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Building and entorcing inteUectual property value

An international guide for the boardroom 2003

Editor joff Wild (jwild@globewhirepage.coG,

Managing editor Adrian Preston

Cover design Fran Lane

Production Language by Design

Associate pubiisher Steven Evans

Publisher Gavin Stewart (gstewart@globewhitepage.com)

Publishing directors Tony Harriss. Nigel Page

Printing & binding Garden House Press Ltd

Buíldíng and enforcing intel!ectual property value

An international guide for the boardroom 2003

is published by

Globe White PageOne Cathedral Streec

London BridgeLondon SEl 9DE

United Kingdom

Tel +44 20 72340606Fax +44 20 7234 0808Email info@g{obewhitepage.com

www.globewhitepage.com

First published 2002ISSN 1478-8462

Building aná enfoTcing inteHectual property value

An international guide for the boardroom 2003

© 2002 Gobe White Page

No photocopying: copyright licences do not appty

DISCLAIMER

This pubUcation is written as a genera( guide onty. It should not be relied upon as a

substitute for specific (egal and/or other professional advice. Professional advice should

a(ways be sDught Defore taking any action based on the information provided. Every

effort has been made to ensure that the information in this guíde is correct at the time

of publication.

The publishers and authors stress that this publication does not purport to provi de

investment advice, nor do they bear the responsibility for any errors or omissions

contained hereín. The views expressed ín the artic1es contained in this publication are

those Df the authors. Copyright in the individual chapters rests with their authors.

GLOSEINHITE P."'.GE

copyríghts deveIoped under an employment or contractual

relationship wiII be owned by the hiring party unless the

agreement provides otherwise.

Copyright infringement has increasingly become an

:-::;porrant Íssue in BrazíI and tnere are man}' dífferent

campaigns to combat copyright infringement. The

phonographic and software industries are making a great

effort to reduce infrmgement by educating society about the

ill effects of copyright infringement on the country's

economic developrnem.

Stroeter. Royster & Ohno Advogados, associated with Steel Hector & Davis UP

MANAGtNG tNTElUcrUAL PROPElUY ASSETSIN BR-1\21L

Planning

Effecrive management af yaur intelleetual property rights

reqmres special atrention aud a number of preventive and

enforcement efforts. Taking the proper acriou 'YiUminimise the

risks associated ,virh the enforcement of your rights andlor thepossibIe Ioss of your intellectual property rights and the related

consequential costs. Brazilian law provides intellecrnal property

holders ,•.rim me tools to safeguard and enforce their rights.

Nevertheless, intellecrual property holders should always take

affirrnative steps to entorce their rights, both preventative and

reacrive, by taking legal aetiou against alleged infringers.

l3U1lD!NG ANO ENfORCING INTHLEcrUAL PROPERTYVALUE169

EricaAoki- - -- ----------_._---_._----- -------_._--- ----- --------- -------Stroeter, Royster 8. Ohno Advogados.associated with Steel Hector & DavisllP. São Paulo and Rio de Janeiro

Managing intelLectual property assets in Brazil

Do you have complete and accurare information on ali the IP assets o\.vned by your

company? Do you know how much it costs your company to maintain these and how

much rhey are worth? Do you know how to rake the ma.ximum comperitive advamage

from your lP assets?

If you are hesitam tO answer rhese quesrions, you may be losing money. Ir is ver)' unlikely

that your compa..1Yhas nothing to benefit from taking measures to proreet its IP assets,

even if rhe only asset is a trademark, wruch you do not consider importam or famous.

Wirh the Internet, we are experiencing me era of insram farne and globalisation. To

enhance and safeguard corporare comperitiveness, ir has become importam to plan

your markering strategy, which shouId include protection and mana gemem of your

imellectual property rights, not oruy in your ovm territory, but in territories where your

product or servÍce may have some commercial impact.

Takíng pre\."entive measures will allmv your company to reduce the risks and costs

associared with lirigation relared to infringement of inrelleetual property rights, either

by being accused of infringement or by having your righrs infringed.

Ir is unquestionable thar Brazil, due to its size and rhe potemial of irs market, should

not be excluded from }"our rarget territory list. However, despite the fact thar Brazil

ma}' represem a tremendous business opportuniry for your company, the failure to

undersrand or learn abour rhe counrry's imellectual property system may delay your

decision to spend time and rake the effort to protecr your imellecmal property rightsin Brazil.

ln order to help you \Vith the managemenr of your inreilectuaI property rights in Brazil,

\ye have prepared this memo, which ma}' provide fOU wirh some guidance on the 'do's

and don'ts' \Vith }lour inrelleetuaI propeIt}' righrs in Brazil.

© Stroeter. Royster & Ohno

Advogados.associated withSteel Heetor & DavisLLP2002

Managing intellecrual property rights is nor an easy task, even if fOU have some

knmvledge of rhe relevant intellecrual property Iaws and regulations of your own

166 BUllD1NG AND ENFORC1NG lNTEllECTUAL PROPERTI VALUE

jurisdiction. Your headache may increase if you have to

manage your intellectual property rights througb different

jurisdictions and submit to different regulations and laws.

The importance of protection

As is the case with other property rights, to secure

intellectual property rights, the interested party must take

some affirmative action, in which case a complete

understanding af the necessary measures to guarantee

property rights is essential. AIso, as with other property

rights, preventive measures to safeguard your interesrs wiU

save you a lot af time and money in the long termo

First, you should recognise that, despite the fact that the

Brazilian legal system is often criticised and described as not

being fully prepared to protect intellecrual property rights, the

new laws governing intelleetual property in Brazil provide al1

of the necessary tools to safeguard and/or guarantee the

proper protection of intellectual property rights held in the

counrry. Recent changes to laws mean that Brazil has now

fulfilled the majority of its obligations under TRIPs.

The rules for the protection of trademarks, patents and

copyrights in Brazil are in compliance with the mIes of

international convenrions such as the Paris Convention, Bern

Convention and TRIPS. The registration procedure may

differ in terms of detail and some minor aspects may also

slightly differ from what you may be accustomed to in your

home country.

Trademarks

As Brazil has a 'first to file system', you must be the first to

file the relevam registration application, otberwise you may

loose your rigbts to a trademark on account of a difference

of just a few seconds from a third party that has previously

ápplied for registration of the same trademark.

It is highly recommended that you check on the viability of

having the application approved for regisrration before you

begin the processo The Brazilian Patem and Trademark

Office's ('INPI') data base may now be searched via the

internet (http://www.inpi.gov.br). Although the properevaluation of the registrability of a proposed trademark

requires some technical knowledge, you may nevertheless

receive some comfort by condueting a prior search 00 the

internet. The proper evaluation of the registrability of the

Stroeter. Royster & OhnoAdvogados. assodated with Steel Hector & Davis LLP

lvlANAG1NG lNTELLECTUAL PROP"ERTY ASSHS IN BRAZIL

proposed trademark is necessary to avoid the costs

associated with applying for a non-registrable trademark in

the case of the priority of a third party. If you do conduct an

internet search, you should keep in mind that the INPI's

data base is updated with a time lag of at least 15 days to a

month. Thus, the results of the search may or may not

include newly filed applications.

After filing me trademark registration application, it is very

importam to continuously check for any trademark

registration applications filed by third parties that may cause

association or çonfusion with your trademark, whether

registered or still in the application processo Filing an

opposition or nullity request with respect to any trademark

application or registration during the administrative

proceeding term against a third party application or

registration tbat may increase the likelibood of confusion or

associarion with your trademark may reduce cost and time,

when compared to filing a judicial action with respect to thesame matter.

To secure an interest over the applied for or registered

trademark, you must initiate the use of the object

of such trademark no later than five years after the

relevant registration date. The required proof of use

may be satisfied by any commercial ar financial document or

by a licence agreement. The trademark must be used

in the exact form anel/or manner as specified in the

relevam application ar registration and must be used

strictly with respect to the product or service related to the

class of such registration or application. Where a trademarkholder fails to make use of the trademark in commerce in

Brazil for more than five consecutive years, the registration

may be cancelled.

If the trademark owner is not a resident of Brazil, it musr

appoint a legal representative to represem it before the INPI.

The failure to appoint a represemative may cause the

cancellation of the trademark registration. Ir is very

importam to keep the INPI's data base updated on the name

of and currem information on the appointed representa tive

who "',riUbe responsible for receiving aoy notification related

to the rrademark. Furthermore, for the maintenance of the

trademark registration, it is also necessary to inform the

INPI about any changes in your corporate name, principie

place of business and/or any assignment made.

BUILDING ANO ENFORCING lNTELLECTUAL PROPERTY VALUE I 67

Mi\J.'JAGING INTEllfCTUAl PROPERTI ASSETS IN BRAZIL

Alrhough it is nor a legal requirement, ir is advisable to

maintain only one represemative for ali of your trademark

registrarions and/or applications. Maintaining multiple

representatives for trademark registrations may make ir

more difficult to control ali of the trademark registration

proceedings of yonr company. However, considering the

conflict of interest issue, in practice, ir is very difficult

to keep onl)' one legal representarive for )'our emire

trademark portfolio. Therefore, it is ver)' importam

that )'ou reguest your legal represemative to check on the

existence of any canflicts of imeresr berween your rrademark

and other trademarks handled by himJher and confirm theabsence rhereof.

Apart from the managemem of the trademark, it is also very

important to check on rhe use of any trade names and

domain names mat could harm four interests.

Patents

\Vith regard to your patem rights, )'ou must also take alI

necessar)' steps to file a patem application in Brazil prior to

any use af rhe parem in an)' part af rhe warld ar at leasr

during the priority term to satisfy the nove!ty requirement.

To mainrain a parem registrarion in Brazil, it is importam to

effect rimely paymenr of the reqnired annual fees and to

appoint a representative in cases where the patent is

registered in the name of a nan-residem.

li you do not have a registered parem in Brazil, yau may not

be able to license the patem and/or receive royalties for the

licence since your patem will be treated as non-patented

technology in Brazil and thus in the pllblic domain.

A patem infringement action requires a very careful technical

analysis. Since patem attorneys in Brazil do not necessarily

have rhe required rechnical background, attorneys usualIy

render opinions on such matrers with the assistance of, and

based an, the technical expertise of an engineer.

If you curremly have or use non-patemed ar non-paremable

technology which vou wallld like to rransfer to it

Brazilian emity, you may want to consider the formal

transfer of such through a technology transfer agreement.

This wiII alIow the recipienr to make use of sucb rechnology

during and after rhe terminarion of rhe term of rhe

168 BUILOING ANO ENFORCING INTHLECTUAL PROPERTI VALUE

agreement. The technology transfer agreernent rnust also be

registered with the INPI and is also subjeet to cerrain specific

treannent as to rernittance and for pllrposes of deductibility

of raralty payments.

Copyright

As me Brazilian legal s}'stem adopts the sarne rationale as the

French system, copyright is considered the persanal right af

the anthor who wil! always keep the moral rights over rhe

work created by him/her.

As copyrights are considered to be personal rights, the law

does not aIlow corporate entities to be the author of any

work protected under a copyright. The corparate entity may

have patrimonial rights to use, distribllte, transmit and/or

cammerciaIly explore the work protected under copyright,

however such rights wiU be limited to the extent expressly

provided for in an assignmem agreemem. The new capyright

Iaw in Brazil has intentionaIly excluded the 'wark made for

hire' pravision, which was provided for under former

legislation. This inrenrional excIusion was effected ta force

parties to negotiate the use of and safeguard against the

abusive appropriation of copyrighted work.

Copyright over a certain work is protected as of the creation

of such work and no specific registration is required.

However, the registration of copyrighted works may serve as

proof of the date of authorship of the relevam wark.

Although registration is not indisputabJe proof of

authorship, it wil! place rhe burden of proof of authorship aisuch work on third parties claiming authorship.

Becallse a carporate entity wiU not be recognised

as rhe author af any copyrightable wark created in Brazil, it

is very importam to have a praper agreement regarding

the rights over such works with any employees hired in

Brazil so as to minimise the risk of copyright infringement

of an employee's rights. Companies must take affirmative

steps to cover this issue, which is critical for companies

whose most importam asset is the copyrighted material

created by employees.

This rule is nor applicable to saftware, despite the

fact that software is considered to be copyrighrable

subject matter under Brazilian law. Software is governed

in a specific law, which clearly provides that software

Stroeter, Royster & Ohno Advogados. associated with Steel Heàor & Davis lLP