Marcello do Nascimento and Wellington Souza de Oliveira of David do Nascimento Advogados Associados describe the measures available to IP rights holders in Brazil
1. Introduction
Before presenting a general overview about the Laws pertaining to Intellectual Property Rights in Brazil that may be applied against counterfeiting, some comments ought to be made on the current scenario existing in the country.
Unfortunately, Brazil is sometimes referred to as being a country where Intellectual Property Rights are not respected, since a large number of counterfeit products can be found within its major cities. Manufacture and commercialization of fake goods result in huge losses to the IP rights owners and the entire Brazilian economy.
On the eve of hosting the most important sporting events in the world (FIFA Confederations Cup, FIFA World Cup and the Olympics), this situation will tend to get worse if the necessary measures are not taken by the holders of IP rights as well as by the competent authorities that are responsible for fighting these illegal practices that cause huge losses to society.
One should note that unprincipled businessmen and traders, encouraged by the sense of impunity that hovers in the country, and eager for easy profits, do not hesitate to reproduce copyrights, trademarks, industrial designs, and other rights without authorization, which are capable of bringing them a lot of advantages as a result of their unauthorized use.
In this regard, both in large cities, as well as in the countryside, large distribution centers of counterfeit goods may be found which are used to warehouse and commercialize imported products plus goods that were manufactured by counterfeiters in Brazilian cities who have specialized themselves in producing these illegal products.
On the other hand, it should be noted that Brazil has an excellent legal framework that allows the IPR holders to take appropriate measures to stop illegal practices immediately when their rights are being endangered or violated.
In fact, there are countless alternatives that may be taken by IPR holders in defense of their rights. They can even use the Judiciary, Police Authorities, Customs Officials and other Government Agencies that may help them to interrupt such illegal practices, through adopted adequate measures.
2. The Brazilian Legislation
a. The Federal Constitution
So great is the importance of Intellectual Property Rights in the Brazilian legal system that before being provided by special laws, the paternal legislature integrated its protection with the Federal Constitution, stating that said rights are to be exclusively enjoyed by their respective owners and that they should be respected by all, as provided by Article 5, XXVII, XXVIII and XIX:
XXVII – the exclusive right of use, to publish or to reproduce intellectual works belongs to their authors and they are transferable to their heirs for as long as the law has set forth.
XXVIII – pursuant to the law, it is herein ensured:
a) The protection of individual participation in collective works, as well as the right to reproduce images and the human voice, including regarding sports activities;
b) The right to inspect the economic exploitation of the works by their creators or participants, by their interpreters and by their respective union associations.
XXIX – the law shall ensure industrial inventors the provisional privilege of use of their inventions, as well as the protection of industrial inventions, the ownership of trademarks, the names of their companies and other distinctive signs, taking into account the social interest and the country’s technological and economic development.
b. International Treaties
In addition to its Federal Constitution and to specific laws, Brazil is also a signatory to several International Treaties concerning the protection of Intellectual Property Rights that, by being part of its legal system, can also be utilized to combat illegal and improper use of such rights.
These International Treaties should also be used in order to prevent unauthorized third parties from making use of the IPR of their true owners, avoiding the losses resulting from this illegal activity.
The most important are:
b.1. The Bern Convention regarding the literary and artistic works protection, as amended in Paris on 06/24/71, enacted by the Decree no. 75.699 on 05/06/75;
b.2. “CUP’’ – The Paris Convention on Industrial Property Protection, enacted in Brazil by the Decree no. 635 of 08/21/92;
b.3. “TRIPS’’ – Uruguay’s GATT Multilateral Business Negotiations Round, enacted in Brazil by the Decree no. 1.355 on 12/30/94.
c. Industrial Property Law
Law 9.279/96 regulates the rights and obligations pertaining to Industrial Property in Brazil. Right at its start, in its Article 2, the Law discusses the protection of these rights, taking into account their social relevance and the technical and economic development of the Country, which are fomented through the granting of invention patents, utility models and their industrial designs; through the granting of the registration of trademarks, the repression to spurious geographical indications, and also to unfair competition.
The aforementioned law, which grants exclusivity of use to its owners, also lists the crimes arising from the unlawful use of these assets, and it regulates the procedures that need to be adopted in case such Industrial Property rights are violated.
Among the measures that may be adopted in case of violation, the one which is considered to be the most effective has to do with the search and seizure of all counterfeit products. This search and seizure can be preliminarily carried out on the civil or criminal spheres without hearing the other party (“preliminary injunctions”), which is accomplished after the court has issued the necessary warrant, and this search and seizure warrant may be carried out at the premises of the counterfeiter and/or at the premises of large distributors even before these products reach the market.
The adoption of measures such as those that have been described above intends to render the violator helpless, who, caught unaware, is prevented from defrauding the process by hiding or by destroying the goods that have been counterfeited.
It should be stressed, however, that when it comes to the civil sphere, the seizure of the products, together with the order to refrain from any further illegal practices, under penalty of fines, which is assured to the owner of said industrial property rights, is intended to prevent the losses suffered by the victim of the falsification from being extended throughout the time it takes for the proceeding to take its course. While on the criminal sphere, the seizure of the products is, in principle, limited to obtaining factual evidence which would be sufficient to lead to the conviction of the violator.
It should also be stressed that in Brazil, lawsuits involving industrial property rights should be incepted on the criminal sphere by the victim company (Private Criminal Lawsuit), the State not being responsible for undertaking this role.
Another important and imperative tool is the possibility that the counterfeit merchandise may be seized inside of customs premises (Article 198 conjoined with Articles 605 and 606 of the Customs Regulations – Decree 9.759/09) even before the goods enter the country per se. Normally, measures of this nature are the result of the excellent work carried out by Brazilian customs, which is conjoined with the cooperation given by private initiative, and which is accomplished by way of Workshops, lectures, trainings of public agents that act at ports, airports and on national borders, all of whom have been trained to identify and to tell apart counterfeit products that are received from or which are sent to other countries.
In cases of blatant violation of industrial property rights, one exceptional alternative is the adoption of police raid by which it is also possible to search and seizure counterfeit products.
Finally, it is extremely important to stress that the “LPI”, when conjoined with other legal rules, allows the owners of industrial property rights to claim indemnities for both material damages and for pain and suffering that may arise from the unlawful use of their rights.
d. Copyrights Law
The Law no 9.610/98 modifies updates and consolidates the laws on copyrights and deals with further matters.
This law has regulated only the civil penalties for the copyright infringement, allowing besides the counterfeit product’s seizure, the suspension of the respective release (Art. 102).
The decision sentencing the infringing party of the copyrights may order the destruction of all illicit examples, master drawings, moulds, machines and equipment used by the counterfeiter (Art. 106).
The payment of damages is also provided for the copyright infringement and, in the impossibility of counting the counterfeit samples, they shall be figured as amounting to 3,000. (Sole Paragraph of Art. 103).
The Brazilian copyright laws also grant extensive protection to the moral rights.
The trader or distributor, and the importer of “pirate’’ products, are jointly and liable with the manufacturer of the counterfeited goods (Art. 104), and this provision is quite effective to enforce copyrights in Brazil.
One of the great benefits of the Copyrights law resides in the regulation of its criminal sanctions listed in Articles 184 to 186 of the Penal Code in force.
Such benefit lies in the fact that the criminal proceedings against those who reproduce an intellectual work without its author’s authorization with commercial purposes, or sell, import or store (for sale) products manufactured under copyright infringement, are public criminal prosecutions, that is, the Police may, within its investigatory powers, search and seize “pirated’’ products even without the victim’s representation. In fact, it enables effective results, since it is possible to reach a greater number of infringers involved, even those identified on the spot by the investigation and seizure, without the inherent and necessary bureaucracy to obtain a search judicial warrant.
e. Software Law
In Brazil, the protection of computer programs and any other measures referring to the theme are discussed by Law 9.609/98. The protection granted to software owners is the same as that attributed to the owners of copyrights (Law 9.610/98), except for some particularities that are inherent to the matter.
Among the peculiarities of this law, the more relevant of them resides in the fact that the State is not responsible for fighting crimes of this nature. It is thus the owner of these rights who has the encumbrance to file private lawsuits asking for the crime to be investigated, just as it happens in regard to industrial property rights (Article 12).
Intending to stop these illegal practices, the owner of right regarding a software may file civil lawsuits (Article 14) which are intended to cause the seizure of the copies that have been produced in violation of such rights, and such measure is to be preceded by an inspection which is to be carried out by experts who are responsible to determine that a crime has actually occurred (Article 13). The losses borne by the victim of the counterfeiting shall also be determined during the same lawsuit.
f. Other Laws that improve the Enforcement of Intellectual Property Rights
Besides a specific Legislation, Brazil also has enacted several subsidiary laws that assist holders of IPR in their battle against piracy and counterfeiting. Considering that these laws focus on specific items, they are applied secondarily on the Enforcement of Intellectual Property Rights, indirectly helping its owners to combat these illegal practices.
A good example of the above is represented by Law 8.078/90. Although its main objective is to defend and to protect consumer rights, it is a powerful tool and can also be invoked to curb abusive practices in consumer relations arising from the sale of counterfeit goods before unsuspecting consumer.
Another law that could be mentioned here is Law 8.137/90 which describes fiscal, economic and consumer relations crimes and which also deals with other matters, including the Decree 2.781/98 regarding a program against smuggling.
These laws that have been just mentioned are very important since counterfeiting is a common practice. Counterfeit goods are manufactured and commercialized without paying taxes, thus giving rise to tax evasion.
Especially in the case of imported products, the smuggling and under-invoicing are equally and frequently used by counterfeiters to allow placement of such goods at reduced prices in the market.
3. Conclusion
Taking into account the Laws that were analyzed previously, and which are part of the overall Brazilian legal infrastructure, one may undoubtedly say that the owners of intellectual property rights are being protected by countless measures, tools and weapons that are indispensable in the fight against the unauthorized use of their properties.
Among the aforementioned tools, it is necessary to mention the civil (and/or criminal) provisional measures, such as the civil lawsuits that refer to the obligation to do or not to do, customs measures (which are very important) as well as police raids, it being up to the area specialist to identify the best measure that ought to be applied in every concrete case.
Authors: Mr. Marcello do Nascimento and Mr. Wellington Souza de Oliveira
David do Nascimento Advogados Associados
Sao Paulo, Brazil
www.daviddonascimento.com.br
