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BRAZIL: An Introduction to Intellectual Property

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LUIZ LEONARDOS & ADVOGADOS 

There is no denying that Brazil is a booming consumer market and one of the world's 10 largest economies, but the uncertainties arising from the new government that will assume the presidency in January 2019 may affect the confidence in investing in Brazil and possibly cause momentary stagnation of the market. However, according to the International Monetary Fund, the country will recover and grow thanks to a resumption of private consumption and investments.

Contrary to certain international trends, Brazil is rising in the ranks of major destinations for investment. This may be on account of an ever-expanding agribusiness sector, which handles seven out of 10 of Brazil’s most exported items; and a fierce and demanding consumer market as a result of recent social achievements, placing Brazil among the world's top four consumers of cosmetics and personal care products.

Trademarks 

If, on one hand, it is undeniable that there is a considerable backlog of pending trademark applications to be examined by the Brazilian Patent and Trademark Office - BPTO, on the other hand, during the years of 2017 and 2018 there has been a reduction of the backlog as a result not only of the 50 new trademark examiners hired in 2017, but also of a series of internal measures that were taken by the BPTO for this purpose.

It is important to note that the Trademark Directorate of the BPTO began, in 2017, to take the necessary steps for Brazil’s membership of the Madrid Protocol, according to information appearing on the PTO’s website. However, this has not yet occurred and with the new President Jair Bolsonaro taking office on January 1, 2019, the IP community is still awaiting a final decision on this matter as the corresponding Bill is still pending in Congress.

The truth is that the BPTO should be prepared to receive a much higher number of trademark applications in the future, in case applicants from other jurisdictions change the current statistics and begin including Brazil in their IP strategy planning.

The 2018 statistics appearing on the PTO’s website indicate that between January and October 2018, 171,970 trademark applications were filed in Brazil, which represents an increase of 11.3% during the same period in 2017.

Interestingly, the trademark applications filed during 2018 belong to applicants from 109 jurisdictions, but Brazilian applicants represent 86% of the applications. The probable reason for such a remarkable difference in the percentage of Brazilian applicants (86%) when compared to foreign applicants (14%) is the long time applicants must wait to get their IP rights.

The delay in obtaining a trademark registration can be considered the main reason that leads foreign entities not to seek protection for their trademarks in Brazil. The good news, however, is that the BPTO has knocked its average time of 4 years down to 2 years, approximately, assuming no objections are raised. This significant decrease in the time taken to grant a trademark registration is due to Brazil’s intention to sign the Madrid Protocol, which led the PTO to hire 50 trademark examiners and to streamline the trademark registration process.

But not every change has exactly been a bed of roses at the BPTO. Along with the adjustments mentioned in the preceding paragraph, the quality of decisions rendered by trademark examiners has suffered and resulted in inconsistent and questionable decisions. This is because examiners are trained on an expedited basis, many of them are inexperienced and moreover, they have been working under enormous time pressure. The combination of these factors cannot, by any means, maintain the good quality of decisions.

Besides the abovementioned changes and despite its financial problems (the PTO does not keep all of its funds), the PTO has been trying to play its role in order to improve the trademark registration process and to ensure protection of trademark rights. International cooperation with Patent and Trademark Offices of other countries, the adoption of the Trademark Manual (which provides detailed rules for trademark examination), as well as investments in information technology and improvement in planning and strategic management were important steps made by the BPTO that show its intention to encourage investment in IP.

Patents  

It is true that the BPTO has been fighting an arduous battle against the backlog for some time. Now, it must be recognised that numerous measures have been taken by the Institute, such as hiring examiners and simplification of procedures regarding information technology.

In 2018, the BPTO established a pilot project on pre-examination reports as an extra effort to expedite the substantive examination of patent applications, defining that applicants can voluntarily submit new pages of the application in order to better define the invention based on comments already highlighted by other patent offices.

By doing so, the BPTO identifies applications that remain in the applicant’s interest and promotes the prior adjustment of the set of claims to the state of the art in order to accelerate the substantive analysis of the application.

Among several other reasons that motivated the formulation of this pre-examination official action, the following can be cited:

• the set of claims and arguments submitted as a response to the first technical opinion has usually been used during the prosecution of corresponding applications in other countries; and
• almost 20% of the applications examined are abandoned after the first technical examination.

As stated in data released by the BPTO, from the 680 pre-examination reports published between January and March 2018, 150 were unanswered, representing 22.1% rate of abandonment. To compare the effect that such abandonment rate may have on the full scenario, the BPTO has clarified that the abandonment rate was 24.5% in 2017 and 26.14% in 2016. This represents an average reduction of 17.3% in the number of applications to be examined as such applications are removed from the examination line.

Some other measures implemented and consolidated by the BPTO are gradually contributing to the reduction of the backlog, such as the extension of the Patent Prosecution Highway (PPH) agreements to:

i) the Chinese Patent Office (SIPO) for patent applications in the technical fields of information technology, packaging, measurement and chemistry,
ii) the UK Intellectual Property Office (UKIPO) for patent applications in the technical fields of biotechnology, electrical machines, appliances and energy, audiovisual technology, telecoms, digital communication, basic communication processes, computer technology, management methods and semiconductors, and
iii) the Danish Patent and Trademark Office (DKPTO) for patent applications in the technical fields of mechanics.

Further, new Resolution No. 218/2018 regarding priority examination of applications and patents relating to public health products, pharmaceutical processes, equipment and materials was published. In the scope of such resolution rare diseases, chikungunya and zika were included.

It is essential to demonstrate that the BPTO is working on measures to reduce the time that the application takes until its actual examination. According to data published by the BPTO, there was a 4.8% decrease in the filings of patent applications for the same period of 2017.

Notably, among the largest patent applicants the United States stands out with 31%, followed by Germany with 8% and Japan with 7%. The filing of patent applications from Brazil amounts to 19% of the total number of filings until November 2018.

Conclusion 

There are potentially many other measures that could be implemented to increase the BPTO’s productivity and efficiency and the quality of its decisions. However, although the BPTO still has a long path to go, undeniably, the measures adopted demonstrate the seriousness of the BPTO in improving the service provided and stimulating the use of the rights derived from industrial property.