Patent enforcement: a reality in Brazil

Introduction

In the past five years, the number of new court actions seeking the enforceability of patent rights substantially increased in Brazil. In 1997, for example, almost 80 new patent actions were filed before the Brazilian courts. In 1999, that number rose to more than 200 new filings.

There are several reasons for this phenomenon, including the development of the local market and the significant improvement of the country’s economy. There are two legislative developments, however, that may be the real forces responsible for this new trend in the Brazilian courts: the enactment of the Brazilian Industrial Property Law (BIPL) in 1997 and the Agreement on Trade Related Aspects of Intellectual Property Rights (the TRIPS Agreement), which carne into force in 1995. In fact, these recently enacted legal tools for enforcing patent rights in Brazil are leading patent holders to litigate for the protection of theix rights and for monetary compensation for violation of their patents.

This trend is also causing the Brazilian courts to be more severe when analyzing patent infringement cases. In 2001, for instance, the courts found 83 percent of decided cases valid and infringed when the patent owners were foreign companies. This percentage shows that the Brazilian courts genèrally are very much on the side of the patent owners when judging patent infringement cases.

New Effective Legal Remedies

Under the new Brazilian law, a patent infringement may be both a tort and a criminal offense. According to the BIPL, infringement of a patent occurs by

1. The manufacture of a product that is patented without authorization of the patentee;

2. Using a patented process without authorization of the patentee;

3. The export, sale, exhibition, offering for sale, maintaining in stock, concealing, or receiving, with intent to use for economic purposes, of a product manufactured in violation of a patent;

4. Importing a patented product without the patentee’s consent for the purposes mentioned in item 3, provided that the product was not placed on the market by the patentee or with the patentee’s consent; or

5. Supplying a component of a patented invention, provided that the final application of this component necessarily leads to the exploitation of the patent’s subject matter.

It is important to note that both contributory infringement and infringement by equivalence are also expressly allowed by the Brazilian legislation. In cases of process patents infringement, the law also provides for the reversal of burden of proof (ix., the defendant has to show that he is not using the patented process in the manufacture of his products).

As mentioned above, the patent holder in Brazil is allowed to seek simultaneously both criminal and civil remedies to stop the patent violation. The following remedies are available under local law:

1. Criminal remedies:
– Ex parte search and seizure of the infringing products
– Criminal complaint
– Imprisonment of the infringers
– Fines

2. Civil remedies:

– Search and seizure of the infringing products
– Ex parte preliminary injunctions
– Recovery of damages
– Destruction of seized products
– Recovery of attorney fees and judicial costs

In the civil sphere, for instance, the BIPL allows the judge to grant an inaudita altera parte preliminary restraining order to determine the immediate cessation of the patent violation. The judge may celso order the ex parte seizure of all the infringing products, which is a very effective tool in combating patent infringement. Judges are very flexible when granting these types of measures if the plaintiff can prove a strong right deserving protection and the judge can be convinced that the plaintifPs right is threatened by the defendant’s activity and could be severely damaged if no action is taken before a final decision on the merits is rendered.

The patent holder may celso seek compensation for the damages caused by the violation. According to Article 210 of the BIPL, the damages (i.e., loss of profits) will be determined by the most favorable to the injured party of the following criteria: (1) the benefits that would have been gained by the injured party if the violation had not occurred; (2) the benefits gained by the author of the violation of the rights; or (3) the remuneration that the author of the violation would have paid to the proprietor of the violated rights for a granted license, which would have legally permitted him to exploit the subject matter of the right.

In view of this, even if the infringer does not keep records of his illegal operations, it is possible to determine the damages using a different criteria, such as the benefits that would have been obtained by the injured party if the violation had not occurred, or the remuneration that the infringer would have paid to the owner of the violated rights for a license.

Besides the civil measures, if a patent owner detects a patent infringement by a specific Brazilian company, one of the possible responses against the infringer is the filing of a criminal search and seizure procedure. This criminal injunction procedure authorizes the title holder to seize the infringing products and obtain enough elements to start a criminal action against the legal regresentatives of the companies involved (or against the people who committed the crime).

The criminal search and seizure is a preliminary measure and is necessary to provide elements for the proposal of a criminal action. It was originally created to collect evidence of the infringement as well as to enable the patent holder to obtain a legal expert opinion on the samples of the infringing products in order to confirm the infringement. A new provision in the BIPL (Law 9,279/96), however, allows the owner of an infringed patented process to request the extension Qf the effects of the decision to seize the totality of the products manufactured using the patented process. This means that, depending on the judge’s opinion, this measure may generate the same effects as a preliminary injunction order granted by a civil court.

If the experts confirm the infringement, the patent owner will need to file a subsequent complaint in order to start the private criminal action. After a final decision with the condemnation of the defendant, the judge may order the destruction of the products seized during the criminal search and seizure and, based on the conditions of the people involved, may order the arrest of the defendants. The criminal penalties against a patent infringer range from one month to one year of detention or a fine.

In short, patent owners in Brazil have several effective legal tools available to protect their patent rights, and the local courts are not reluctant to fiercely enforce the new BIPL against patent infringers.