Guidance

Intellectual property rights in Brazil

Updated 20 August 2021

All information correct at the time of update in 2019.

1. Introduction

In Brazil, Intellectual Property Rights (“IPRs”) can be generally classified in three main groups: Industrial Property, Copyright and Related Rights and sui generis IPRs.

Industrial Property includes patents, trademarks, industrial designs, geographical indications and non-patentable knowledge (e.g., know-how, trade secrets). It is regulated mainly by Federal Law No. 9.279/96 (the “LPI”).

The Brazilian Industrial Property Institute (the “INPI”) is the Brazilian Patent and Trademark Office and is an autonomous federal agency under the Ministry of Development, Industry and Commerce. The INPI is responsible for implementing rules regulating industrial property, as well as for granting and registering patents (i.e., inventions and utility models), industrial designs, trademarks, geographical indications, software and at times technology transfer contracts.

Copyright protection is granted for texts of literary, scientific or artistic works, musical compositions, audiovisual works, drawings, paintings, and photographic works. It is regulated mainly by Federal Law No. 9.610/98 (the “Copyright Law”). Neighboring or related rights are also regulated by the Copyright Law and it generally protects the rights of:

(i) interpreters and executors (e.g., actors, musicians, singers, dancers or artists in general);

(ii) producers of phonograms and sound recordings concerning these recordings; and

(iii) broadcasting companies in their programming.

Whilst software receives specific protection, i.e., software protection is provided by Federal Law No. 9.609/98 (the “Software Law”), the Copyright Law is complementarily applicable to the matter.

Sui generis IPRs include plant variety protection, which is regulated by Federal Law No. 9.456/97, and the protection for the layout of integrated circuit, which is regulated by Federal Law No. 11.484/07.

Another important subject to be approached, although not directly associated with Intellectual Property Rights, would be data privacy rights, for its timely importance and relevance as to protect the fundamental rights and freedoms of natural persons in particular their right to have their personal data regulated.

In Brazil, the data protection is regulated by Federal Law n. 13.709/18, the General Data Protection Law (“LGPD”) was publicized in August, 15th 2018, and will be applicable as of August, 15th, 2020.

2. Patent

2.1. Legal Framework

LPI.

2.2. Patent types

LPI establishes two types of patents: patents of invention (the “PI”) and utility model (the “UM”).

A PI is granted when an invention is novel, involves an inventive step and is capable of industrial application. To comply with the novelty requirement, the invention must be new to the world’s body of technical knowledge. An invention involves an inventive step when it is not obvious to a person of ordinary skill in the relevant area. Industrial applicability is satisfied when the invention can be manufactured or incorporated into practice in the respective industry.

An UM can be referred to as ‘minor patent’ and its rules are similar to those for PI, although the hurdle is lower for UM. It may be granted when the object has an industrial use, presents a new shape or layout and involves an inventive act that results in functional improvement in terms of use or manufacture.

LPI operates under the ‘first to file’ principle, i.e., if two people apply for a patent on an identical invention, the first one to file the application will be awarded the patent.

Software Patents: INPI stablishes that software, itself, is not considered an invention or a utility model.

Nonetheless, any software that comply with the three patent requirements: novelty, inventive technology and capability of industrial application and it is towed into a hardware could be patentable. It means that a patentable software must be encompassed in a hardware and be essential to its functioning.

As a general rule, software will only be subject to patent registration within a practical application into a computer program. In case of any absence in practical application and/or lack of any patent requirements, the software will not be granted as a patent and will have the protection as stablished in item 9 of this Guide.

2.3. How to protect

Patent applications are filed with the INPI by paper or online application.

Patent applications filed before INPI must contain the claims, a complete description of the invention with a drawing (if applicable) and evidence of compliance with all legal requirements. INPI will then proceed with a preliminary formal review and a filing certificate will be issued. This application will be kept confidential for 18 months, after which it will be officially published. The inventor has 36 months to request a technical examination of the patent application. If no such request is made, the application will be dismissed. The letter patent will be issued after granting of the patent application.

The concession of a patent, by INPI, would mean, in theory, a more effective legal measure of defending the property against third-parties competitors, since the patent would be provided with an official document and the right to avoid, in short, that any third party may exploit the invention for a period of time.

In this line, infringement of a patent is a crime and liable for any loss, that is, the advantage that the owner would have to defend the invention both administratively, within the scope of the INPI, and judicially, according to the technical and formal requirements.

Nevertheless, in practice, there are some disadvantages to patenting something. One is that the patent has a fixed term and upon expiration any third party is free to explore the invention. Depending on the investment made, due to the term of protection, the financial return may not be worth it.

In addition, INPI has a very high stock of patent pending backlog, which contributes to the agency’s enormous delay in granting patents, thus creating legal uncertainty for those staking in inventions with the hope of having their patents guaranteed protection.

There is also the possibility of granting privilege to a patent before third parties, within the judiciary. Unfortunately, Brazilian judiciary is also very slow and also often lack technicality in their decisions.

Since 2001, pharmaceutical patent applications are subject to a dual-assessment process, whereby the National Health Surveillance Office (“ANVISA”), i.e., the Brazilian Medicines and Healthcare products Regulatory Authority, will assess the patentability criteria, in addition to the assessment completed by the INPI. On April 10, 2013, ANVISA Directorate´s Resolution no. 21/2013 amended the writing of articles concerning ANVISA’s prior approval for patent applications related to pharmaceutical products and processes.

Currently, the applicant must request the INPI for the examination of the patent application for pharmaceutical products and processes. Following a non-technical, documentation-focused assessment, the INPI will forward the files of the patent application to ANVISA, which will analyze whether the application contradicts the public health, through decisions based on technical opinions issued by the qualified division of ANVISA.

2.4. Length of protection

A patent gives the owner a monopoly right over the product or process and also allows it to license the patent for others to make and sell, in return for the payment of royalties. The protection afforded by a PI is valid for a period of 20 years for PI and 15 years for UM, but never less than 10 years from granting.

3. Trademarks

3.1. Legal framework

LPI.

3.2. Trademark types

Most trademark rights derive from registration in Brazil. As a general rule, a trademark is awarded to the first party that applies for the registration. Yet, a bona fide user of an unregistered trademark may claim priority rights over a competing trademark application, provided there is evidence confirming the use of said unregistered trademark in Brazil for at least 6 months before the date in which the competing application was filled. Brazilians or foreigners can apply for trademark registration at INPI.

Any visually perceptive distinctive sign, when not prohibited under law, may be registered as a trademark. Brazilian Law does not grant protection to the so-called non-traditional trademark, such as sound and aroma trademarks.

Private legal entities may only request registration of a trademark relating to the activity that they effectively and licitly exercise directly or through undertakings that they control directly or indirectly. The INPI uses the Nice International Classification System in order to classify trademarks.

3.2.1. Classification based on content

Trademarks can be classified based on their content.

• product or service trademark: those one which are used to distinguish products or services from another that is identical, similar, or alike, but of different origin
• collective trademark: those one that are used to identify products or services provided by members of a certain entity
• certification trademark: those one that are used to attest the conformity of a product or service with certain technical standards or specifications, particularly regarding its quality, nature, material and/or methodology

3.2.2. Classification based on presentation

Trademarks can be classified based on their presentation.

• word trademark: exclusively composed by letters and/or numbers
• figurative trademark: exclusively composed by a design, image, figure or any stylized form of letter and number alone
• combined trademark: composed by a combination of verbal and figurative elements
• three-dimensional trademark: although the law does not define it, can be described as a physical object with distinctive appearance. It consists on the configuration or physical conformation of product or packaging, whose form has distinctive capability in itself and is dissociated from any technical effect

3.2.3. Famous trademark (alto renome)

As a rule, under LPI, a trademark is protected only in that market segment for which the registration was granted by INPI. An exception to this principle, called principle of specialty, is the famous trademark.

Under LPI, a famous trademark is that whose distinctive products or services lead it to surpass its original range of trademark protection. That is, in view of its recognition by a large portion of the consumer public, quality, prestige, repute and capability of attracting consumer by its mere presence, such trademark has a special protection in all fields of activity, rather than only in that field for which the trademark registration was granted.

The INPI issued Normative Act nº 107/2013 (modified by the Normative Act n. 172/2016), which governs the proceedings concerning how and under what conditions the INPI would recognize the status of famous for trademarks.

3.2.4. Well-known trademark

The well-known trademark within its branch of activity pursuant to Article 6bis (I) of the Paris Convention for Protection of industrial Property enjoys special protection, regardless of whether it has already been filed or registered in Brazil.

3.3. How to protect

The application for registration of a trademark and any documents attached must be presented in Portuguese and, whenever there is a document in a foreign language, a translation must be presented at the time of filing the application or within 60 days. A foreign applicant must maintain a qualified attorney, resident in Brazil, with authority to represent the applicant administratively and judicially.

After publication in the Official Gazette, there is a period of 60 days in which any interested person may file opposition. In such case, the applications’ owner has a period of 60 days to submit an answer to the opposition.

Based on the papers filed by each party, the INPI comes up with a decision regarding the grant of the pending trademark. INPI has autonomy on its decisions and they must not be necessarily linked to the grounds on the opposition.

As of the publication of the decision of acceptance of the application, a 60-day term will be opened for the applicant to file the receipt of payment of the official fee for the issuance of the Certificate of Registration and for the first 10-year term of protection of the registration.

An appeal may be filed against the decision of rejection of the application for registration, in a term of 60 days as of the date of publication thereof.

In addition, administrative nullity proceedings may be requested by the INPI or by a legitimately interested party within 180 days as of the date of granting of the application.

There are absolute and relative grounds for refusals of registrations. Both are examined ex officio. Based on absolute grounds, the INPI does not grant registration to trademarks that: do not consist of signs graphically represented; are devoid of any distinctive character; contain or consist of a false or true designation of origin or a geographical indication; are contrary to accepted principles of morality or against the freedom of religion or conscience; contain official symbols, such as national flags and monuments; are of such a nature as to deceive the public, for instance, as to the nature, quality or geographical origin of the good or service; are signs or expression used only as a means of advertising; are not related to the activity performed directly or indirectly by the applicant. Based on relative grounds, the INPI does not grant registration to trademarks that: contain or imitate any previous rights or trademarks of a third part; are identical trademarks, even in cases where both are related to the same owner; are usual, common or ordinary shapes of the product or its packaging, or shapes that cannot be separated from a technical effect.

As a new and effective measure, Brazil has joined, in 25.06.2019, the Madrid Protocol to be part of the International Trade mark System – Madrid System – within the World Intellectual Property Organization (WIPO).

The Madrid System is a convenient and cost-effective solution for registering and managing trade marks worldwide.

Within that scope, by the Madrid System, any international trademark request can now be made through INPI, that analyses the request and sends directly to the Madrid System, acting as a WIPO Original Office, certifying and evaluating the request, within two months.

By being part of the Madrid System, any Brazilian trademark request must be evaluated up to 18 months. The INPI must comply with this rule which is very beneficial since INPI backlogs were a hindrance to guarantee and protect the trademarks in Brazil.

3.4. Length of protection

The registration of a trademark shall remain in force for a period of 10 years from the date of granting of the registration, and such period may be extended for equal and successive periods, upon payment of the correspondent fees.

The renewal shall be requested during the last year of the term of the registration, or, exceptionally, during the following 6 months after the expiration.

4. Industrial designs

4.1. Legal framework

LPI.

4.2. Definition

The Industrial Design (the “ID”) consists in any ornamental shape of an object, or the ornamental combination of outlines and colors applicable to a product, which result in a new visual effect.

The ID can be constituted of three-dimensional structures, such as the component form or two-dimensional structures such as templates, lines or colors. It is important to mention the esthetic essence of your protection, do not thereby protecting any technical features of the device in which it is applied.

4.3. How to protect

The protection of the ID is provided by registration with the INPI. Granting an industrial design, unlike patent regulation, is not subject to prior examination by the INPI regarding its merit. Registration is immediately published and granted by the INPI if the application complies with all legal requirements, as follows:

Novelty. One ID is considered new when is not understood in the state of the art, which consists in the period of time in which everything that was made is informed to the public before the filing date in Brazil or abroad, or by using any means. However, LPI sets forth a “grace period”, which consists of a security to the inventor and states that there will be no harm if the information about the ID have been disclosed to the public in the twelve months preceding the filing either by the inventor or by third parties.

Originality. ID is regarded as original when it results in a distinctive visual configuration relative to other objects (or patterns) already known.

Capable of industrial manufacturing. The claimed object should be able to be reproduced industrially. In other words, it must be reproducible in scale, providing identical copies. It follows from the definition that natural elements (e.g., shells) and artwork cannot be eligible for protection by ID because the object will never be reproducible in scale, due to the particularities presented by each element.

An application for an ID registration must contain a form, specification and claims, if applicable, drawings and/or photographs, the field of application of the object and evidence of payment of the filing fee.

Once an application is filed, it will be published automatically and registration granted simultaneously, and the respective certificate will be issued at once. At the applicant’s request, the application may be kept secret for a period of 180 days from the filing date, after which it will be processed.

If legal requirements are not met, an official action shall be issued, to which a response should be filed within 60 days. The penalty for failing to do so is a withdrawal of the application.

Administrative nullity proceedings may be instituted ex officio or at the request of any person having a legitimate interest within five years from the grant of registration. It will suspend the effects of the grant of a registration if presented or published within 60 days of the grant.

The registrant will be notified that he or she has 60 days from the date of the publication to respond. Subsequently, the INPI will issue an opinion, to which the registrant and the applicant shall respond within 60 days. Even if no responses are presented, the process will be ruled upon by the president of the INPI, thereby completing the administrative process.

4.4. Length of protection

The registration is valid for a period of 10 years as of the filing date, and can be extended for three consecutive five-year periods.

5. Geographical indications

5.1. Legal framework

LPI.

5.2. Types of geographical indications

A geographical indication (the “GI”) is constituted by an indication of source or an appellation of origin.

Indication of source is considered to be the geographical name of a country, city, region or locality of its territory, which has become known as a center of extraction, production or manufacture of a determined product or for providing a determined service.

Appellation of origin is considered to be the geographical name of a country, city, region or locality of its territory, which designates a product or service, the qualities or characteristics of which are exclusively or essentially due to the geographical environment, including natural and human factors.

In 2018, INPI has issued a Normative Act n. 095/2018 stablishing that terms liable to cause confusion, can reproduce, imitate or constitute:

(i) geographic name or its gentile which has become common use, designating product or service;

ii) Name of plant variety, cultivated or not, which is registered as a cultivar, or which is commonly used or existing in Brazilian territory at the date of the request;

iii) Name of an animal breed that is of current use or existing in Brazilian territory at the date of the request;

iv) Homonymous with any geographical indication already registered in Brazil that indicates identical or similar product or service, except when there is substantial differentiation in the distinctive sign – shall not be granted and considered GI for the purpose of the Law.

5.3. How to protect

A GI application must be accompanied by instruments proving the legitimacy of the applicant, norms regulating of use of the GI by holders, official documents delimiting the geographical area, the description and characteristics of the product or service and proof of existence of a structure for controlling the standards of production by authorized producers.

After the application is filed, the INPI proceeds to a formal examination of the documents. If they are in order, the INPI publishes the application in the Official Gazette; otherwise, the applicants have 60 days to comply with the requirement(s) made by the INPI.

Following publication of the application, third parties have 60 days to file opposition, and the applicants have 60 days to respond. The INPI issues a decision regarding the application. If granted, applicants have 60 days to pay the required fee; in case of rejection, they have the same time period to appeal. The final decision is issued by the President of the INPI.

6. Trade secret

6.1. Legal framework

TRIPS Agreement and LPI.

6.2. Definition

Applicable for cases in which a given technology does not meet the minimum requirements of patentability or the owners prefer to keep the technology confidential and protect it by secrecy.

Every part of information that gives a competitive advantage to its holder may be classified as a “trade secret”. Brazilian courts have acknowledged as trade secrets, for example, supplier lists, client lists, distributor lists, marketing strategies, consumers’ profiles, among others.

Information that at the time of the disclosure or use is already of public knowledge or obvious to a person skilled in the art is not considered a trade secret and may be used without restrictions.

6.3. How to protect

Trade secrets are protected under Brazilian law regardless of any formality or registration and the term of protection is unlimited, lasting as long as the confidentiality. Protection to such information may be perpetual if its holder manages to keep it from being disclosed to third parties.

Although Brazilian law does not establish any specific requirements for the protection of trade secrets, Brazilian courts usually apply the list of article 39.2, of the TRIPS Agreement:

(a) the information must be secret;

(b) the information must be valuable; and

(c) the holder must take reasonable precautions to keep the information secret.

The most usual forms of violation of trade secrets are included in the LPI as acts of unfair competition, establishing civil and criminal penalties for the discloser of the information.

7. Plant variety protection

7.1. Legal framework

Law No. 9,456 of 1997 (the “PVP Law”).

7.2. Definition

According to PVP Law, plant variety consists in a variety of any plant genus or species that is clearly distinguishable from other known plant varieties by a minimum margin of descriptors and by its own denomination, is homogenous and stable in its descriptors throughout successive generations and belongs to a species useful in farming and forestry, being described in a publicly available and accessible specialized publication, including the component lines of hybrids.

Only a new plant variety or an essentially derived variety of any genus or species is eligible for protection. New plant variety, according to PVP Law, means a variety that has not been offered for sale in Brazil for more than 12 months prior to the date of the application for protection and, with due regard to the period for commercialization in Brazil, has not been offered for sale in other countries, with the breeder’s authorization, for more than six years for tree and vine species and for more than four years for other species.

7.3. How to protect

The application for protection of a new plan variety shall be formalized in a request signed by the natural or legal person who has bred the plant variety or his agent and endorsed by the competent agency. Such application shall include at least the requirements established in Article 14 of the PVP Law.

Every plant variety shall have a denomination that identifies it, serves as its generic designation and conforms to the following criteria for the purposes of protection:

(i) it must be unique, and not expressed in the form of numerals only;

(ii) it must consist of a designation that is different from that of a pre-existing plant variety; and

(iii) it must not mislead as to the essential characteristics or origin of the variety.

The application for protection shall be published within 60 calendar days of the filing thereof. On publication of the application for protection, there shall begin a period of 90 days for the submission of any appeals, the applicant being informed thereof.

The plant variety protection certificate shall be issued immediately after the time limit for appeal or, where an appeal has been filed, on the official publication of the ruling thereon.

7.4. Length of protection

The protection of the plant variety shall be effective for a period of 15 years from the date of grant of the Provisional Certificate of Protection, except for vines and fruit, forest and ornamental trees, including in each case the rootstock thereof, for which the term shall be 18 years.

8. Copyright

8.1. Legal framework

The Copyright Law.

8.2. Scope of protection

Copyright protects in Brazil all intellectual works that are creations of the mind, whatever their mode of expression or affixation in any kind of media, physical or virtual. Only concrete expressions are protectable and not ideas. It includes artistic, literary and scientific expressions, text, music, works of art such as paintings and sculptures, as well as technological works, for example, computer programs and electronic databases.

There are two types of rights conferred by the copyright system:

(a) patrimonial rights, which provide to the holder the right to obtain financial return from the use and exploitation of the work and

(b) moral rights, which accentuate the existing personal link between the author and the work. Different from patrimonial rights, moral rights shall not be transferred to third parties.

8.3. How to protect

Registration is optional for purposes of protection. Assuming that the work is original, it will be afforded copyright protection irrespective of registration.

National and foreign authors and owners may register their works with the public bodies defined by local norms. The main registration authority is the Copyright Office of the National Library.

Although not mandatory, copyright registration is still recommend as a way to evidence authorship, especially for foreign authors and owners. And in case of assignment or licensing to local companies, the respective agreement may be entered as a marginal note to the registration certificate, giving the opportunity to third parties to become aware of the contents of the agreement.

8.4. Length of protection

As a general rule, the Copyright Law sets the duration of economic rights for a period of 70 years counted from 1 January of the year following the author’s death.

8.5. Related rights (Direitos Conexos)

Related rights provide protection to the following people or organizations:

(a) Interpreters and executors (actors, musicians, singers, dancers or artists in general), because of their performances;

(b) Producers of Phonograms and sound recordings (by CDs cassette tapes, for example) concerning these recordings; and

(c) Broadcasting companies in their TV programming and radio.

Copyright and related rights protect different people. While copyright protects authors of works, Related Rights, protect those that bind to the work without having created.

9. Software

9.1. Legal framework

Law No. 9,609 (the “Software Law”) and Copyright Law.

9.2. Scope of protection

It is protected under the scope of software an organized set of instructions in natural or codified language embedded in physical media of any nature to be necessarily used in automated machines to handle data, devices, peripheral instruments or equipment, based on digital or analogous techniques to make them operate in a specific manner and for specific purposes.

9.3. How to protect

Registration is optional for purposes of protection. Assuming that the software is original, it will be afforded copyright protection irrespective of registration.

Likewise copyright, registration of software is not mandatory. Tough, it is still recommend as a way to evidence authorship. The INPI is the responsible authority for registration of software.

9.4. Length of protection

The effective period for software protection is 50 years after its creation.

10. Layout of integrated circuit

10.1. Legal framework

Law No. 11,484 of 2007.

10.2. Scope of protection

Integrated Circuit shall mean a product, in its final form or an intermediate form, in which the elements, at least one of which is an active element, and some or all of the interconnections are intended to perform an electronic function.

10.3. How to protect

All applications are filed with and analyzed by the INPI. They must contain:

(i) the description of the topography and its function;

(ii) drawings or photographs of the integrated circuit;

(iii) a declaration of previous exploitation, if needed;

(iv) receipt of payment of the filing fee.

Once the application is filed and all the formal requirements are complied with, the INPI automatically publishes it and simultaneously grants the registration.

Applicants may request at the time of filing that the application is kept secret for a period of six months, after which it is processed.

10.4. Length of protection

The protection is granted for 10 years from the date of filing or the first holding, whichever occurred first.

11. Infringement and remedies

Actions against the infringement of all types of IP may be brought under Brazil’s Penal Code and specific IP legislation, with the possibility of higher penalties for infringers including imprisonment and fines.

There are two main levels at which IP rights may be enforced in Brazil:

(a) Civil action - there are no specialist courts exclusively dealing with IP-related cases. The ordinary civil courts deal with cases as appropriate. Laws relating to trade name registration and protection are contained within the Civil Code. All other areas of IP have their own specific legislation.

(b) Criminal prosecution - actions against the infringement of all types of IP may be brought under Brazil’s Penal Code and specific IP legislation, with (in theory, at least) higher penalties for infringers including imprisonment and fines. A criminal complaint must be preceded by a search and seizure action, which aims to collect evidence rather than halt the infringement.

Specialist federal courts in Rio de Janeiro are available to hear actions, such as cancellations, coming from proceedings at the national office. Specialized state courts are available in infringement actions in both Rio de Janeiro (first instance only) and Sao Paulo (second instance only).

Actions by Customs also play an important part in IP enforcement in Brazil. Customs can monitor and seek seizure ex officio infringing products on import or export.

12. IP license agreements and technology transfer agreements

In general terms, in Brazil all bilateral transactions involving license of trademarks and/or patents, supply and/or transfer of non-patented proprietary technological knowledge (e.g., know how, trade secrets and technical specifications) and the supply and rendering of technical and scientific assistance are considered as technology transfers.

According to LPI, INPI is the governmental authority responsible for the registration of any agreements and contracts involving transfer of technology. In addition to the rules of the LPI, the INPI’s internal rulings establish the conditions referring to technology transfer agreements and the main requirements for their registration.

The official registration of a technology transfer agreement is required to

(a) authorize the remittance of cross-border payments of royalties relating to the technology transferred;

(b) allow the licensee or recipient of the technology to deduct the royalty payments as expenses; and

(c) cause the agreement to be enforceable against third parties, allowing the licensee to protect the licensed technology from misuse and dilution. In case of royalty free technology agreements, the registration is not mandatory.

Foreign companies may face certain challenges on the registration of the technology agreements in Brazil as INPI imposes strict requirements for the registration procedures. The agreements must be drafted in accordance with the guidelines established by INPI, which are based on surpassed regulations.

INPI does not recognize the licensing of non-patentable technology. It is the understanding of the entity that such kind of technology (e.g., know how, trade secrets and technical specifications) is only subject to the definitive transfer to the recipient party and not to the temporary licensing. Hence, the holder of the technology cannot forbid the recipient party to freely use such technology after the termination of the agreement.

In relation to the term, for agreements related to non-patentable technologies, INPI allows a maximum contractual term of 5 years, which may be exceptionally renewed for additional 5 years upon authorization of the INPI, as long as the parties justify that said additional period is in fact necessary for the transfer of the technology. For licensing of patents, the term of the agreement may be the period of validity of the patents registered in Brazil.

For the royalties, payments made by a Brazilian company to a related company outside of Brazil are limited to a percentage of the net sales price of products licensed through the agreement. This rate varies according to the field of activity in which the agreement is inserted, but the highest rate is 5%. The rates are the same used for the allowance of tax deduction of expenses based on royalty payment.

Although Brazilian law does not establish any limitation on payments made between unrelated parties, INPI usually requests a reduction of the contractual remuneration if it considers that the amount exceeds usual market standards ^{[footnote 1]}.

As the royalties may only be remitted outside of Brazil after the registration of the agreement, INPI only allows retroactive payments from the date of the application to register the agreement. Any payments related to the period before the filing of the application cannot be made.

In relation to any improvement or new technology developed by the Brazilian party during the term of the agreement, INPI considers that the rights on said improvements, innovations or new technology will be owned by the Brazilian party. Clauses to the contrary may be challenged by INPI.

In addition, INPI may also challenge clauses establishing that improvements developed by the licensor may only be used by the Brazilian company upon the execution of a new agreement with a specific remuneration. On the other hand, if the agreement is silent on the possibility of use of improvements developed by the foreign company, INPI will probably consider that the remuneration established in the agreement already covers the improvements, and may deny any request of the foreign company for the amendment or renewal of the referenced agreement or for the registration of a new agreement related to the improvements of the previous technology.

13. General data protection

13.1. Legal framework

Federal Law n. 13,709 of 2018 (the “LGPD” Law)

13.2. Scope of protection

LGPD has the main purpose of protecting natural persons´ personal data.

In Brazil, this Law establishes the processing of personal data, digitally or not, by natural person or a legal entity (public or private), in order to protect the fundamental rights of liberty and privacy, as well as the free development of the personality of the natural person.

13.3. How to protect

In general terms, the personal data can only be processed in the following cases:

i) previous consent of the personal data holder;

ii) to fulfil any legal obligation or regulatory by the controller of the data;

iii) by any public organism for the processing and/or shared usage of data necessary to execute public policies;

iv) For studies and/or research bodies, with the guaranty of anonymization of the holder;

v) when necessary for the agreement enforcement or preliminary proceedings related to any agreement or negotiation;

vi) for the regular exercise of rights in any legal action, administrative or arbitral procedure;

vii) for the protection of any life or physical safety of the holder or third party;

viii) for the protection of any health matter;

ix) Necessary to fulfil the legitimate interests of the controller or third party;

x) for the protection of credit.

The main objective of the Law is that the holder of any personal data has to be aware and thus consent to how its personal data will be used and processed by any third party.

In this regard, the usage and processing of any personal data must have a justifiable, lawfulness, fairness and transparency purpose as to prevent any unreasonable movement of personal data.

The responsibilities within the processing of personal data will lie with any natural or legal person, public authority, agency or other body which, alone or jointly with others, has determined the purposes and means of processing the personal data, designated by the Law as being the Controller or the Operator, also, a natural or legal person, public authority, agency or other body, which processes personal data on behalf of the controller.

In Brazil, the Law stablishes that a National Authority of Data Protection will be created to protect and inspect and supervise the personal data processing in Brazil, also to apply any penalties in case of any non-compliance with legislation.

13.4. Length of protection

There is no length of protection expressly determined in the LGPD.

1. A recent court decision affirmed that the INPI does not have legitimate powers to act this way, but the lawsuit is still under discussion on an appeal presented to the higher courts. ↩