Is Brazil on your IP agenda?

Brazil is definitely “of the hour”. The country has 12% of world’s drinkable water and its Amazon forest produces 20% of the Earth’s oxygen. Brazilian agriculture and technology have provided the world with ethanol as an alternative fuel. The consumer market is significant (200 million people) and the political and economic institutions are stable. Not enough? The FIFA Soccer World Cup (2014) and the Olympic Games (2016) will be held there, and have already brought investments in security and infrastructure. As US president Barack Obama commented while visiting Brazil last month (yes, the country is on his agenda): “Brazil is no longer a country of the future, the future has arrived.“

In the intellectual property field, a modern law passed in 1996 has created a good environment for protecting and enforcing IP rights.

Patent and trademark e-filing

A growing backlog of patent applications has led the Brazilian patent and trademark office (INPI) to implement an electronic patent filing system. This system is already in the test phase and is forecast to be operating fully before the end of 2011. E-Patent, as it is called, aims to accelerate the examination phase and reduce the time to grant from the current average of seven years to four years. In addition to the time advantage, the accessibility of file wrappers and the reduction in administrative costs will lower the fees currently charged for searches and queries by Brazilian agents.

E-Patent follows the introduction of e-Marks, a similar system for trademarks which has been operating since September 2007. The new system has been well received by trademark agents and already accounts for 53% of the total volume of filings, exceeding the amount of paper filings. The timeframe for trademark examination has been reduced from six to two years for applications without opposition.

Fast track patent examination

Besides reducing the time required for patent examination by increasing the number of qualified examiners and implementing the E-Patent system, the INPI has also introduced fast track examination for applicants who meet certain requirements.

Of particular importance for international IP owners is the possibility of requesting fast track examination if the technology at issue is being violated in Brazil. The fast track request should be supported by evidence of violation (such as a cease and desist letter and, if possible, a sample infringing product). If the request is granted, the applicant will jump the queue and may have its application examined within a few months.

Protection against unfair competition

The Brazilian IP Law (9.279/96) provides that to be registered as a mark, a sign must be “distinctive and visually perceptible”. In the INPI’s opinion, this legal provision curtails the protection of non-traditional signs such as sound, smell, touch and taste marks.

This unfavourable view is offset by the far-reaching protection which the IP Law contemplates against unfair competition in a broad sense, where any individual who uses fraudulent means to divert consumers is guilty of unfair competition.

Sound marks, various types of trade dress, retail store layouts, internet search engine sponsored links, and many other means of diverting consumers have already been tested in the Brazilian courts, with positive results for IP owners. Although non-traditional marks are not accepted for registration at the INPI, rights may be enforced under unfair competition rules.

Domain name disputes

The administrative dispute resolution system was finally extended to domain names ending in .br (Brazil’s country code top-level domain) last September. The disputes are argued before Brazil-Canada Chamber of Commerce in Brazil and the procedure is very similar to ICANN’s Uniform Domain-name Dispute Resolution Policy.

Some features of the Brazilian rules should be highlighted. Prior rights of the complainant and bad faith of the infringer are the only requirements that should be met – it is not necessary to demonstrate lack of legitimate interest from the infringer (such as in WIPO procedures). Further, it is possible to file a complaint relating to a pending trademark application or well-known mark – registration in Brazilian territory is not mandatory. These developments make combating cybersquatting far easier than before.

State and federal courts specialized in IP

In Rio de Janeiro, where the INPI is located, four federal courts (first instance) and two chambers (appeal courts) specialize in intellectual property. They handle most of the invalidation actions for IP rights that take place in the country. In state-level courts (where infringement actions are pursued), IP matters are also examined by specialized judges. This structure generally secures high-quality decisions within a reasonable timeframe in IP litigation.

Preliminary injunctions and damages

In IP cases, preliminary injunctions are particularly important to stop infringement during the course of legal action. Further, ex parte injunctions may be necessary to preserve evidence and guarantee a successful search and seizure raid.

Specific provisions allowing preliminary and ex parte injunctions were inserted in the IP Law. Ex parte restraining orders and the seizure of counterfeit goods are expressly provided for in the law, so judges no longer hesitate in granting such powerful tools against IP infringers.

The IP Law also brought concrete benefits for victims of IP infringement who seek compensation for losses and damages. The damages awarded to an injured party are determined by one of the following criteria: a) losses suffered by the injured party due to the violation; b) the benefits gained by the infringer; or c) licensing royalties.

In the last couple of years the Superior Court of Justice has accepted that in IP violation cases, damages may be presumed (i.e. there is no need to prove actual damages).

Border control

Being the fifth largest country in the world with a long coastline and frontiers with 10 countries, Brazil suffers from the importation of counterfeits from various sources.

Customs are legally mandated to search for and seize counterfeit goods at the borders. For that purpose, IP owners may provide a list of their trademarks or copyrighted works to the Customs Central Office.

Some IP owners also provide training programmes to the local authorities, which have proven to enhance the officials’ ability to locate and identify counterfeit goods.

Conclusion

This article has highlighted some of the most important legal developments which have encouraged investment in IP in Brazil in recent years. These developments reflect the presence of the country on the international stage as strategically important for foreign companies. Equally, Brazilian industries and researchers are educating themselves about investment abroad, and deciding to protect their innovations overseas. So, is Brazil on your agenda yet?

Bruno Lopes Holfinger is a telecommunications engineer and a lawyer. He is a partner at Dannemann Siemsen Bigler & Ipanema Moreira in Brazil. He can be contacted at holfinger@dannemann.com.br

Filipe Fonteles Cabral is a lawyer and partner at Dannemann Siemsen Bigler & Ipanema Moreira. He can be contacted at filipe@dannemann.com.br