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IP gets stronger in Brazil after one year of the new Civil Procedure Code

Brazil’s new Civil Procedure Code came into force last year. Breno Akherman and André Oliveira of Daniel Legal & IP Strategy analyse its impact on IP litigation so far

The enactment of the new Civil Procedure Code in Brazil in March 2016 raised tons of discussions regarding its impact on IP protection in Brazil and a lot of expectations due to important changes of the rules regarding several procedural aspects such as a more standard proceeding that involves preliminary injunctive reliefs, fewer kinds of appeals, more precise deadlines and the possibility for parties to actively negotiate terms of the proceeding.

Obviously, all the discussions and expectations were constructed on theoretical scenarios and we would have to wait and see how these new rules would apply in the real world. Could the new procedural rules impact, positively, on IP litigation?

After a little more than one year since the Civil Procedure Code came into force, several lawsuits involving IP have been filed at the Brazilian Courts regarding all kinds of subject matters and the general scenario discloses that IP is becoming more relevant at the Brazilian Courts and that the enforcement of IP rights is getting stronger due to the new rules.

Straightforward proceedings

Brazil has been known in the legal world as a country with endless litigations, mostly caused by the innumerous kind of appeals that may be lodged by the parties during a lawsuit. It was not unusual to see lawsuits bearing thousands of pages and several appeals being prosecuted to the main discussion. There were so many legal and formal requirements to be fulfilled that a lawsuit could actually be decided on procedural aspects that had no relation to the actual discussion brought to the Courts.

During the whole elaboration of the new Civil Procedure Code, lawmakers were guided by the necessity of simplifying the proceedings and making the legal and formal requirements more flexible to give emphasis to what actually matters. The idea was to give more space for parties to dedicate their time to the subject matter under discussion instead of wasting their time trying to check what deadline is applied to each kind of appeal, if the Court's official fees were duly paid or not and, most of the time, trying to find any procedural flaws on the opponent's side hoping that this would mean winning the case.

The enforcement of IP rights is getting stronger due to the new rules

In this sense, the decrease on the number of possible appeals to be lodged, the establishment of standard deadlines to any kind of appeal and the possibility of correcting any procedural mistakes along the way instead of having their rights shut down due to any basic flaw definitely created a more productive environment for the parties to litigate, and even more important, to solve their problems.

Not only are the parties able to have a better picture of what may happen during the prosecution of their lawsuits and of the time frame involved, but Judges may also dedicate their time to the most relevant phases of the prosecution by establishing more straightforward proceedings.

The new procedural rules allied with other important aspects, such as the development and creation of new Specialized IP Courts and the increasing number of Courts that abandoned paper by adopting electronic proceedings, were capable of reducing even more the time frames.

For instance, the IP Specialized Federal Courts of Rio de Janeiro – the main venue chosen by parties to question administrative decisions issued by the Brazilian Patent and Trademark Office – have been taking around one-and-a-half years to issue a trial decision in trade mark cases. There are some Judges that are capable of issuing trial decisions in even less time, which is the case in lawsuits referred to the 25th Federal Court of Rio de Janeiro that were decided within six months at trial level.

The Appellate District Courts of Rio de Janeiro, which is one of the main venues for infringement claims, have also dramatically reduced the timing to rule appeals lodged against trial decisions. The Appellate Panels have been able to receive, analyse and rule appeals within four months.

The same goes with regard to São Paulo's District Courts and this should be improved because it was approved by the creation of IP Specialized Courts for business matters – encompassing IP matters – at the end of 2016 after almost two decades of discussions towards this issue.

Focus on what matters

Another positive consequence of the new rules that are being applied with regard to civil action prosecution is that attorneys have more time to dedicate to the development of thesis and on better grounded IP claims.

The Brazilian IP Law (Law No. 9.279/96) turned 20 in 2016 and hasn't been significantly amended since 2001, meaning that it got way behind the worldwide development of the IP controversies. The Brazilian Courts have been analysing and deciding IP issues that are not present in the law, but are present in the real world. For instance, the realization of the 2014 World Cup and of the 2016 Olympic Games gave a boost to ambush marketing cases and exclusivity licensing discussions.

Several lawsuits dealing with discussions around Acquired Distinctiveness and Secondary Meaning (subjects that are not foreseen in the Law) have also been filed in recent years and, with more time to dedicate to the merits of the lawsuits and less time dedicated to procedural aspects involved, the Brazilian attorneys and Judges have been engaged in even more complex IP discussions and on developing new theses for the enforcement of IP rights.

IP protection can't wait for the development of the Brazilian Law and even less for the Brazilian Patent and Trademark Office to solve the infamous backlog that has haunted IP right owners over the decades. This explains the growing number of IP lawsuits solely grounded on unfair competition or on pending applications, and the increasing success in this kind of lawsuits due to the development of the Civil Procedure Code.

A few months ago, a District Judge of São Paulo, after recognising the unjustifiable delay in the prosecution of a Patent Application for a pharmaceutical invention at the Brazilian Patent and Trademark Office, issued a decision granting preliminary injunction relief to order the immediate cease of exploitation of the subject matter of such application. This decision was considered very controversial because the Brazilian IP Law is express when it establishes that pending patent applications do not guarantee exclusivity rights, but it clearly demonstrates that the relevance of IP protection has been increased at the Courts and under the Judge's eyes.

The enlargement of the accepted kinds of evidence also represented an important role in this whole process because it opened more space to developing creative strategies to seek the protection of IP rights in the Courts.

Several times parties have not had to wait for the Judge to order the production of evidence. Market surveys have been used more than ever as pieces of evidence for the demonstration of the impact of an alleged infringement under the view of customers, as well as the use of the online information obtained within the internet and attested by notary publics.

The new Civil Procedure Code allows parties to debate the terms of the proceeding and this has been happening in practical terms. In the past, we have seen patent lawsuits that took years to be decided simply because parties challenged the qualification of the experts appointed by the Judges, which led to the lodging of subsequent appeals that weren't even related to the actual claim under debate. In a recent patent infringement lawsuit that is being prosecuted at the District Court of Rio de Janeiro the parties have requested that the Judge appoint a common chosen expert, instead of leaving this task to the Judge.

At the end of the day, what we see is a clear effort from all parties involved to dedicate their time and knowledge to focus on what actually matters and to try to increase IP protection and preservation in Brazil.

More preliminary injunctions and faster outcomes

One of the biggest topics under discussion since the elaboration of the current Civil Procedure Code was the expansion of the possibilities to obtain preliminary injunctive relief in the Courts. The new rules established the chance of obtaining preliminary injunctions not only when urgency was demonstrated, but also when there is strong evidence that the non-granting of the injunction may result on the perishing of a right.

Nowadays, the Brazilian Law not only maintains the possibility of obtaining ex parte preliminary injunctive reliefs, but it also foresees that in the case that the Defendant does not appeal a decision that granted the preliminary injunction this decision becomes final, thus ending the litigation.

The rules were also expanded to enable the production of technical evidence, for instance, prior to the filing of the actual complaint, which would normally take place after the Defendant responds the complaint and the Plaintiff replies to the response. In other words, there is a clear objective in the Law to make proceedings more objective and to try to speed the outcomes.

When it comes to IP litigation, timing is especially important in the protection and, mainly, for the preservation of an IP right. The whole improvement of the procedural rules for obtaining preliminary injunctions, the expansion of the kinds of evidence accepted by the Courts and the relevance that IP has been taking in Brazil has resulted in the growing number of preliminary injunctive reliefs granted by the Courts in IP related lawsuits.

All the aspects above, along with the fact that the rules of new Civil Procedure Code enabled parties to improve their thesis and arguments instead of dedicating their time to procedural aspects and requirements, are resulting in the granting of requests for stronger preliminary injunctive reliefs.

The District Court of São Paulo recently issued a few decisions ordering the search and seizure of goods based on parallel import claims and the same is happening in trade mark and patent infringement based lawsuits. Since nowadays a great portion of parallel import and infringement of IP rights are mostly practiced on the internet by small local businesses that could easily eliminate the infringement and vanish in the market by changing their names and addresses, the expansion of the possibilities to obtain preliminary injunction and consequently the increase of such orders were crucial for the protection and preservation of IP rights.

A glimpse of the future

It is important to highlight that the new Civil Procedure Code is a young law and that many procedural discussions are still taking place at the Courts to settle doubts about the application of the new rules.

Besides, the improvement of the procedural rules is not a remedy itself for all problems faced by the IP community in Brazil. There is much work that needs to be done in other battle fronts, such as the one regarding the huge backlog of pending examinations at the Brazilian Patent and Trademark Office.

Nevertheless, after one year of the new rules being applied it is already possible to see practical and positive improvements, and to have a glimpse of a better future for the protection and preservation of IP rights in Brazil.

Breno Akherman
  Breno Akherman is a partner at Daniel Legal & IP Strategy and is currently working in the litigation department. Since he entered the IP field, eight years ago, Breno has dedicated his activities to trade mark and patent litigation, with the focus on cases involving patents in the pharmaceutical and agrochemical areas.

André Oliveira
  With over 18 years of experience in intellectual property and litigation, André Oliveira is responsible for the legal department at Daniel Legal & IP Strategy. His expertise covers all aspects of intellectual property, with emphasis on civil litigation involving patents, trade marks, copyright, industrial designs, IT law and unfair competition.


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