Editor's note: Licks Attorneys' Otto Licks is a leading Intellectual Property lawyer in Brazil. He has featured in Chambers guides since 2012 and gradually moved up the rankings until achieving the Band 1 position in 2020. He is highly respected in the market and is noted for advising international clients. Licks authors the article below where he lays out the challenges and opportunities around Brazil's Intellectual Property regulation.
Brazil is part of the major international treaties in intellectual property law and has a WTO TRIPs-plus substantive standards in many aspects. The acquisition and adjudication of intellectual property rights (IPR) in Brazil goes back to 1809. The country has a pro-IPR judicial branch known to grant preliminary injunctions and permanent injunctions. IPRs in Brazil are constitutionally guaranteed and the country has incorporated the provisions of the WTO TRIPs Agreement through Decree #1,355/1994, having enacted Federal Law #9,279/1996 (Brazilian Patent Statute) aiming to regulate patent, trademark, and industrial design protection, as well as geographical indications and unfair competition.
Patent Rights – overview of the impacts of the Unconstitutionality Challenge (ADI) #5529
Recently, the Brazilian Supreme Court ruled on the unconstitutionality of the Sole Paragraph of Article 40 of the Brazilian Patent Statute, which brought significant changes to the patent landscape in the country. It was the first time in this century that the court took a substantive patent case. The last time the Supreme Court took a case on patent term was in the 1970s, over fifty years ago. The Challenge of Unconstitutionality #5529, filed on May 17, 2016 by the Federal Prosecutor's Office (FPO), alleged that the term of protection counted from the grant of the patent unduly extend the term, thus making it indeterminate, violating the requirement of temporality for the patent privilege and undermining the principle of free competition.The Sole Paragraph of Article 40 was the Brazilian patent adjustment (PTA) clause. The general rule is that a patent will be in force for twenty (20) years counting from the filing date but, in cases where the Brazilian Patent and Trademark Office (BRPTO) took more than ten (10) years to examine the application, the Sole Paragraph of Article 40 of the Brazilian Patent Statute established that the term of protection would be of ten (10) years, counting from the date of grant.
The Sole Paragraph of Article 40 of the Brazilian Patent Statute compensates the patent owner for the backlog and long pendencies in examination, avoiding granting patents with an already lapsed term or with only a few months of protection. Needless to say, in Brazil, until 2016, the BRPTO exceeded fifteen (15) years and, currently, it can reach up to twelve (12) years to conclude the substantive patent examination. The section was a solution to overcome the BRPTO backlog and pendency times.
Due to the coronavirus pandemic, on February 24, 2021, the FPO filed a request for a preliminary injunction seeking to stay the effects of the provision. According to the FPO, the injunction was necessary to allow access to more pharmaceutical products and vaccines used in the treatment of COVID-19.
On April 7, 2021, Reporting-Justice Toffoli anticipated his vote on the merits of the case, pointing out that the challenged provision should be declared unconstitutional, granting the FPO's preliminary injunction request to suspend its effects for newly issued patents covering pharmaceuticals product and process, and for medical equipment and materials for use in healthcare granted after April 8.
Justice Toffoli also proposed limitations of the effects of the decision, suggesting the unconstitutionality not be retroactive from the date of publication of the trial result with two hypotheses of exception: the decision would have retroactive effects (ex tunc) to (i) patents under ongoing litigation (regardless of the technology field), in which the constitutionality of the Sole Paragraph of Article 40 of the Brazilian Patent Statute is one of the grounds for invalidity, and (ii) all patents covering pharmaceutical products and processes and medical equipment and materials for use in healthcare. It is necessary to emphasize that the Justice's written opinion did not restrict its scope only to coronavirus-related patents.
Later, on May 12, 2021, the Supreme Court Justices, by a majority, declared the Sole Paragraph of Article 40 of the Brazilian Patent Statute to be unconstitutional with ex nunc (no retroactive) effects, thus determining that all patents granted with a 10-year term of protection counted from the grant before the publication of the final hearing minutes will remain valid, maintaining the referred exceptions.
The ruling had several impacts on the Brazilian patent system: at least 12,705 duly filed patent applications that have been waiting over ten (10) years to be examined by the BRPTO (12,168 utility patents applications and 537 utility model patents) were affected by the decision, most of which are related to the pharmaceutical, telecommunications, and agrochemical sectors.
On May 18, 2021, the BRPTO provided the first list of patents affected by the ruling issued in the dockets of ADI #5529, pointing out that 3,341 pharma-related patents will have their term of protection reduced or will be declared expired. On June 1, 2021, a second list was provided, revealing that 2,114 patents related to medical technologies will also have their term of protection reduced or declared expired.
Now the stakeholders in Brazil seek to introduce a bill before the Congress to implement patent term adjustment and patent term extension aligned with the Brazilian Supreme Court decision.
Trademark Rights – overview of the Madrid Protocol
After a decade negotiating Brazil's assertion of the Madrid Protocol, the Brazilian Senate approved the agreement text in October 2019. Since then, trademark applicants have been allowed to file their requests in one single application before countries that have adhered to the Protocol. The advantages are that the request can be filed in one language, the fees paid in one currency, the trademark will have one date of extension, and there is no mandatory obligation to file each application separately.
Therefore, a Brazilian applicant who already has one or more trademark applications or registrations granted by the BRPTO, who wishes to file a trademark application in other countries through the Madrid Protocol, should file an international application. Then, the BRPTO will assess the application to verify if it fulfils the legal requirement for granting. If there is no irregularity in the application, the application will be forwarded to the WIPO within two months.
The WIPO will proceed with a formal examination of the application. If it is deemed there is no irregularity, it will register this request and publish it in its International Gazette and notify the countries chosen by the applicant. Each country will examine the application considering its own laws and relay its decision to the WIPO, which will then inform the applicant. To adhere to the Protocol of Madrid, the BRPTO had to reduce the backlog for the first technical trademark examination to twelve (12) months.
Further to that, the BRPTO announced that until October 1, 2020, the day before the anniversary of the Protocol of Madrid in Brazil, one hundred and nine (109) international trademark requests were filed by Brazilians, aiming to protect their brands in foreign countries and be more competitive in such markets. Also, the BRPTO revealed that 7,896 requests made abroad indicated Brazil as their destination during the same period.
Therefore, the Protocol of Madrid enables Brazilian companies to expand the range of their trademarks with reduced bureaucracy and expenses for the trademark registration procedure and facilitates foreign brands requesting such protection in Brazil, thus contributing to the growth of the country's economy.
Industrial Design Rights – overview of general aspects
The registration of an industrial design enables its owner to enforce it for ten years counted from the application's filing date—such term is renewable for three successive periods of five years each.
Industrial design protection can be relevant in the fashion industry, as it enables the protection of a significant and profitable range of products developed by this sector, among which are textile prints, shoes, bags, jewellery, perfume bottles, and others, since such creations, in particular in the luxury market, are a constant target of imitation, unauthorized copying, and counterfeiting.
To facilitate filing industrial design applications, the BRPTO, through Resolution #232/2019, instituted the Industrial Design Manual, with guidelines to explain the procedure for requesting such protection and how the BRPTO will proceed when analysing an application.