Brazil: Tenth Year Commemoration Of The Brazilian Industrial Property Law: Contradiction Vis-À-Vis The Current Piracy?

Last Updated: 7 November 2006

Article by Marcelo Inglez de Souza *

This year, the law regulating industrial property rights in Brazil (Law no. 9.279/96) is celebrating its tenth anniversary. It is so an opportune moment to review the changes brought about by it and evaluate whether it resulted in improvements or not to our system as a whole.

After evaluating all changes, we can enthusiastically announce that the results are positive. Despite some deficiencies (such as, for instance, the impossibility of registering sound and scent trademarks), there is a current consensus among the professionals of this area that the industrial property rights in Brazil have significantly improved. Law no. 9.279/96 brought the Brazilian system in line with all the standards provided for in international conventions and treaties on the matter.

Nonetheless, especially to those not acquainted with industrial property issues, the acknowledgement of improvements in this area may sound contradictory in view of the still increasing volume of counterfeit products. If legislation improved, why then does piracy continue to grow?

Before answering this question, a brief summary of the Brazilian industrial property history up to the enactment of Law no. 9.279/96 is required to allow a better understanding of the circumstances we are facing today. Fact is that, today, the problem is no longer strictly legal. If on the one hand legislation improved, on the other this is not enough. Above all, legislation must be effective; and effectiveness depends on the commitment of all the spheres of the society.

Industrial property protection has always been associated with the political and economic history of the Brazilian society. As a consequence of the Portuguese exploitative colonization (which went in the opposite direction to the developmental and settling pattern followed in North America), in Brazil governmental policies towards the modernization of the industrial sector have always been implemented at random and on the spur of the moment, what resulted in an incomplete and late industrialization.

Not surprisingly, in a quite recent past, Brazil’s industrial policy aimed only at the use of already-existing technologies, with imposition of customs barriers to foreign goods, which, being more developed, would unbalance the domestic market. We had a closed, protectionist, competition-discouraging economy, which did not foster financial investments or intellectual efforts towards the development and improvement of the domestic industry.

In this context, Brazil has always had a natural lack of awareness regarding industrial property protection. The incomplete and late industrialization, based on the use of already-existing technologies, did not encourage creation and, consequently, protection of industrial conceptions. As a result, Brazil’s industrial property laws were faulty and overlooked the significance of the matter.

Then came the 90’s, when the Brazilian economy opened up and imported goods invaded the domestic market. Soon it became clear that the Brazilian industry would not survive for much longer, if it did not change its rudimentary premise of conformism with the use of old-fashioned technologies, already abandoned by other countries. Brazil had to search its development in the industrial field to keep itself competitive vis-à-vis the globalized world.

It is unquestionable that the basic guidelines of a country economy stem from its industry. The competitive capacity of countries is intrinsically associated with their technological evolution, with their industries’ capacity of enhancing the production levels and adding value to their products, in order to face the fierce competition in the international market.

Hence, after this initial phase, in which the Brazilian economy opened up and was exposed to the international market, in the juridical field, there was a need for increasing the protection of industrial property, so far detracted by a retrograde political and economical environment, indifferent to its significance. Industrial property would never progress without an appropriate protection that could ensure its title holders due compensation for their efforts and, so, encourage the continuity of their activities.

It was in this context that the first signs of an awareness of the significance of industrial conceptions emerged in Brazil. In line with the guidelines in international treaties, Law no. 9.279/96 was enacted, and it eventually gave a new breath to the industrial property rights in Brazil.

However, as we said, changing laws it is not enough. It is also necessary that the rights vested by laws be effective, and that laws themselves have instruments allowing the full exercise of said rights. So much so, that currently it is not the acknowledgement of industrial property rights per se that is under discussion in Brazil, but, instead, the need for making them effective. Our current challenge is no longer to confer rights upon industrial property, but, instead, to enforce those rights.

This is not a problem specific to Brazil. The concern about making industrial property rights effective is behind many initiatives worldwide. The most significant example is the advisory committee on enforcement, established by the World Intellectual Property Organization (WIPO) specifically to address the matter. Brazil, in its turn, implemented the National Anti-Piracy Committee, whose efforts resulted in an expressive increase in seizure of counterfeit goods and imposition of penalties on those involved in crimes against industrial property.

As for the legal sphere, today many countries are striving to have their procedural laws changed, exactly to provide their legal system with specific measures for the protection and effectiveness of industrial property rights. A typical example is the Directive no. 48/2004 of the European Union, under which its Member States are required to adopt procedural measures essential to the protection and effectiveness of those rights.

It is at this point that we, Brazilians, may be proud of our legislation and, again, state that the results of Law no. 9.279/96 are positive. While some first-world countries are still adapting their laws to regulate, for instance, the possibility of filing preliminary injunctions for seeking protection of industrial property rights, in Brazil all the essential procedural measures for the enforcement of those rights already exist and are ready to be used.

It is not an ungrounded statement, but a fact. Brazil has already all the essential procedural measures for protecting and making industrial property rights effective. A comparative analysis with the Directive recently implemented by the European Union leaves no room for doubts. No essential measure was overlooked by the Brazilian legislation. When not provided for in Law no. 9.279/96 itself, those measures may be easily found in the Brazilian procedural system. Finally, we may affirm that in this area, there is no more omission, delay or underdevelopment in Brazil. Our system is in full harmony with the most modern international standards for the protection and enforcement of industrial property rights.

We must return then to our initial question: If legislation improved, why then does piracy continue to grow? Why is it so difficult to make industrial property rights effective in Brazil?

As we said, the problem is not strictly legal. Further to possible identifiable and remediable deficiencies in the legislation, Brazil’s current difficulty of bestowing effectiveness upon industrial property rights still results, above all, from lack of awareness about the significance of those rights. These are the traces of the contempt that prevailed in the past.

In administrative sphere, for instance, this lack of awareness is clearly reflected by the trifle importance given to the Brazilian Patent and Trademark Office (Instituto Nacional da Propriedade Industrial - INPI) over the past years. In spite of the honorable efforts of those working at said agency, the government lacked awareness in definition and organization of the INPI, which have always lagged behind the levels required for Brazil to reach the expected and promised technological development. Today, the INPI is still striving to win its own economic and financial autonomy, although Law no. 9.279/96 granted this prerogative to the agency a decade ago.

On the other hand, in judicial sphere, despite the currently available guaranties and instruments, as well as the praiseworthy initiative of some courts in giving a differentiated treatment to the matter, we still have some judges who are lenient with violations of industrial property rights, as if those were matters of trivial importance. An example of this contempt are decisions that, astonishingly, still deny granting preliminary injunctions for immediate cessation of recognized violations, based on the retrograde and unlawful argument that these violations may be subject to damages in a final judgment. It is a true absurd, if we consider the fast pace of current technological development, the time consumed to reach a final judgment, the uncertainties surrounding payment of damages and, above all, the basic fact that a proceeding, as a legal instrument, should guarantee full exercise of rights and not merely damages.

Finally, in civil sphere, there must also be a change in the concept of violation of industrial property rights. This can no longer be considered an infringement minor than the infringement of material property. In fact, today, in Brazil, the trespass of a material property is invariably more reproached by society than the usurpation of a trademark or the unlawful reproduction of a patent-protected product (not to mention pirate CDs of software programs and music, which, despite being an express violation of copyrights, are ordinarily tolerated by our population). Further to the economic and social problems that certainly influence this situation, the fact is, however, that all the unlawful actions mentioned here are equally violations of property rights. They should then be equally reproached, without any distinction between material and industrial property.

And for those who still believe that the material property has more economic and social importance than industrial property, think about the economic worth represented by trademarks as Microsoft, Coca-Cola, Nike or IBM, as well as about the social importance involving patents protecting alternative fuel systems or biotechnological inventions.

So, in a nutshell, we can certainly be proud of the legal system and instruments protecting the industrial property rights in Brazil. The tenth anniversary of Law no. 9.279/96 is, without doubt, motive for commemoration. Nonetheless, if we look ahead, we still have to develop awareness about the significance of those rights and definitively defeat the contempt that prevailed in the past. To be competitive in the international market, Brazil has to ensure the integrity of its industrial conceptions. Legal instruments for that already exist; now it is a matter of using them and effectively enforcing industrial property rights. Protected, the industrial property will progress and foster Brazil’s growth.

* Member of the Intellectual Property Department of Demarest e Almeida Advogados - Brazil; Member of the Special Commission on Intellectual Property of the Brazilian BAR Association - SP; Doctoral Student at Freiburg University, Germany.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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