeding must be filed at a Federal Court.
Post-grant (administrative) oppositions can only be filed within six months from the patent grant at the BPTO and they do not prevent the defendant from filing an invalidity lawsuit nor from raising invalidity arguments in infringement suits.
Other than lack of novelty and inventive step, what are the grounds for invalidity of a patent?
Are infringement proceedings stayed pending resolution of validity in another court or the Patent Office?
What other grounds of defense can be raised in addition to non-infringement or invalidity?
In addition, although rarely, the laches doctrine in patent infringement lawsuits may be raised and accepted if the court is convinced that the patent owner knew about the infringing activities but delayed substantially to file the lawsuit, so as to increase potential damages.
Are (i) preliminary, and (ii) final injunctions available, and if so, on what basis in each case? Is there a requirement for a bond?
Permanent injunctions are also available and are normally granted whenever a judgment of infringement is made, although a stay on the injunction may be determined by the Court of Appeals before the appeal has been decided upon by the court.
On what basis are damages or an account of profits assessed? Are punitive damages available?
There is no statutory provision setting forth punitive damages in Brazil and courts are usually reluctant to adopt this doctrine.
How are orders of the court enforced (whether they be for an injunction, an award of damages or for any other relief)?
What other form of relief can be obtained for patent infringement? Would the tribunal consider granting cross-border relief?
The court would consider granting cross-border relief depending on the circumstances; for instance, shipment details, information on the importer, or evidence that the incoming or imported product reproduces and/or infringes the patented product in Brazil. In the context of the patent, this is not a simple task for Customs Officials. A generic claim will not be sufficient to obtain relief.
How common is settlement of infringement proceedings prior to trial?
After what period is a claim for patent infringement time-barred?
Is there a right of appeal from a first instance judgment, and if so, is it a right to contest all aspects of the judgment?
What are the typical costs of proceedings to first instance judgment on (i) infringement, and (ii) validity? How much of such costs are recoverable from the losing party?
For jurisdictions within the European Union: What steps are being taken in your jurisdiction towards ratifying the Agreement on a Unified Patent Court, implementing the Unitary Patent Regulation (EU Regulation No. 1257/2012) and preparing for the unitary patent package? Will your country host a local division of the UPC, or participate in a regional division? For jurisdictions outside of the European Union: Are there any mutual recognition of judgments arrangements relating to patents, whether formal or informal, that apply in your jurisdiction?
Can a patent be amended ex parte after grant, and if so, how?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Are there any constraints upon the amendments that may be made?
The Guidelines on voluntary amendments will become an important source and reference point for Brazilian Examiners when performing substantive examination on patent applications.
Can a patent be amended ex parte after grant, and if so, how?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Are there any constraints upon the amendments that may be made?
The Guidelines on voluntary amendments will become an important source and reference point for Brazilian Examiners when performing substantive examination on patent applications.
Can a patent be amended ex parte after grant, and if so, how?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Can a patent be amended in inter partes revocation/invalidity proceedings?
Are there any constraints upon the amendments that may be made?
The Guidelines on voluntary amendments will become an important source and reference point for Brazilian Examiners when performing substantive examination on patent applications.
Are there any laws which limit the terms upon which parties may agree a patent license?
Yes. License agreements are subject to recordation in the BPTO in order to produce effects against third parties and whenever payment is remitted abroad. In the process of recording, the BPTO may provide limitations upon which parties may agree. The most critical limitation is on the consideration clause. The BPTO often issues office actions questioning payment methods whenever the license agreement does not establish a “fixed amount per unit sold” or “a percentage on the net selling price”. The BPTO also limits tax deductions in order to limit the remittance of payments among colligated companies. Furthermore, the BPTO does not permit any compensation for patent applications.
Another limitation provided by the law refers to improvements. License agreements executed in foreign countries often contain a clause providing that improvements belong to the licensor, even if made by the licensee. Nevertheless, the Brazilian Patent Law determines that any improvement on a licensed patent shall belong to the person who made it, thus guaranteeing the other party the right of preference with respect to a license.
If there is an antitrust concern, the BPTO often questions non-competition clauses when the period is greater than five years after the end of the license and limits the term of the license by the respective patent term.
Recently, however, the BPTO has reduced its intervention in license agreements, thus allowing the parties to negotiate the terms thereof without many constraints.
Can a patent be the subject of a compulsory license, and if so, how are the terms settled and how common is this type of license?
Are there any constraints upon the amendments that may be made?
The Guidelines on voluntary amendments will become an important source and reference point for Brazilian Examiners when performing substantive examination on patent applications.
Can the term of a patent be extended, and if so, (i) on what grounds, and (ii) for how long?
Are all types of subject matter patentable, and if not, what types are excluded?
In addition, the Statute provides that the following are not patentable: “I. that which is contrary to [accepted principles of] morality and good conduct and to public safety, order and health; II. substances, matter, mixtures, elements or products of any kind, as well as any modification of their physical-chemical properties and the respective processes of obtaining or modifying them, when they result from the transformation of the atomic nucleus; and III. the whole or part of living beings, except transgenic microorganisms which meet the three requirements for patentability – novelty, inventive step and industrial application – specified in Article 8 and which are not mere discoveries.”
Is there a duty to the Patent Office to disclose prejudicial prior disclosures or documents? If so, what are the consequences of failure to comply with the duty?
May the grant of a patent by the Patent Office be opposed by a third party, and if so, when can this be done?
Is there a right of appeal from a decision of the Patent Office, and if so, to whom?
How are disputes over entitlement to priority and ownership of the invention resolved?
Is there a “grace period” in your jurisdiction, and if so, how long is it?
What is the term of a patent?
Is there a mechanism for seizing or preventing the importation of infringing goods or services and, if so, how quickly are such measures resolved?
However, interested parties have mechanisms to alert the relevant authorities of their trademark rights and provide information regarding the identification of counterfeit goods. Once infringement has been confirmed, the Customs Authority will seize the goods/ services and may apply a forfeiture (and destruction) penalty. In some cases, Customs require the party file a specific lawsuit determining final seizure and destruction.
The plaintiff covers the costs incurred with these measures.
Can antitrust law be deployed to prevent relief for patent infringement being granted?
Have there been, or are there anticipated, any significant legislative changes or case law developments?
In its decision, the Superior Court of Justice held that the reproduction of songs on streaming platforms constitutes new public reproduction of musical works and therefore, under the BCL, royalties must be paid accordingly.
Said decision has impact on other streaming service providers, such as Spotify, Deezer and Google Play.
Are there any particularly noteworthy issues around the application and enforcement of copyright in relation to digital content (for example, when a work is deemed to be made available to the public online or hyperlinking, etc.)?
What can be registered as a trademark?
What cannot be registered as a trademark?
I. crests, armorial bearings, medals, flags, emblems, distinctions and monuments, as well as their respective names, representations or imitations, when they are of an official or public nature, whether they are national, foreign or international;
II. an isolated letter, numeral and date, unless displayed in a sufficiently distinctive manner;
III. an expression, representation, drawing or any other sign that is contrary to (accepted principles of) morality and good conduct or is offensive to a person’s honor or image, or is an affront to freedom of conscience, belief, religion or ideas and feelings worthy of respect and veneration;
IV. the designation or acronym of a public entity or agency, unless registration is applied for by the public entity or agency itself;
V. the reproduction or imitation of the characteristic or distinguishing element of a third party’s establishment title or company name, which is liable to cause confusion or association with such distinctive sign;
VI. generic, necessary, common, usual or simply descriptive signs, when they are related to the goods or services they identify, or those commonly used to indicate a characteristic of the goods or services regarding their nature, nationality, weight, value, quality and time of production or provision of a service, unless displayed in a sufficiently distinctive manner;
VII. signs or expressions used merely as a means of advertising;
VIII. colors and their names, unless displayed or combined in a unique and distinctive manner;
IX. a geographical indication and its imitation that is liable to cause confusion, or a sign that may falsely lead to a geographical indication;
X. a sign that leads to a false indication as to the origin, source, nature, quality or utility of the goods or services for which the mark is intended;
XI. the reproduction or imitation of an official hallmark regularly used to guarantee a standard of any kind or sort;
XII. the reproduction or imitation of a sign that has been registered as a collective or certification mark by a third party, with due regard for the provision of Article 154;
XIII. the name, award or symbol of an official or officially recognized sporting, artistic, cultural, social, political, economic or technical event, as well as an imitation that is liable to create confusion, except with the authorization of the competent authority or entity promoting the event;
XIV. the reproduction or imitation of a title, policy, coin and paper currency of the Union, the States, the Federal District, the Territories, the Municipalities or of any country;
XV. the legal name or corresponding signature, family name or patronymic and the image of third parties, except with the consent of the owner, his/her heirs or successors in title;
XVI. well-known pseudonyms or nicknames and individual or collective artistic names, except with the consent of the owners, their heirs or successors in title;
XVII. literary, artistic or scientific works, as well as titles that are protected by copyright and are liable to cause confusion or association, except with the consent of the author or owner;
XVIII. technical terms used in industry, science and art that are related to the goods or services they identify;
XIX. the reproduction or imitation, either wholly or in part, even with additions, of another person’s registered trademark to distinguish or certify identical, similar or related goods or services that is liable to cause confusion or association with the other person’s mark;
XX. the duality of trademarks in the name of a single owner for the same goods or services unless, in the case of marks of the same nature, they are displayed in a sufficiently distinctive form;
XXI. the necessary, common or usual form of a product or packaging, or a form that cannot be dissociated from a technical effect;
XXII. an object that is protected by registration as an industrial design in the name of a third party; and
XXIII. a sign that imitates or reproduces, either wholly or in part, a trademark that the applicant clearly could not be unaware of as a result of his/her activity, in the name of a person established or domiciled in Brazil or in a country that is bound to Brazil by agreement, or that assures reciprocity of treatment, if the mark is intended to identify identical, similar or related goods or services liable to cause confusion or association with the other person’s mark.
What information is needed to register a trademark?
• priority number and date, if applicable;
• declaration confirming that the goods or services applied for are related to an activity in which the applicant is effectively and lawfully engaged;
• foreign applicants must engage a local representative domiciled in Brazil, so a Power of Attorney is required; and
• color claim, if applicable.
Both the priority document and the Power of Attorney may be filed later (four months and 60 days, respectively) provided that a supplemental deadline is requested when the application is filed.
What is the general procedure for trademark registration?
If the application meets the minimum filing requirements, it will be published for opposition purposes in three to four weeks from filing. Interested third parties will then have 60 days to raise objections and file oppositions (no extensions of time are allowed). If an opposition is filed, a notice will be published, and the applicant will have an unextendible 60-day term to submit a reply. The examination of the application (including reviews on both absolute and relative grounds) will only be carried out by the BPTO after the deadlines for opposition proceedings have expired.
Roughly 12 to 15 months from the filing of the application, the BPTO will publish its decision on the registrability of the trademark, either allowing or rejecting its registration. If an application is allowed, the applicant will have a 60-day term to pay the final issuance fees, whereas, if rejected, it will have the same term to file an appeal.
When granted following payment of the issuance fees, the registration will be published in the Official Gazette and the corresponding Certificate will be provided electronically by the BPTO within approximately two months.
It is not necessary to announce “intent to use” at any time.
How are goods and services described?
Who can own a trademark in your jurisdiction?
Can a trademark acquire distinctive character through use?
In other words, it is the BPTO’s view that its role is limited to analyzing (i) the intrinsic distinctiveness of a trademark, and (ii) its distinctiveness in comparison with other registered trademarks.
Despite the above, a secondary meaning is widely accepted by Brazilian courts, which have not only built considerable case law confirming the possibility of the distinctive character of a trademark being acquired through use but have also expressly recognized the applicability of Article 6 quinquies of the Paris Convention. In any event, involvement of the Brazilian courts is only permissible after a decision is handed down by the BPTO, and therefore, once the trademark application is rejected for lack of distinctive character, a court action must be filed seeking the annulment and subsequent revision of the administrative decision. In order to evidence that a trademark has acquired secondary meaning before the Brazilian courts, the main elements that should be provided are as follows:
time of continuous use in Brazil;
acknowledgment by the competition;
notoriety (recognition by Brazilian consumers);
period when exclusive use was enjoyed; or
non-contestability by third parties.
Additional factors put forward by Brazilian scholars include the applicant’s intent of distinctive use, which consists in repeated efforts to make the trademark distinctive, removing the same from the public domain.
How long on average does registration take?
Does your jurisdiction recognize Collective or Certification marks?
In the case of collective marks, the application can only be filed by a juridical person that represents the relevant trade association, which may engage in a different activity from that of its members, and it must contain the regulations governing the use of the mark.
In the case of certification marks, the application can only be filed by a person that has no direct commercial or industrial interest in the certified goods or services, and must contain (i) the characteristics of the goods or services to be certified, and (ii) the control measures that the owner shall adopt.
Does your jurisdiction recognize Collective or Certification marks?
In the case of collective marks, the application can only be filed by a juridical person that represents the relevant trade association, which may engage in a different activity from that of its members, and it must contain the regulations governing the use of the mark.
In the case of certification marks, the application can only be filed by a person that has no direct commercial or industrial interest in the certified goods or services, and must contain (i) the characteristics of the goods or services to be certified, and (ii) the control measures that the owner shall adopt.
What are the absolute grounds for refusing registration?
crests, armorial bearings, medals, flags, emblems, distinctions and monuments, as well as their respective names, representations or imitations, when they are of an official or public nature, whether they are national, foreign or international;
an isolated letter, numeral or date;
an expression, representation, drawing or any other sign that is contrary to (accepted principles of) morality and good conduct or is offensive to a person’s honor or image, or is an affront to freedom of conscience, belief, religion or ideas and feelings worthy of respect and veneration;
the designation or acronym of a public entity or agency, unless registration is applied for by the public entity or agency itself;
generic, necessary, common, usual or simply descriptive signs, when they are related to the goods or services they identify, or those commonly used to indicate a characteristic of the goods or services regarding their nature, nationality, weight, value, quality and time of production or provision of a service;
signs or expressions used merely as a means of advertising;
colors and their names;
a sign that leads to a false indication as to origin, source, nature, quality or utility of the goods or services for which the mark is intended;
the reproduction or imitation of an official hallmark regularly used to guarantee a standard of any kind or sort;
the reproduction or imitation of a title, policy, coin and paper currency of the Union, the States, the Federal District, the Territories, the Municipalities or of any country;
technical terms used in industry, science and art that are related to the goods or services they identify; and
the necessary, common or usual form of a product or packaging, or a form that cannot be dissociated from a technical effect.
What are the ways to overcome an objection on absolute grounds?
If refusal is grounded on prohibitions relating to the protection of morality or public order, it is not possible to overcome the objection unless the applicant evidences that the absolute grounds were not applicable to that specific case.
What is the right of appeal against a decision to refuse registration by the Patent and Trademark Office?
What are the absolute grounds for refusing registration?
crests, armorial bearings, medals, flags, emblems, distinctions and monuments, as well as their respective names, representations or imitations, when they are of an official or public nature, whether they are national, foreign or international;
an isolated letter, numeral or date;
an expression, representation, drawing or any other sign that is contrary to (accepted principles of) morality and good conduct or is offensive to a person’s honor or image, or is an affront to freedom of conscience, belief, religion or ideas and feelings worthy of respect and veneration;
the designation or acronym of a public entity or agency, unless registration is applied for by the public entity or agency itself;
generic, necessary, common, usual or simply descriptive signs, when they are related to the goods or services they identify, or those commonly used to indicate a characteristic of the goods or services regarding their nature, nationality, weight, value, quality and time of production or provision of a service;
signs or expressions used merely as a means of advertising;
colors and their names;
a sign that leads to a false indication as to origin, source, nature, quality or utility of the goods or services for which the mark is intended;
the reproduction or imitation of an official hallmark regularly used to guarantee a standard of any kind or sort;
the reproduction or imitation of a title, policy, coin and paper currency of the Union, the States, the Federal District, the Territories, the Municipalities or of any country;
technical terms used in industry, science and art that are related to the goods or services they identify; and
the necessary, common or usual form of a product or packaging, or a form that cannot be dissociated from a technical effect.
What are the ways to overcome an objection on absolute grounds?
If refusal is grounded on prohibitions relating to the protection of morality or public order, it is not possible to overcome the objection unless the applicant evidences that the absolute grounds were not applicable to that specific case.
What is the right of appeal against a decision to refuse registration by the Patent and Trademark Office?
On what grounds can a trademark be opposed?
Further, oppositions invoking special rights may be filed as an exception to the general rules of the Brazilian IP Law, such as (i) the principle of territoriality, (ii) the principle of specialty, and (iii) the principle of attributive trademark rights, as explained below:
(i)Oppositions grounded on well-known trademarks
Ownership of a trademark is acquired by a valid registration, which grants the right to exclusive use throughout Brazil. As a rule, a prior trademark application or registration is required as the basis for an opposition.
However, a trademark that is well known in its field of activity (pursuant to the provisions of Article 126 of the Brazilian IP Law and Article 6 bis of the Paris Convention) will enjoy special protection, irrespective of whether or not it has been previously filed or registered in Brazil. As such, upon submitting evidence of the trademark being well known in Brazil (and not only abroad), an opposition can be filed regardless of whether a prior application exists at the BPTO (an exception to the principle of territoriality). Nonetheless, it is mandatory to file a trademark application within 60 days of the opposition.
(ii)Oppositions grounded on highly renowned (reputed) trademarks
The right to exclusive use of a trademark is limited to the goods or services covered by the registration. As a rule, a prior trademark application or registration can be used as the basis for an opposition provided that the opposed trademark was applied for to identify identical, similar or related goods or services. However, a trademark that is considered highly renowned will be assured special protection in all fields of activity (pursuant to Article 125 of the Brazilian IP Law). As such, upon obtaining a ‘highly renowned’ status (which must have been applied for previously through specific proceedings), an opposition can be filed against similar trademarks in any of the existing classes of goods or services (an exception to the principle of specialty).
(iii) Oppositions grounded on prior fair use Priority in registration is based on the filing date of the trademark application or priority document. As a rule, Brazil adopts the first-to- file system and prior use does not support a priority claim.
However, any person who, in good faith, on the priority date or the filing date of the application, was using an identical or similar mark to distinguish or certify identical, similar or related goods or services for at least six months in Brazil shall enjoy a right of precedence in registration (pursuant to Article 129, 1st Paragraph, of the Brazilian IP Law). As such, an opposition against a more senior application is possible if based on prior use (an exception to the principle of attributive trademark rights).
Who can oppose the registration of a trademark in your jurisdiction?
What is the procedure for opposition?
Roughly one to two months from filing, the notice of opposition will be published in the Official Gazette, triggering the applicant’s deadline to submit a reply, which is not mandatory and will not result in a default decision. In any event, the BPTO will conduct the substantive examination of the application and, in addition to the arguments raised in the opposition, will consider any absolute or relative grounds for refusal, including other prior registrations for identical or similar trademarks, in the name of different third parties.
What happens when a trademark is granted registration?
From which date following application do an applicant’s trademark rights commence?
Nevertheless, a pending trademark application is an expectant right; as such, the Brazilian IP Law assures the applicant the right to safeguard its material integrity and reputation. The applicant is therefore allowed to: assign the trademark, license its use, and file oppositions; however, it is prevented from filing an infringement claim.
A trademark infringement claim can be grounded on a valid registration, unless it is based on unfair competition (passing off).
What is the term of a trademark?
How is a trademark renewed?
If the renewal application is not filed prior to the expiration of the term of registration, the applicant may do so within the following six months, upon payment of an additional fee (roughly USD 297.00).
Can an individual register the assignment of a trademark?
Are there different types of assignment?
Recently, the BPTO started raising office actions during the assignment proceeding, requesting the parties amend the assignment document to avoid the cancellation or dismissal of the marks that were not assigned and would fall within this legal provision.
Can an individual register the licensing of a trademark?
For license agreements, it is necessary to present a specific form enclosing either the original or a certified copy of the license agreement, duly notarized and legalized before a Brazilian Consulate.
Are there different types of license?
Can a trademark licensee sue for infringement?
Are quality control clauses necessary in a license?
Can an individual register a security interest under a trademark?
Are there different types of security interest?
What are the grounds for revocation of a trademark?
(i) expiration of the registration term (failure to renew the registration for an additional 10- year period);
(ii) express waiver of the rights to the trademark (either wholly or for part of the goods or services);
(iii) cancellation on non-use grounds; or (iv) failure to comply with Article 217 of the Brazilian IP Law, according to which a person domiciled abroad must appoint and maintain an attorney domiciled in Brazil, duly empowered to represent the party and receive service of process. Only item
(iii) requires a specific proceeding to have the mark revoked.
The revocation (or forfeiture) is determined if use of the mark has not been initiated in Brazil or if use has been interrupted for more than five consecutive years; or if, during the same period, the mark has been used with modifications which constitute an alteration to its original distinctive character protected by the Certificate of Registration.
The mark may be declared partially revoked if the registrant fails to evidence use of the mark in connection with certain goods or services that are either similar or related to those in respect of which use of the mark was proven.
What is the procedure for revocation of a trademark?
As for revocation based on non-use grounds, the Brazilian IP Law sets forth a specific proceeding, which is initiated by the filing of a specific form in which the applicant attests its legitimacy to request the declaration of forfeiture. The legitimacy of the applicant may be founded on a trademark application, copyright or any other arguable right against the targeted registration.
Who can commence revocation proceedings?
What grounds of defense can be raised against a revocation action?
From experience, invoices and/or certificates of importation attesting that the goods have actually entered the country have more weight in the overall analysis of actual use of the mark, though by law all available evidence should be taken into consideration by the examiner (e.g. advertisements, pictures, videos, and printed materials in general, among others – as long as they are duly dated, the mark can be clearly perceived and the goods and services are described).
What is the route of appeal against a decision of revocation?
What are the grounds for invalidity of a trademark?
What is the procedure for invalidating a trademark?
Who can commence invalidation proceedings?
What grounds of defense can be raised against a revocation action?
What grounds of defense can be raised against a revocation action?
What is the route of appeal against a decision of invalidity?
How and before what courts can a trademark be enforced against an infringer?
What are the key pre-trial procedural stages and how long does it generally take for proceedings to reach trial from commencement?
Subsequently, and if all the requirements have been duly complied with, the court will determine that the defendant be served with process. The defendant has 15 days to file a reply to the lawsuit under penalty of the facts alleged by the plaintiff being considered true. If a reply is filed, the plaintiff can file a rebuttal within 10 days. After such period, the court will determine which evidence is allowed to be produced (including the need for an expert opinion), thus beginning the production of supporting evidence phase. Once this phase is completed, the case is ready to be tried.
The term for such proceedings varies greatly, depending on the complexity of the case and on the speed of the court. A decision on the merits in an ordinary trademark infringement case may be expected within 12–24 months, on average.
Are (i) preliminary, and (ii) final injunctions available and, if so, on what basis in each case?
Can a party be compelled to disclose relevant documents or materials to its adversary and, if so, how?
Are submissions or is evidence presented in writing or orally, and is there any potential for cross-examination of witnesses?
Can infringement proceedings be stayed pending resolution of validity in another court or the Patent and Trademark Office?
After what period is a claim for trademark infringement time-barred?
Are there criminal liabilities for trademark infringement?
(i) reproduces a registered mark without consent or imitates it in a manner that can lead to confusion; or
(ii) alters another’s registered mark which is already in use on a product placed on the market. A crime against a trademark registration is also committed by whoever imports, exports, sells, offers or displays for sale, conceals or keeps in stock:
(i) goods identified by another’s trademark, unlawfully reproduced or imitated either wholly or in part; or (ii) a product of its own industry or trade, held in a vessel, container or packaging, bearing another person’s legitimate trademark.
All IP-related crimes are generally considered petty crimes and, although they are punishable with imprisonment and/or a fine, imprisonment is usually converted into a fine.
It should be noted that the imprisonment penalties may be increased by one-third to one-half if:
(a) the offender is or was a representative, attorney of record, agent, partner or employee of the owner of the registration or a licensee; or
(b) the mark that has been altered, reproduced or imitated is highly renowned or well known, or is a certification or collective mark.
If so, who can pursue a criminal prosecution?
What, if any, are the provisions for unauthorized threats of trademark infringement?
What grounds of defense can be raised to argue non-infringement against a claim of trademark infringement?
Besides the above possible defenses, according to the Brazilian IP Law, the trademark owner may not:
(i) prevent merchants or distributors from using their own distinctive signs together with the mark that identifies the product, in its promotion and marketing;
(ii) prevent manufacturers of accessories from using the trademark to indicate the destination of the goods, provided that fair competition practices are followed;
prevent free circulation of a product placed on the domestic market by the owner or by another party with the owner’s consent; or
prevent reference to the trademark in a speech, scientific or literary work or any other publication, provided that this is done with no commercial deception and without detriment to the distinctive character of the trademark. In all these cases, the use of the mark is legitimate and justifiable.
What grounds of defense can be raised in addition to non-infringement?
What remedies are available for trademark infringement?
Are costs recoverable from the losing party and, if so, how are they determined and what proportion of the costs can usually be recovered?
What is the right of appeal against a first instance judgment and is it only on a point of law?
In what circumstances can new evidence be added at the appeal stage?
Is there a mechanism for seizing or preventing the importation of infringing goods or services and, if so, how quickly are such measures resolved?
However, interested parties have mechanisms to alert the relevant authorities of their trademark rights and provide information regarding the identification of counterfeit goods. Once infringement has been confirmed, the Customs Authority will seize the goods/ services and may apply a forfeiture (and destruction) penalty. In some cases, Customs require the party file a specific lawsuit determining final seizure and destruction.
The plaintiff covers the costs incurred with these measures.
To what extent are unregistered trademark rights enforceable in your jurisdiction?
It should be noted, however, that Brazil has adopted the attributive system, which means that trademark rights are fully enforceable only upon registration. Therefore, a lawsuit can only be brought by the applicant or user in very limited cases, and in most based on associated rights such as company name, prior use, copyright and so on (e.g. a lawsuit could be brought seeking damages due to the conduct of a distributor, local representative or partner that is unethical or in bad-faith).
To what extent does a company name offer protection from use by a third party?
Are there any other rights that confer IP protection, for instance book title and film title rights?
It should be noted that the Brazilian IP Law forbids the registration of literary, artistic or scientific works, as well as titles that are protected by the copyright and are liable to cause confusion or association, except by the consent of the author or right-owner. This prohibition also applies to the translation of book and film titles.
RELEVANT LEGISLATION AND RULES GOVERNING FRANCHISE TRANSACTIONS
What is the legal definition of a franchise?
What laws regulate the offer and sale of franchises?
Are there any registration requirements relating to the franchise system?
(i) to make the agreement effective against third parties;
(ii) to permit the remittance of payments to the foreign party; and
(iii) to qualify the licensee for tax In addition, for the purposes of remittances of remuneration, the registration of the agreement at the Brazilian Central Bank (“BACEN”) is also required.
Are there mandatory pre-sale disclosure obligations?
Is the format of disclosures set forth in law or any other regulation, and how often must disclosures be updated? Is there an obligation to make continuing disclosure to existing franchisees?
Are there any other requirements that must be met before a franchise may be offered or sold?
Is membership of any national franchise association mandatory or commercially advisable?
Does membership of a national franchise association impose any additional obligations on franchisors?
The payment of a membership fee is the most relevant obligation imposed on franchisors.
For more information, please go to www.portaldofranchising.com.br.
Is there a requirement for franchise documents or disclosure documents to be translated into the local language?
The BFL does not set forth any specific rule regarding the language of the franchise or disclosure documents. It only sets forth that the disclosure document should be in a language which is precise and clear to the prospective franchisee. Although it is advisable to draft such documents in Portuguese, which is the official language in Brazil, in international franchising it is perfectly common and possible for the FDD to be written in a foreign language, provided that the Brazilian party is fluent in the respective language and expressly acknowledges it.
TERRITORIAL SCOPE
Will the LGPD be applied abroad?
COMPANIES REPRESENTATIVE AND DATA PROTECTION OFFICER (DPO)
I am a foreign company based outside Brazil. Do I need to nominate a representative?
Do I need to appoint a Data Protection Officer (DPO)?
Can a business appoint a single DPO to cover multiples entities?
Must the appointment of a DPO be notified to the Data Protection Authority?
Must the contact information of the DPO be disclosed?
What are the activities of the DPO provided by law?
• accepting complaints and communications from the data subjects, providing clarifications and taking necessary measures;
• receiving communications from the National Data Protection Authority and taking necessary measures;
• instructing the company’s employees and contractors on the practices to be adopted with respect to personal data protection; and
• carrying out any other duties established by the controller or in supplementary rules, which can also be issued by the National Data Protection Authority.
INTERNATIONAL DATA TRANSFER
Are there any restrictions on the transfer of personal data to other jurisdictions?
DATA SECURITY AND DATA BREACH
Data Security and Data Breach
Additionally, in connection with the Civil Framework for the Internet, there are a few security standards applied to internet companies. In this regard, Decree 8,771/2016 sets forth the following security information requirements: (i) the setting of strict control on data access by defining access permission to specific employees; (ii) authentication mechanisms to access data, by using, for example, two-factor authentication processes; (iii) a detailed inventory of the access logs to the data stored, including the time, duration and identity of the employee; and (iv) the use of log managing solutions by means of cryptography technologies or similar information security measures.
ENFORCEMENT AND SANCTIONS
Enforcement and Sanctions
PRIVACY IN THE WORKPLACE
Privacy in the workplace
DIGITAL TRANSFORMATION
What is the main legislation?
The Provisional Measure n. 2200-2/2001 regulates the legal validity and effectiveness of digital transactions and creates the Infrastructure of Public Brazilian Keys (abbreviated ICP). Later, Law n. 12682/2012 established parameters for the digitalization and retention of documents, updated by the amendment to the Economic Freedom Law (Law n. 13874/2019). Recently, a new Provisional Measure n. 983/2020 was enacted to regulate e-sign specifically on transactions with the Public Sector and in matters of health.
Is there any requirement for digital legal transactions in Brazil?
In general, Brazilian legislation allows the contractual freedom, but in order to have legal validity and effectiveness digital transactions must guarantee by some means the authenticity and the integrity of its content. Some sectors such as banking, health and transactions with Public Sector have specific regulations about the measures that must be taken to fulfill this requirement.
RELEVANT LEGISLATION AND RULES GOVERNING FRANCHISE TRANSACTIONS
What is the legal definition of a franchise?
What laws regulate the offer and sale of franchises?
Are there any registration requirements relating to the franchise system?
(i) to make the agreement effective against third parties;
(ii) to permit the remittance of payments to the foreign party; and
(iii) to qualify the licensee for tax In addition, for the purposes of remittances of remuneration, the registration of the agreement at the Brazilian Central Bank (“BACEN”) is also required.
Are there mandatory pre-sale disclosure obligations?
Is the format of disclosures set forth in law or any other regulation, and how often must disclosures be updated? Is there an obligation to make continuing disclosure to existing franchisees?
Are there any other requirements that must be met before a franchise may be offered or sold?
Is membership of any national franchise association mandatory or commercially advisable?
Does membership of a national franchise association impose any additional obligations on franchisors?
The payment of a membership fee is the most relevant obligation imposed on franchisors.
For more information, please go to www.portaldofranchising.com.br.
Is there a requirement for franchise documents or disclosure documents to be translated into the local language?
Are there any foreign investment laws that impose restrictions on non-nationals in respect of the ownership or control of a business in your jurisdiction?
For example, foreign entities must be enrolled on the Federal Corporate Taxpayer’s National Register and with BACEN. Also, foreign entities must appoint an individual resident in Brazil to act as their attorney-in-fact and for being served with process on their behalf.
Moreover, there are specific restrictions on foreign investors taking part in certain sectors and types of company, such as the aerospace industry and cable TV.
What forms of business entity are typically used by franchisors?
Are there any registration requirements or other formalities applicable to a new business entity as a pre-condition to being able to trade in your jurisdiction?
(i) the type of entity being set up, and
(ii) its field of activity.
In order to set up an LLC, for example, the basic licenses and authorizations that companies are required to obtain, regardless of their field of activity, are detailed below:
Federal Corporate Taxpayer’s National Registration for Foreign Investors (for foreign partners of the Brazilian company); registration of the articles of association/ organization with the Trade Board that will generate the identification number on the Registry of Companies;
Federal Corporate Taxpayer’s National Registration of the Brazilian Company;
State Taxpayer Registration for Corporate Entities;
Municipal Registration and Operating Permit; and
Social Security Registration.
Is there a maximum permitted term for a franchise agreement?
Is there a maximum permitted term for any related product supply agreement?
Are there restrictions on the ability of the franchisor to impose minimum resale prices?
Encroachment – are there any minimum obligations that a franchisor must observe when offering franchises in adjoining territories?
There are no legal restrictions related to the offering of franchises in adjoining areas or streets. Having said that, it is important to stress that the BFL determines that the franchisor disclose to prospective franchisees whether the franchisee is guaranteed exclusivity or a right of first refusal in any particular territory or activity and, if so, under what conditions. Therefore, if any rights are given to the prospective franchisee in respect of an adjoining territory and the franchisor does not comply with it, this may be construed as a breach, which could lead to early termination of the agreement.
Although Competition Law establishes that any act that obstructs the establishment and operation of businesses in the local market is an infringement of the economic order, covenants that prohibit from competing directly or indirectly with the franchisor during or after the term of the franchise agreement are legally valid and enforceable due to the special features of a franchised business.
How are trademarks protected?
Are know-how, trade secrets and other business-critical confidential information (e.g. an Operations Manual) protected by local law?
Is copyright (in an Operations Manual or in proprietary software developed by the franchisor and licensed to the franchisee under the franchise agreement) protected by local law?
Yes. Operations manuals can be subject to protection under Brazilian Copyright Law (Law no. 9,610/1998). Computer programs on their end are also protected by copyright, as expressly set forth in the Brazilian Software Law (Law no. 9,609, dated February 19, 1998).
LIABILITY
What remedies can be enforced against a franchisor for failure to comply with mandatory disclosure obligations? Is a franchisee entitled to rescind the franchise agreement and/or claim damages?
Is there a requirement for franchise documents to be governed by local law? If not, is there any generally accepted norm relating to the choice of governing law?
The rules for choosing a venue in Brazilian private international law are to be found in Decree-Law No. 4657 of September 4, 1942 (Law of Introduction to the Civil Code or “LICC”) and in the Code of Civil Procedure. According to LICC, the parties are free to agree on the applicable law, provided that the foreign law complies with the following conditions: (i) it must conform to Brazilian public order and good morals; and (ii) it must not infringe upon questions of national sovereignty. In addition, Article 9 of the LICC determines that, if the parties do not specify the applicable law in the contract, obligations are governed by the law of the country where they are created (lex loci celebrationis).
Do the local courts provide a remedy, or will they enforce orders granted by other countries’ courts, for interlocutory relief (injunctions) against a rogue franchisee to prevent damage to the brand or misuse of business-critical confidential information?
Brazilian local Courts do provide a remedy for interlocutory relief in the event of urgent matters related to franchises, especially involving the use of trademarks following termination, intellectual property, unfair competition practices, repossession of inventory and equipment (if relevant) and covenants not to compete.
The number of available tools increased as of March 2016, when Brazil enacted a new Code of Civil Procedure. One of the newest and most efficient options is to file an autonomous and ex parte request for a preliminary injunction, which, if granted, may lead to the immediate closure of the case if the defendant fails to appeal in time. If the defendant appeals, the plaintiff has a 15-day term to file a full claim. However, in order to obtain a fast response from the Courts, the parties should choose Brazilian law and jurisdiction to govern the agreement. Although the Brazilian judicial system does recognize the validity of foreign decisions, in order to be locally enforceable, they need to go through a ratification proceeding before the Brazilian Superior Court of Justice, which is rather complex and time-consuming.
Among the main requirements to be complied with are:
the parties must prove that the decision meets all legal formalities;
the decision must be final, with no possibility of further revision;
it needs to be notarized by a Brazilian Consul in the country where it was delivered and translated into Portuguese; and
in addition, in order to receive the exequatur from the Superior Court of Justice, the foreign decision cannot be contrary to Brazilian public order and local Although the case should not be retried, the approval of the decision may take some time locally.
Such ratification procedure currently takes from two to 24 months if the decision complies with all the rendering country’s procedural requirements. Once ratified, such decision is then forwarded to the Federal Court in the State where the defendant has its headquarters, to begin its enforcement procedure, which usually takes from four months to two years, according to the complexity of the case.
Is arbitration recognized as a viable means of dispute resolution and is your country a signatory to the New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards? Do businesses that accept arbitration as a form of dispute resolution generally favor any particular set of arbitral rules?
Brazil ratified the New York Arbitration Convention on July 24, 2002, with Legislative Decree no. 4,311.
Since then, and particularly over the last decade, the number of conflicts subject to arbitration has been sharply increasing in Brazil and even the new Brazilian Code of Civil Procedure dated 2016 now encourages parties to find alternative means of dispute resolution. The parties are free to elect the set of arbitral rules that best suits their interests, as there is no particular set used in Brazil.
Generally speaking, is there a typical period for a commercial property lease?
Based on Article 51, II of Law no. 8,245/1991, commercial property is normally leased for a period of five years.
Is the concept of an option/conditional lease assignment on the lease (under which a franchisor has the right to step into the franchisee/tenant’s shoes under the lease, or direct that a third party (often a replacement franchisee) may do so upon the failure of the original tenant or the termination of the franchise agreement) understood and enforceable?
However, based on our experience, this assignment is seldom negotiated and might be difficult to accept by some landlords (especially in the case of shopping malls).
However, if the parties agreed to such condition in the lease agreement, it will be duly valid and enforceable under Brazilian law.
Are there any restrictions on non-national entities holding any interest in real estate, or being able to sub-lease property?
For properties located in urban areas, with the exception of properties owned by the Federal Government where the President’s authorization is required, there are no legally
established restrictions to non-national entities holding any interest therein.
However, the same cannot be said about properties located in rural areas. In this regard, Law 5,709/71, Decree 74,965/74 and Normative Act 76/2013 from the National Institute of Land Reform (“INCRA”) must be noted as they establish some restrictions and conditions for non-nationals becoming the owner of rural properties.
Give a general overview of the commercial real estate market. Specifically, can a tenant reasonably expect to secure an initial rent-free period when entering into a new lease (and, if so, generally for how long), or are landlords demanding “key money” (a premium for a lease in a particular location)?
After the real estate market boom in Brazil until 2012, prices significantly dropped in the following 4 years and are now facing stagnation. Based on this commercial scenario, although it is not common practice, some landlords have exceptionally accepted the negotiation of an initial rent-free period, when entering into a new lease agreement.
Although not expressly authorized by Law no. 8,245/1991 (which is the law regulating lease agreements in Brazil), our local Courts hold that shopping malls, acting as landlords, are authorized to demand payment for res sperata, which may be understood as “key money”, as a precedent condition for the execution of the lease agreement for the mall.
If an online order for products or a request for services is received from a potential customer located outside the franchisee's exclusive territory, can the franchise agreement impose a binding requirement for the request to be re- directed to the franchisee for the territory from which the sales request originated?
Are there any limitations on a franchisor being able to require a former franchisee to assign local domain names to the franchisor on the termination or expiry of the franchise agreement?
Are there any mandatory local laws that might override the termination rights that one might typically expect to see in a franchise agreement?
Are there local rules that impose a minimum notice period that must be given to bring a business relationship that might have existed for a number of years to an end, which will apply irrespective of the length of the notice period set out in the franchise agreement?
With respect to indefinite term agreements, a 90-day prior notice period is required for terminating the agreement.
However, with respect to fixed term agreements, which is the most common choice in franchising, the franchise agreement will terminate upon expiration of its contractual term. Although the parties may stipulate that it will not be necessary to take any specific action to terminate the franchise agreement in this case, it is advisable to send a proper notice for post-termination obligations.
Also, it is important to stress that Article 473 of the Brazilian Civil Code establishes, as a rule for termination of agreements, that if any of the parties has made significant investments for the execution of the agreement then unilateral termination will only be effective after the agreement has been in force for a term compatible with the nature and amount of such investments. If the termination conflicts with such provision, the Brazilian courts may (i) set an additional term for the agreement to remain in force or
(ii) set specific compensation if the conflict between the parties renders an extension unfeasible.
Is there a risk that a franchisor may be regarded as a joint employer with the franchisee in respect of the franchisee's employees? If so, can anything be done to mitigate this risk?
Is there a risk that a franchisor may be held to be vicariously liable for the acts or omissions of a franchisee’s employees in the performance of the franchisee’s franchised business? If so, can anything be done to mitigate this risk?
The franchisee is directly responsible for its employee’s acts or omissions, as defined in Article 932, III of the Brazilian Civil Code.
Nevertheless, from a consumer protection perspective, it is worth mentioning that the Brazilian Consumer Defense Code (“CDC”) sets forth a joint and strict liability of all the parties involved directly or indirectly in the supply chain of products and services to consumers. Hence, the franchisor could be deemed liable to end consumers for acts of the franchisee.
CURRENCY CONTROLS AND TAXATION
Are there any restrictions (for example exchange control restrictions) on the payment of royalties to an overseas franchisor?
Nevertheless, royalties involving subsidiary and parent companies are limited by the corresponding ceiling of fiscal deductibility specified by Ministerial Ordinance no. 436/58, which varies between 1% and 5% of the net sales of contractual products, depending on the field of activity involved.
Are there any mandatory withholding tax requirements applicable to the payment of royalties under a trademark license or in respect of the transfer of technology? Can any withholding tax be avoided by structuring payments due from the franchisee to the franchisor as a management-services fee rather than a royalty for the use of a trademark or technology?
IRRF is levied at a general tax rate of 15% on net revenues, which may be higher or lower depending on where the franchisor is resident or domiciled (e.g. in a tax haven or jurisdiction with which Brazil has executed a double taxation convention), and the foreign franchisor is the legal entity responsible for payment (the taxpayer).
However, IRRF is withheld by the BACEN whenever the franchisee remits any royalty abroad. So, in practice, the franchisee collects IRRF on behalf of the franchisor (taxpayer).
However, the financial burden for such tax may be contractually shifted, by means of a gross- up clause.
The abovementioned rule for IRRF on royalty payments also applies to the payment of a services fee, whatever its nature.
Are there any requirements for financial transactions, including the payment of franchise fees or royalties, to be conducted in local currency?
Is there a risk that a franchisee might be treated as the franchisor's commercial agent? If so, is there anything that can be done to help mitigate this risk?
Conversely, franchise relationships are much more complex than agency relationships, since franchising normally involves the granting of several rights to the franchisee, as well as the transfer of know-how.
Therefore, it would be difficult for a real franchise operation to be considered an agency in Brazil, since both commercial structures are ruled by specific laws and have fundamental differences between each other.
Is there any overriding requirement for a franchisor to deal with a franchisee in good faith and to act fairly in its dealings with franchisees according to some objective test of fairness and reasonableness?
The general rules and principles laid down by the Brazilian Civil Code concerning the negotiation and execution of agreements, including post-contractual obligations, also apply to franchise agreements.
Articles 113 and 422 of the Brazilian Civil Code set forth that all agreements are subject to the principles of good faith. Beyond the obligation not to harm, according to the principle of good faith, the parties are legally expected to cooperate with one another with fairness, mutual trust, transparency and honesty during all phases of the transaction in order to ensure that the other party fully understands what is being negotiated and obtains the expected results.
The observance of good faith clearly drives the offering stage of franchise transactions, where the franchisor is obliged to provide prospective franchisees with an FDD, describing in detail the main information on the franchised business. The standards of the principle of good faith should subsist through all phases of the transaction and even survive termination, which means that the contracting parties must observe and act in accordance with such standards during negotiations, before and during the term of the agreement, as well as after its termination.
Are there any specific laws regulating the relationship between franchisor and franchisee once the franchise agreement has been entered into?
What disclosure obligations apply in relation to a renewal of an existing franchise at the end of the franchise agreement term?
Is there any overriding right for a franchisee to be automatically entitled to a renewal or extension of the franchise agreement at the end of the initial term irrespective of the wishes of the franchisor not to renew or extend?
Is a franchisee that is refused a renewal or extension of its franchise agreement entitled to any compensation or damages as a result of the non-renewal or refusal to extend?
Is a franchisor entitled to impose restrictions on a franchisee's freedom to sell, transfer, assign or otherwise dispose of the franchised business?
The franchisor is also able to include conditions in the agreement, i.e. the franchisor’s prior approval being required for the transfer of assets or equity, or even the franchisor’s ability to prevent it from happening at all. The main purpose is to maintain the administration and guidance of the franchisee business as initially agreed with the franchisor.
If a franchisee is in breach and the franchise agreement is terminated by the franchisor, will a "step-in" right in the franchise agreement (whereby the franchisor may take over ownership and management of the franchised business) be recognized by local law, and are there any registration requirements or other formalities that must be complied with to ensure that such a right will be enforceable?
If the franchise agreement contains a power of attorney in favor of the franchisor under which it may complete all necessary formalities required to complete a franchise migration under pre-emption or "step-in" rights, will such power of attorney be recognized by the courts in the country and be treated as valid? Are there any registration or other formalities that must be complied with to ensure that such power of attorney will be valid and effective?
Are there any specific requirements for applying an electronic signature to a franchise agreement (rather than physically signing a "wet ink" version of the agreement), and are electronic signatures recognized as a valid way of creating a binding and enforceable agreement?
However, the main issue remains the ability to prove the authenticity of the parties’ e-signature. To counter that, despite not being mandatory, it is advisable that the Brazilian party e-signs the agreement by means of a certified digital signature issued by entities accredited at the Infrastructure of Brazilian Public Keys. This digital signature affords the presumption of validity on the e-signature, as per Article 10, paragraph 1 of Executive Order no. 2,200-2/2001.
If a signed/executed franchise agreement is stored electronically (either having been signed using e-signatures or a "wet ink" version having been scanned and saved as an electronic file), can the paper version of the agreement be destroyed?
What are the requirements for copyright to subsist in a work?
Law no. 9,610/98 (the “Brazilian Copyright Law” or “BCL”) sets forth, in Article 7, that all creations of the spirit expressed by any means or affixed in any type of tangible or intangible support are protected as intellectual works.
From that legal definition and the doctrine developed on the subject, it is possible to draw two main conditions with which an intellectual work must comply to be entitled to protection in Brazil:
(i) the work must be externalized in some form, meaning that the work cannot be a simple idea; and
(ii) the work must be original. The uncertainty around the definition of originality has led to different doctrinal approaches: on one hand, we find the objective approach where a work is considered original when it is novel; on the other hand, according to the subjective approach, an original work is a work that expresses the author’s individuality/personality.
Brazilian Courts have applied different thresholds according to the type of work, but it is safe to say the work must contain a minimum level of creativity to be protected in Brazil.
On the presumption that copyright can arise in literary, artistic and musical works, are there any other works in which copyright can subsist and are there any works that are excluded from copyright protection?
As examples of work subject to protection, Article 7 of the BCL sets forth that copyright can arise in works such as:
literary, artistic or scientific works;
lectures, speeches, sermons and other works of the same nature;
dramatic works with or without accompanying music;
choreographic works and pantomimes, if their scenic performance can be fixed in writing or any other form;
musical compositions with or without accompanying words;
audiovisual works, with or without accompanying sound, including cinematographic works;
photographic works and works produced by a process similar to photography;
works of drawing, painting, engraving, sculpture, lithography and kinetic arts;
illustrations, geographical maps and other works of the same nature;
plans, sketches, and works of fine art concerning geography, engineering, topography, architecture, landscaping, scenography and science;
adaptations, translations and other transformations of original works presented as new intellectual creations;
computer programs; and
collections or compilations, anthologies, encyclopedias, dictionaries, databases and other works that, in view of the selection, organization or arrangement of their contents, constitute intellectual
Conversely, Article 8 of the BCL expressly sets forth that the following are excluded from protection:
ideas, normative procedures, systems, methods, projects or mathematical concepts as such;
schemes, plans or rules to carry out mental acts, games or businesses;
blank forms to be completed with any kind of information, whether scientific or not, as well as their instructions;
texts of treaties and conventions, laws, decrees, regulations, court decisions and other official acts;
information of common use such as calendars, agendas, registries or captions;
isolated names and titles; and
the industrial or commercial use of ideas contained in the works.
Is there a system for registration of copyright and, if so, what is the effect of registration?
With the exception of computer programs, which are registered by the Brazilian Patent and Trademark Office, intellectual works can be registered before public offices, such as the National Library, the School of Fine Arts and the School of Music. Each institution has its own procedure and related costs.
What is the duration of copyright protection? Does this vary depending on the type of work?
The overall rule for the duration of property rights is 70 years, as of January 1st of the year following the author’s death.
In the case of jointly owned works, the 70-year period will be as of the death of the last surviving co-author.
Moreover, anonymous works or works published under pseudonyms will also be protected for 70 years as of January 1st, following the first disclosure of the work. The same applies to audio-visual and photographic works.
Is there any overlap between copyright and other intellectual property rights such as design rights and database rights?
Are there any restrictions on protection for copyrighted works that are made by an industrial process?
This has led in the past to a false interpretation that works made by an industrial process are not entitled to protection under copyright law.
Accordingly, Brazilian judges were skeptical in granting copyright protection for goods manufactured by an industrial process.
Nowadays, this controversy seems a bit outdated, and important case law has in general terms afforded copyright protection for products made by an industrial process, such as bags and purses, under the argument that the means reproducing the work does not affect in any way the protection granted by copyright.
Who is the first owner of copyright in each of the works protected (other than where questions 2.2 or 2.3 apply)?
Where a work is commissioned, how is ownership of the copyright determined between the author and the commissioner?
Moreover, when it comes to collective works, it is noteworthy that Article 17, paragraph 2 of the BCL determines that the “organizer” is the titleholder of the property rights. The organizer may be an individual or a company that publishes the work under its name or trademark. On the other hand, with respect to computer programs, the Brazilian Software Law sets forth that, unless otherwise stipulated in the commission or employment agreement, copyright belongs to the commissioner of the computer program or the employer.
Where a work is created by an employee, how is ownership of the copyright determined between the employee and the employer?
While the issue is controversial, it is understood that there is no automatic assignment of rights to the employee, except in the case of computer programs. Thus, it is advisable for employers to insert a copyright assignment clause in the employment contract, and also to execute separate assignments for each work created by the employee.
However, it is important to highlight that if the work falls under the concept of collective work, the employer that disclosed the work under its name or trademark may claim ownership over the property rights as the organizer of the work.
Is there a concept of joint ownership and, if so, what rules apply to dealings with a jointly-owned work?
Conversely, if it is indivisible, none of the co-authors may disclose or authorize the disclosure of the work without the consent of the others, excepted as a collection of all his/her works, under the penalty of paying for losses and damages. In the event of conflict, the decision taken by the majority of the co- authors rules. Nevertheless, the co-author on the losing side of the conflict may choose not to bear any costs related to the disclosure and not have his/her name displayed. In this case, he/she would automatically waive the profit share arising from the exploitation of the work. Also, if the jointly-owned work is indivisible, each co-author may, without the consent of the remaining co-authors, apply for registration and defend his/her own rights against third parties.
It is worth paying special attention to our comments regarding collective works in questions 2.2 and 2.3 on page 63.
Are there any formalities which apply to the transfer/assignment of ownership?
It is important to note that, in Brazil, any assignment agreement is interpreted in a restricted fashion in favor of the author. Accordingly, it is paramount that all assignment conditions are expressly contained in the agreement, including the territory, all forms of exploitation, right to disclose and adapt the work, the term and the price, etc.
According to Articles 49 and 50 of the BCL, in the absence of written provision, the assignment will be presumed royalty-bearing, will have a maximum term of five years, will only be valid in the country in which the agreement was executed, and will only comprise the form of exploitation for which the agreement was executed.
Are there any formalities required for a copyright license?
Where a work is 3.3 Are there any laws which limit the license terms parties may agree (other than as addressed in questions 3.4 to 3.6)?by an employee, how is ownership of the copyright determined between the employee and the employer?
Which types of copyright work have collective licensing bodies (please name the relevant bodies)?
In the field of dramaturgy and visual arts, there is ABRAMUS – the Brazilian Association of Music and Arts, which also includes musicians and is itself affiliated to ECAD.
Where there are collective licensing bodies, how are they regulated?
On what grounds can license terms offered by a collective licensing body be challenged?
What acts involving a copyrighted work are capable of being restricted by the rights’ holder?
Accordingly, Article 29 of the BCL lists a series of acts that require the author’s prior and express consent. We list below the most relevant ones:
the reproduction (partial or total, by writing, drawing and/or other means) of the work or its use in any form that currently exists or has yet to be invented;
the disclosure of the work;
the adaptation, translation into any language, musical arrangement or any other transformation of the work;
the distribution of the work, unless otherwise provided in an agreement executed by the author with a third party concerning the use or exploitation of the work; and
the direct or indirect use of the literary, artistic and scientific works (such as performances and recitals, etc.).
Are there any ancillary rights related to copyright, such as moral rights, and, if so, what do they protect, and can they be waived or assigned?
Moreover, the author has the moral right to keep the work form being disclosed to the public. The author also has the right to adapt the work before or after the work was used. Conversely, the author has the right to secure the integrity of the work, by refusing any modification or act that may put the work in harm’s way or that damages the author’s reputation or honor. Accordingly, the author may suspend any form of exploitation that harms his/her image or reputation.
Article 27 of the BCL states that moral rights are inalienable and cannot be the subject of an agreement. Brazilian courts and doctrine have interpreted this norm rigorously, considering that moral rights are not subject to transferal or waiver by the author.
However, under very specific situations and on an exceptional basis, we understand that, although moral rights cannot be alienable, the parties could limit their effects and applicability if the work is applied to the industry, especially if there are technical constraints imposed by the means of production.
Unfortunately, court actions involving the validity of such clauses are not very common in Brazil, as we do not have a solid understanding of this matter from the courts.
Are there circumstances in which a copyright owner is unable to restrain subsequent dealings in works that have been put on the market with his/ her consent?
However, it is important to highlight that, in the case of works of art and written creations, the BCL determines that the author has a right to receive a remuneration of 5% on the additional price the work was resold by, when compared to the initial selling price.
Nevertheless, the sale of the work does not include the assignment of the author’s moral rights. Therefore, if use by the new buyer harms the author’s image or reputation or the works’ integrity, he/she could stop the new buyer’s use.
Are there any statutory enforcement agencies and, if so, are they used by rights’ holders as an alternative to civil actions?
As an alternative to civil actions, it is common for copyright owners to work together with customs authorities to counter the import of counterfeit goods. In Brazil, customs authorities may seize suspicious products (that may infringe third parties’ copyrights and/or trademarks) at ports and airports ex officio. However, for these products to remain seized and be subsequently destroyed, the IP owner must submit within a 10-business day term, extendable for one additional period of 10 business days, an affidavit confirming that the goods are counterfeit (some customs units require a court order to this end). In addition, as copyright infringement is a crime set forth in the Brazilian Criminal Code, the copyright owner may file a complaint in any police station and initiate an investigation leading to a criminal lawsuit. Currently, there are two police departments specializing in IP crimes in Brazil, located in the cities of Rio de Janeiro and Recife.
Other than the copyright owner, can anyone else bring a claim for infringement of the copyright in a work?
Can an action be brought against ‘secondary’ infringers as well as primary infringers and, if so, on what basis can someone be liable for secondary infringement?
The Brazilian Criminal Code expressly sets forth that it is a crime to import, distribute, market and/or maintain in stock products that infringe third parties’ copyrights.
Are there any general or specific exceptions which can be relied upon as a defense against a claim of infringement?
Are interim or permanent injunctions available?
On what basis are damages or an account of profits calculated?
Also, if it is not possible to determine the profit made by the infringer, damages and losses can be estimated based on the royalties the copyright owner would have been paid if a license had been granted.
In some cases, moral damages can also be granted, although there is no precise method of calculation and the amount can vary considerably depending on the judge and the circumstance of the infringement.
What are the typical costs of infringement proceedings and how long do they take?
Regarding typical costs, in addition to lawyers’ fees, there are official taxes that are usually connected with the value given by the Plaintiff to the case (and this also varies from one court to another), and a court’s bond that is due by any foreign company that wishes to file court actions in Brazil to guarantee payment of damages (this amount is fully recoverable by the company if it wins the case). We roughly estimate that a company will spend between USD 10,000 and USD 30,000 on a copyright litigation until there is decision on the merits by the District Judge.
Is there a right of appeal from a first instance judgment and, if so, what are the grounds on which an appeal may be brought?
What is the period in which an action must be commenced?
However, for the purposes of stopping an ongoing infringement, it is highly advisable to act immediately after becoming aware of the infringement, as urgency is a mandatory requirement for the granting of preliminary injunctions.
Are there any criminal offences relating to copyright infringement?
What is the threshold for criminal liability and what are the potential sanctions?
The penalties may range from three months to four years imprisonment, without prejudice to a fine depending on the circumstance of the crime, i.e. if the copyright was infringed for the purposes of obtaining a profit or not.
Have there been, or are there anticipated, any significant legislative changes or case law developments?
In its decision, the Superior Court of Justice held that the reproduction of songs on streaming platforms constitutes new public reproduction of musical works and therefore, under the BCL, royalties must be paid accordingly.
Said decision has impact on other streaming service providers, such as Spotify, Deezer and Google Play.