The legal framework for Brazil’s electronic games industry comes into force: understand what the new legislation says

The legal framework for Brazil’s electronic games industry comes into force: understand what the new legislation says

On 3 May 2024, Law No. 14.852/24, which creates the legal framework for electronic games in Brazil, was sanctioned. The new legislation regulates the manufacture, import, commercialization, development, and commercial use of games, as well as introduces measures to encourage the business environment and increase the supply of capital for investments in the sector.

Worldwide, the electronic games industry is worth around 200 billion dollars[1] and is increasingly consolidating its position as one of the main technology, entertainment, and media sectors of the 21st century. Brazil, in turn, has a turnover of around 2.6 billion dollars (around 13 billion reais) a year in the sector, making it the tenth largest games market in the world. [2]

Among the main points, article 5 of the new law defines electronic games, for purposes of protection through intellectual property (IP) as such: the interactive audiovisual work developed as a computer program, as defined in law 9609/98 (“software law”), in which images are altered in real time based on the player’s actions and interactions with the interface; the central device and accessories, for private or commercial use, specially dedicated to running electronic games; and software for use as a mobile phone application and/or web page, video game console games and games in virtual reality, augmented reality, mixed reality and extended reality, consumed by download or streaming.

It should be noted that the law considers electronic games to be both the part that enjoys protection as software (art. 5, items I and III) and the central devices and accessories, which can enjoy other forms of protection by other forms of intellectual property rights (art. 5, item II). Thus, electronic games are goods that can enjoy multiple IPR protections, not only in their expressive or aesthetic part (by software/copyright), but also by patents (in the case of technical and functional creations), industrial designs, (in the case of ornamental creations), among others. There are multiple possibilities of protection of aspects related to electronic games.

It is important to note that the so-called legal framework for games, in its art. 20, inserted a new item into art. 2 of the Industrial Property Law (Law 9.279/96 – LPI). Item VI, in this sense, states that the protection of IP rights will be achieved through a specific registration for electronic games at the INPI.  This provision raises questions about the need and technical suitability of creating a specific form of registration for electronic games, above all because of the already existing provisions in the Brazilian Software Law. This new form of registration created by Law No. 14.852/24 also potentially creates a practical challenge to the INPI, which will be the governmental body responsible for the implementation of this new modality of registration.

Law 14.852/24 also provides for tax incentives aimed at boosting the economy and attracting investment to the electronic games industry. Since games are now considered a research, development, innovation and cultural activity, developers will be able to benefit from the Rouanet Law and the Audiovisual Law, which allow them to raise funds on the market with tax benefits for investors, provided they fulfil the requirements of these laws.

The legal framework also defines guidelines to support the industry, creating a more competitive and attractive business environment. The regulation also includes a commitment to training professionals for the sector, encouraging the creation of specific technical and higher education courses; and the use of games for didactic, therapeutic, training and capacity-building purposes. For example, the government will be able to purchase educational games for use in public schools and create repositories of electronic games financed with public funds, for free use by public education, research and health institutions.

In addition, the law establishes obligations to protect children and adolescents in the digital environment of electronic games. Among the measures, games must be designed with the best interests of young people in mind, including actions to mitigate risks and promote their rights. Developers and suppliers should create communication channels with young audiences, guarantee safe environments free from discrimination and abuse, and implement effective moderation and reporting systems. In this sense, transparency about violations and actions taken is also required. In-game purchases must include tools that ensure parental consent for transactions.

It should be noted that the legislation excludes from its scope of protection slot machines, games of chance, commercial promotions, lottery modalities, or any type of game that offers some kind of bet, with prizes in real or virtual assets, or involving a random or prognostic outcome.

Dannemann Siemsen believes that this legal framework will, in general, bring more legal certainty and encouragement to an innovative and strategic sector that is constantly developing in Brazil. We are available to answer any questions that may arise about the new legislation and to help with measures to protect electronic games in their various forms through intellectual property rights.

The legal framework for Brazil’s electronic games industry can be accessed via the link: Lei nº 14.852/24

[1] Games Market Revenues Will Pass $200 Billion for the First Time in 2022 as the U.S. Overtakes China. Newzoo. Available at: https://newzoo.com/resources/blog/games-market-revenues-will-pass-200-billion-for-the-first-time-in-2022-as-the-u-s-overtakes-china. Accessed on May 13th, 2024.

[2] Top country and Markets by video games revenue. Available at: https://newzoo.com/resources/rankings/top-10-countries-by-game-revenues. Accessed on May 13th, 2024. See also: Brazilian Games Industry Survey 2023. Available at: https://www.abragames.org/uploads/5/6/8/0/56805537/2023_relat%C3%B3rio_final_v4.3.3_ptbr.pdf and Pesquisa Game Brasil (PGB) 2024. Available at: https://www.pesquisagamebrasil.com.br/pt/. Accessed on May 13th, 2024.