Problems relating to Trade and Investment on Brazil

 
17. Implementation of intellectual property rights ("IPRs")
Issue
Issue details
Requests
Reference
(1) Insufficient IPRs' Protection - While the legislative overhauls have made a fair progress in each country, the economic growth and the snowballing patent applications have outpaced such overhauls in each country. Qualitative differences in the level of Examiners, examination delays, etc. have been the cause of Scattering Results amounting to the pending task that demands the improvement. It affects the applicant's quest for a stable protection of IPRs. - It is requested that INPI advances the collaboration with other countries under Patent Prosecution Highway (PPH), ASEAN Patent Examination Co-operation (ASPEC), etc., promotes their utilisation in order to resolve the backlog of examination, and gives training to examiners.
  (Action)
- The prevalence of pirate editions and other illegal imports into Brazil is accounted for by its high rates of tariff and taxes, doubling the prices of imports through regular route compared to the pirate editions. GOB develops boycott campaign against the pirate editions focused on the youth.
- In December 2004, GOB jointly with private concerns established "National Council to Combat Piracy and Intellectual Property Crimes (CNCP)" which is engaged in formulating the measures to combat counterfeits and pirate editions.
- In 2008, the Local Japanese Affiliated Enterprises (LJAE) established "Central & South America IPG" for promotion of a cross business sector IPRs protection activity, exchanging information and association by and among the members and the local governments.
- According to the CNCP's estimate, the damage from counterfeits and pirate editions sustained by the Brazilian enterprises in 2009 climbed to USD20 billion in total, of which medication drugs represented USD5.25 billion, parts USD3 billion, software USD2.25 billion, tobacco USD200 million, fuels USD200 million and electric/electronic appliances USD180 million.
- USTR in its "2010 Special 301 Report" states: "Brazil will remain on the Watch List in 2010. Brazil continued to show a commitment to fighting counterfeiting and piracy and to strengthening its enforcement efforts; however, significant levels of piracy and counterfeiting continue... Concerns remain over border enforcement and the lack of expeditious and deterrent sentences".
- Since 2009, Japan Side has requested the Brazilian Side to tighten its clamp down on counterfeits by showing the distribution channel of counterfeit goods, under the IPR Working Group of Japan-Brazil Investment Promulgation Joint Committee.
- In Brazil, in the criminal proceeding concerning infringement of intellectual property rights, the rightful claimant must take the lead in investigation and prosecution. In the criminal proceeding, not only infringement of the identical trademark but also similar trademark or label can be the subject of criminal charge. The jurisdiction of legal proceedings is the state court of the place where the infringing conducts have taken place.
(2) Inadequate Import Embargo Provisions on Patent Infringing Products - Customs measures at ports provide the suspension of products that infringe the trademarks only and do not provide the suspension of patent infringing products.
We have such information as the customs suspension is extremely rare case of imported patent infringing products.		 - It is requested that GOB positively makes rules for suspending import of patent infringing products at ports. - Industrial Property Act, Article 198
- "Industrial Property System in Brazil", Japan Industrial Property Association
(3) Delayed Patent Application Examination and Issue of Patent - It takes 8 to 9-years in average for establishment of patent right. In the electric-electronic fields, it takes more than 10-years in some cases for the establishment of patent right.
- In average, it takes 8-years from the application to the patent to be issued.
- The extraordinary long examination period on patents and utility design application in Brazil (10 years or more), as compared to other emerging countries, makes it difficult to obtain substantive protection of Intellectual Property Rights (IPRs) on products with short life cycle.		 - It is requested that GOB:
-- increases the number of examiners,
-- reduces the time period from the filing date to the patent issuance as National Institute of Industrial Property (INPI) has represented at its seminar of various kinds.
- It is requested that GOB takes steps to cut down the period required for patent issuance from the date of filing application.
- It is requested that INPI reduces the period for issuance of patents and IPRs in Brazil through promotion of the cooperation on examination with other countries, etc.		 - Examination and Employment
(4) Rigorous Conditions for the use of Expedited Examination Scheme - Exercise of Priority Right for Patent Application requires to satisfy any of the following requirements which are difficult:
1) Applicant must be individuals over 60 years in age,
2) Unauthorised use by a third party of the invention.
3) Registered patent is conditional upon the acquisition of financial resources (the evidence required).		 - Promulgation of Rules enabling early examination will facilitate the use of the Priority Right.
For example, promulgation of a rule that accepts the applicant's submission of the Search Result in a Corresponding Foreign Country will facilitate exercise of PRPA.		 - Resolution 132/2006
  (Info)
- Resolution 132/2006
(http://www.wipo.int/wipolex/en/details.jsp?id=8389)
(5) Examination made in Order of Patent Application Nos. - INPI examines in the order of Patent Application Numbers (PAN). As a result, the examination takes place regardless of when the Request For Examination (RFE) is filed. Later RFE gets examined earlier than the later RFE in the sequence of the PAN. - It is requested that INPI examines in the sequence of Acceptance of the Request for Examination.
(6) Difficulty in contracting Licencing Agreement on Royalty Payment (LARP) - In lieu of LARP, in Brazil, it takes the form of technical licencing agreement for once only renewal (after 5-years with 5-year validity) in total of 10-years. The royalty so payable is inclusive of technical assistance fees, foreclosing conclusion of Continual Use Licencing Agreement (CULA). - It is requested that GOB takes step:
-- to enable conclusion of CULA, and
-- to allow payment of technical assistance fees outside the framework of the licencing agreement.		 - Section355, Income TaxRegulation ("Regulamento do Imposto de Renda")
- Section 74 Law 36.470 of 1958
- Section 12 Law 4.131 of 1962
- Section 6 Decree-Law 1.730 of 1979
(7) Restrictions Relative to Technical Licence Agreement - Technical Licencing Agreement (TLA) must be registered at The National Institute of Industrial Property (INPI) countervailing powers against third party's claim, and for both remittance of royalty abroad, and deduction from the taxable income on Corporate Income Tax provided, however, that in effect; INPI exercises its substantive examination right, upon registration of TLA.
- As regards registration of TLA at INPI, the applicant must carefully appeal the freshness of the technology to be introduced, otherwise registration can take much time, blocking the remittance. It also takes an expert's assistance for TLA registration.		 - The GOB's requirement as described in the left column had been repealed in many countries, and goes against the international trends.
- It is requested that GOB amends the related legislation and improves the implementation by the governing authority.
- It is requested that GOB amends of the related legislation and improves the implementation by the governing authority.
  (Action)
- Since February 2009, at the Japan-Brazil Joint Committee on Promotion of Trade and Investment Japanese enterprises brought up the issues involving technological licencing agreement in respect of the term of contract, the term of confidentiality obligations, and the cap on the royalty remittance term urging improvement.
- In Brazil, "Law on Foreign Capital and Remittance Abroad" provides the cap of 5-years on deduction from the taxable income of royalty payment based on Agreement for Transfer of Technology (ATT)(Know-how Agreement). Normally INPI approves ATT Registration only under this cap, effectively limiting the ATT term to 5-years. As to Patent Licencing, royalty payment may be collected throughout the term of the Agreement.
- INPI is entitled to extend for a further 5-year period, deduction of royalty payment from the taxable income, as empowered by CMN (National Monetary Council.). However, it is the basic understanding in Brazil that the technology is completely transferred within the period of 5-years. To get extension by another 5-year period, it is prerequisite to convince INPI as to its necessity. In practice, this is a difficult task and many such requests have been denied. Collection of royalty over a long-term has become a difficult ordeal.
- Because the term of Technical Transfer Licencing Agreement is limited to 5-years, in principle, so is confidentiality protection term, restricted to 5-years also and no extension is permitted. The brevity of the confidentiality protection term under the Know-How Agreement has been a matter of concern leading to the exodus of technology.
  (Improvement)
- Through the dialogues exchanged at the Japan-Brazil Investment Promulgation Joint Committee, some improvement has been made. In the Letter (of 30 September 2010) of the Deputy Minister of both Japan and Brazil, Brazilian Side response was received: "The term mutually agreed as adequate can be stipulated as the term for the confidentiality protection in Technical Licence Agreement (TLA), while TLA with confidentiality protection term exceeding 10-years may be registered at INPI."
(8) Insufficient Disclosure of IPRs Information - In emerging countries with growing needs for acquisition of Intellectual Property Right, the database remains unprepared for statistical information on the number of IPRs applications, etc. It is impossible to ascertain accurately the risk from the patents held by other enterprises. - It is requested that GOB:
-- advances the collaboration with IPOs of other countries, and
-- overhauls the IPRs database as soon as possible.
(9) Restrictions on Patents relative to Medical Drug - The Brazilian Authority restricts patentable inventions relative to the Medical Drugs. Patent examinations are bifurcated (in duplication) in Brazil, namely at both, National Institute of Industrial Property (INPI) and Brazilian Health Surveillance Agency (ANVISA), so that it takes a long time before patent is issued. - It is requested that the Brazilian Authority:
-- issues patent on the applications that satisfy the requirements under Article 8, that none of the negative reasons under Article 10 applies, and
-- discontinues Anvisa's bifurcated examination in duplication.		 - Industrial Property Act, Article 8, Article 10 and Article 229C
(10) Payment of Renewal Fees during Continuation of Patent Applications - During the continuation of Brazilian patent application, applicant must pay renewal fees to National Institute of Industrial Property (NIIP). As it now stands, where renewal fees are annually payable, in the event of abandonment of patent application in the end, all past payments are wasted. Moreover, depending upon the field of technology, renewal payments have been made without examination on the remaining period. - As is the case in the U.S., Japan, and other major countries, it is requested that GOB takes step to amend the law allowing payment of renewal fees after the registration renewal, all payments in arrears in lump sum to the point of registration. - INPI Chapter XII, Article 84.

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