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4. INTELLECTUAL PROPERTY

4.1. TRADEMARK

Authors: Ana Carolina Lee Barbosa/Marina Inês Fuzita Karakanian -
Dannemann, Siemsen, Bigler & Ipanema Moreira

Signs that may be registered as trademarks

According to the Brazilian Industrial Property Law (LPI) - Law 9.279/1996 - the distinctive signs that are visually noticed and used to identify the origin of certain products or services may be registered as trademarks.

Therefore, in Brazil, the signs that are accessible only for the sight, hearing, taste and smell cannot be protected as trademarks.

In addition, signs that cannot be registered as trademarks are those that may fall into the legal prohibitions contained in article 124 of the said law, such as signs contrary to moral and good customs; reproduction or imitation of a characteristic element of a title of establishment or the name of an undertaking belonging to a third party; a sign of a generic, necessary, usual or simply descriptive character , when related to the product or service to be distinguished, a sign or expression used only as a means of advertising; reproduction or imitation of a registered third party trademark; etc.

The National Industrial Property Institute (INPI) is the Brazilian Self-Regulatory Body responsible for registration of trademarks in Brazil.

Modalities of trademark registrations

The trademarks in Brazil may be registered in the following forms: (i) nominative (only words); (ii) word and design (styled drawing, word or letters); (iii) figurative (only drawing); and (iv) three-dimensional (drawing in three dimensions - example: product or packaging format).

Possible purposes of the trademarks

As per article 123 of the LPI, the trademarks may have three purposes:

(i) to distinguish a product or service from one having a different origin, that is identical, similar or akin - trademarks of products and service;

(ii) to attest that a product or service conforms with determined technical norms or specifications, notably in relation to its quality, its nature, the material used and the methodology employed - certification trademarks; and

(iii) to identify products or services originated from members of a certain entity - collective trademarks.

Applicant of trademark registration

The applicant for a trademark, whether a Brazilian or foreign natural person or legal entity, must prove that they perform, legally and effectively, directly or through a company that they directly or indirectly control, the activity to which protection of the goods and services to be identified by the trademark is claimed. Said condition must be declared in the application for trademark registration.

Priority Right

In the event of a trademark application to be filed in Brazil which has already been requested in a country that has an agreement with Brazil or with an international organization, the right to priority can be granted, provided the time periods set in the agreement are fulfilled.

As provided in article 4 of the Convention of the Union of Paris (CUP), which Brazil is also a signatory party, the period to request priority is of six months for trademarks. Therefore, the trademark holder is entitled to the filing date in the country of origin, and any fact which occurs within this period (between the original filing and the filing in the country where the priority is requested) shall not prevent its registration in Brazil.

The claim for priority will be made and proven as provided for in article 127 and paragraphs of the LPI.

Protection conferred by trademark registration

As a rule, the trademarks are protected in certain classes of products and services and, by the Principle of Speciality of the Trademarks, the coexistence between similar trademarks is possible and even if they are identical to identify products or services that are totally distinct, as the trademark protection ends in the limits of its activities.

An exception to said Principle are the "famous marks", which have a special protection in all fields of activity in the national territory, pursuant to article 125 of the LPI.

The referred article 125 of LPI was regulated by Resolution 121/2005, issued by INPI on September 6th, 2005.

The notoriously known trademark also has special protection, but only in its field of activity and regardless of being previously filed or registered in Brazil, according to the terms of article 126 of the Intellectual Property Law (LPI), as well as of article 6 bis (I), of the Convention of the Union of Paris (CUP).

Brazil adopts the attributive system of trademark protection, that is, its property as well as its right of exclusive use in the national territory is only acquired with the registration validly issued by the National Industrial Property Institute - INPI. The holder of a trademark application has the mere expectation of rights but, certainly, this person will enjoy the rights of previous use since the INPI's exam takes into consideration that one that first filed its application, taking into account the day, time, etc.

It should be noted that the LPI also provides the preferential right (article 129, 1st paragraph), according to which, the person who in good faith at the date of priority or of the application was using in the country an identical or similar trademark to identify identical products or services or similar ones for at least six months, can have his/her right of previous use prevailed.

The protection of trademark registration in Brazil is valid for 10 (ten) years, counted from its granting, to be extended for successive periods of ten years, on an endless basis.

The registrant of, or applicant for, a mark is also guaranteed the right to (i) assign its registration or application for registration, (ii) license its use and (iii) care for its material integrity or reputation, under the terms of article 130, clauses I, II and III of LPI.

Necessity of use of a registered trademark

The simple granting of trademark registration may not mean ease of mind or intangible or unchangeable rights, even if the granting has occurred without any defect that could make it null and void. This is because the holder of a trademark registration in Brazil has the period of five years from the date of its granting to start its use, provided that if after this period its use is not initiated or proven, the holder may be subject to an administrative proceeding of forfeiture, which aims the cancellation of the registration for lack of use. It should be highlighted that the trademark must be used in the way its registration was granted.

Even if the use of the trademark is initiated after the aforementioned period, if this is interrupted for five consecutive years, the registration is likely to be declared forfeit. The forfeiture process may be filed by a third party with legitimate interest.

Both the holder of the registration and the possible licensee may prove the effective use of the trademark in order to avoid this to be declared forfeited

Trademark License of Use

With regard to the trademark license agreement, this can be made by the registrant of or the applicant for a mark and the licensee is vested with full powers to act in defense of the trademark. This license must be recorded before the INPI so that it may produce effects relative to third parties. However, one should note that, according to LPI, in order to validate proof of use, license contracts need not be recorded at INPI.

Crimes against trademark registration

It should be noted that in Brazil the trademarks are protected both by civil and criminal laws , and the breaching parties shall be subject to penalties that may range from 1 (one) month to 1 (one year) of imprisonment, as provisioned in articles 189 and 190 of the LPI (there is a Bill that intends to increase the penalties to up to 04 years of imprisonment).

The criminal actions subject to the penalties under the LPI are:

• Reproduce, without the authorization of the holder, in its whole or in its part, a registered trademark, or to imitate it so that it may induce to misunderstanding;

• Change the registered trademark of a third already applied to a product placed on the market;

• Import, export, sell, offer or exhibit to sale, omit or maintain in stock (i) a product that is marked with a trademark that is illicitly reproduced or imitated, from a third party in its whole or in its part, (ii) product of its industry or commerce which is contained in a glass bottle, recipient or package which contains the legitimate trademark of a third party.

Geographical indications

It should be noted that the Brazilian Industrial Property Law foresees the protection of geographical indications, i.e., the indication of origin and naming of origin.

Origin indication is the geographical name of the location which has become known by the extraction, manufacturing or production of a certain product or rendering of a certain service.

On the other hand, one is regarded as origin naming the geographical name, which also became known by the extraction, manufacturing or production of a certain product or rendering of a certain service but whose human and natural factors of this location influenced in the quality or characteristic of product or service.

4.2. PATENTS

Author: Frank Fischer -
Dannemann, Siemsen, Bigler & Ipanema Moreira

Brazilian Industrial Property Law was amended by Law 9.279/96 (which became effective on May 15, 1997), being grants legal protection thereunder to all types of inventions, inasmuch that it eliminated several prohibitions that were established in the former law.

Under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) provisions, the inventions related to foods, chemical-pharmaceutical products, medicines, production processes based on biological material such as microorganisms, biological material and genetically modified microorganisms that were not formerly patentable were thenceforth susceptible of being patentable pursuant to the enactment of Law 9.279/96.

Law 9.279/96 still establishes the exclusion of certain matters that cannot be patented in Brazil, such as, for example, commercial principles or methods, in addition to operation or surgery techniques and methods, as well as therapeutic or diagnosis methods applied to the body of humans or animals.

Types of patents and patentability requirements

Brazilian law established two types of patents: Invention Patents and Utility Models.

In these two types of patents an examination on the merits conducted to assert the following patentability requirements:

(i) Novelty: when the invention does not fall within the state of the art.

(ii) Inventive activity and inventive act:

a. Inventive activity in the case of patents of invention: The invention features inventive activity whenever, when, for a person skilled in the art, it does not derive in an evident or obvious manner from the state of the art.

b. Inventive act in the case of utility model patents: The utility model features inventive act whenever, when, for a person skilled in the art, it does not derive in a common or usual manner from the state of the art.

(iii) Industrial application: The invention and the utility model are deemed susceptible of industrial application when they may be used or produced in any type of industry.

In further regard to the patentability requirements, Law 9.279/96 establishes the so-called "grace period" according to which the invention may be disclosed before the patent application is filed with the Brazilian Trademark & Patent Office (Instituto Nacional da Propriedade Industrial - INPI) without jeopardizing the novelty requirement.

Once filed with the INPI, the patent application will be kept on hold until its publication, which shall occur in 18 months as of the filing date or priority date, if any, and the applicant must request the examination of the application within 3 years as of the filing date, for the INPI to examine whether the patentability requirements are met and issue its opinion, official action to fulfill a requirement, allow or reject the application.

If the application is allowed, the applicant must pay an issuance fee for the issuance of the Letter-Patent. The Letter-Patent of an invention patent is valid for 20 years and 15 years for the utility model, always counted as of the filing date.

Law 9.279/96 further establishes that the applicant must pay annuities as of the 3rd year, counted as of the filing date, which will be due up to the expiration of the patent, if granted.

Protection conferred by the patent

Law 9.279/96 clearly defines the patent violations and confers to the patent owner the right to prevent an unauthorized third party from manufacturing, using, placing for sale, selling or even importing the subject matter protected by the patent, also being considered a crime the use of means that are equivalent to the patent's subject matter.

Furthermore, Law 9.279/96 introduced indirect violation to facilitate the inhibition of use of the patent's subject matter by a third party. Accordingly, the patent owner confers the right to prevent third parties from contributing to the practice, by other parties, of conducts that are defined as patent violations.

Moreover, in the cases of violation of patented process rights, the burden of proof is reversed and the accused party must prove that its product was obtained through a manufacturing process other than the process protected by the patent.

In addition to the provisions of the law, it should be mentioned that, despite of the low number of lawsuits involving patents, the Brazilian court rulings have been revealing a trend of decisions in favor of the patent owner, thus rendering a patent to be a valuable asset in trade activities in Brazil.

As concerns the steps to be taken by a patent owner against a potential offender, the first step usually consists in a warning letter. In regard to legal action, there are suitable lawsuits at the civil law level, aiming through injunction the immediate cease of the competitor's conduct of manufacturing, selling, imports or exports of matter that violates the patent owner's right, as well as to condemn the offender to indemnity the losses and damages that were suffered, in addition to the criminal suit to condemn the offenders for crime against intellectual property rights.

As aspect to be considered in regard to the patent violations in Brazil is that Law 9.279/96 establishes some exceptions to patent owners' rights, being allowed use on a private, non-commercial basis; use for experimental purposes, related to studies or scientific or technological research; the preparation of a medicine according to a physician's prescription, in individual cases; and in the cases related to living matter, the non-profit use of a patented product as an initial source of variation or propagation to obtain other products.

Compulsory license

Law 9.279/96 also establishes the possibility of obtaining a compulsory license of a patent in any of the following events:

(i) The owner exercises the rights conferred by the patent in an abusive way;
(ii) The owner commits abuse of the economical power;
(iii) The subject matter protected under the patent is not exploited in Brazil by way of manufacture or incomplete manufacture of the product or by lack of full use of the patented process, in which case the license must be claimed after a three year period has elapsed since the patent was granted;
(iv) Commercialization does not meet the needs of the market;
(v) Dependency of another patent;
(vi) National emergency;
(vii) Public interest.

In the events quoted in (i) and (ii), the party that claims the compulsory license has the burden to prove the abuse committed by the patent owner.

In the event quoted in (iii), Law 9.279/96 provides that, in the event of economical unfeasibility, the local manufacture may be replaced by import of the patented product, however opening the possibility of parallel import by third parties.

In further regard to the event quoted in (iii), it should be noted that, depending on its interpretation, Law 9.279/96 may or might not be fully in conformity with the TRIPS, as this treaty establishes that "patent rights shall be exercisable without discrimination as to the place of invention, technological field and the fact that the goods are imported or manufactured locally".

On the other hand, another way to interpret this issue is based on the Paris Convention, which establishes that "Each country of the Union shall be free to adopt legislative measures that determine compulsory licenses to prevent abuses that could result from the exercise of the exclusive right that is afforded by the patent, such as, for example, the lack of its exploitation". Thus, considering that the Paris Convention establishes the compulsory licensing for the lack of exploitation, and the fact that the TRIPS determines that the Paris Convention provision quoted above must be respected by the members of this treaty, it may be construed that there are no inconsistencies in Law 9.279/96 in this regard.

As regards item (iv), it establishes that even if the patent owner explores the object protected under the patent, it will be subject to a compulsory license if it does not fulfill the market's needs. Such license may be requested after a three-year period following the grant of the patent.

In the cases of dependence on the patent provided in item (v), the subject matter of the second patent must consist in a substantial technical progress in regard to the first patent, being foreseen the possibility of a cross-license in the event the compulsory license is granted to the owner of the second patent based on the dependence of patents.

In regard to the cases foreseen in items (vi) and (vii), having in view that Law 9.279/96 does not clearly define "national interest or emergency" this matter was regulated by Decree 3.201 of Oct. 6, 1999, supplemented by Decree 4.830 of Sept. 4, 2003.

According to this Decree, a patent may be compulsorily licensed in cases of national emergency or public interest, in the latter case only for non-profit public use, provided that declared as such by the Government, when it is asserted that the patent owner, directly or through its licensee, does not fulfill the related needs.

In further regard to this Decree, it should be mentioned that in the cases in which a compulsory license is granted, in the cases in which the unfeasibility to manufacture the object of the patent by a third party or by the Government is demonstrated, the Government may import the patented product, giving priority to the product that was placed in the market directly by the owner, or with the owner's consent. Considering that this measure entails the possibility of importing products manufactures by third parties (presumably from countries where there is no patent protection) and that this would go beyond the provisions of Law 9.279/96, this Decree could be challenged in court on the grounds of unconstitutionality.

Further, this Decree establishes the obligation of the patent owner to provide the required and sufficient information for reproducing the patented object and the other technical aspects applicable to the case under penalty of nullity of the patent. This measure, however, is not foreseen in Law 9.279/96 and, thus, such obligation could also be challenged in court.

In recent development in this scenario, on May 5, 2007, based on Decree 3.201, the Brazilian Government issued a new Decree No. 6.108, obtaining a compulsory license for Merck Sharp & Dohme patents, related to Efivarenz Aids treatment drug.

According to this Decree, two patents No. BR1100250-6 and BR9608839-7, were compulsorily licensed, on a non-exclusive basis and within the scope of the Nation Program for Sexually transmittable diseases/AIDS. The term of the license fixed in the Decree is five years and the royalty rate is 1.5% of the cost of manufacture of the drug by the Ministry of Health. The drug can, if necessary, be imported.

In addition to the obligation to license its patents, the patent owner will have to provide the Ministry of Health with the necessary and sufficient information to effectively reproduce the protected subject matter, having the Government the obligation of keeping any secret information transmitted by Merck, protected. Until this date, Merck has not adopted any judicial measure against this compulsory license.

Finally, still in the field of patents involving pharmaceutical inventions, in recent Resolution N° 45, published in the Brazilian Official Gazette of June 24, 2008 and issued by ANVISA (the National Agency for Sanitary Surveillance), it became established that ANVISA will examine pharmaceutical patent applications with a view to providing, or not, its prior consent for the grant of a patent, as determined by article 229-C of Law 9.279/96.

The new regulation establishes that ANVISA will carry out a full examination as to the patentability of pharmaceutical inventions, in terms very similar to those laid out in the Industrial Property Law for application by INPI (the Patent Office) itself. In this manner, as from this resolution, applicants of patent applications will receive office actions by registered mail and will also have to read the daily Official Gazette of the Union where the decisions granting or refusing consent will be published. Decisions refusing consent may be appealed within a period of 60 days.

Registration of Industrial Designs

Law 9.279/96 grants to the author the right to a registration of an industrial design that affords ownership over the "ornamental plastic form of an object" that provides "a new visual result and unique in its external configuration and that may be used as a type of industrial manufacturing".

The registrations of industrial designs are issued without an examination on the merits therefore, in a few months (in average 2 to 3 months) as of the filing of the application and are valid for 25 years, at maximum.

Upon the issuance of the industrial design registration, the owner may immediately enforce its rights, inclusively to take court action against any violators. However, considering that the registration is granted without a formal analysis, it is advisable to, following the grant of the registration, to request the INPI to formally analyze it. After obtaining a favorable opinion issued after the formal analysis is completed (in approximately 1 to 2 months), the owner's position in regard to third parties is strengthened considerably.

In view of the celerity in the process of grant and analysis of the Industrial Design Registrations, the protection of products in Brazil in this category has been demonstrated to be an excellent competitive tool.

4.3. TECHNOLOGY

Author: Marina Inês Fuzita Karakanian -
Dannemann, Siemsen, Bigler & Ipanema Moreira

One of the areas of great interest in the intellectual property field is the subject of technology (non-patented), as Brazil, being a developing country, is continuously receiving new technologies from abroad with the purpose of improving its economic capacity. It is by means of technology transfer agreements that the Brazilian and foreign parties negotiate and regulate these interests.

Technology Transfer/Supply Agreements

As of the beginning of the ‘70s, the promotion of the entry of technology into Brazil was regulated locally, and the Brazilian Patent and Trademark Office (INPI - Instituto Nacional da Propriedade Industrial) was designated as the governmental authority authorized to scrutinize the technology supply agreements and the other contracts that involved intellectual property rights (i.e., patent licenses, trademark licenses, franchise agreements, technical assistance agreements, etc.).

By applying, particularly Law 5.648/70 and Normative Act no. 15/75, the INPI adopted an extremely interventionist position in the technology supply agreements, which ultimately caused the contract registration process to be lengthy, with official requirements that the INPI issued out of its self-established rules and interpretations.

In the ‘90s the deregulation of the Brazilian economy was initiated, thus allowing a progressive entry of new technologies originated from the developed countries. Pursuant to article 50 of Law 8.383/92, it became possible to remit payments between a subsidiary and its parent company (controlled and controlling companies) under technology supply agreements (and other intellectual property licenses as well) that had been executed between parties and registered with the INPI and with the Central Bank of Brazil - BACEN after December 31, 1991. The remittance of payments between a branch company and its parent company continues to be not allowed according to the Brazilian law.

Pursuant to the enactment of Normative Act no. 120/93 and Law 9.279/96 (the Brazilian Intellectual Property Law), the INPI assumed a more liberal position in the recording/registration of the technology supply and intellectual property licensing agreements.

Although the INPI's authority is currently limited, by law, to an analysis of the formal aspects and to the validity of the intellectual property rights that are involved in the recording/registration of contracts proceedings, the INPI establishes its own interpretation criteria without prior notice and continues to issue official requirements. This fact renders the INPI's registration proceeding to be slow and bureaucratic.

Outlined below are certain clauses established in technology supply agreements that are not accepted by the INPI:

Return to Supplier (foreign company) of technological know-how received by the Supplied Company (Brazilian company) and cease of use of the technology upon the expiration/termination of the supply agreement. The INPI does not accept the concept of "technology license" but instead only the concept of transfer of technology. Accordingly, in the INPI's viewpoint, once the technology has been transferred to the Brazilian company, the latter incorporates it and thus it can no longer be returned.

The remittances of payments that pursue from contracts between companies that have common stockholders, in which the supplier (domiciled abroad) holds directly or indirectly the control of the voting capital of the supplied company (established in Brazil) cannot exceed the limits of tax deduction established in the Ministry of Finance's Ordinance no. 436/58.

The INPI does not accept retroactive payments in the technology supply agreements. Retroaction is allowed only up to the date on which the application for registration of the contract is filed with the INPI, i.e. the start date of the validity of the registration certificate will be the date of submission of the contract for registration with the INPI. The royalties may then only be computed as of such date and remitted after the contract has been registered with the Central Bank - BACEN. This understanding pursues from the INPI's construction of the Federal Revenue - SRF Decision no. 9/2000.

As provisioned in article 211 of Law 9.279/96, the technology supply agreements must be registered (recorded) with the INPI. The purposes of the registration of these agreements are: (i) to enable the remittance of payment to foreign countries, observing the currency exchange and tax laws; (ii) enable the tax deductions of these payments, observing the tax laws; (iii) validity against third parties.

The INPI will grant a term of validity of, at maximum, five (5) years to the registrations (and, consequently, for the remittance of royalties) of the technology supply agreements, extendable for an additional five (5) years, upon justification of the need for continuity to receive the technology. This understanding is based on article 12, paragraph 3 of Law 4.131/62.

Other Intellectual Property-related contracts

In addition to technology supply agreements, contracts that have as a subject matter the licensing of intellectual property rights must be recorded (registered) with the INPI. According to Normative Act no. 135/97, the following types of contracts may be recorded with the INPI:

Patent License Agreements;

Trademark License Agreements;

Supply of Technological Know-How Agreements;

Technical and Scientific Assistance Agreements; and

Franchise Agreements (Law 8.955/94).

Pursuant to the recording/registration of the relevant contract with the INPI, its registration with the Central Bank (BACEN) is required to enable the foreign remittance of royalties, and also for the purpose of the tax deduction of these payments.

The tax deduction limits are established in the Treasury Department Ordinance no. 436/58, and range from 1% to 5% depending on the product involved. In the case of contracts between controlling and controlled companies, these deductibility limits shall be the same for the remittance of royalties, according to the INPI's interpretation of article 50 of Law 8.383/91.

In the case of trademark licenses, the tax deductibility limit is 1% of the net sales revenues of the contractual products, provided that the use of the trademark does not pursue from the use of a patent, manufacturing process or formula (item II of Ordinance 436/58). Accordingly, the INPI does not allow the foreign remittance of royalties through a trademark license if there exists simultaneously a patent license and/or a technology supply agreement related to the same products.

The intellectual property rights-related agreements shall only be effective against third parties after they have been registered with the INPI. In addition to enabling the foreign remittance and tax deductibility of royalties, in the case of non-gratuitous contracts, the registration of these contracts generates the following effects:

a) Warranted exclusivity as to the right granted to the licensee, in the case of exclusive licenses; and

b) Legitimate the licensee to figure as a party in lawsuits related to trademarks and patents, severally or as a co-plaintiff or co-defendant along with the licensor, if the contract so allows.

It should be noted that, under the current law the registration of trademark or patent licenses is not a condition for the purposes of validating the use of a trademark or patent by a third party, provided that the owner proves that the user holds an authorization therefor.

Software Agreements

As regards software agreements, only the contracts for the supply of software program technology are required to be registered with the INPI in order to produce effects against third parties (article 11 of the Software Act - Law no. 9.609/98). In order to enable the remittance of royalties under this type of contract, its recording with the INPI and registration with the Central Bank (BACEN) are required.

The sole paragraph of article 11 of the Software Act provides that for the registration of a contract for the supply of software program technology the supplier must provide complete documentation to the party to which the technology is supplied, particularly the notes on the source code, description memorial, internal functional specifications, diagrams, flow charts and other technical data required to absorb the technology.

With regard to software licenses, they are not required to be submitted to the INPI's scrutiny, and the remittances of the related royalties may be done directly through a commercial bank authorized by the Central Bank (BACEN) to perform such operation.

Taxation

As to the taxation of technology transfer and other intellectual property related agreements between national and foreign companies, the following events of levy might apply: withholding tax ("IRF") - 15%; economic domain intervention contribution ("CIDE") - 10%, with possibility of credit on patent and trademark license agreements; service tax on the import of services ("ISS-Importação") - maximum duty rate of 5%; Contribution for the Social Integration Programs on the import of foreign products or services ("PIS/PASEP-Importação") - 1.65%; Contribution for the Financing of the Social Security System by Importers of Foreign Goods or Services from Abroad ("COFINS-Importação") - 7.6%; Tax on Financial Operations ("IOF") - rate reduced to 0%; Temporary Contribution on Financial Movement ("CPMF") - 0.38%.

Constitutionality and effective application of some of the above taxes remain questionable, and might be subject to revision by the Brazilian Judiciary Power.

4.4. TECHNICAL ASSISTANCE

Authors: Daniela Thompson S. Martinez/Marina Inês Fuzita Karakanian -
Dannemann, Siemens, Bigler & Ipanema Moreira

In addition to the technology supply agreements, the INPI [National Institute of Industrial Property] also records contracts or invoices related to technical assistance services (SAT).

With regard to technical assistance, there are doubts as to which kind of of technical services may be recorded with the INPI. The INPI is inclined to adopt the following criteria for the recording: (i) whether the services are of a technical nature; (ii) whether the services are intended for the supplied company's core business; (iii) whether the services characterize a transfer of technology.

According to information provided in the INPI website (www.inpi.gov.br), Technical assistance Services contracts or invoices (SAT) "that establish the conditions for obtaining techniques, planning and programming methods, as well as research, studies and projects intended for the performance or supply of specialized services" may be recorded.

The www.inpi.gov.br website further provides a list of the activities/services that are not required to be recorded with the INPI since they do not characterize a technology transfer, namely:

• Purchase agent agreements, including logistics services (shipment supporting services, administrative work related to customs clearance, etc.);

• Product processing;

• Homologation and certification of quality of Brazilian products intended for export;

• Financial consulting;

• Commercial consulting;

• Legal consulting;

• Consulting for participation in bids;

• Economical feasibility studies;

• Marketing services;

• Services performed abroad without the presence of technicians of a Brazilian company and that do not generate any documents and/or reports;

• Software maintenance services without the arrival of technicians in Brazil, provided, for example, through a "help-desk";

• Software license without the supply of complete documentation, particularly notes on the source code, in accordance with article 11 of Law 9609/98;

• Purchase of a single software copy;

• Distribution of software.

The INPI recently dispensed the requirement for registration of technical services related to software when no transfer of the source code occurs/occurred.

The application for the recording (registration) of the contract or invoice related to the rendering of technical assistance services must contain a description of the services, the rendering period, indication of the price of the service in worker/hour or worker/day, the number and title of the technicians involved and the number of hours/days worked that may be approved by the INPI.

The same comments that were set out related to the technology supply agreements with regard to the purposes of the registration, timeframes and limits established for remittance and tax deduction apply to this contract category. As an exception to the rule, the INPI has been accepting the retroactivity of the payment for a technical service already supplied or due before the date of filing of the recordal application.

Finally, it should be noted that the Research and Development (R&D) sharing agreements, so-called "cost-sharing" contracts, are no longer recorded by the INPI pursuant to Normative Act 135/97, which revoked Normative Act 116/93, which allowed the recordal of cost-sharing agreements.

Regarding the taxation of services that may be recorded with the INPI, in addition to the CIDE contribution, the Sales Tax - ISS, according to Complementary Law 116/2003, as well as the PIS/ COFINS contribution, according to Law 10865/2004 (the constitutionality of which is also questionable) have recently become due by the Brazilian company (contractor or intermediary of the service) consequently significantly burdening the import of services.

Income Tax is also due on the services price, being however possible to select the party responsible for the tax burden, according to article 725 of the Income Tax Regulation (RIR) - Decree 3000/99.

4.5. COPYRIGHT LAW

Author: Gabriela Muniz Pinto -
Momsen, Leonardos & Cia.

4.5.1. Copyright Law (Copyright and related rights)

Initially, we must clarify the suitable nomenclature for the institution being analyzed, which, in relation to the differences established by the most respected doctrine, the expressions "Copyright Law " and "copyright" are actually many times used as synonyms without major classification distinction. However, according to our specific legislation on the matter, i.e., Law under n. 9,610 dated 02.19.1998 (LDA), we will adopt in this work the expression "Copyright Law" or "copyright", as the gender of which the "royalty" and "related rights" are samples (according to Article 1 of the referred law).

The institution of Copyright Law, beside the industrial law, is inserted under Intellectual Property, which deals with the so-called "intellectual rights". These are rights which fall on human creations, manifested in sensitive, aesthetic or utility forms, being therefore assigned aesthetic or practical purpose.

Thus, the Intellectual Property is the branch of the law which splits up in the study and regulation of the Copyright Law and industrial law or industrial property rights, originating two different legal systems of special protection.

4.5.2. Concept and Legal Nature

Many are the doctrinaire definitions of Copyright Law, and we hereby transcribe the teaching of some scholars studying the matter.

In synthesis, Carlos Alberto Bittar understands that:

"(...) the Copyright or Copyright Law is the branch of the Private Law ruling the legal relations originated from the creation and economic use of aesthetic intellectual works comprised in the literature, arts and sciences".

For Antônio Chaves , the Copyright Law would be:

"(...) the set of privileges recognized by the law to all intellectual creators on their literary, artistic or scientific productions with some originality: or extra monetary nature, in principle, without time limitation; and of patrimonial order, to the author, during all his life, with the accrual, for the successors appointed by the law, of the term defined thereby.
We identify therein two types of assignments: on one side, those pertaining to the so-called moral right, which consists of the right to the recognition of the paternity of the works, the right of the unpublished, the right to the integrity of its creation, the right to modify the work, finish it, oppose that other person should finish it etc.; on the other side, those of patrimonial nature, which lie in the exclusive privilege of receiving from its production all benefits it may give cause to, especially through the publication, reproduction, play, performance, translation, acting, adjustment, arrangements, dramatization, adaptation for movies, radio broadcasting, television etc."

Please note that the concept established by Antonio Chaves is vested on great complexity, of which we can already extract considerations on the hybrid nature of such law.

In its origin, it was understood that the Copyright Law have intimate connection with the Civil Law, being inserted in this branch of the law. Currently, there prevails the understanding regarding its scientific independence, being deemed a true expertise.

Several theories arose along History regarding the legal nature of the Copyright Law, whose determination constitutes a classic problem coming from the XVIII Century. We enhance therefrom the two main trends which faced each other at the beginning of the last century: the Monist and the Dualist theories.

The monists understood the nature of the Copyright Law to be unique, representing either a purely property right (albeit intellectual) or an exclusive personality right. The English and German scholars defended the property right, whilst the French scholars defended the personality doctrine.

The dualists, on their side, defended the double nature of the Copyright Law, comprised of moral rights beside the rights of patrimonial nature. Said theory started with the French and Italian scholars, among others of Latin origin.

With the advancement of the scientific progress and legal studies, such theories were slowly being abandoned, proving to be insufficient to clarify the specificities of the law under study.

Our days, after overcoming the doctrinaire discussions regarding the classification of the Copyright Law as property or personality, the understanding was adopted that it is a sui generis law, result of the interrelation of moral and patrimonial law. It is not merely property right, nor is it a personality right, vested of personal and monetary characteristics and constituting thus a new type of private law.

The hybrid nature of the Copyright Law results from several factors and peculiar structural elements, such as the special nature of the intellectual work and of the regulation itself, which rules its protection, as it is determined by such special nature. For this reason, it requires to be considered an independent law, to be ruled by specific legislation.

At the same time in which the intellectual work constitutes a product of the spirit and personality of its creator, such creator establishing an undetachable relation, it is also considered an economic assets and, as such, liable to exploitation. Thus, the Copyright Law has moral and patrimonial characteristics, being divided in these two areas of the law which, due to their nature and purpose are, however, intimately connected, constituting an undetachable set.

The Copyright is thus a special law, destined to the defense of the personal and patrimonial connections of the author with the work, deserving dedicated legal grounds, separate from the codes, as it happens with several current legal systems.

Actually, the scientific independence of this law is justified by its specificity, due to its peculiar characteristics which make it different from the other private law issues, easily identifiable by the doctrine, precedents and legislation, at national and international level.

Regarding the regulatory evolution of the Copyright Law, we emphasize that in Brazil a relevant landmark was the enactment of the (now revoked) Copyright Law under number 5,988, dated 12.14.1973. Up to then, the issue was ruled by the Civil Code of 1916, under the name "Literary, Scientific and Artistic Property" (Articles 649 to 673), and currently it is ruled by Law number 9,610/98.

Let us also emphasize that, slowly, this branch of the law is acquiring a didactic independence, even though there are still very few law courses which teach the matter in an independent and systematic manner.

4.5.2.1. Faces of the Copyright Law

As seen, the Copyright Law is vested on moral and patrimonial components related to the connections of the author with his work, identified as moral and patrimonial rights.

These two faces of the Copyright Law, each with its own characteristics and features, are connected and supplement each other to protect the author regarding the creation, materialization and use of the work, thus constituting the one and undetachable content of such law.

4.5.2.1.1. Moral Rights of the Author

The moral rights of the author are destined to the protection of the personality of the creator, in recognition of his efforts and of the creative result itself, true manifest of its personality. In this sense, it is convenient to observe that the moral character of the copyright is inherent thereto due to the fact that the author's work itself is an economically worthy asset. Such rights are therefore permanent liens of the creator with his work to defend its personality.

They arise from the very creation of the intellectual work and last throughout the existence thereof, producing its effects, due to the essential feature of maintaining the connection between the work and its creator. We therefore emphasize that there are moral rights which are transmitted to the successors of the author.

Some of the moral rights arise from the mere materialization of the work (such as the right to the unpublished, the right to paternity, the right to nomination), whilst other emerge only from the communication of the work to the public (right to integrity, right to change and right to claiming the work).

As essential characteristics of such rights, we can emphasize the following: personal nature (strictly personal nature), undisposability and unavailability, perpetuity (they survive the death of the author and, including, the expiry of the property rights of the author, when the work becomes of public domain), lack of statutes of limitation (may give cause to jurisdictional protection anytime), absence of pledge (they do not give room to judicial constriction) and absence of waiver, being any contractual clause aiming at negotiating such rights completely null and void. They are also transmitted by succession, except for those connected to the person of the creator himself, which, according to the Brazilian Law (Law number 9,610/1998 - LDA) are the rights to change and to remove the work from circulation.

Actually, any agreement involving moral rights of the author will be deprived from effectiveness due to offense of the public order rules which regulate them.

Article 24 of the LDA lists the moral copyright, among which we enhance the following: right to the paternity of the work (right to connect the author's name to his creation), right of unpublished (right of not disclosing or communicating the work), right to nomination (right to give the name, step name or any other signal identifying the author to the work), right to the integrity of the work (right of preventing the modification or the practice of any act which may hurt the author in his honor or reputation), right to change, right to remove the work from circulation (or right to retraction) or the right to suspend any kind of use already authorized, the two latter provided the use or circulation implies offense to his reputation or honor, except for indemnities to third parties, when applicable. Such conditions involve both subjective and objective aspects and there is up to now no consolidated precedents on the matter.

4.5.2.1.2. Property rights of the Author

The property rights of the author consolidate the defense of the interests of the author over the economic use of the intellectual work, through all means possible. They also arise with the creation of the work, manifesting with the communication thereof to the public.

Such rights originate from the monopoly of use granted to the author aiming at the economic exploitation of the works, being such exclusivity temporary, relative and limited.

Therefore, the property rights of the author constitute the right to use and enjoy the works, in whole or partially, exclusively of the author who may use them, at any title, transmitting them to third parties, in whole or part, between live people or by succession. These are thus rights of exclusive nature, in as much as the author is the sole party to be able to enforce such privileges. From such exclusive right there arises the necessity of prior and express authorization from the author for third parties to make any economic use of the intellectual work protected.

Under the terms of Article 3 of LDA, the property rights of the author are considered chattel, exactly to make its disposal possible. Otherwise, the moral rights of author are rights of material nature, disposable, temporary, can be pledge (with the legal exceptions - Article 76 of LDA) and subject to statutes of limitation.

Thus, the property rights of author may be temporarily or permanently negotiated. Through the negotiation of such rights, that is, of its use authorized by third parties, the author may enjoy the economic benefits of his intellectual creation, constituting one of the essential objects of the Copyright Law.

In this sense, we must observe that the property rights are independent among them and, consequently, so are the different types of use of the intellectual works. This principle, expressed under Article 31 of the Brazilian Copyright Law (LDA), is extremely important, since the result thereof is that the negotiation of a property privilege does not imply the necessary negotiation of other. The logic application of this principle is subsumed in the issue concerning restrictive interpretation of the juristic acts involving Copyright Law (Article 4 of the same law), so that the author holds the property rights not expressly transferred to other or those kinds of use of the work not provided or not existing at the time of the negotiation.

As examples of property rights of the author we enhance the reproduction rights (originated from the indirect communication of the work to the public, through, for instance, of: print, engraving, photograph, mechanical, cinematographic or magnetic recording, reproduction by communications satellites), the right of representation, among others.

4.5.3. International Law

The intellectual property has a cosmopolitan, universal character, exceptional nature and immaterial essence, which cannot be located by the customary means and criteria. Once it has such international character, it is object of differentiated treatment based on the Berne Convention, with which we will deal later.

The Copyright Law has always claimed for international recognition, so as to implement the intended protection. With the evolution of the communications means in the modern age, the necessity of international protection is even more serious.

In a short historical description, we must emphasize that in the Ancient times the Copyright Law, as it exists nowadays, was not known. It was in the Middle Age, more precisely with the discovery of the press and, thus, the possibility of multiplying writings, that there was a decisive landmark for the occurrence of the Copyright Law. It was at that time that the privileges started being granted by the King to the editors, who were true temporary monopolies to economically exploit a given work. There was not a work on copyright, even though the authors already claimed for protection.

Therefore, in face of the insufficiency of the system and of the claims of the Authors regarding the necessity of being compensated for the exploitation of their works, in 1710 Queen Anne of England enacted the first law recognizing the right, the Statute of Anne or the so-called Copyright Act.

Further laws started to grant some rights to the Authors, such as the Federal Copyright Act, of 1790 and the French Laws of 1793.

The French Revolution, landmark of the individual rights, inspired the recognition of the other face of the Copyright Law , that is, its moral aspect. Actually, it was the German doctrine which initially manifested it, through the concept of the crime of forgery, irrespectively of the privilege granted. Later, the French precedents were responsible for its sedimentation. Thereof, the internal rights started to rule the Copyright Law and industrial property.

The difficulties of revealing the judicial nature of the Copyright Law is reflected in the internal legislations and international conventions. With the appearance of the Codes, this problem was aggravated, since people did not know where to deal with such rights.

We emphasize that from the inception two different judicial systems ruling copyright have challenged each other: the Anglo-Saxon system, which calls the rights pertaining to author copyright, and the European system, which refers to the droit d'auteur or diritto d'autore.

The copyright, whose origin is connected with the origin of the press, preceded the rights pertaining to author, corresponding only to the economic exploitation of the work. The droit d´auteur, on its side, appeared a few centuries later, inspired by the principles of the French Revolution, being then propagated throughout Europe and later through the Latin American countries, such as Brazil.

Therefore, the copyright system, in force in the Anglo-Saxon countries, protects the property components of the Copyright Law, whilst the European system, of French origin, is in force in the countries of Roman tradition, exceeding the privileges of moral order and the strictly personal character of the Copyright Law .

However, the effort of the authors to legislate in the internal order was not satisfactory. The lack of protection, in some countries, and the difference among the existing systems made it difficult to achieve an effective protection. Thus, it was seeking international protection, comprised of material rules and of procedural character. In fact, the Copyright Law was object of great mobilization in the international area.

In such context, the efforts of the international community, which aimed to protect both the moral aspects, and the property aspects of the intellectual work, resulted in the appearance of the first great international agreement on copyright, the Berne Convention, dated 1886, whose principles continue to be updated and effective. After several reviews, it continues to be the instrument grounding the International Copyright Law, as it has guided the subsequent international conventions on the matter.

Jointly, the Berne Convention and the Paris Convention (1883), which rules the industrial property, reflect the dichotomy model which called for the division of Intellectual Property into two parts. Such dichotomy was incorporated to the Brazilian Civil code of 1916, which separated the industrial property and the Copyright Law. However, such historical view was overcome in 1967 with the creation of WIPO (World Intellectual Property Organization), which originated the modern model, according to which the Intellectual Property is a joint set of complex rights. Just like the Paris Convention, the Berne Convention is currently managed by WIPO.

We also emphasize the Geneva Universal Convention of 1952, whose wording was leaded by the United States of America, and to which most of the countries signatory of the Berne Convention, such as Brazil, have adhered. Its administration is done by UNESCO and the latest review was in 1971.

Other international conventions ruling Copyright Law have succeeded, such as: The Rome Convention for the protection of performing artists or performers, producers of phonograms and radio broadcasting organizations of 1961, managed by UNESCO, by WIPO and ILO; the Convention to protect producers of phonograms against unauthorized reproduction of their phonograms, signed in 1972 in Geneva and managed by WIPO; the Convention to protect signals transmitted by communications satellites, signed in Brussels in 1974; and the Convention that instituted WIPO, of 1967.

Finally, we must point that, with the inclusion of Intellectual Property issues in the Uruguayan Round of the GATT (General Agreement on Tariffs and Trade), important discussion court of issues on international trade which resulted in the creation of the World Trade Organization (WTO), there appeared the TRIPS - Trade-Related Aspects of Intellectual Property Rights.

TRIPS, attached to the Agreement Constituting the WTO, was enacted in Brazil through Decree under number 1,355, dated 1994, contributing to the great advance in the international and internal legal handling of Intellectual Property as a whole.

Specifically in respect of Copyright Law, the great innovation brought by TRIPS refers to the protection of computer software, recognizing them internationally as literary works, under the terms of the Berne Convention.

4.5.4. The Brazilian Positive Law

Attempts of drafting a civil statute to rule the copyright in Brazil have failed at the time of the Empire and even after independence; the printing privileges remained in force for a long period.

The Criminal Code of 1831, however, already acknowledged the protection of the moral aspect of the Copyright Law, through the typification of the infringement crime.

We must enhance another previous law, i.e., the law which instituted the Law courses, in 1827, assigning the teachers privileges on their lessons.

Together with the failure of the several projects to rule the Copyright Law, Law under n. 496 was enacted in 1898, inspired in the project of Medeiros e Albuquerque, which defined and guaranteed copyright. Thereafter, several laws appeared on the matter, in parallel with the international trend in such direction.

The great advancement in that area occurred with the 1916 Civil Code, which had one whole chapter called "Da Propriedade Literária, Científica e Artística" [On the Literary, Scientific and Artistic Property] (Articles 649 to 673), in the part referring to Property Right, according to the guidelines which prevailed up to then.

Regarding the Brazilian Constitutions, all assigned protection to Copyright, except for the Constitution of 1824 and the Letter of 1937. Actually, the Federal Constitution of 1988, currently in force, consolidated the treatment of the matter, raising the copyright to the level of essential rights, and providing thereon in its Article 5, subsections XXVII and XXVIII.

The Constitution of 1988 once more stated the exclusive right of the author on his work and brought great victories to the Brazilian Law when granting specific protection to the arena right, which constitutes the rights to the set of the show (and not on the individual participation). We emphasize, in this sense, that the so-called "Lei Pelé" (Pelé Law - Law n 9,615/1998) contains general rules on the sports, previously dealt with by "Lei Zico" (Zico Law - Law n 8,672/1993).

As already mentioned, Law under n. 5,988 was enacted in 1973, which ruled the copyright in the country, meeting the claims of the local doctrine in the sense of excluding it from the Civil Code and consolidated in independent diploma.

As of such law, other legal diplomas were enacted regarding copyright, sometimes modifying some of its provisions, even though this has not been a period of great legislative production. Law under n. 5,988/1973 remained in force for over twenty years and, after several projects and a lot of lobby, was fully and expressly revoked by the current law, Law under n. 9,610, dated 02.19.1998 (LDA).

The new Law under n. 9,610/1998 introduced a series of victories to the treatment of the issue, in spite of the relevance of certain criticism to its text. Actually, reflecting the concern to preserve the guidelines followed as of the Berne Convention, such law maintained the pioneering institutions of the previous law and the constitutional principles introduced by the Constitution of 1988, so that, in spite of certain exclusions, its innovative character is basically due to the systematization and updating of the previous law. It is convenient to point, in this sense, that the double nature of the copyright has been maintained, as a consequence of the set constituted by its property and moral components.

It is also convenient to point out that the following diplomas on copyright are also in force in the country: the referred Berne and Geneva Conventions, enacted respectively through Decrees ns. 75,699, of 1975 and 76,905, also of 1975, TRIPS, through the referred Decree under n. 1,355, of 1994, which enacted the same, articles 184 to 186 of the Criminal Code, with the new wording given by Law under n. 10,695 of 2003, articles 524 to 530 of the Criminal Procedure Code, among other internal diplomas and international treaties to which Brazil has adhered.

4.5.4.1. Law under n. 9,610, dated February 19, 1998

We must consider some of the important issues and principles covered by the new law.

We must emphasize, as seen, that Law under n. 9,610/1998 rules the copyright and its related rights, as provided under its Article 1.

4.5.4.1.1. Treatment to the Foreigner

Article 2 of Law under n. 9,610/1998 establishes, in its caput, that the foreigners domiciled abroad will be assured protection of their copyright under the terms of the agreements, conventions and treaties in force in Brazil. In its sole paragraph, it determines that the application of the referred law to the locals or people domiciled in country assuring the Brazilians or people domiciled in Brazil the reciprocate protection of the copyright or equivalents.

4.5.4.1.2. Important Definitions

The Law establishes, in its Article 5, some definitions which may guide the interpretation of its application, which, however, are object of criticism by some scholars. In this sense, it is convenient to observe that it missed defining the important concept of plagiarism, such a current practice, whose prevention and repression are over and above the whole authorial legislation.

4.5.4.1.3. Authorship and Title

The protection of the intellectual work by the Copyright Law appears with its creation, understood as the insertion in the external work through its original form. In principle, therefore, the author is the creator of the work itself, individual of whose intellectual effort it results.

However, in the protection of copyright, the expression author may rise a series of doubts regarding its true meaning.: would the intellectual creator of the work be the original owner thereto or the current owner?

There are situations in which such concepts fit in, which we clarify in general lines.

The principle established by Law under n. 9,610/1998, Article 11, caput, is that the author is the individual who creates the literary, artistic or scientific work, i.e., the one giving raise to a spiritual work. This is thus the general rule on the authorship of the intellectual works protected by the Brazilian Copyright Law.

In this sense, the authorship does not depend on any condition such as age or mental condition, and the person under legal age may be the intellectual creator as well as the Indian, the prodigal and the mentally ill, even though the exercise of the copyright is always subject to the rules of the Civil Law.

Regarding the foreign author, his protection is ruled by Article 2 of the law, according to item 4.5.4.1.1. above.

In the sole paragraph, the referred Article 11 establishes an exception when defines the possibility of legal entities becoming subject of copyright in the cases provided by the same law.

This way, legal entities may exceptionally bear title of copyright, whether for origin, through the creation, whether for derivative ways, in the case where there is a transfer of rights, as clarified below.

Actually, our legal order has no impediment for the legal entity to bear title of rights and obligations, and such understanding may extend to the copyright, provided the limitations are observed, regarding the physical phenomena of the creation, which will always be incumbent on the performing individuals. Besides, this is the guideline adopted by the legislations of several countries.

The collective work is a typical example of original title which may be attributed to a legal entity. The referred Article 5 of the law defines, in its subsection VIII, letter h, as "that created upon initiative, organization and responsibility of an individual or legal entity, which publishes it in its name or brand and that is constituted by the participation of different authors, whose contributions merge in an independent creation".

The property rights of author over the collective work are incumbent on its organizer, individual or legal entity, being assured protection to the individual participation, including the corresponding compensation under the terms of Article 17 of the law.

Under the Title dealing with the use of intellectual works and phonograms, Law under n. 9,610/1998 has a specific chapter on the use of the collective work, providing on the same in its Article 88.

It is also necessary to clarify that the title to the copyright may be of origin or derivative. The author of the works, understood as the creating individual, is also the original owner, as well as the legal entity in the case of creation of collective work. It is thus observed that not always the title of origin coincides with the authorship.

However, the title of the authorial work may be transferred to third parties, whether by the willful act of its author or original holder, whether as a consequence of his death. Thus, the derivative holder is the party which acquires, by means of convention (editing agreements, license, assignment or concession, for instance) or succession (according to the civil law ruling the matter), the copyright over the intellectual work, in whole or part, in spite of not having participated of its creation.

It shall be noted that such transmission of rights is limited to the property rights of authorship, with the sole exception of the moral rights of author which are transmitted by succession.

It is important to clarify that the derivative title does not relate to the so-called derivative works, whose author is deemed the original holder of copyright, as clarified by item IV.1.6.1 below.

4.5.4.1.4. Registration

In Brazil, the protection of copyright is inherent to the creation, appearing with the manifestation of the idea under a given form. Therefore, it does not depend on any registration, this is provided by Article 18 of Law under n. 9,610/1998. Hence, the registration of the intellectual work is optional, and can be done before the competent public offices under the terms of Article 19 of the same law.

Even though the registration of the work is merely declaratory and not a constitution item of the law, we recommend it be done whenever possible, since it will act as evidence means, or, at least, as strong indication of authorship or title.

4.5.4.1.5. Protection Term

It is repeated, in first place, that the moral rights of the author are permanent and some of them are transmitted to the successors (Article 24, paragraph 1 of Law under n. 9,610/1998).

As a rule, the property rights of the author, including on posthumous works , will have duration of seventy years counted as of January 1st of the year subsequent to that of the author's death, observing the succession order established by the New Civil Code (Article 41 of such law).

In case of works done through co-authorship, therefore work of indivisible nature, such seventy years term will be counted as of the death of the last surviving co-authors, accrued to the rights of the survivors those of the co-author who dies without successors (Article 42 of the above law).

Regarding the anonym works or published with pseudonyms, the same term of seventy years as of January 1st of the year subsequent to that of its first publication will be counted (Article 43 of the referred law).

There is also a specific provision for the initial term of the protection term of the property rights on the audiovisual and photographic works, which will be of seventy years counted as of January 1st of the subsequent year to that of the first disclosure (Article 44 of the same law).

This way, after expiry of the protection term of the property rights of the author, under the legal terms, the intellectual works will be of public domain, and then they may be freely used by third parties, for economic purposes.

Additionally, we must point out that the works of deceased authors who have left no successors, as well as those of unknown authors, except for the legal protection to the ethnical and traditional knowledge, will be of public domain, as determined by Article 45 of Law under n. 9,610/1998.

4.5.4.1.6. Intellectual works

4.5.4.1.6.1. Concept

The Copyright Law aims, basically, to protect the intellectual works of aesthetic nature. In this context, the Copyright Law rules the legal relations between the creator and its work, both as a consequence of the creation itself and of the circulation of the work, in face of all who in any way interact therewith, such as the State, the people as a whole, the user and the party undergoing economic exploitation. Actually, there is an undetachable lien between the work and its creator, being the Copyright the result of such lien.

The terminology used is also large, so that several expressions are held synonyms to name such work of aesthetic nature: Intellectual work, inventive work, creation etc.

Article 7 of Law under n. 9,610/1998 contains definition on the works protected by Copyright Law, as transcribed below:

"Article 7 - The creations of the spirit, expressed by any means or affixed in any support, tangible or intangible, known or to be invented in the future are protected intellectual works, such as:
(...)". (bolded emphasis added)

From this definition one can extract the basic principle that the Copyright Law does not protect the idea, but only the manifested form of a creation, consequence of the emanation of the human spirit, whose affixation can be done in material or non-material support.

One can then conclude, therefore, that the intellectual work, always of aesthetic purpose, is determined by two conditions: (i) the form of expression, resulting from manifestation of creative content in some support, and (ii) the originality of such form of expression.

Regarding the issue originality, it is important to clarify that, even though there is no mention in the Copyright Law in such respect, there is a consolidated doctrinaire understanding in respect of its related character. This because, regarding copyright, the absolute novelty is not required, but only that the work has some originality, that is, individualized creative elements able of differentiating it from other previously existing work.

It should be emphasized that the authorial protection always requires that the intellectual work be within the protection time granted by the law.

It must also be emphasized that the protection of the intellectual works does not depend on any subjective analysis as to its value or merits. Therefore, a work is subject to authorial protection provided it is an original aesthetic creation, manifested in some manner, even that, strictly, it does not classify as literary, artistic or scientific work, such as recognized including under the TRIPS Agreement.

Considering the requirements for characterization of the works protected by Copyright Law, it is convenient to state that there are creations which are outside the range of authorial protection, in first place it is distinguished the works of merely utility nature, subject to the protection of the industrial property law.

Article 8 of the law lists the unprotected creations, quoting, for instance, the ideas, regulatory procedures, the texts of treaties or conventions, laws, decrees, rules and legal decisions.

We must also point that the works can be original or derivative, depending on their independence in relation to another preexisting one. The original or primary works are created independently of any other, while the so-called derivative works depend on another, from which they originate through intellectual creation procedures, such as conversion, supplementation or reduction. Typical examples of derivative works are: the translation and the adaptation (Article 5, Subsection VIII, letter g of such law).

As they appear from foreign creation, originated from the use of preexisting intellectual works, they require the prior and express authorization of the author/owner of the original work who gives the essence thereof (Article 29 of the law), except if the latter is of public domain. Anyhow, once the necessary requirements are meeting, they are deemed new and original works inserted in the range of the authorial protection.

4.5.4.1.6.2. Exemplifying list

Law under n. 9,610/1998 establishes in its Article 7 a merely explanatory list of the intellectual works under protection, both original and derivative. In fact, such list could not be decisive, given the wide extent of the Copyright Law, which may encompass an infinite number of aesthetical creations vested with a minimum of originality.

Along with the general rules, the referred law assigned specific treatment to certain types of protected works, enhancing below considerations in respect of some of them.

Fine Arts Works:

The protection of fine arts works is associated to the public interest, given their unquestionable cultural and historical value.

Article 77 of the law covers the use of fine arts works, providing as general rule that the disposal of the object into which it materializes only transmits to the purchaser the right of exhibiting it, while the reproduction rights remain as the property of the author.

Under Article 78, the law establishes the assumption of cost of the authorization for reproduction of the fine arts work by the author, which shall always be done in writing.

Therefore, the property copyright on the fine arts work belongs to its author or holder. In case of disposal and in the absence of express otherwise provision stating otherwise, the owner/purchaser of the object into which the work materializes will only have the right of displaying the work, but not that of reproducing it. Any other form of use of the work will be subject to prior authorization of the author/owner, since the types of use of the intellectual works do not depend on each other.

Furthermore, the legal provisions above are perfectly conform to the general rule of Article 37 of the law, which determines that, except if otherwise agreed and under the cases provided thereby, the acquisition of original or counterpart of a work (of whatever nature) does not convey the purchaser any of the property rights of the author.

Photographic Works:

The photographic work classifies as artistic work, being object of copyright protection, irrespectively of the fact it results of the joint use of arts and technique.

Article 79 rules the use of this type of work in a brief manner:

"Article 79 - The author of photographic work has the right to reproduce it and offer it for sale, provided the restrictions regarding display, reproduction and sale of portraits are complied with, and without prejudice of the copyright over the photographed work, if it is a protected fine art.
§1 - The photograph, when used by third parties, will legibly identify the name of its author.
§2 - The reproduction of photographic work is prohibited when it is not in absolute consonance with the original, except upon prior authorization of the author".

The paragraphs of such legal provision refer to the moral rights of the photographer: right to nomination and right to integrity of the work, and only the photographer may modify it or authorize its modification by third parties.

Regarding such special protection system, we must quote the valuable lessons of the late jurist Carlos Alberto Bittar"

"Additionally, the corresponding use is subject to special rules, exactly because, when the object is the human person, the rights of the person pictured must be observed, and, on the other hand, the disclosure of use of reproductions through photographs also affects several areas of the art (such as painting, sculpture, architecture).

In this sense, regarding the photographic work, the author usually is entitled to reproduce it and place it for sale, but, in the portraits, the restriction regarding display, reproduction and sale, in face of the rights of the person focused, shall be complied with. Likewise, being the photograph a figurative arts work, the exercise of the rights of the photographer shall be done without prejudice of the copyright on the work reproduced (Article 79), depending on the conciliation of prior adjustment among the interested parties, always respecting the moral aspects of the primary creation".

We must also emphasize that the new law did not maintain the assumption present in Article 56 of the former law, according to which the delivery of the negatives would imply the assignment of the copyright on the photograph.

In respect of the compensation for the use of the photographs, it must be object of agreement among the parties, being the execution of agreements in that area very common, especially in case of photographs used for publicity.

Architecture and Engineering Works:

Under Subsection X of Article 7, Law under n. 9,610/1998 expressly inserts as protected works "the designs, sketches and fine arts works related to geography, engineering, topography, architecture, landscaping, scenography and sciences".

We must clarify that the designs at issue shall not be confused with the mere design mentioned under Subsection I of Article 8 of such law, which is indeed excluded from copyright protection.

Concerning the architectonic work, we must emphasize that there is a discussion on its aesthetic or utilitarian nature, and that we deem more adequate to consider its double functional aspect.

Exactly as a consequence of such double nature, we understand that the building itself is not object of copyright. Thus, the architect, in principle, cannot oppose to a possible modification of his design upon the building of the work, but he is allowed, however, to refute the paternity of the amended work during or after the end of the construction. In this sense it is ponder in Article 26 of the current law, thus consecrating the mitigated moral right of the author-architect.

It is also observed that, along with the rules established by the Copyright Law, the architectonic works are object of dedicated regulations.

The engineering designs are also protected by the Copyright Law and, as seen for the architectonic designs, they may be registered at specific office (CONFEA - Conselho Federal de Engenharia e Arquitetura - Federal Council of Engineering and Architecture).

Computer Software:

The copyright protection of the computer software was consolidated by Law under n. 9,610/1998, in its Article 7, Subsection XII. However, in paragraph 1 of the same provision, it was established that such software is object of specific legislation, and the provisions of the referred general law applicable thereto shall be complied with.

Thus, Law under n. 9,609 was issued in Brazil, also dated February 19, 1998, to deal with the specific protection of the computer software, considered in its Article 2, caput, as literary work protected by the copyright legislation and related laws in force in Brazil, provided its provisions are always complied with. This way, and taking into consideration the existence of specific law to rule the computer software, the application of Law under n. 9,610/1998 is only subsidiary.

Database:

Database started to receive legal protection in Brazil as of Law under n. 9,610/98. The previous legislation in force - Law under n. 5,988/73 - did not expressly provide it. The new legal diploma includes, therefore, the database in Article of protected works, together with the compilations, anthologies, encyclopedias and dictionaries. Such protection is outlined under Article 87, which provides that the owner of the database will bear the exclusive right on the expression means of the structure of such base. Additionally, paragraph 2 of Article 7, XIII, determines that such protection does not encompass the material data themselves and is considered free of prejudice of any existing copyright on the data or material included in the works.

The Databases may be considered a compilation of data, works and several other independent materials, organized in a systematic manner, as a consequence of certain criteria and for specific purposes.

Hence, it is important to emphasize that the protection to one database does not encompass the software used to create it, nor on the operation of the base, nor on its contents or on the works (individually protected) which may eventually be part thereof. The protection is given to the structural form, to the architecture of the base, to the form in which it was organized.

We must observe that not all databases deserve copyright protection. It is necessary for they to contain creativity and originality, that is, they are not protected as long as they are mere lists of information, but only when such elements are organized, organized and systemized in a creative and distinctive manner.

Thus, the database with merely informative content, which does not deserve copyright protection, may seek the rules establishing the agreements and secrets of the business, for instance, but not the copyright protection.

Anyhow, even the copyright protection is not sufficient to assure the security required by the market nowadays, to hinder unlawful competition, to avoid third parties to use other people's investments to set up a given database.

This way, now it is frequently discussed in Brazil the convenience of a sui generis protection for the databases, including exactly what the copyright protection cannot encompass: the contents of the database, aiming at safeguarding the investment made by the owner of the base.

4.5.5. Related Rights

The so-called rights related to copyright are those whose title is granted to artists, interpreters and performers of works and to producers of phonograms, videograms and radio broadcasting organizations. Such right is attributed to these subjects as a consequence of their role of assistants for production, creation or broadcast of intellectual works protected by the copyright.

The related rights, as provided under articles 89 et seq. of Law under n. 9,610/98, also comprise two paths: the moral and property, and their holders have the right to prevent the use of its interpretations/performances etc., for which they have not granted express authorization.

The duration of the related property rights is seventy years (Article 96 of Law n. 9,610/98) counted as of January 1st of the year subsequent to the affixation (phonograms), transmission (broadcast of radio broadcasting companies), and public performance and representation for the other cases.

In order to exercise their related rights, the law allows their holders their association, with no profit intent, aiming at the collective management of such rights.

It is relevant to note, in respect of the related rights, that it is not necessary that the interpretation be affixed in a material support so as to exist a related right, since the mere unauthorized transmission of the interpretation implies its infringement.

4.5.6. Copyright Agreements

Law under n. 9,610/98 establishes, as general rule, for the interpretation of the juristic acts on the matter:

"Article 4 - The juristic acts on the copyright are restrictively interpreted".

The moral copyrights (listed under Article 24 of Law n. 9,610/98) are not liable of negotiation by the author (Article 27 of Law 9,610/98) and, among them, we enhance the right to nomination (Article 24, II), that is, the right of being announced as author of the work in any use thereof; and the right to oppose to changes which may damage the work or affect him, as author, in his reputation or honor (Article 24, IV, of law n. 9,610/98). These two types of moral rights, albeit not negotiable, shall be transmitted causa mortis to the successors of the author, as established under Article 24, paragraph 1º of Law n. 9,610/98.

Also regarding the capacity of transmission of the copyright, Article 49, I, of the same legal diploma already quoted, establishes that "the total transmission encompasses all copyright, except for those of moral nature and those expressly excluded by the law".

The property copyright, such as provided under Article 28 et seq. of the current Law, are the negotiable content of the copyright, corresponding to the exclusive right of the author of using, enjoying and disposing of his work:

"Article 28 - The Author bears the exclusive right of using, enjoying and disposing of the literary, artistic and scientific work".

The contractual transmission of the copyright occurs according to the provisions from Articles 49 to 52 of Law under n. 9,610/98, after meeting the following legal requirements:

a) regarding the form - that the total and final transmission of the copyright shall only be acceptable through written agreement;

b) regarding the term - the maximum duration of any kind of contractual transmission will be of 5 years in case of absence of written contractual provision; in case of assignment of future works the assignment will cover, at most five years as well, being also reduced to five years the duration of the assignment, whenever it is recorded as undefined or superior, reducing, in the due proportion, the price determined.

c) regarding the territory - except if otherwise expressly provided, the assignment will only be valid in the country where the agreement was signed; and

d) regarding cost - the total or partial assignment of the copyright is assumed to be at cost.

Also in respect of Articles 49 to 52, it is relevant to observe that the contract of copyright assignment may be registered on the margin of the corresponding registrations, depending on the nature of the works, and its essential elements will be mentioned in the instrument of assignment as the object and conditions for the exercise of the rights, regarding time, place and price.

It is noted that the copyright may be transmitted in a contractual or non-contractual form. The non-contractual form of transmission is the succession, which covers both the property rights and some of the moral rights, as already seen previously.

Regarding the types of contractual transmission, it must be mentioned that the tonic of Law number 9,610/98 regarding juristic acts related to copyright is the protection of the author and, therefore, no transmission of rights is assumed or implied, and the agreements shall be always carefully worded, so as that any work can be used or reproduced. The most common types of contractual transmission of copyright are:

a) total assignment - the assignment and transfer agreements consist of the disposal of all property copyright. However, it is noted that the cases of use shall be (in this type and all other, we must say) all expressed in the written agreement, as a consequence of the restrictive interpretation of the legal copyright agreements imposed by LDA in Brazil.

b) partial assignment - This type implies the passage of one or several possibilities of enjoying the thing of the legal area from its owner to another. The main right is therefore burdened, loosing one of the possibilities of enjoyment.

c) license - the license agreement consists of the limited concession of use or reproduction, similar to the lease of material assets, which may or not be exclusive, according to the rules of Articles from 49 to 52 of LDA (9,610/98). The License is thus a form of assignment of a possibility of enjoying the thing without it being transmitted or the property right of the author burdened. It thus creates a new active legal situation favorable to the holder of the license, with the corresponding obligations undertaken by the holder of the property right of the author, without it being modified due to effect of the Agreement.

There are also rules for typical agreements or agreements related to specific kinds of works, such as the agreement for the edition of intellectual works (Articles 53 to 67), or agreements related to theatre, music works and phonograms (Articles 68 to 76), fine arts works (Articles 77 and 78), photographic works (Article 79) and audiovisual works (Article 81).

From the typical agreements specified by Law n. 9,610/98, it is relevant to enhance the Edition Agreement as example, since it was the contractual type deserving major attention of the current legal diploma, being regulated by Articles 53 to 67 of the Copyright Law.

Such agreement widely refers to all and any kind of reproduction. Strictly speaking, it will refer only to the kind of edition referring to graphic work. The system of Law n. 9,610/98 seems to set up a general system, a treatment of the edition in a wide sense, it being reasonable to consider that the edition system may be, in practice, a basic agreement for the other kinds which provide for the reproduction of works.

4.5.7. Custom-made work

Law n. 9,610/98, currently in force, different from the already revoked Copyright Law of 1973, does not bring up any rule regarding the custom made works under protection. In the previous law, it was assumed, in the absence of an agreement, that the property copyright of the custom made work was divided into equal parts (i.e. condominium) between the author and the contractor (the party posing the order).

The absence of any rule on this hypothesis leads us to conclude that, should there be no agreement ruling the title to the property copyright, the totality of such rights belongs exclusively to the author, and the compensation paid by the contractor will be deemed only a counterpart for the author's services, but not for the transfer or license of use of the copyright on the work. In such case, all the contractor may do is a limited use of the work, under the terms of Article 49, VI of Law n. 9,610/98:

"Article 49 - The copyright may be fully or partially transferred to third parties, by himself or his successors, at universal or single title, personally or by means of representatives with special powers, by means of license, concession, assignment or by other means accepted by the Law, provided the following limitations are respected:
(...)
VI - there being no specifications regarding the type of use, the agreement will be construed restrictively, deeming as limited only to one which is that mandatory to meet the contractual object".

Thus, we notice the importance for the contractor to ascertain that any work to be created made to order be supported by specific agreement providing for the transfer of copyright. For each employee, trainee or service provider it is recommended to make a written agreement, executed by the parties and two witnesses, expressly providing for the transfer of the works already created (if any) and yet to be created. Taking into consideration the several restrictions existing in articles 49 and 50 of Law n. 9,610/98, such agreement shall be subject to several precautions, as mentioned above.

4.5.8. Copyright Protection

The protection of copyright is granted through measures which are already part of the Common Law, which apply both to its property side and that of the personality, or specific provisions observed in Law n. 9,610/98 itself.

As well taught by Carlos Alberto Bittar , with the concern of ameliorating the effectiveness of the jurisdictional provision regarding Copyright, the legislator provided for the civil protection thereof under Law n. 9,610/98: "among the several types of copyright protection applicable to the Copyright Law, we have the prevention (such as the registration of the copyright), guarantee (such as the use of possession instruments), conservation (as, for instance, the possibility of seizure of the fake materials) and remedy of damages caused (by means of indemnity of material and moral damages, compulsory disclosure of the author's name or the destruction of the seized fake material)".

4.5.8.1. Civil and Criminal Areas

I.7.1. - in the civil area, the copyright protection is granted by Articles 102 et seq. of Law n. 9,610/98, which provide for civil penalties imposed on infringements of such rights, also establishing, in its Article 103, sole paragraph, the strict criteria of payment, by the infractor, of the price of three thousand units, for the cases in which it is not possible to determine the number of units constituting the fraudulent edition.

In the criminal area, Law n. 10,695 amended and added a paragraph to Article 184, giving a new wording to the Criminal Code.

On one side, such amendments constituted an advance in the treatment of infringements of copyright and related rights in Brazil, moreover in respect of the following amendments:

a) the adoption of the penalty of imprisonment from two to four years (paragraphs 1, 2 and 3), characterizing such crimes as of major offensive potentiality;

b) the inclusion of the infringement of related rights pertaining to artists and phonogram producers, which up to then used to characterize offense;

c) the typification of the offer to the public by means of cable, optical fiber (etc), work (paragraph 3), converting into crime what Law n. 9,610/98 already considered offense and reaching infringement acts performed with the support of new technologies, including the Internet.

d) the insertion of the notion of indirect profits and not only the intention of profiting, fact that ended up inducing the interpretation that only the direct profit would characterize the crime.

Such changes certainly meant a contribution to the piracy fighting, being tuned with Law n. 9,610/98 and with the international treaties on the matter, even though the effectiveness of such provisions depend clearly on the will of the authorities at the time of their imposition.

An aspect of such change that is also relevant was the understanding that the full copy of intellectual work does not constitute crime if it is done for the private use by the copier, with no direct or indirect profit intent (paragraph 4). Such practice constitutes, according to Law 9,610/98, an offense, fact that shows the legislator advanced when dealing less strictly with the private use (with no direct or indirect profits) of intellectual works.

However, the issue is polemic and proves to be difficult to comprise, due to the quantity and complexity of public and private interests involved therein. The consideration and balance of such interests continue to be the main challenge of this subject.

4.6. DOMAIN NAME

Author: Simone Bittencourt de Menezes -
Momsen, Leonardos & Cia.

4.6.1. Registration procedure before FAPESP

The registration system for domain names in Brazil was created in the nineties, and FAPESP (Research Support Foundation of the State of São Paulo) was initially responsible for the registration services of ".br.".

On October 21st, 2005 the Brazilian Internet Management Committee designated to Núcleo de Informação e Coordenação do Ponto Br (NIC.br) the administrative functions related to the domain ".br" such as the execution of the registration of domain names and the allocation of IP addresses.

The registration of a domain name with the extension ".br" is made through electronic fulfilling of a form found on the Registro.Br's website . The application for registration of a domain name can be made by any entity legally established in Brazil as a legal entity or individual that has a contact in the Brazilian territory. However, to register some top-level domain names (TLD) there are some special requirements. Naming for example the cases of TLDs such as <.edu.br> (education institutes), <.gov.br> (government entities), <.mil.br> (military entities), <.org.br>, <.psi.br> (internet providers), <.net.br> (multimedia communication companies, specialized network and internal circuit or holders of independent internet-connected system and <.coop.br> (cooperatives).

On May 1st, 2008, it was authorized the registration of domain names with the extension <.com.br.> also by individuals, which previously could only be registered by legal entities.

As of July 1st, 2008 Registro.Br authorized the release of the extensions , and , formerly only permitted for TV and radio channels. The release at issue enables registration of domain names with those extensions by any corporation in the country.

It is worth mentioning that a foreign company that intends to register a domain name before Registro.Br must have a proxy legally established in the Brazil and be registered before the registry's system. Only upon this registration the company will receive an identification number (that will be informed in the registration form) in substitution to the CNPJ [local corporate taxpayer registration number], which is required for legal entities established in Brazil.

Besides the registration mentioned above, foreign companies wishing to register a domain name in Brazil must submit the following documents:

(i) power of attorney notarized from the company's country of origin, granting power to the proxy to register the domain;

(ii) declaration of the company's commercial activity, notarized from the country of origin, in which it must be present the: company name, complete address, telephone, corporate purpose, activities developed, name and title of the legal representative and;

(iii) declaration of corporate commitment, notarized in the company's home country, through which the company pledges to establish its activities definitively in Brazil, in one year time, starting from the receipt of this document at the registry agency.

It is important to draw attention to the need of legalization, before the Brazilian Consulate in the country of origin, of the power of attorney, declaration of commercial activity and declaration of commitment; as well as the sworn translation of the power of attorney and of the declaration of commitment; in addition to copy of the proxy's CNPJ or CPF (local taxpayer registration number) and a statement by the attorney-in-fact informing the ID of the foreign compnay's contact.

If the authorized proxy does not have an entity registered at Registro.Br system, then such registration must be arrenged by sending his/her complete data: CPF/CNPJ, corporate name, name, complete address, telephone and ID of the entity's contact.

After the sending by email of the registration form and the necessary documents, Registro.Br will conduct an identification search in order to verify if there is any domain name identical to the one that the company intends to register, or if this domain name is identical to a well-known or high reputed trademark, according to a list maintained and given by INPI (Brazilian Patent and Trademark Office). Should the domain name be identical to a preexisting one or a trademark considered well-known or of high repute (and that is included in the aforesaid list), Registro.Br will reject the application for registration, and no administrative appeal may be filed against such rejection decision.

Registro.Br exempts itself from any liability in regard to violation of third party's property rights, once it does not act in partnership with INPI in order to verify if the domain name proposed has already been registered as trademark by another holder. The only search this agency carries out is mentioned above.

If, on the other hand, the registry accepts the request of registration for the domain name proposed, which issues in a few seconds, the applicant must pay the fees for its registration and for its ongoing maintenance.

It is important to mention that the registration of a domain name implies in agreement with the clauses of the adhesion contract imposed by Registro.Br, which establishes the parties' obligations. Therefore, we emphasize the 3rd clause in which the obligations of the domain name ower are establishes , and the penalty for lack of compliance with such rules is the cancellation of the domain.

Also, we highlight the provisions of Resolution n° 002/2005, of the Brazilian Internet Management Committee, which establishes in its Article 9, the extinction for the right of use of a domain name registered on the internet under the domain ".br", thus providing effect to its cancellation .

Furthermore it shall be pointed out that, since April 4th, 2002, the maximum limit of 10 domains per person, that is, per number of CNPJ or CPF, was interrupted. Nowadays, a corporation or a natural person can register as many first-level domains as they wish.

Registro.Br, since May 9th, 2005 has started to accept registration of domain names with the characters allowed in the Portuguese language, to wit: accented vowels and cedilla.

However, it is still valid the restriction for the registration, by the same entity, of the same expression as a domain name under different and generic Top-level domain names (TLDs). This is intended to maintain the richness of the field of names and also to allow the coexistence of homonyms under different TLDs. Nevertheless, some combinations are allowed. For example, it is possible for the same domain name holder to own "company.com.br" and "company.tv.br", but cannot own simultaneous registrations for domain names such as "company.com.br" and "company.ind.br".

It's relevant to notice some considerations about the so-called process for release of domain names. When a domain name is found to be in release process it is likely that this is due to the lack of payment by the owner of the fees required for the registration or due to the non-use of the domai name in the period established by Registro.Br.

Therefore, during this release period the parties that are interested in having the domain name registered can, in the period determined by Registro.Br, submit their candidature for its registration.

After the end of the candidature period, the domain names that have not been claimed will be automatically made available for registration to the first interested party, and the names that have only one candidate will be assigned to the candidate. If several claims for registration were submitted in the course of the release process, then a new release process will be opened until a claim is submitted for the domain name, until there is only one claim made for that specific domain name.

Until the present time, Registro.Br has not yet adopted any alternative dispute resolution procedure. Therefore, any and all controversy or dispute involving the domain names with the extension ".br" must be submitted to a court.

4.6.2. Resolution of conflicts involving trademarks and domain names

The internet has become, undeniably, one of the most effective channels in the communication between companies and their customers, allowing them, most of the time, to purchase products or hire services without leaving their homes. Consequently, several companies have invested considerable amounts of money to reflect, in the virtual world, all the prestige they benefit from on the traditional channels of commerce.

For that, one of the first measures to be taken by those companies is to register a domain before Registro.Br. Through such electronic address the consumer will be able to access the company's website and purchase the products or hire the services desired.

Not rarely companies seeking a virtual address decide to register their most familiar trademarks as such before their consumers. How surprised are they to find out that their trademarks have already been improperly registered in the name of third parties???

In fact, Brazil followed the system that was adopted by the U.S. registration authorities, which is based on the principle of "first-come, first-serviced" . Accordingly, the owner of the domain name will be the party that first comes to register the domain before such authority, even if such domain name reproduces third parties' legally registered trademark.

At the request of a specific domain name registration before Registro.Br, the applicant will have to oversee for the regularity of all the formal requirements formulated by Registro.Br. Registro.Br only analyzes the fulfillment of the requirements to grant the specific domain name registration to the applicant, without even carrying out any previous analysis (even if superficial) about the legitimacy of the applicant when requesting for an expression registration as a domain name.

Once the registratio is granted, Registro.br claims its exemption as to any and all liability fot both the improper use of the domain name and for the improper registration of trademarks by third parties. Furthermore, it should be noted that when Registro.br , adopted the U.S system's principle of priority to secure the registration of a domain name, it disregarded the resolution of disputes by arbitration procedure that was adopted by the U.S. and developed by the ICANN (Internet Corporation for Assigned Names and Numbers), which has played a key role in the settlement of disputes involving domain names.

Given that the owner of a registerd trademark cannot obtain, either through an administrative proceeding before Registro.br or through an arbitration proceeding, the cancellation or assignment of the domain anme that was registered detrimental to its intellectual property rights, the only alternative is to resort to court action. Currently, it is being discussed whether Registro.br should or not be included as co-defendant in the lawsuit, but its inclusion would imply in the transfer of the authority (jurisdiction) to procee and rule the case by a civil court to a federal government treasury court.

Not standing to sue "ad causam"- Domain Name - annulment, condemnatory and damage actions - FAPESP absence of legitimate action in the party defendant of demand- Agency in charge of proceeding in the registration and maintenance of the domain names, through Management Committee delegation of Internet Brazil - Competent to Art. 1st Resolution 002/98, of referred committee (revoked by Resolution 001/2005) - The choice of the domain name and its adequate use are exclusively of the applicant responsibility. FAPESP exclusion of the party defendant of determined demand - Extinction of the process relating to it judged extinct without solution, in the terms of art. 267, VI, of the Code of Civil Procedure - Inversion of the onus regarding legal fees and costs - Plaintiff that will respond for the costs and processual costs spent by the referred entity, as well as the lawyer's fees in the proportion established in the sentence. - FAPESP reexamination and appeal were provided. Bolded emphasis added. (Civil Appellate Review no. 263.0063.4/0, São Paulo, SP, Judged on July 1st, 2008).

Cases involving the violation of trademarks in domain names had become common before the Brazilian Courts, which have already established important precedents, some of which we shall hereto address.

In most of the cases the Brazilian courts have ruled privileging Intellectual Property rights in detriment of the of acts of piracy commited by those without demonstrating any rights or legitimate interest in the registered expression, obtain the registration of a domain anme. As examples, we hereby trasncribe two summaries of rulings of the Court of Appeals of the State of Rio de Janeiro (TJRJ).

"Interlocutory Appeal. Ordinary Action. Dismissal of advance relief. Concession of active supersedeas, granting advance relief. Present to the concession requirements. Evidence of severe damage by use, on the Internet, of domain names corresponding to registered brands by the plaintiff companies. Inexistence of considerable damage or irreversibility of the measure for the defendant company. Appeal provided. Advance relief granted as an active supersedeas of the appeal that must be maintained." Bolded emphasis added. (Interlocutory appeal no. 2000.002.04140, 12th Civil Chamber, judged on 12/11/2001)

"Industrial Property. Ordinary action with the objective of use ceasing of a domain name on the Internet. Confrontation between registered domain name at FAPESP and, on the other hand, domain names registered at the same entity and nominative brands and industry mixes and commerce trusted in INPI - National Institute of Industrial Property, all of them possessing as a characteristic and distinctive sign the expression "IG". Request for preliminary order, written in Law 9279/96. art. 209, par. 1. (Law of Industrial Property), initially denied by the court, followed by denial of active supersedeas. Precedence Sentence of the active supersedeas, determined, after, the process in judgment, expedition of official notice to FAPESP for the cancellation of the registered domain name "ignoticias.com.br". Interposition of appeal by the decision, received in double effect. Persistence in the processual interest in the judgment of the appeal, before the possibility of denial of the preliminary order initially denied. Verification, by the elements in the process files and by the examination of the sentence judged at the ordinary action, in the presence of the requirements for the concession of the wanted preliminary order. Presence of appearance of good law and the danger of the time consuming practice of acts possible to harm the reputation and the business of the appellant establishing confusion between product and service. Granting the appeal with the concession of preliminary order to abstain the appellant, until the judgment of the appeal, from using the domain name "ignoticias.com.br", subject to daily fine of twenty minimum salaries, paid to FAPESP for the pertinent measures." Bolded emphasis added. (Interlocutory appeal no. 2001.002.12221, 3rd Civil Chamber, Judged on 08/13/2002)

In a recent and interesting ruling of the TJRJ, the Principle of Specificity (which rules the Brazilian Trademark Law) was adopted to assess the conflicts involving a trademark and a domain name. It found that the third party, who registered the other party's trademark as a domain name, did not violate the trademark rights of the lawful owner thereof since it was engaged in a totally unrelated field of business, not representing any risk to the consumer:

"Industrial property. Commerce Brand Name. Registration in the National Institute of Industrial Property. Principle of Specialty. Art. 123 of the Industrial Property Law. Provider of access to the Internet registering its domain name before FAPESP does not practice unlawful competition to the company selling household appliances and related items which had previously registered similar name before the National Institute of Industrial Property. Absolutely different activities not meaning, at this case, notorious brand name (Art. 125)" Bolded emphasis added. (Civil Appellate Review under number 2002.001.21172, 17th Civil Chamber, Judged on 11/13/2002).

Hence, we may note that although the resolution of conflicts that involve trademarks and domain names is becoming evermore common in the rulings of the Brazilian courts, the rulings of the cases that have been submitted thus far have privileged the owners of the intellectual property rights.

4.7. GENETIC RESOURCES, TRADITIONAL KNOWLEDGE AND BIOTECHNOLOGY

Author: Edson Paula de Souza
Momsen, Leonardos & Cia.

4.7.1. Biodiversity and Genetic Resources

With regard to the legal protection of biodiversity and genetic resources the Convention on Biological Diversity (CBD) is an international document of critical importance, as it introduced important concepts and established minimum parameters to be observed by the member countries in the regulation of the matter.

The CBD, which was drafted in the so-called "ECO92" (meeting held between Chiefs of State in Rio de Janeiro, Brazil) was characterized by the concern with sustainable development, which consists of the development that meets the current needs without jeopardizing future generations.

According to the CBD "biological diversity" means "the variety of live organisms of all origins, covering, among others, the terrestrial, marine ecosystems and other aquatic ecosystems and the ecological complexes to which they are integral parts, covering, further, the diversity within the species, among species and of ecosystems" and the "genetic resources" mean the "genetic material of real or potential value."

Among the targeted purposes, the following may be cited:
1) The conservation of the biological diversity and traditional knowledge;
2) The sustainable use of the components thereof, respecting traditional cultural practices; and
3) The fair and equitable sharing of the benefits that result from the use of the genetic resources.

Since Brazil is one of the fifteen "mega-biodiversity" countries, with approximately 22% of the entire biodiversity of the planet and an immense cultural diversity (parties, traditions, arts and rituals) and, further, having evolved into a major agricultural producer in the foreign market, it is now a Party to the main agreements on environmental protections and sustainable development, such as the Kyoto Protocol, approved on the Global Leading Countries Meeting on Sustainable Development (the so-called RIO+10).

Internally, a set of laws, agendas and programs are creating more efficient instruments to enable the transition to the desired model of sustainable development.

Brazil's biodiversity is estimated to be worth US$2 trillion. Irrespective of whether this estimate reflects the reality, what is known is that the global social-economical interests converge over biodiversity, as it constitutes a source for the feeding of the world's population and of the active ingredients in the production of medicines.

4.7.2. Traditional Knowledge and Access to Genetic Resources

It is important to stress that in the study of this matter the stereotypes of traditional meaning "old", "ancient" must be dismantled as this word in no regard invokes such meanings. Here, traditional concerns the cultural particulars of each community, which derive from practices adopted by the community to solve a certain problem and which solutions are transmitted from generation to the next generation.

In referring to Traditional Knowledge (TK), the first vision that comes to mind is that of Indians, huts and settlements. Without discrediting the Indian community and although they hold slightly over 10% of Brazilian lands, with communities of approximately 350,000 individuals, the other traditional and non-traditional communities that contributed to the growth of the Brazilian Traditional Knowledge should not be forgotten.

Thus, the traditional communities are comprised by Indians, natives, Azoreans, backwoods inhabitants, palm-tree area natives, jangada-type rafters, swampland natives, pastors, quilombo fugitive slaves, Amazon area cross-bred natives, non-Amazon cross-bred races, ranchers/cowboys, small fisherman and producers, while the non-traditional communities are comprised by farmers, vacationers, salespersons, government workers, entrepreneurs, employees, owners of palm processing companies or of other resources, lumberjacks.

Given that the Brazilian communities are more closely akin to the contents of this article, it is important to mention their main features:

- Dependency and consequential in-depth knowledge of nature and nature's cycles, generating a better use of the natural resources and consequential improvement of the subsistence activities;
- Notion of territory where the social group reproduces economically and socially;
- Reduced accumulation of capital;
- Importance of the family and of the relations of relatives;
- Importance of symbols, myths and rituals (associated with hunting, fishing and mining activities);
- Use of simple technologies, with a low environmental impact; and
- Minimum political power.

What, then, would be Traditional Knowledge? The Worldwide Intellectual Property Organization (WIPO) finds that: "Traditional Knowledge consists of the innovations and creations of traditional basis that result from the intellectual activity in the industrial, scientific, literary or arts fields."

It should be highlighted that there are a number of different definitions of Traditional Knowledge in the literature but none of them is widely accepted presently.

Regardless of the lack of a precise and widely accepted definition of Traditional Knowledge, it should be noted that TK is built up collectively, cumulatively and in response to different causes. It relies upon tradition, the observation and the use of biological processes and resources. Examples of possible manifestations are myths, rituals, oral narratives, and other practices.

The search for instruments more efficient than those that currently exist in Brazilian law is merely beginning. The possibility of adopting a sui generis protection system is an on-going debate in society at large. According to international organizations such as WIPO and UNESCO (United Nations Educational, Scientific and Cultural Organization), the use of the existing protection mechanisms is not feasible, as they would solve only a part of the problem, leaving other aspects unprotected.

The studies conducted by WIPO led to the conclusion that the literary and art work may be protected under copyright Law; the technical creations by the Principle of Repression of Unfair Competition and by patents; the aesthetic and functional creations are afforded protection under Copyright and Industrial Design law, and, finally, the communities' identification signs would be protected as trademarks and geographical indications of origin, all of which mechanisms already exist in Intellectual Property law.

In his statements made in meetings held in Manaus, Maranhão and in Rio de Janeiro, Nuno Pires de Carvalho, a WIPO consultant, listed the main elements of Traditional Knowledge, which are not included in the foregoing protection mechanisms. This is why a sui generis protection system should be sought. Such elements are four, namely:

1) Holistic element, pursuing from the culture, spirituality and practice of this Knowledge;
2) Adaptable element, in view of its ongoing evolution;
3) Complementary element, since they are cultural identifiers and have an economical function; and
4) Pragmatic element, as its production is no systematic.

In this regard, the aforesaid WIPO consultant mentioned the main questions in the attempt to fit the TK into the mechanisms currently adopted to protect Intellectual Property: Is there novelty in the subject matter of the right?; Who would be the author and owner of such right?; What would be the period of protection; How would the right be acquired, enforced and cancelled? Stress should be laid on the fact that answers to these questions are yet to be come up with.

In addition to a sui generis protection system, WIPO recommends the creation of modern data bases, such as those already implemented by Venezuela, China and India, which position is being defended by Brazil.

Brazilian laws:

For several decades the Brazilian government is expressing concern with the protection of the cultural patrimony of Brazil and has taken important legislative initiatives. The most recent are quoted below:

Legislation	Subject Matter
State Law no 1,235/97 of the State of Acre	Provides on the instruments of control of the access to the genetic resources of the State of Acre.
State Law no 388/97 of the State of Amapá	Provides on the instruments of control of the access to the biodiversity of the State of Amapá.
Law no 6,001/73	Sets out the Indians Statute.
The Federal Constitution of Brazil of 1998	Specific provisions on article 215, paragraph 1 (protection of popular, indigenous and afro-Brazilian culture manifestations, besides those of other groups that participate in the national civilizatory process); article 225, paragraph 1, clause II (the Public Sector must preserve the diversity of the genetic heritage of the country and surveil the entities streamlined into the research and manipulation of genetic material); and article 213, caput (acknowledgement of the social organization, costumes, language, beliefs and traditions of the Indians, which will be protected by the Federal Government).
Decree no 1,355/94	Promulgates the Final Act that incorporates the results of the Uruguay Round of multilateral commercial negotiations of GATT - TRIPs.
Law no 9,279/96	Provides on the Industrial Property rights and obligations.
Decree no 2,519/98	Promulgates the Convention on Biological Diversity, signed in Rio de Janeiro on June 5, 1992.
Decree no 3,551/00	Establishes that the registration of cultural assets of immaterial natural that constitute Brazilian cultural patrimony operates through a specific system of books, always quoting the historical context of the asset and its national relevance for the memory, identity and formation of Brazilian society. Accordingly, at the initiative of the Ministry of Culture, the National Program of Immaterial Patrimony was created and contains 4 books: Book of Registration of Knowledge (for the knowledge and form of doing rooted in the daily activities of the communities), Book of Registration of Festivities (for the rituals and parties), Book of Registration of the Forms of Expression (for the literary, musical, plastic arts, scenery and amusement arts) and Book of Registration of Sites (for the places where collective cultural practices are reproduced). As regards the Traditional Knowledge, Folklore and Handcraft, it would be possible to catalogue it in the aforementioned books, eternalizing the description of celebrations, religious or non-religious ceremonies, rituals, musical, literary and art work.
Provisory Act (MP) no 2,186-16/01	Provides on the access to genetic resources and to associated traditional knowledge on the sharing of benefits and the access to technology, transfer of technology derived from its use, among other provisions.
Decree no 3,945/01	Regulates article 10 of MP no 2,186-16/01: Defines the composition of the Council for the Genetic Heritage Management, which affords the possibility of registering the Traditional Knowledge associated to the genetic patrimony.
Decree nº 4,339/02	Institutes principles and guidelines for implementing the National Biodiversity Policy.
Decree nº 4,946/03	Alters, revokes and adds dispositions to Decree nº 3,945, of September 28, 2001, which regulates MP nº 2,186-16, dated August 23, 2001.
Decree nº 5.439/05	Gives new wording to arts. 2º e 4º of Decree nº 3,945, dated September 28, 2001.
Decree nº 5.459/05	Regulates art. 30 of MP no 2,186-16, of august 23, 2001, stating the penalties applicable to activities that harm the genetic resources or the associated traditional knowledge, among other provisions.

 

Further, as for the administrative regulatory framework, the following recent Resolutions should also be mentioned: Resolution no 23/06 of the Council for the Genetic Heritage Management (CGEN), and resolution no 134/06, of the National Institute of Industrial Property (INPI), which set out that the Applicant of a patent application must inform whether the object of the invention to be protected was obtained through the access to a sample of a component of the national genetic heritage as from June 30, 2000. As may be noted in the foregoing table, Provisory Act (MP) no 2,186-16/01 provides on the access to genetic resources and to the associated traditional knowledge, among other dispositions. It is important to clarify that traditional knowledge may or may not be associated to genetic resources and, in the affirmative, it shall be regulated by this Provisory Act.

In this regard, we resorted to the MP to define the concept of "associated traditional knowledge": "information or individual or collective practice of an Indian or local community, having a real or potential value, associated to the genetic patrimony."

The local community that creates, develops, holds or preserves the knowledge thenceforth has the right to: have the origin of the access to the knowledge recognized in all of the publications, usages, exploitations and disclosures (also being mandatory to mention the origin in any patent application); prevent non-authorized third parties from exploiting the knowledge; receive benefits for the economic exploitation of the knowledge by a third party.

As a curiosity, since traditional knowledge not associated to the genetic resources, such as e.g. folk expressions, is not the subject matter of this article, the protection of this kind of knowledge has been widely discussed and there has been considered the possibility of attributing copyright protection or creating a protection system through the cataloging of the 4 Books of the Ministry of Culture, in accordance with Decree no 3,551/00.

More specifically in regard to the access, the MP introduces important definitions: "access to genetic heritage" means "the obtaining of a sample of a component of the genetic patrimony for the purposes of scientific research, technological development or bio-prospection, aimed at its industrial or other type of application" and "access to the traditional associated traditional knowledge" means "obtain information on the knowledge or individual or collective practice associated to the genetic patrimony of an Indian or local community, for the purposes of scientific research, technological development or bio-prospection, aimed at its industrial or other type of application".

Therefore, it may be concluded that this MP does not cover the human genetic heritage.

The access is subject to authorization by the Council for the Genetic Heritage Management (CGEN), which is comprised by members of many Ministries, associations, public organs, councils and research institutes. As for the use, sale and benefiting (which are subject to inspection, restrictions and sharing of benefits), the same are subject to Federal Government authorization, being prohibited the access for practices that are hazardous to the environment, human health and for the development of biological and chemical weapons.

The Provisory Act (MP) further determines the equitable sharing of the benefits derived from the exploitation of a component of the genetic heritage and of the associated traditional knowledge (through a "Contract for Use of Genetic Heritage and Sharing of Benefits", the parties to which would be the owner of the public or private property or the representative of the Indian community or local community and the official Indian authority, on one side, and the national entity authorized to access and the intended organization. The benefits may consist of: profit sharing, payment of royalty fees, access and transfer of technology, licensing, free of charge, of products and processes and training of human resources.

In the event the economic exploitation of the product or process has been proceeded with based on a sample of a component of the genetic heritage or on associated traditional knowledge accessed in violation of the provisions, the infringing Party shall be subject to payment of an indemnity equal to at least 20% of the gross revenues obtained with the sales of the product or of the royalties paid by third parties to the violator through a licensing of the product or process or for the use of technology, whether protected or not by intellectual property law, in addition to the applicable administrative and criminal penalties.

The venue for solution of conflicts in the "Contract for Use of Genetic Patrimony and Sharing of Benefits" must necessarily be Brazil.

Stress should be laid on the fact that this Provisory Act (MP) has been heavily criticized, especially by the scientific community, which claims a simpler path for the national researcher to collect samples and information without breaking the law.

The position adopted by the Brazilian government has been expressed in the main international venues. In December 2001, for example, 23 Indian curing doctors (pajés) representing Brazilian Indian tribes met in São Luís, Maranhão, to draft a letter that was subsequently presented in the Second Meeting of the Inter-governmental Intellectual Property Related to Genetic Resources, Traditional Knowledge and Folklore Committee, which was held in the headquarters of WIPO in Geneva, Switzerland. The following part of such letter stands out: "As traditional Indian tribes that live in several ecosystems, we have knowledge on the handling and sustained use of this biological variety. This knowledge is collective and does not consist of a product that may be sold as any common object in the market."

Even if the protection of biodiversity and the economic exploitation thereof is urgently required, the preservation and the conservation of this patrimony is foremost an issue of humanity and survival of future generations, being indispensable the immediate creation of a database to catalogue the natural and cultural assets.

Still in this regard, a lot was discussed about cataloguing and certifying the origin of genetic resources in the last Conference of the Parties, COP 8, which took place in Curitiba-PR, from March 20 to March 31, 2006. The Conference of the Parties is the governing body of the Convention on Biological Diversity. On that occasion, the creation of a certificate of origin for genetic resources was addressed. With such a certificate, companies using resources such as plants, extracts, oils, for instance, would have to identify the origin of the component used. The results of the studies conducted about the said certification will be presented at COP 9, in Bonn, Germany, in May 2008. Also, it was established that the year 2010 would be the limit for the creation of international rules on the use and benefit sharing of genetic resources and traditional knowledge.

Finally, it should be pointed out that a Bill aiming at replacing the Provisory Act no 2,186-16/01 is currently under public consultation. Said Bill provides on the collection of biological material, the access to genetic resources and their derivatives, for the purposes of scientific or technological research, biosprospecting or preparing or developing commercial products, the delivery and the transportation of biological material, the access to and the protection of associated traditional knowledge and the farmer's rights, and the benefit sharing, and other dispositions.

Among the main objectives of said Bill, the following may be highlighted: 1) Ease research and prospection; 2) Define which types of use of genetic resources or the associated traditional knowledge should entail benefit sharing; 3) Identify in a more rational way the recipients of the benefit sharing; and 4) Set out mechanisms to promote efficient benefit sharing, destining some resources to the conservation of biodiversity, the protection of traditional knowledge and sustainable development.

However, some criticisms and suggestions have already been made to the text of the Bill, which could be amended along the approval procedure at the National Congress. In this regard, the following was mentioned: 1) The lack of definition of terms and technical concepts used in the text, with the suggestion of adopting the terms and concepts used in the CBD; 2) The creation of a new tax, the CIDE-Genetic Resource, which will be over the commercialization of products and the exploitation of the intellectual rights derived from the access to genetic resources or to traditional knowledge; 3) The creation of three national registries of biological material and genetic resources; 4) The possibility of nullifying or adjudicating in favor of the Federal Government a patent issued in disagreement with the Bill, that is, a patent whose object was obtained through the access to a genetic resource would be declared null or transferred to the Federal Government if such access was not duly registered, licensed and authorized by CGEN.

4.7.3. Biotechnology and Protection of the Associated Creations

Biotechnology congregates techniques that enable the use of live organisms or parts of live organisms, modified or not, to generate new products with specific purposes.

The impact of biotechnology has been felt mainly in the fields of agriculture and health, of both humans and animals. New vegetable varieties, drugs and vaccines and also research in the field of embryology and reproduction of animals have brought a new dimension to the field of biotechnology.

The analysis of genomes has been used to isolate and characterize genes apparently involved in biological processes controlling features of great commercial importance in plants, animals and microorganisms. Accordingly, plants that are genetically modified resistant to plagues and that have the capacity to produce drugs and biopolymers may be obtained.

The social-economic importance of biotechnology may be demonstrated by the value associated with its global market, estimated at more than US$ 50 billion per year. According to data collected by Brazilian Agricultural/Livestock Breeding Research Institute (EMBRAPA) in agriculture alone there is a potential market of US$ 30 billion per annum.

The biotechnological inventions rely upon high investments, specialized infrastructure and detailed regulatory approval. Therefore, in order to foster such inventions there must be an adequate protection system that compensates the time and money spent with research and development (R&D).

In this regard, Brazil protects biotechnological creations broadly: biotechnology inventions are patentable before the Brazilian Industrial Property Institute (INPI), provided that specific requirements are met and new plant varieties may be registered, for the purposes of protection of intellectual property rights, before the National Protection of Plant Variety Service (SNPC). It should be emphasized that the Brazilian Federal Health Surveillance Department (ANVISA) further regulates health-related products.

Brazilian legislation:

In Brazil, the protection of inventions began in 1809 and patent protection was afforded to the inventors of an industrial invention or discovery in 1882. Since then, the law has been continuously amended (with a total of five Bills and an Industrial Property Code).

Currently, Law no 9,279/96 regulates patent protection. Two specific articles (Article 10, clause IX and Article 18, clause III) outline the protection for biotechnological inventions and/or those derived from access to genetic resources:

"Article 10 - The following are not considered an invention or utility model:
IX - the whole or part of living, natural beings and biological material found in the natural environment or isolated there from, including the genome or germ plasma of any natural living being and the natural biological processes.

Article 18 - The following cannot be protected by a patent:
III - the whole or part of living beings, except genetically modified microorganisms that fulfill the three requirements of patentability - novelty, inventive function and industrial application - established in article 8 that do not consist of a plain discovery.
Sole Paragraph - For the purposes of this law, genetically modified microorganisms are organisms that, except the whole or part of plants or animals, that express through direct human interference in its genetic structure, a feature that is normally not attained by the species under normal conditions."

As regards new plant varieties, Brazilian law provides protection since 1945, as mentioned in Article 3, clause I of Decree-law no 7,903 of Aug. 27, 1945 (as amended by Decree-law no 8,481 of Dec. 27, 1945):

"Article 3 - The protection of industrial property is provided through:
(a) the grant of a patent privilege to inventions, utility models, industrial designs or models, new plant varieties;"

In 1997 the so-called "Plant Variety Law" was introduced to protect new plant varieties, in a fashion similar to UPOV (abbreviation in French for "International Convention for the Protection of Plant Varieties"), more specifically the version of 1978 of the UPOV convention, but also containing some provisions of the 1991 UPOV version. It should be emphasized that Brazil became a member of UPOV in March 1999 (adhering to the 1978 version of this Convention), and its adherence was confirmed by Legislative Decree no. 28 of 1999.

The regulation of the aspects related to biosafety, such as the use of genetic engineering and release into the environment of genetically modified organisms must abide by the so-called "Biosafety Law" (Law no 11,105/05). It should be emphasized that the regulation of these aspects has not yet assured the full release of the plantation and sale of the crop of genetically modified plants in Brazil - this still being a controversial theme.

The following table indicates the current legislation:

 

Legislation	Subject matter
Law no 9,279/96	Regulates industrial property-related rights and obligations.
Law no 9,456/97	Institutes the right to Plant Variety Protection, according to the provisions established therein.
Decree no 2,366/97	Regulates Law no 9,456/97, which institutes the right to Plant Variety Protection, provides on the National Service of Plant Variety Protection – SNPC, and other dispositions.
Law no 10,196/01	Amends and adds provisions to Law no 9.279 of May 14, 1996 which regulates industrial property-related rights and obligations, among other provisions.
Law no 10,688/03	Sets out rules for the sale of the production of soybean harvested in 2003, among other provisions.
Law no 10,711/03	Provides on the National System of Seeds and Seedlings, among other provisions.
Law no 10,814/03	Sets out rules for the planting and sale of the production of the genetically modified soybean harvested in 2004, among other provisions.
Law no 11,092/05	Sets out rules for the planting and sale of the production of the genetically modified soybean harvested in 2005, amends Law no 10,814/03, among other provisions.
Law no 11,105 of March 24, 2005	Regulates clauses II, IV and V of Paragraph 1 of Article 225 of the Federal Constitution, provides for safety norms and inspection mechanisms for activities that involve genetically modified organisms - – GMOs and their by-products, implements the National Biosafety Council (CNBS), re-structures the National Biosafety Technical Commission (CTNBio), provides for the National Biosafety Policy (PNB), revokes Law no 8.974, of 5 January 1995, and Provisional Measure no 2.191-9, of 23 August 2001, and arts. 5, 6, 7, 8, 9, 10 and 16 of Law no 10.814, of 15 December 2003, among other provisions.

 

The Brazilian background and international treaties on biotechnology scenario:

The Brazilian laws currently in force do not object to the protection, by industrial property law mechanisms, of inventions in the biotechnology field, as previously stated. A comparison between Brazilian law and TRIPS (abbreviation for Trade Related Aspects of Intellectual Property Rights Agreement, introduced by the World Trade Organization - WTO) does not reveal any inconsistency between the two texts, more specifically the comparison of articles 10 and 18 of Law 9.279 and the corresponding provisions of the TRIPS agreement.

The TRIPS agreement sets out that patents will be available without discrimination as to the field of technology, exceptions existing in a few specific cases. As far as biotechnology is concerned, the exclusion of patent protection by the member countries may apply to inventions (as established in section 5, Article 27 of TRIPS) that:

a) conflict with public order or morality, inclusively to protect the life and health of humans, animals or plants, or to prevent major damage to the environment;

b) diagnosis, treatment and surgery of animals or humans methods;

c) animals or plants that are not microorganisms;

d) essentially biological processes for the production of animals and plants, except non-biological or microbiological processes.

Another very important issue regarding patent protection in the biotechnology area concerns the patents of inventions that derive from the access to genetic resources and associated traditional knowledge. This matter is specifically addressed in Provisory Act (MP) no 2186-16 (see above), which determines that in patent applications for processes or products obtained from a sample of a component of the genetic patrimony, the Applicant must inform the origin of the genetic material or traditional knowledge.

Provisory Act (MP) no 2186-16 aims to harmonize patent law and the purposes of CDB.

In the administrative sphere, attention should be drawn again to Resolutions no 23/06, laid down by CGEN, and no 134/06, laid down by INPI, which set out that the Applicant of a patent application must inform whether the object of the invention to be protected was obtained through the access to a sample of a component of the national genetic heritage as from June 30, 2000.

4.7.4. Practical Recommendations for the Corporate Use of Biotechnology

4.7.4.1. Genetic resources and Associated Traditional Knowledge:

- Abidance by the provisions of Provisory Act (MP) no 2.186-16/01:

The participation of a foreign company in an expedition for collection of sample of genetic component on-site and to access associated traditional knowledge will only be authorized when jointly with a Brazilian governmental entity, with the coordination of the activities carried out compulsorily by the latter and provided that all the organizations involved conduct research and development activities in the biological and related areas.

When there is a perspective of use on a commercial scale, the access to a sample of component of the genetic heritage, in on-site conditions, and to the associated traditional knowledge shall occur only after the Contract for Use of the Genetic Heritage and Sharing of Benefits has been executed. And whenever there is a perspective of commercial use of a product or process that results from the use of a component of the genetic heritage the prior execution of such contract will be required.

The access to technology and the transfer of technology between the Brazilian research and development organization, whether governmental or private, and the foreign entity may be implemented, among other activities, through scientific research and technological development; constitution and training of human resources; exchange of information; exchange between the Brazilian research entity and the foreign-based entity; consolidation of scientific research and technological development facilities; economic exploitation, on a partnership basis, of a process or product derived from the use of the component of the genetic heritage; and by establishing a joint venture of the technological base.

- Abidance by the rules established in the State laws of Acre and Amapá, in the event of interest to access the genetic resources of these States.

4.7.4.2. Patent Protection in the Biotechnology field and Protection of New Plant Varieties Through the Plant Varieties Law:

- Abidance by the patentability requirements:

According to Law no 9,279/96, the following requirements should be met for the grant of a patent application: 1) novelty; 2) inventive activity; 3) industrial application; and 4) sufficiency of disclosure.

- Abidance by the exclusions from patentability established in Articles 10, clause IX and 18, clause III of Law no 9,279/96:

Materials found in nature, even if isolated therefrom, are not patentable. However, new, inventive and industrially applicable formulations and/or compositions, containing such materials may be patented.

Another very important aspect in the patent protection of biotechnology concerns the exclusion of parts of living beings, according to Article 18, Clause III. Animal or plant cells, even if transformed and functioning as microorganisms are considered by the Brazilian Industrial Property Institute (INPI) as parts of living beings and, therefore, are not patentable. Thus, in inventions that include cells that operate as microorganisms and the processes for obtaining products associated therewith, only such processes and products are in principle patentable. It should be pointed out, however, that the Brazilian Industrial Property Institute is currently studying the adoption of new guidelines for the examination of patent applications in the fields of pharmaceuticals and biotechnology, reason why a new orientation in this respect could be followed soon.

Hybridomas, provided that they are sufficiently disclosed (and, if necessary, accompanied with the filing of the cell line before an international depositary institution recognized by the Budapest Treaty), inventive, new and industrially applicable, could be patented, falling outside the prohibition of article 18, III, of Law no 9,279/96.

- Abidance by the exclusions of patentability of plants established in Law no 9,279/96 and the protection of new plant varieties according to Law no 9,456 (Plant Variety Law):

Still with regard to the exclusion of plant protection (the whole or parts of living beings), it is important to point out that the plant varieties that have not yet been included in the list of protection of the Plant Variety Law are left without protection.

Indeed, according to Article 4 of Law no 9,456 (Plant Variety Law), more specifically Paragraphs 2 and 3 thereof, the protection of plant varieties is provided on a progressive basis, with at least 5 species protected at the date the regulation of the Law comes into force, and a minimum of 24 species protected after 8 years.

Presently, by means of official acts of the Brazilian Government, there are more than 70 plant species included in the plant variety protection regime. Although it is more than the minimum required by the Law, not all possible plant species have been contemplated yet. This fact prevents any interested to seek protection for these other species, since they are not protected by the patent system either, as provided in the legal provisions above discussed.

- Abidance by the necessary requirements to obtain plant variety protection and which is the object of protection:
The requirements set out in the Plant Variety Protection Law are: 1) capacity to distinguish; 2) homogeneity; 3) stability; 4) novelty (in trade); and 5) adequate denomination.

With regard to the object of the protection, it should be pointed out that the same is the breeding or vegetative propagation material of the plant. In other words, the scope of protection encompasses from the seed (in the case of sexual reproduction) or seedlings, shoots or even the whole plant, in the case of vegetative propagation (asexual reproduction).

4.8. PIRACY AND THE JUDICIAL PROCEEDINGS IN BRAZIL

Alexandre Fragoso Machado - Momsen, Leonardos & Cia. - PART I /
Filipe Lovato Batich e Jose/ Henrique Vasi Werner - Dannemann, Siemens, Bigler & Ipanema Moreira - PART II

PART I

4.8.1. Introduction

The scope of this study is nothing but a summary on what the judicial proceedings in cases of infractions to third parties' intellectual property are. Therefore, it is not stated herein that the ideas exposed are to exhaust the matter, taking into consideration all the possible procedural variations that measures may assume so as to stop the use of third parties' intellectual property.

By virtue of the bilateral essence encompassed by this sort of publication - "Doing Business", the proposition of this article presented herein aims at trying to show the Swisscam's associates how the Brazilian legal system, diametrically different from the Swiss legal system, deals with proceedings for repression to this kind of infraction, which nowadays has been referred to as piracy.

However, we do consider as fully reasonable some comments on piracy, its genesis and its current international conjuncture.

[1Lawyer and agent for industrial property, member of Momsen, Leonardos & Cia. - SP, post-graduated in Intellectual Property Law at PUC-Rio and Law of the New Technologies at CEU-SP.]

4.8.2. Piracy

"Piracy is the 21st Century crime", already stated Mr. Luiz Paulo Barreto, Chairman of CNCP (National Council to Combat Piracy and Crimes against Intellectual Property) and Executive Secretary of the Department of Justice. According to Interpol, the forgery of products generates about US$ 520 billion annually around the world.

The term "piracy", according to its modern conception, arose in the XV Century. The term was better applied to stateless individuals, who used to misappropriate goods shipped at sea by the State or by assemblage of persons assured by the former. Although the current use of such term might seem to be sufficiently different to assure its integral distinction from the marine meaning, there are numberless slight differences for the quoted older use which remains important presently yet.

The concept of piracy was so inserted into the assumption of a law related to the commercial domain that the European ships used to commonly consider as lawful its predatory feature itself over the local merchants.

Now, the battle against "piracy" takes place in the domain regarding the knowledge transmuted into property, and the law and the rhetoric of unlawful use, distribution and production of property concentrate on policies gradually more protectionist ruling incorporeal property, such as trademarks, patents and copyright.

The previous uses of those policies are found in the XVI and XVII Centuries, a period when the Venetian and English laws granted printing monopoly to specific publishers and established the control from the Rule of Law (for instance, censorship). By the XIX Century, the term "piracy" was repeatedly applied to publishers who used to do copies of books to sell without author's freely-given consent or the payment of royalties. The majority of the debates occurring at that time focused on the non-authorized reproduction of works in other countries, in which local legislation there was no jurisdiction.

To copy, reproduce or sell alien products without respecting the rights and the will of their primary trademark creators and owners. That basically constitutes the definition of piracy, an illegal practice that has been propagated and discussed lately, although bothering the society for ages. Some of the greatest inventions of mankind were subject to dispute of paternity, not to mention copied by many people. All of them standing in competition so as to achieve the legal, intellectual and financial recognition on the works.

And that happened with the radio, the airplane, the telephone and, prior to all of them, the printing press. The roll of fake products encompasses toys, cigarettes, clothes, drinks, cassette tapes, electronics, perfumes, watches, sneakers, software and even condoms. Other modalities of this sort of fraud occur in the country as well, however, once they do not require a mounted framework, their surveillance on the part of the police is almost impossible, for instance, the reproduction of books.

This conjuncture claims that the Legislative and Judiciary States act in a more and more new-fashioned, effective and, in the main, swift manner. Indeed, piracy is a concept for illicit performance which distinguishes by the creativity and lies safely due to the legal insecurity which some institutes inspire and, mainly, the weakness of our legal system.

4.8.3. Brazilian Legal System

Brazil adopts the legal system called Civil Law, whose essential source is the Law, in opposition to the system called Common Law, which is based on the costume as legal source, that is to say, based especially on the statements from those supposed originators of relationship, with similar or identical situation already experienced or decided by the Justice. The Brazilian legal system is similar to the German system and to the former Italian Code of Civil Procedure.

As a country practitioner of Civil Law, the Brazilian legal system is featured by the following hierarchical line:

• The Federal Constitution of 1988, which acknowledges the rights of Intellectual Property as proprietary rights, pursuant to Article 5o, subsection XXIX;

• Federal Laws such as the Penal, the Civil and the Criminal Codes; the Code of Criminal Procedure and the Consumer Protection Code, which dealt with general matters;

• Specific Laws ruling a single issue such as Copyright Law and Industrial Property Law;

• International treaties, trade settlements incorporated within the country, for instance the Paris Convention for the Protection of Industrial Property and the treaty on the Trade-Related Aspects of Intellectual Property Rights, simply referred to as TRIPs.

The Brazilian legal system is based on the Roman Law, and its first feature refers to the fact that it is constituted of written and compiled laws; a system codified and non-defined, like the Common Law, by judges. The principle of the Civil Law is to provide every citizen with an amenable and written compilation of laws that is applied to them and obligatorily executable by the judges.

It shall be noticed the current trend concerning harmonic cohabitation of the systems, that is to say, the countries that adopt the Common Law are more and more laying out laws, on the other hand the ones that adopt the Civil Law are more and more valorizing the jurisprudence.

In practice, the Common Law systems are significantly more complex than the idealized behavior above described. The decisions are binding upon only a single jurisdiction in special and, even inside a certain jurisdiction, some courts hold more power than others.

Even though the relevance of the study on Law from other countries with Civil Law system is incontestable, the truth is that, because of the complicated circumstances experienced by the current Brazilian legal system, it is not expected that such study could be effective.

Perhaps a system gathering features of both already existing systems is more suitable to the Brazilian reality, nation where the laws still dictate the legal system, and the Judiciary or amends or criticizes the provision of Law, aimed at surpassing the Civil Law system.

Notwithstanding, despite of the discussions, the Brazilian legal system is still ruled in the highest degree by the legal definitions and their construction or the contradictory system, and thus it could be taken before the Judiciary, which must manifests once provoked, in conformity with the Principle of Inertia.

4.8.4. Judicial proceedings

Hence, the intellectual offense referred to as "piracy" takes place exactly at said legal conjuncture. On the other hand, just to remark parenthetically, it is true that several situations involving infraction to property of intellectual property do not necessarily imply piracy.

Piracy is the classic infraction when the individual, by abusing third parties' intellectual rights, achieves profit fraudulently. It is normal to see on the news facts associated to piracy such as closure of stores, search and seizure of fake products or even arrest of individuals who manage the fraud addressed to intellectual property pertaining to third parties.

In respect of a system like that of Common Law, the protection of industrial property in Brazil is determined legislatively and in such standard there lie, due to the law under number 9,279/96, Industrial Property Law in force (hereafter LPI, according to Lei da Propriedade Industrial), the steps preceding the placement of fake products at the market, such as the search and seizure of fake property at the faker's business organization, and the destruction of the fake brands on the product, obviously protecting those licit activities developed pari passu to those illicit, and finally the agent shall account for (civilly and criminally) possible excesses perpetrated in the time of the execution of the judicial proceedings.

4.8.4.1. Criminal proceedings

Articles from 196 to 206 provided for in LPI rule the hypothesis of criminal proceedings involving infractions to property of third parties' intellectual property.

LPI in this articles discourses, among other matters, about the search and seizure and optional seizure proceedings granted to the injured person or to the authority which are the most used by the holders of fake brands. It constitutes proceedings highly necessary in order to fight the infraction to intellectual property rights in general, such proceedings are used when a swifter measure is required by the authority and that having his right injured.

In order to restrain the flow of fake products before they arrive at the market, there are proceedings which are more and more important and thus present in the Brazilian legal system, they are provided for in Articles from 51 to 58 of the TRIPs (Decree under no. 1,355/94), attached to the International Agreement which created the WHO and considerate in Article 198 of LPI, to wit: the feasibility of seizure, by duty or upon the interested party's order, performed by the customs authorities at the act of check in ports, airports and borders in general, of products marked with fake brands, counterfeited or falsified brands, or products bearing false indication as to provenience.

Briefly, the search and seizure proceedings were primarily created in order to obtain evidences as to the infraction as well as to allow the patent's holder to achieve an expert examination per sampling of the products that are object of the infraction so alleged, this way corroborating the existence of infringement.

Usually, the search and seizure proceedings take place in the absence of the violator, fact that represents surprise as to the search, when or if it is granted by the Judiciary. Another interesting fact in respect of such proceedings includes the Judiciary's construction concerning the object of the proceedings claimed by the presumed injured party.

The proceedings may consist of two main results: (a) total seizure of the products called fake, so as to achieve immediate stoppage of undue distribution and commercialization of the pirated products; or (b) seizure of a sufficient number of products used to guide the expert examination to be carried out by the Judicial Power, so as to identify the falsification of the products object of seizure.

For the first case, it will be considered by the representative of the bench the existence of incontrovertible elements as to the violator's illicit behavior and, according to the intelligibility of the facts reported by the injured party, the search and seizure may be proceedings already included in the Complaint, object of Article 199 of LPI, and then granted in venue of preliminary injunction.

For the second case, however, one cannot see clearly the alleged violator's illicit behavior, reason why the search and seizure may be a preparatory measure for the Complaint, which shall be carried out before the Judiciary.

According to Article 200 of LPI, the criminal action and the preliminary searches of search and seizure, for crimes against industrial property, are found ruled by the provisions of the Code of the Criminal Proceeding, that is, it is reasonable to state that the provisions of Article 525 and 527 present in the same Code apply to those cases involving infraction to property of intellectual property pertaining to third parties.

As regards to the procedural practice, in a couple of hours Judges grant search and seizure preliminary orders and warrants, provided that the plaintiff exhibits the danger in case of delay of judgement and good chances for exit in the ground of action.

Once the body of the offense is constituted, with the aid of the emergency steps, the private procedures relative to the Complaint proceed; such procedures aim at condemning the violator through deprivation of his/her liberty, according to provisions from Article 189 to 195 of LPI, a punishment that may vary between one (01) month to one (01) year of confinement.

For the Brazilian practice, however, there are few relevant imprisonments of agents that are guilty due to infringement to the right on property of intellectual property. Normally, the Judicial Power is found entitled to stop the undue use of intellectual property and repass to the civil scope the setting of punishment for damages susceptible to correct the violators.

4.8.4.2. Civil Proceedings

In the civil scope, the judicial proceedings are focused on the levels of emergency and common injunctions. Indeed, the action that is more subject of legal dispute is the common injunction, which imposes a punishment so as to stop the use of intellectual property object of counterfeit. In general, it is accumulated with damages.

The same proceeding may be applied to judicial proceedings aiming at the stoppage of non-authorized use of intellectual property with civil character, analogously to what happen to search and seizure proceedings with criminal character.

In general, the aggrieved parties, when seeking civil actions for stoppage of use of intellectual property, claim for the search and seizure of the fake property; they take as principle possible prior expert examinations or even proven facts that incontestably appoint infraction to the injured party's intellectual property.

Notwithstanding such feasibility, the scope of such civil proceedings is to stop, immediately and definitely, the non-authorized use of intellectual property and, commonly, such injunction is achieved in an advanced manner in case of provisional remedies, by means of restraining orders or preliminary injunctions.

The provisional remedies are found established in Articles 796 and sequentes of the Code of Civil Procedure, and may be, at any time, claimed by way of preparation to the principal action for acquaintance.

The injunction to be obtained by provisional remedies derives from a judgement of probability and, therefore, special conditions have to be noted so as a preliminary injunction can be adopted and then granted by the Judge.

Once the need of provisional remedy on emergency basis is considered, elements susceptible to demonstrate such need are required so as the Judge, inaudita altera parte, can evaluate and so advance the effects of the judgement.

Hence, one must prove the existence of the elements fumus boni iuris and pericullum in mora in order to demonstrate the need of grant for preliminary injunction to achieve the effects of the judgement on merits.

The purpose of the preliminary injunction is to assure the result of the final decision, to be given at principal action.

LPI establishes, on its turn, in paragraphs of its article 209, the feasibility of grant for preliminary proceeding in order to avoid irreparable injury or injuries whose redress is hard to achieve, preliminarily establishing the removal of the infringement or act giving ground thereto prior to the service of process for the defendant upon, if necessary, cash bond or personal security.

Should the infraction remain obvious, the Judge may sentence the seizure of all goods, products, objects, packages, tags and other items bearing the brand that is fake or counterfeited (Article 209, Paragraph 2o of LPI).

On the other hand, the preliminary injunction, object of Article 461 of the Code of Civil Process, means satisfaction as to the right claimed, once such right pre-exists in relation to the final jurisdictional decision.

It is worth to mention that the foregoing means that the preliminary injunction is always satisfactory, and the examination as to the granting of the right assured is carried out without the need of evidence instruction.

The preliminary injunction, due to being satisfactory and capable of guaranteeing the new equilibrium of the right to be claimed for the injured party, is already required in the principal action, although one shall consider that the injunction is not a preparative result, but the right itself that someone is claiming for.

In Brazil, the preliminary proceedings are legislative creations in response to the delay as to the obtainment of legal definition on matters invocating the Judicial Power.

As once said, the claim for stoppage of undue use of intellectual property is accumulated in addition to damages by virtue of injuries caused by the infraction.

According to LPI, the injuries (future earnings) may be settled taking into consideration the most favorable manner for the injured party, for that the following criteria shall be observed:

(a) the benefits that the injured party would have received should the infraction had not occurred;
(b) the benefits that were received by the defendant, responsible for the copyright infringement; or
(c) the compensation the author of the quoted infringement would have paid the holder of the right infringed for the granting of a license allowing he/she to legally exploit the property.

All things considered, even in the case of the violator not submitting the financial documents whereby the volume of products manufactured and/or commercialized infringing the patent, it is possible to define the injuries by using other criteria predetermined by law.

The several judgements concerning the field are based upon the legislation already referred to, that is, upon the LPI, the Civil Code - mainly as regards the provisions on the liability.

4.8.5. Jurisprudence

The Brazilian Judicial Power has held essential role towards comprehension and development of the matter concerning crime against intellectual property, even in a system that adopts the Civil Law.

Because of the growing interest of the useful Brazilian Society in relation to the benefits which followed innovation, creativity and technology, culminating in protection by means of property of intellectual property, our Judges have developed their abilities and the judgements aggregating elevated technical, juridical quality are already present in the records of the Jurisprudence.

For purposes of instances, we deem as pertinent to bring up for discussion some judgements that discourse about the current set of problems involving piracy and its harmful effects to Brazilian consumers.

4.8.5.1. Civil Proceedings

INDUSTRIAL PROPERTY - Stoppage of use of brand - Compensation for pain and suffering and pecuniary damages - Sell of fake toys "MAX STEEL" with no authorization for use of brand and copyright - Judgement sentencing the defendant to stoppage of use of the said brand and copyright and compensation for damages, whose amount will be determined in execution of judgement - Allegation of absence of malice - acquisition through peddler at 25 de Março Street - Unfounded.

Civil Appellate Review 425.535-4/5-00 - 4o Private Law Chamber of the Supreme Court of the State of São Paulo - High Court Judge Reporter Ênio Santarelli Zuliani - Sentenced on February 12th, 2006.

COPYRIGHTS. Sell of fake product. Undue use of brand pertaining to the plaintiff. Prohibition to act on the contrary, under threatening penalty. Future earnings to be settled according to subsection II, Article 210 of Law no. 9,279/96. Denial of remedy.

Civil Appellative Review 2006.001.00391/06 - 2o Civil Court of the Supreme Court of the State of Rio de Janeiro - High Court Judge Reporter Leila Mariano - Sentenced on January 18th, 2006.

ORDINARY LAWSUIT. PIRACY OF SOFTWARE - DUE COMPENSATION - MARKET VALUE OF THE SOFTWARE - SETTLEMENT OF DAILY FINE - FEASIBILITY.
The compensation due because of infringement of software creators' copyright shall take place taking into account the relevance of damages effectively examined. The settlement of daily fine for the case of new copyright infringement is lawful. Remedy partially granted.

Civil Appellate Review 1.0251.008576-2/001 - 10o Civil Court of the Court of the State of Minas Gerais - High Court Judge Reporter Roberto Borges de Oliveira - Sentenced on August 21st, 2007.

4.8.5.2. Criminal Proceedings

CRIME AGAINST INDUSTRIAL PROPERTY - Maintenance of fake products at the market - criminal permanent and continuous offense that cannot be split by bringing suit of provisional remedy before the Civil Court - Bringing suit of criminal action after six months as of knowledge of infraction - Laches - Remedy not granted - Vote subdued.

The maintenance of fake products at the market as well as the permanence of using tags considered as similar to those recorded by the injured party constitute permanent crime and continuous crime, whose permanence and continuation cannot be split by bringing suit of provisional remedy before the Civil Court, but only with entering an action. Article 529 of the Code of Penal Procedure does not contain an exception to the provisions in Article 103 (then Article 105) of Penal Code, but it should be applied along with that.
Remedy (Complaint) 407.669-2 - 4o Chamber of the Supreme Court of São Paulo - High Court Judge Reporter Barreto Fonseca - Sentenced on February 26th, 1986.

Crime against the incorporeal property - Copyright infringement - Copy, for purposes of commerce, videophonograms without the creator's authorization - in principle behavior conforms to Paragraph 1o, Article 184 of Penal Code - Thus, hypothesis of public criminal action - Search and seizure of the tapes, action determined by the policy authority when proceeding to examination - Admissibility - Inapplicability of Articles 525 and sequentes of the Code of Penal Procedure - Application of Articles 186, final portion, of Penal Code and 240 of the Adjective Code.

Copy of phonograms for purposes of commerce without the creator's authorization conforms, generally speaking, to the crime of copyright infringement, which takes place upon public criminal action, according to Article 186, in fine, of Penal Code, reason why the policy authority shall, when becoming aware of the notitia criminis, proceed to examination, invoking the search and seizure proceedings, pursuant to rule of Article 240 of Code of Penal Procedure, and not pursuant to Articles 525 and sequentes, which address to crimes against incorporeal property and take place upon complaint.
Appeal by Judge's own motion 62.027-3/88 - 2o Criminal Chamber of the Supreme Court of São Paulo - High Court Judge Reporter Renato Talli - Sentenced on June 06th, 1988.

CRIME AGAINST THE INCORPOREAL PROPERTY - Copyright infringement - Criminal action - Criminal action of public criminal constitution - Barring - Admissibility - Manager of commercial establishment who has exposed for sale T-shirts unduly bearing trademark without holders of right's authorization or license - Fact that does not conform to crime provided for in Article 184, Paragraph 2o of Penal Code - Infraction that injures the rules of Law no. 9,279/96, condemnable upon private criminal action entered by means of complaint.

Habeas Corpus 293.946-3/1 - 2o Criminal Chamber of the Supreme Court of the State of São Paulo - High Court Judge Reporter Cabuçu de Almeida - Sentenced on September 27th, 1999.

4.8.6. Conclusion

Notwithstanding the development of intellectual property systems in the Country, some points are required to be ameliorated yet. Perhaps one of the primary points concerns the need of more rigorous judgements in respect of application of the fine, search and seizure of goods and mainly as to the expert examination per sampling.

Nowadays, the greatest punishment applied to violators of intellectual property, excepting few cases, is payment of basic-needs grocery packages. For the great part of the cases, the violators perpetrate crimes while they aware of how ease and swift he/she can escape from the expected punishments. The work for reprehension of piracy has not been a factor capable to encourage the Company injured or the police, which has a scarce system for accounting and storage of the goods susceptible to seizure.

Recently the Brazilian National Forum against Piracy defended the creation of an expert examination per sampling. The major advantage of such methodology is the reduction noted for those problems caused by storage of goods seized during long periods.

Finally, it is obvious to testify that nowadays it is a profitable practice the crime of piracy in Brazil, considered all the problems already mentioned. Therefore, we support that the theme shall be dealt more rigorously.

The Commission of Constitution, Justice and Citizenship (CCJ) recently approved an amendment to the Bill 2,729/03, of Representative Leonardo Picciani (PMDB[Party of the Brazilian Democratic Movement]-RJ), which typifies the crime of piracy against intellectual composition, phonogram, videophonogram, software and applications.

The original proposal foreseen, besides the typification, the worsening of the penalties for crimes of piracy. The reporter, in his amendment, noticed that the worsening of the penalties "is irrelevant and is not proportional in relation to the penalties foreseen for the other crimes against property or offense against the human person".

Furthermore, the Reporter excluded from the text the feasibility of the criminalization of persons who acquire fake work. According to him, not doing that would occasion to the construction under which the mere purchaser of original or copy of intellectual and audiovisual composition would be subject to criminal penalty. Pursuant to the text approved, the purchaser of fake product will only be criminally punished when it is evident the intention of direct or indirect profit.

Piracy, of any kind, ruins employment, decreases tax collection, strengths organized crime, distorts the image of the official products and nevertheless deceives the consumers. Some factors use to ease such practice, for instance unemployment and subsequent search for informal work, pilferage, corruption of agents, amelioration of gang of thieves and the Brazilian taxation system, which several times causes the manufacturing of goods to be excessively expensive.

The problem worsens due to the popularization of the Information Technology, which propagates and makes digital piracy easier. All legal, political and economic efforts which may be used in order to have such practice duly controlled probably will be not enough in front of the urgent need of a global policy concerned with the problem, as borderless as Internet itself.

PART II

4.8.7. CRIMINAL MEASURES

4.8.7.1. Preparatory Measure for Search and Seizure

From all criminal measures that can be used to prevent falsification, the criminal preliminary search and seizure procedure is highlighted.

As the name says, it is a preliminary measure for the main procedure (criminal action). In the scope of Intellectual Property, it is intended only to collect evidence of the crime (proof of the crime materiality) with the seizure of samples of falsified products in order to compose the corpus delicti.

In certain specific situations and grounded on the provisions contained in item I and II of Article 202, of Law nr. 9.279/96 - Industrial Property Law, the holder of the violated right may require the seizure of all illicit units and their destruction by justice.

Therefore, notwithstanding the holder of the false, altered or imitated brand having the prerogative to request the search and seizure of only the units for the purpose of proof of corpus delicti, he may also, alternatively, if it is convenient to him, request the seizure and destruction of the false, altered or imitated brand, wherever it is found, prior to being used for criminal purposes.

For this reason, his request is valid in all cases in which the evidentiary procedure is necessary to the filing of the major criminal lawsuit. In addition, one should remember that the request for preliminary search and seizure is a specific condition for the proposal of the criminal law suit in crimes that leave evidence.

Once the seizure is completed, samples of the seized products are sent to experts recommended by the Criminal Judge so that an elaboration of an investigational exam can be made to prove the illicit act.

After the search and seizure procedures as well as the elaboration of the report are concluded, the Judge must endorse it so the subsequent legal action may be initiated.

It is important to underline that such criminal preliminary search and seizure procedure can be also applied to crimes against patent, industrial designs, geographical indications, as well as to crimes of unfair competition (excepting some of the behaviors listed on the provisions set forth on article 195, of Law 9,279/96.

4.8.7.2. Police Inquest

In the midst of the most common criminal measures used against infringements in the scope of immaterial property, the police measure is pointed out.

The police inquest constitutes the set of investigation actions performed by the Judiciary Police in order to check the existence of a criminal fact and its authorship, to enable the performance of the legal action. It is not a proceeding as it does not contain a set of logically occurred acts, with the purpose of making possible the exercise of jurisdiction. This is defined as persecutory administrative procedure.

Once the practice of the crime against industrial property or against copyright is known to the police authority, it is up to the victim to demand police inquiry, with the consequent identification, qualification and accusation of those responsible for the described crimes and the action of seizure of any material that might infringe the rights related to offended part, including the objects used to practice the crime.

If the infringement leaves evidence, which occurs in most crimes against intellectual property, the corpus delicti exam is essential, whether direct or indirect.

In contrast to what occurs in the scope of preliminary criminal search and seizure procedure, the performance of the investigation is not conducted by the experts appointed by the Judge, but by the experts of the Criminal Institute, the competent entity to act in those cases.

In parallel with the violation in the field of industrial property or of copyright, which may bring about the request to establish police inquest, the offended party, depending on the case, may still allege the practice of larceny crimes, receiving of stolen goods, fraud to commerce, crime against the tax system, crime against the consumption relation e conspiracy to commit crimes. In most cases, said crimes occur concomitantly to the violating practice of intellectual property rights, being inevitable consequences originating from special crimes.

4.8.8. Customs measures

Article 198, of Law nr. 9.279/96, entitles the Customs authorities to seize,
ex officio, or as per the interested party request, products marked with false, altered or imitated brands or that present false indication of origin.

In fact, said article aims at neutralizing another source of falsified products. And in addition to the national products marked with false, altered or imitated brands or that contain false indication of origin, the legislator attempted to classify as illicit other products that contain the same characteristics but which are manufactured in a foreign country, being introduced in the country by means of import.

It is affirmed that the essence of article 198 has legal grounding in the 9th article of the PC - Paris Convention that, in its wording, imposes that the illicit products must be seized by the competent authorities.

The content of the 9th article of PC was in its turn introduced in article 51 of the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement and became another more important resource to fight against the import of falsified products. Said article, in particular, contains not only the major aspects of the matter but also provisions of procedural nature to be applied by the member countries.

Although many changes are still missing in order to improve the existing procedure, the current Customs Regulation Decree 4.543/2002, which contains the amendments of Decree 4.765/2003, is able to give effectiveness to article 198, of Law nr. 9.279/96.

In fact, said effectiveness is frequently accomplished once the customs authorities themselves try to solve any possible deficiencies in the legislation, applying, by analogy, the procedures used in other cases. This is the case of seizures that are regularly made by the Customs authorities of Brazilian ports and airports that even due to the lack of a more detailed regulation of procedural nature have succeeded in said cases.

One should highlight that for the identification of illegal imports, it is very important that the holder of the rights, by means of a petition requesting measures by the customs authorities, proves the property over the brand, by presenting the registry certificate or the publication of the concession order published on The Industrial Property Magazine, a Power-of-Attorney and other documents that would state its legitimacy to require measures before the Customs authorities.

As the Customs authorities are faced with a formal accusation of illegal import of illicit products, they retain the falsified goods, notifying the importer to present the documents that would prove the license for the import of the referred goods.

If the importer does not reply, the merchandise retained is seized and an administrative proceeding is established for the destruction of the goods. The loss of the assets, in casu, as it is not grounded on absence or irregularity in the tax collection that is due to the Federal Union but as a violation of the property of the immaterial movable good, occurs in favor of the holder of the violated right and therefore an auction of seized goods made by the Federal Revenue is inappropriate.

In case of presentation of undoubtful proof, the demand is cured, and the goods are cleared and then released to the importer.

Despite the limits provisioned by article 198, of Industrial Property Law, relative to the scope of procedure with regard to the registered brands and copyright, depending on the specific situation and taking into consideration the other provisions of the Customs Regulations, the same procedure may be applied in a more comprehensive manner to the other rights of industrial property, i.e., patents, the utility models, the industrials designs or if the simple practice of unfair competition is characterized.

 

 

 

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