Industrial Property Law and Border Measures

Brazil, which has a population of 170 millions, is one of the world’s largest consumer markets and the fifth largest country in size, occupying 47.7% of South America. Brazil’s extensive, 10,000 kilometer coastline also warrants note, as does the fact that it borders every South American country except Ecuador and Chile.

These attributes may constitute a significant advantage in terms of the country’s commercial relations, but they also pose a serious challenge for protecting intellectual property, especially with regards to counterfeiting.

It is a well-known fact that the majority of counterfeit products consumed in Brazil is of foreign origin, as a simple visit to commercial centers in the country’s largest capitals confirms. The diverse entry channels and a very attractive consuming public are an invitation for pirated products.

This context underscores the importance of Industrial Property Law (No. 9,279/96), whose provisions for border measures has contributed greatly to reducing the country’s volume of counterfeit products from fraudulent imports.

The rule contained in Article 198 of the Industrial Property Law enables customs officials to seize, of their on authority or at the request of the interested party, goods bearing false, altered or imitated trademarks, or that have fraudulent indication of origin.

This legal provision did not begin with the current Industrial Property Law (IPL): the Industrial Property Code of 1945 (Decree-Law No. 7,903, of August 27, 1945), in its Article 185, already provided for a virtually identical authority, which was only revoked when the new law took effect.

However, unquestionably one of the supreme merits of the IPL was that it effectively assured this protection, whose applicability was formerly quite limited.

The IPL Article 198, on which the text of Customs Regulation was based (Article 544 of Decree No. 4,765, of June 24, 2003), enabled customs officials to effect many apprehensions, so that owners of the violated rights could take appropriate judicial measures.

Following seizure of goods under IPL Article 198, the interested party may file civil and/or criminal suits for the purpose of definitively seizing and destroying the merchandise, and also of obtaining indemnification for the unlawful practice and criminal punishment of those involved: IPL Article 191, Subparagraph I classifies importation of goods with illegally reproduced or imitated trademarks as not only a tort, but also a crime.

Criminal treatment of importation of falsified goods has proven considerably efficient. One noteworthy case was judged in the Paraná State Court of Appeals (Appeal No. 2004.001216-0). The decision upheld the conviction of those responsible for importing automobile radios that reproduced the trademark of a renowned company in the sector.

The control of merchandise entering Brazil is still far from ideal: despite the diligent performance of customs authorities in inspecting counterfeit products, there is still a shortage of Federal Revenue Service workers.

It is equally true that for effective control of counterfeiting and pirating in Brazil, the owners of intellectual property rights will have the intelligence of IPL Article 198 on heir side, which will permit them to avoid the customs clearance and the consequent invasion of illegal goods on the Brazilian market.

*co-authored with Thiago Andrade Silva