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INTELLECTUAL PROPERTY PROTECTION IN BRAZIL July 2010 Fernando Jucá Vieira de Campos / Pedro Vilhena.

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Presentation on theme: "INTELLECTUAL PROPERTY PROTECTION IN BRAZIL July 2010 Fernando Jucá Vieira de Campos / Pedro Vilhena."— Presentation transcript:

1 INTELLECTUAL PROPERTY PROTECTION IN BRAZIL July 2010 Fernando Jucá Vieira de Campos / Pedro Vilhena

2 OVERVIEW POLITICAL AND ECONOMIC BACKGROUND – Monetary and political stability – Economic growth and attracting foreign investments – Need to adequate Brazil to international legal standards (IP included) LEGAL FRAMEWORK – Main international treaties (Paris, Berne, PCT and UPOV); – TRIPS Agreement (1994) – Enactment of new laws: Industrial property (1996) Cultivars (1997) Copyright and software (1998) Topography of integrated circuits (2007)

3 SUMMARY TYPES OF PROTECTION: – Patents – Unpatented technology – Industrial Designs – Cultivars – Copyright – Software – Trademarks – Geographical Indications – Topography of Integrated Circuits – Unfair Competition Rules ENFORCEMENT OF IP RIGHTS IP RELATED AGREEMENTS MAIN TAX ISSUES

4 TYPES – Patents of invention – Utility models REQUIREMENTS – Novelty – IMPORTANT!!! – Inventive step / inventive act – Industrial scale PRIOR USER RIGHTS – Good faith use TERM OF PROTECTION – Patents of invention – 20 yrs – Utility models – 15 yrs PRIORITY – 12 months from the first filing abroad PATENTS WHAT CANNOT BE PATENTED – discoveries, theories and methods; – purely abstract concepts; – schemes, plans, principles or methods; – any aesthetic creation; – computer programmes per se; – rules of games; – operating or surgical techniques and therapeutic or diagnostic methods; – natural living beings and natural biological processes; – substances, matters, mixtures, elements or products of any kind; – living beings, except transgenic micro-organisms meeting the requirements, provided they are not mere discoveries; and – anything that is contrary to the moral, good customs and public security, order or health.

5 SCOPE OF PROTECTION – Upon granting, prevent third parties from exploiting the object of the patent in BRAZIL PATENT DEVELOPED BY AN EMPLOYEE OR BY A HIRED PARTY – Property vested in the employer – Property vested in the employee – Property shared COMPULSORY LICENSE AND LACK OF USE – Abusive exploitation – Insufficient commercialization – Lack of manufacture REGISTRATION PROCESS – BPTO – Timeframe ANNUITIES PCT APPLICATIONS PATENTS

6 WHAT CAN BE PROTECTED? – Valuable information which gives a competitive advantage – EXCEPTION: Public knowledge / Obviousness to a skilled person – IMPORTANT: REASONABLE PRECAUTIONS SCOPE OF PROTECTION – Violations are repressed civilly and criminally: Industrial spying, illicit disclosure, contractual breaches DRAWBACKS AND ADVANTAGES – Limited scope (illicit modes of acquisition only) – Risk of parallel independent obtainment of the information – Possibility of perpetual protection IMPORTANT Strategic analysis may guide companies in the choice of the most adequate means of protection for a given technology. TRADE SECRETS

7 OBJECT OF PROTECTION – Ornamental plastic form REQUIREMENTS – Novelty – Originality – Industrial scale TERM OF PROTECTION – 10 yrs + 5 yrs + 5 yrs + 5 yrs REGISTRATION PROCESS – BPTO – Timeframe – Examination of the merits MAINTENANCE FEES INDUSTRIAL DESIGNS

8 OBJECT OF PROTECTION – New plant varieties and essentially derived plant varieties, which meet the legal requirements TERM OF PROTECTION – 15 yrs (in some cases, 18 yrs) SCOPE OF PROTECTION – Inhibit the free use of plants, charge and receive royalties REGISTRATION PROCESS – Department of Agriculture (through SNPC) ANNUITIES PRIORITY RIGHT – 12 months from the first filing abroad COMPULSORY LICENSE – Enacted by the Administrative Council for Economic Defense, to ensure regular supply, quality maintenance and adequate remuneration CULTIVARS

9 OBJECT OF PROTECTION – Artistic, literary, scientific works created by the human mind MORAL RIGHTS AND ECONOMIC RIGHTS – Possibility of assignment – Requirements for assignment REGISTRATION – Optional (creates a presumption of authorship) TERM OF PROTECTION – 70 yrs counted from January 1st of the year following the author’s death, or the public performance, or the setting of the phonogram or the broadcasting OWNERSHIP OF THE WORK MADE BY AN EMPLOYEE OR HIRED PERSON – General rule: the ownership is vested in the author, unless agreed otherwise expressly and in writing COPYRIGHT

10 COPYRIGHT PROTECTION – Copyright law is applicable, except for: Moral Rights – Narrower extent Term of Protection – 50 yrs counted from January 1st of the year following publication or creation Ownership of Work made by an employee or hired person – Specific provisions RECIPROCITY OF PROTECTION – The rights in Software Law are only applicable to foreign people whose country of origin ensures the same rights for Brazilian citizens ASSIGNMENT OF RIGHTS – Possibility and requirements REGISTRATION – Optional (creates a presumption of authorship) SOFTWARE

11 WHAT CAN BE REGISTERED? – Visually perceivable signs (words, figures, devices, 3D only) TYPES OF MARKS – Product marks / service marks – Collective marks – Certification marks SCOPE OF PROTECTION – Exclusive use of the sign in Brazil for the requested goods or services TERM OF PROTECTION – 10 yrs, renewable indefinitely MANDATORY USEIMPORTANT – Use must be started within 5 yrs from the registration – Use cannot be suspended for more than 5 yrs at any time TRADEMARKS

12 PRIOR USE – Precedence for registration is given for good faith prior users (6 months) REGISTRATION PROCESS – BPTO – Timeframe PRIORITY – 6 months from the first filing abroad CONFLICTS INVOLVING TRADEMARKS AND DOMAIN NAMES – – First come, first served principle – Not related to UDRP – Current implementation of SACI – Court actions TRADEMARKS

13 TYPES – Indication of origin – Designations of origin REGISTRATION PROCESS – BPTO – Optional – Advantages – Documents SCOPE OF PROTECTION – Restriction of use of the GI by third parties – Infringers may be prosecuted civilly and criminally – Obstacle for similar trademark applications GEOGRAPHICAL INDICATIONS

14 OBJECT OF PROTECTION – “chip” TERM OF PROTECTION – 10 yrs from the filing or first operation REGISTRATION PROCESS – BPTO – Examination of the merits (to be requested in court) RECIPROCITY – These rights are only applicable to foreign people whose country of origin ensures the same rights for Brazilian citizens OWNERSHIP OF THE WORK MADE BY AN EMPLOYEE OR HIRED PERSON – Property vested in the employer – Property vested in the employee or hired person INTEGRATED CIRCUITS

15 REQUIREMENTS – Act / omission – Unfairness – Competition EXAMPLES ACKNOWLEDGED BY BRAZILIAN LAW – publishes false statements to the detriment of a competitor; – employs fraudulent means to divert the customers; – uses another person's advertising phrase or sign to create confusion; – uses, improperly, another person's trade name, title of establishment; – attributes to himself a reward or distinction that he has not received; (AMONG OTHERS) PROSECUTION – Infringers may be prosecuted civilly and criminally UNFAIR COMPETITION

16 TYPES OF ACTIONS – Cessation of an infringement (ex.: abstention of use of a trademark); – Recovery of damages; – Obtainment of an IP right (as an appeal to a decision issued by the BPTO); – Cancellation of a third party IP right. APPLICANTS – Some rights are granted to applicants even before the granting of the IP right INJUNCTIONS – In some cases, injunctions may be granted to enjoin the defendant from infringinf the plaintiff’s IP rights or to suspend the effects of the defendant’s IP rights ENFORCEMENT OF IP RIGHTS

17 DAMAGES Determined by the most favourable criteria to the injured party, among: – Profits that would have been obtained by the injured party; – Profits effectively obtained by the infringer; or – Royalties the infringer would have to pay. TIME FRAME Approximately estimated as follows: – First instance: two years (Lower courts) – Second instance: four years (State courts) – Special instance: two years (Superior courts) SETTLEMENTS In order to avoid time-consuming and expensive lawsuits, litigants sometimes prefer to waive their convictions and reach an out-of-court settlement. Settlements must be ratified by the judge.

18 TYPES OF AGREEMENTS Patent license Trademark license Industrial design license Software license Supply of technology Rendering of specialized technical services Franchise EFFECTS OF REGISTRATION (i) opposability against third parties; (ii) deduction by the Brazilian party of the amounts paid to the foreign party for income tax purposes; (iii)allowance for remittance of payments abroad; and (iv) presumption of non violation of the economic order CONTRACTS

19 PAYMENT LIMITATIONS CONTRACTS Type of Agreement Payment Limitation Related companiesUnrelated companies Supply of TechnologyFrom 1% to 5%unlimited Patent LicensesFrom 1% to 5%unlimited Design LicensesFrom 1% to 5%unlimited Trademark Licenses1%unlimited Work Licensesunlimited Software Licensestransfer price rules Technical Services 4 transfer price rules FranchiseFrom 2% to 5%unlimited * percentages are to be calculated on net sales

20 TERM OF THE AGREEMENTS Franchising, license of patents, trademarks, industrial designs and software: Limited to the validity of the licensed rights Supply of technology: 5 years, renewable for an equal period Rendering of technical assistance services: 4 years (in theory) FORBIDDEN AND MANDATORY CLAUSES Supply of technology, technical services and franchise cannot contain clauses forbidding the free use of the technology by the recipient party after the expiration of the agreement or the period of confidentially Patent licenses cannot contain clauses assigning to any of the parties the property rights connected to any improvement made by the other on the licensed patent. Trademark license and franchise cannot contain clauses that prevent the trademark owner from exercising effective control over the quality of products manufactured by the licensee under the contract. It is mandatory to identify the licensed rights (serial numbers, patent titles, trademark classes) in patent, design and trademark licenses, as well as in franchise agreements. CONTRACTS

21 TAX ISSUES TAXES LEVIED ON ROYALTIES/TECHNICAL FEES PAID DIRECCTLY TO THE LICENSOR/SUPPLIER ABROAD Withholding income tax 15%(usually the foreign party) CIDE10%(Brazilian party) Services Tax0-5%(foreign party) Social contribution (PIS/Cofins)9,25%(Brazilian party) Financial transactions tax (IOF)0,38%(Brazilian party) USING A BRAZILIAN SUBSIDIARY STRUCTURE No income tax withheld on payment of dividends Advantages of using this structure must be examined on a case-by-case basis.

22 CONTACT INFO HÉLIO FABBRI JR. FERNANDO JUCÁ VIEIRA DE CAMPOS Ariboni, Fabbri, Schmidt & Advogados Associados R. Guararapes, 1909 - 7. andar São Paulo - SP- BRAZIL Phone: +55 (11) 5502-1222 Fax: +55 (11) 5505-3306 E-mail:

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