Intellectual property rights are widely protected in Brazil. Recognising the importance of “creations of the human mind” the Brazilian Constitution treats intellectual property rights as a fundamental right, and therefore the rights of creators and innovators cannot be eliminated from the Federal Constitution.
As in most countries, in Brazil, intellectual property is divided into two branches: industrial property and copyright. There are two major laws that regulate industrial property rights and copyright, as well as a number of specific laws on related subjects. For the purposes of this handbook, the relevant national substantive legislation is the following:
- Law no. 9.279/1996 – Industrial Property Law.
- Law no. 9.609/1998 – Software Law.
- Law no. 9.610/1998 – Copyright Law.
Brazil is a member of the Paris Union for the Protection of Industrial Property, as well as the Berne Union for the Protection of Literary and Artistic Works and has also implemented the Trade-Related Aspects of Intellectual Property Rights. Hence, intellectual property holders can expect to find a well-structured legal framework for the protection of intellectual property rights in Brazil.
In order to guarantee exclusivity over intellectual creations and innovations, the laws provide for criminal and civil remedies, including provisional remedies intended to cease any counterfeiting immediately. Additionally, there are border enforcement measures and administrative procedures that can be utilized by intellectual property owners.
Even though there have been recent relevant changes to the Brazilian intellectual property legislation in view of the COVID-19 pandemic (for example, as to the patent term and the compulsory licensing of patents), the criminal prosecution and civil enforcement regimes have not been altered significantly over the past few years.
Brazilian legislation is constantly evolving, and there are many bills being discussed in Congress, but there are no imminent changes to current federal legislation that might have a major impact on the enforcement of intellectual property rights in the short term.
1 . Criminal prosecution & civil enforcement
1.1. Criminal prosecution
In Brazil, the criminal enforcement of intellectual property rights is subject to a different regime, depending on the nature of the right violated and the type of crime committed by the infringer. Criminal proceedings can be initiated by the rights holders (private complaint), or by the Public Prosecutor’s Office (unconditional public prosecution or public prosecution conditional on the victim’s representation) as the case may be.
The prosecution for crimes against industrial property, namely crimes against patents, industrial designs, trademarks, geographic indications and unfair competition, is commenced by the intellectual property owner filing a private complaint, except when the offender reproduces or imitates national, foreign or international official armorial bearings or badges. In this situation, the charges are brought solely by the Public Prosecutor’s Office (unconditional public prosecution).
As to copyright infringement, pursuant to article 186 of the Brazilian Criminal Code, the criminal proceedings must be initiated by:
- private complaint in case of crimes against copyrights and related rights;
- unconditional public prosecution when the crimes above are committed for direct or indirect profit;
- unconditional public prosecution in case of crimes committed against public entities, independent agency, public company, government-controlled company or governmental foundation; or
- public prosecution conditional on the victim’s representation if the infringement consists of offering to the public, by cable, fiber optics, satellite, waves or any other system that allows the user to make a selection of the work or production to receive it at a time and place previously determined by one who orders, for direct or indirect profit.
The official statistics published by the National Council of Justice, an agency of the Judiciary, reveal that copyrights and trademarks are typically the subject matter for criminal proceedings. The vast majority of criminal cases involve copyrights. The prosecution for crimes against industrial property is considerably lower and represents around half of the total of copyright infringement cases. Among the industrial property rights, trademarks are the most enforced.
While the Copyright Law provides for copyright protection in Brazil, the criminal offenses are defined by the Criminal Code as follows:
Article 184. To violate copyright and related rights:
Penalty – detention, from three months to one year, or fine.
§ 1º If the infringement consists of a total or partial reproduction, with the intent to obtain direct or indirect profit, by any means or process, of an intellectual work, interpretation, performance or phonorecord, without the express authorization of the author, the performer, the producer, as the case may be, or who represents them:
Penalty – imprisonment, from two to four years, and fine.
§ 2º The same sanction of § 1º will be applied to whom, with the intent to obtain direct or indirect profit, distributes, sells, offers for sale, rents, introduces in the country, acquires, hides, has in store, an original or copy of intellectual work or phonorecord reproduced in violation of copyright, the right of the performer or the right of the phonorecord producer, or rents the original or a copy of an intellectual work or phonorecord, without the express authorization of the owners or their representative.
§ 3º If the infringement consists of offering to the public, by cable, fiber optics, satellite, waves or any other system that allows the user to make a selection of the work or production to receive it at a time and place previously determined by the one who orders, with the purpose of making profit, direct or indirectly, without the express authorization, as the case may be, of the author, the performer, the phonorecord producer, or who represents them:
Penalty – imprisonment, from two to four years, and fine.
§ 4º The provisions of §§ 1º, 2º, and 3º will not be applied in case of exceptions or limitations to copyright or related rights, according to the provisions of the Copyright Law, nor in case of a copy of an intellectual work or phonorecord, in single copy, for the private use of the copyist, with no intention to obtain direct or indirect profit.
On the other hand, the Industrial Property Law prescribes the crimes against patents, industrial designs, trademarks, geographic indications and unfair competition. In general terms, anyone who exploits, without authorization, an industrial property of a third party, or uses fraudulent means to divert someone else’s clientele, commits a crime.
With regard to trademark infringement, the criminal offenses are the following:
Crimes against trademarks
Article 189. Commits a crime against trademark registration who:
I – reproduces, without authorization of the owner, in whole or in part, a registered trademark, or imitates it in a manner that may induce confusion; or
II – alters the trademark of a third party already applied to a product placed on the market.
Penalty – detention, from three months to one year, or fine.
Article 190. Commits a crime against trademark registration who imports, exports, sells, offers or exhibits for sale, hides or has in stock:
I – product identified by a trademark illegally reproduced or imitated, in whole or in part; or
II – a product from their industry or commerce, held in a vessel, container or package carrying a legitimate mark of a third party.
Penalty – detention, from one to three months, or fine.
Note that the detention period may be increased from one third to one half if:
- the accused is or was a representative, attorney, agent, partner or employee of the patent or registration holder, or of its licensee; or
- the altered, reproduced or imitated mark is well-known, famous, or is a certification or collective mark (article 196, IPL).
As in most countries, in Brazil, the intellectual property holder (or the Public Prosecutor’s Office, as the case may be), bears the burden of proving all the elements of the crime. Under the Criminal Procedure Code, the private or public complaint is not admitted if there is no evidence of the infringement, reason why the proceedings are usually initiated by a preliminary search and seizure, so that an expert examination can be carried out to prove the infringement.
Besides the counterfeit products, all the equipment utilized by the counterfeiter to commit the crime can be seized. When delivering the judgment, the court may order the destruction of the goods at issue, as well as the forfeiture of the seized equipment in favour of the National Treasury, which must destroy it, donate it to the States, Municipalities, the Federal District, to public educational or social assistance institutions, or incorporate it into the assets of the Federal government.
Up until now, there have not been specialized courts to deal with intellectual property matters in the criminal area. However, there are law enforcement departments dedicated to crimes against intellectual property in some States such as São Paulo and Rio de Janeiro. The Judiciary has recognized the importance of intellectual property for the development of the country, so the creation of specialized courts is always a possibility.
1.2. Civil enforcement
Since Brazil is a civil law country, the framework for civil enforcement of intellectual property rights is statutory. The Industrial Property Law, the Software Law and the Copyright Law are the laws that usually give grounds for enforcement against counterfeiters.
In general terms, the rights holder has the right to prevent third parties from using their intellectual property without their previous consent, as well as obtaining compensation for unauthorized exploitation of the intellectual property. To enforce such rights, the main remedies available are the following:
- search and seizure;
- anticipated production of evidence;
- destruction of infringing goods; and/or
- recovery of a portion of legal costs.
With regard to damages, the intellectual property holder may be awarded a compensation for past, present and prospective losses suffered as a result of the counterfeiting, as well as for non-economic damages. Punitive damages are generally not available in Brazil, even if the defendant’s conduct was wanton and willful, reckless, or malicious.
The Industrial Property Law provides that compensation will be determined by the benefits that the injured party would have received if the breach had not occurred. The criteria for the calculation of lost profits are determined by article 210, which states that the one that is most favorable to the rights holder shall be adopted, as follows:
(a) the benefits that the injured person would have obtained if the violation had not occurred; or
(b) the benefits that were earned by the infringer; or
(c) the royalties that the infringer would have paid to the rights holder if he had been granted a license that would legally enable him to exploit the industrial property.
It is more common to calculate damages based on the sales of the counterfeiter (letter b) or the amount of royalties that would have been paid to the holder if a license were granted (letter c), noting that, in both cases, the plaintiff will have to produce evidence on the number of products sold by the counterfeiter to quantify the damages.
As to copyright infringement, the Brazilian Copyright Law sets forth a presumption that, if the number of unlawful copies of a literary, artistic or scientific work is unknown, damages will amount to the value of three thousand copies, plus the value of the seized products. However, this legal presumption has not been applied by the courts to all cases.
State courts usually have jurisdiction to hear counterfeiting cases, and, in some places, there are courts specialized in industrial property. Typically, the rights holder first sends a cease-and-desist letter to the infringer (but this is not mandatory) and subsequently brings an infringement action aggregated with a claim for damages and a preliminary injunction request.
1.3. Grey market and counterfeit goods
The sale and distribution of gray market goods are prohibited in Brazil, which has adopted the national exhaustion of intellectual property rights regime. Pursuant to article 132, item III, of the Industrial Property Law, the trademark owner cannot prevent the free circulation of products placed on the internal market by themselves or by others with their consent.
The issue is to determine whether the consent that leads to the exhaustion of rights must be express or tacit. The Superior Court of Justice has held that the consent to parallel importation may be given tacitly by the trademark owner, which may be inferred from their inaction, being indisputable that he had knowledge of the importation carried out by the importer for a long time.
One way to avoid the inference of a tacit consent is to include provisions prohibiting the exportation of goods to Brazil in license and distribution agreements, but trademark owners are also encouraged to adopt measures to gain better control over parallel imports such as implementing product control and tracking procedures.
Moreover, trademark owners are advised to pursue civil measures against parallel importers as soon as they get notice of the importation. Criminal penalties for crimes against trademark registration are not applicable, since parallel importers sell genuine branded goods, therefore they are not committing any of the acts prescribed by the aforementioned articles 189 and 190 of the Industrial Property Law.
With regard to counterfeit goods, it is important to highlight that consumer protection legislation and the law of tax and economic crimes can also be raised against infringers, so there are broad grounds to protect the intellectual property rights in Brazil.
1.4. Criminal v. civil enforcement
The decision on whether pursuing civil or criminal measures must be taken in light of the particularities of each case, taking into account the main objectives of the rights holder.
Criminal enforcement of intellectual property rights is quite effective, even when the identity of the infringer is unknown, but imprisonment is rarely imposed by courts, since the Criminal Code authorizes the replacement of such penalty with services to the community and a fine (when there is no violence, the criminal sanction does not exceed four years and some other legal requirements are met).
Similarly, civil enforcement has the benefit of ceasing the infringement immediately by means of an ex parte preliminary injunction, but it also provides a compensation for the losses suffered by the rights holder. However, the quantification of damages may be a challenge if the counterfeiter does not keep business records. Even if such evidence is available, it may still be difficult to collect damages if the counterfeiter does not have enough funds.
2 . Border enforcement
In Brazil, rights holders can also count on border enforcement measures to protect their intellectual properties at ports of entry.
The detention of suspected shipments of counterfeit products can be performed ex officio by Customs or the rights holder can request it in case of reasonable suspicion supported by articulable facts of counterfeiting. Once the detention is ordered, the customs authority notifies the rights holder to take samples of the goods and prepare a report on its authenticity within ten working days, which can be extended for the same period in certain circumstances. If the goods are not authentic, the rights holder may request the seizure and the destruction of the counterfeit products or bring the pertinent judicial actions to enforce their IP rights against the importer. If the rights holder fails to take action, the goods are released by Customs provided that all the other legal requirements are met.
The detention, seizure, handling, storage and destruction of the counterfeit products are conducted by the federal authorities, and the rights holder does not bear the costs of such measures. However, Customs does not disclose the identity of the importer, which may be obtained through a court action. All the remedies discussed above are available against importers caught importing counterfeit products.
In 2013, the National Council for the Combat of Piracy and Crimes against Intellectual Property and the Brazilian Trademark Office worked together in the creation of the National Directory for the Combat of Trademark Counterfeiting, which aims to facilitate the contact between public authorities and owners of marks registered in Brazil and assist the former in determining IP infringement.
The brand owners can appoint an attorney to represent them before Customs, law enforcement and other authorities involved with anti-counterfeiting cases, as well as provide non-confidential strategic information for combating illegal activities, such as Product Identification Guides, comparative examples of original v. fake products and reports on the marks most frequently subject to counterfeiting.
Also, the rights holders can make direct contact with the Customs agencies to provide more detailed information on the counterfeit products and train the agents on the matter, in order to maximize the IP protection at the borders.
Note that customs control is carried out by the Brazilian Federal Revenue Service, which has its own agents that make infringement determinations at ports of entry. Nevertheless, counterfeiting raids within the national territory are usually performed by the Brazilian Federal Revenue Service with the collaboration of law enforcement agents.
2.2. Recent trends and COVID-19
As a result of the COVID-19 pandemic, the number of counterfeit products seized in 2020 decreased significantly, but counterfeiting expanded into the online market as the pandemic has driven consumers to online shopping. In 2021, with the start of the economic recovery, the seizures grew strongly again and returned to pre-pandemic levels.
Interestingly, the type of seized products has changed due to the COVID-19 pandemic. Cigars, apparel, electronic devices, toys, handbags, sneakers, eyeglasses are some of the goods usually seized in Brazil, but since 2020 there has been an increase in the seizure of units of personal care equipment and other goods related to the pandemic.
3 . Online anti-counterfeiting enforcement strategies
Brazil does not have specific legislation addressing the online sale of counterfeit goods, but the remedies mentioned above can also be utilized by rights holders against online counterfeiters.
The Internet Bill of Rights (Law no. 12.965/2014), sets forth principles, guarantees, rights, and duties for Internet use in Brazil and regulates the liability of internet application providers for damages resulting from content produced by third parties. Such providers may be held civilly liable only if they do not comply with a court order that determines the removal of the illegal content from the platform.
However, such a rule is not applicable to copyright infringement where the courts have been applying the “notice and take down” regime, holding the internet application providers liable for damages if they fail to remove the infringing content after being notified by the copyright holder about the infringement.
If an online infringer also has a physical storefront, the rights holder usually pursues criminal and/or civil measures in both online and physical fronts. In case of criminal enforcement, the involvement of law enforcement in both fronts does not depend on quantities or even the type of counterfeit goods at issue.
Finally, note that the Copyright Law prohibits the circumvention of technological protection measures, providing for the forfeiture of the devices used to circumvent such measures, without prejudice to payment of damages for the losses caused to the rights holder.
3.1. Domain names
Disputes over the .br country code top-level domain (ccTLD) are subject to a dispute resolution policy similar to the one that has been adopted by the Internet Corporation for Assigned Names and Numbers (ICANN). Basically, the complainant must demonstrate that the domain name has been registered and is being used in bad faith and that one of the following elements is present:
- the domain name is identical or confusingly similar to a trademark or service mark owned by the complainant, which has been applied for or registered before the registration of the domain name; or
- the domain name is identical or confusingly similar to a trademark or service mark owned by the complainant, which has not been applied for or registered in Brazil, but is well-known in its field of activity; or
- the domain name is identical or confusingly similar to a name of commercial establishment, tradename, civil name, family or patronymic name, well-known pseudonym, artistic name, or even another domain name in which the complainant has prior rights.
The proceedings can be administered only by approved dispute resolution service providers, such as the World Intellectual Property Organization (WIPO) and the Chamber of Commerce Brazil-Canada, and can result in the cancelation, transfer or retainment of the domain name.
3.2. Social media
Brazil is known for having one of the greatest numbers of social media platforms users. Social media platforms like Facebook and Instagram are very popular and have been used for commerce. Instead of creating an e-commerce platform, many small companies make sales through social media. However, it has also become a place of counterfeiting.
As new technologies emerge, intellectual property holders face new challenges in defending their rights. Unfortunately, cases of copyright infringement have already occurred in Brazil involving non-fungible tokens and, probably, similar cases will be seen in the virtual space.
4 . Additional information
There is not a national intellectual property law enforcement coordination body in Brazil.
Yet, in 2004, the Ministry of Justice and Public Security created the National Council for the Combat of Piracy and Crimes against Intellectual Property (CNCP), a consulting governmental entity that establishes guidelines for the formulation and proposition of a national plan to combat piracy, tax evasion and crimes against intellectual property.
On 3 December 2021, the National Plan to Combat Piracy was released by the Ministry of Justice and Public Security. One of the main goals of such a plan is to tackle online counterfeiting by promoting interaction and coordination between public agents, implementing measures to prevent and reduce the counterfeiting, and raising public awareness of the issue.
5 . Frequently asked questions
1. Are the proceedings time-consuming?
The proceedings are usually time-consuming, but there are provisional measures that can bring immediate results if all the legal requirements are met.
2. Is there a time limit for commencement of civil proceedings?
As to the damages claim, the copyright holder has three years to commence civil proceedings whereas the industrial property right holder has five years counting from the date of the infringement. With regard to the injunctive relief, there is a 10-year-term to bring the action against the counterfeiter, which runs daily if there is a continuous infringement.
3. Where should the civil action be filed?
The general rule is that the civil action must be brought in the judicial district where any defendant is domiciled. However, if there is a damage claim, the plaintiff may file the case in the judicial district where he resides or where the illegal act has been committed.