Brazil is in transition when it comes to making the business connection between corporate growth and intellectual property protection. However, South America's largest economy appears to be moving in the right direction. I have visited Brazil a number of times in the past two years and even in that brief period have seen increased awareness of IP, and specifically the value of patents, to advance business.

Corporate IP culture in Brazil today is quite different than in the recent past.  About a decade ago, corporate leaders viewed intellectual property as a disbursement or overhead.  The cost of IP was the main focus. Today, intellectual property is increasingly being viewed as a valuable tool that helps provide a competitive edge in business.  While there are a number of contributing factors to the transition, it appears there was a primary contributor.

In 2005, Brazil adopted a new legislation called the Lei do Bem, a law that established tax breaks for legal entities that develop technological innovation inside national borders. The legislation was designed to benefit companies, universities and research institutes to maximize the results in R&D.  These initiatives served to reduce the cost or the risks associated with R&D.  In turn, corporations with R&D then quickly realized that protecting their innovation, largely through patents, was critical to stay competitive.  Although protection in the global market, including the U.S. market, may not have been first on their minds, it soon became a reality.

Some comparisons can be drawn between Brazil and China when considering China's approach to IP about a decade ago.  I've traveled to China several times since 2008 and observed on my first visit that the country was about a decade or more behind the U.S. and many other countries in procuring and enforcing patents. However, over the years, the technology market in China has drastically changed its view of patent procurement around the world, particularly in the U.S.  Today, U.S. patent application filings originating from China rank in the top seven relative to other countries.  Moreover, filings originating from China are the third largest in the PCT (Patent Cooperation Treaty; the international patent system).

Similarly in Brazil, though in a much shorter period of time, I am seeing less lip service paid to the value of intellectual property and more action being taken toward actual intellectual property protection. My intellectual property cohorts in Brazil are increasingly discussing their clients' growing interest in doing business in the United States and gaining market share here, in part through patent protection of their innovations.  Indeed new IP work referred to me from my Brazil cohorts reinforces this shift in Brazil's corporate view of IP and patent protection overseas, especially in the United States.

Perhaps it is a longer term result of the 2005 legislation, but Brazil anecdotally appears to be creating a pro-IP culture, understanding that the country's precious resources and raw materials, while ample, are not enough to take the country out of its quasi recession.  It will be interesting to see if this trend will continue and if Brazil is turning the corner regarding its view and actions toward patent procurement in the United States.

Originally published in Crain's Detroit Business

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