Licensing

Among the principles outlined by the Brazilian Federal Constitution, companies duly organised and existing under Brazilian law may not generally be subject to any discrimination based on the nationality of its partners or shareholders. As a result, foreign companies may participate in a company incorporated in Brazil, except for certain activities where the law places specific restrictions, for instance:

• post office services;
• aviation;
• health services;
• nuclear energy;
• banking and insurance;
• broadcasting; and
• exploration of natural resources.

Such limitations do not usually affect international licensing agreements.

A foreign licensor that plans to carry out its activities in Brazil has basically two alternatives. One is to establish a Brazilian business entity in accordance with and to be governed by local norms and headquartered in Brazilian territory. This would include entering into joint ventures structured in the form of a Brazilian company.

The other option is to set up a direct operation in Brazil (eg, through a branch or representative office). This alternative is not generally advisable, since direct operations by foreign companies are subject to accounting and credit restrictions, as well as governmental authorisation. Official examination is usually long and discretionary, and the proper legal instrument for the granting of authorisation is a presidential decree. For this reason, the overwhelming majority of foreign companies choose to establish local subsidiaries or to acquire corporate interest in a Brazilian company, with either a majority or a minority stake.

Foreign licensors should also bear in mind that they must appoint and retain an attorney who is duly qualified and domiciled in Brazil, and with powers to represent them in administrative and judicial proceedings, including receipt of summons.

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Licensing is generally understood as an agreement under which the owner of an intellectual property right (IPR) grants authorisation to its use without an effective transfer of ownership. Licences are granted for a determined period of time and within a determined territory, on a remunerated or free-of-charge basis. A licensor may grant a licence in Brazil to practically any intangible asset, including patents, industrial designs, trademarks and copyrights.

The Brazilian Industrial Property Law (Law No. 9,279 of 14 May 1996) (BIPL) presents the general provisions on technology transfer agreements, which are further regulated by Normative Act No. 135 of 15 April 1997 of the National Institute of Industrial Property (INPI).

Normative Act No. 135 specifies the following categories of agreements that involve transfer of technology:

• licensing of rights (use of trademarks or exploitation of patents or industrial designs);
• the acquisition of technological knowledge (supply of technology and rendering of technical assistance services); and
• franchise agreements.

The Brazilian Copyright and Neighbouring Rights Law (Law No. 9,610 of 19 February 1998) (BCL) determines that the economic rights of the author may be wholly or partly transferred by means of a licence agreement. In contrast, the moral rights of the author are inalienable and irrevocable, meaning they cannot be transferred, licensed or waived. Specifically, in relation to the licensing of computer programs, provisions are found in the Brazilian Software Law (Law No. 9,609 of 19 February 1998) (BSL).

In addition to the above, it is possible to negotiate authorisations to use one’s image, likeness, voice and name (commonly referred to in other jurisdictions as ‘rights of publicity’). These individual assets fall under the category of personality rights, which are protected under several bodies of Brazilian law, namely the Federal Constitution and the Civil Code (Law No. 10,406 of 10 January 2002).

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Licensing agreements that involve transfer of technology, as defined by Normative Act No. 135, must be submitted for the approval of the INPI. The governmental endorsement does not serve as a condition of validity of the agreement between the contracting parties. Nonetheless, the licence will only become binding upon third parties after the approval is published in the INPI’s Official Gazette. This effect has a definite impact on the enforceability of the licensed rights and exclusivity clauses by the local licensee. The INPI’s approval is also mandatory for the remittance abroad of payments and tax deduction of such payments by the licensee.

The INPI performs a discretionary examination of technology transfer agreements, often applying interpretations that are internally consolidated but not found in any established legislation. The INPI’s understandings must be carefully evaluated on the negotiation of licensing agreements, in particular those involving foreign licensors.

An example of such understandings imposes limitations on payments of fees, at least with respect to agreements between local subsidiaries and a foreign company with a majority stake, based on a complex set of tax rules mainly dating from the late 1950s.

In relation to patent exploitation licence agreements and supply of technology agreements (transfer of know-how), the INPI restricts the remittance of payments to percentages that vary from 1 per cent to 5 per cent over the fixed price per unit sold or in relation to net sales. These percentages were originally established for tax deduction purposes by the Brazilian Ministry of Finance’s Ordinance No. 436 of 30 December 1958 and may vary according to the industry or technology area involved. As far as trademark licence agreements are concerned, the maximum limit allowed for the remittance of royalties is up to 1 per cent over the net sales price.

The BIPL prescribes that both the rights holder and the applicant may enter into a licensing agreement. However, payments will only be allowed after the licensed right has been duly patented or registered before the INPI.

Moreover, although Brazil’s legal system generally accepts that parties are free to determine the term of the licensing agreement, the INPI will only approve it for the period of validity of the licensed industrial property right. In the case of trademark registrations, successive recordation amendments will be necessary for each renewal. Agreements involving the transfer of know-how (non-patented technology) must have a maximum term of five years, which may be extended for another five years, provided that technical justifications are submitted and accepted by the INPI.

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As mentioned in question 3, international agreements that involve the transfer of technology must be examined by and registered with the INPI for the purposes of enforcing third parties, remittance abroad of payments and deduction of such payments for local income tax purposes. The INPI may suspend or cancel an approval if it later finds that it is not in compliance with the applicable norms.

In addition, if one of the parties to the licensing agreement is a non-resident, the signature will have to be confirmed by a notary public in accordance with the norms of that jurisdiction. The notarisation will then have to be further legalised by the local Brazilian consular representation. Legalisation may be dismissed in agreements with parties resident in countries with which Brazil has signed cooperation treaties in judiciary matters.

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The Brazilian Civil Code provides for two major principles in relation to contractual relationships:

• the freedom to negotiate shall be based upon and limited by the social purposes of the agreement; and
• during the conclusion and performance of the contract, the parties must observe the principles of honesty and good faith.

These general rules may serve as a basis to redress perceived inequalities or rewrite provisions viewed as being abusive. In other words, when Brazilian law is applicable, a local court may analyse the purposes and conditions of the agreement based on circumstances other than the written provisions.

Additionally, the Brazilian Civil Code provides that, where the law expressly or implicitly allows, a party may unilaterally terminate an agreement upon notification to the other party without good cause. Nonetheless, in agreements where good cause is required, its absence does not preclude termination, but the party that unjustifiably terminated the agreement shall be obliged to pay damages to its counterpart.

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Brazil is party to all three of the aforementioned treaties.

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A contractual disposition that limits the free and ample exercise of a given right may possibly be considered abusive by a Brazilian court. This includes conditions preventing challenges to the validity of a foreign licensor’s IPRs or registrations.

However, it is generally accepted that a licensee may not impose undue obstacles on a foreign licensor’s IPRs or registrations. In addition, it is advisable to contractually prohibit the licensee from applying for registrations of the licensed rights.

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The invalidity or expiry of registration of an IPR will usually be deemed cause for the termination of the licence. Accordingly, given that the right of the licensee to freely compete is not expressly regulated by Brazilian law, it will be bound to the terms and provisions of the licence agreement.

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No such registration or evidence of use is necessary. As a rule, Brazilian law does not make any distinction based on the nationality of the applicant for registration. The only requirement unique to foreign nationals is to appoint and retain an attorney who is duly qualified and domiciled in Brazil.

Registration and use in the country of origin becomes relevant when the priority right of the Paris Convention for the Protection of Industrial Property 1883 (Paris Convention) is applicable. In relation to trademarks, depending on the type of evidence that is provided, such factors could also support the application of article 6-bis and quinquies of the Paris Convention.

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Unregistered trademarks may be licensed in Brazil. However, in order to license its use, the licensor must have at least filed an application for registration in Brazil. It is important to highlight that the remittance of payments from trademark licences will only be accepted after grant of a respective trademark registration by the INPI. Retroactive payments before the grant of the trademark registration are not allowed.

Likewise, a patent application may be subject to a licence agreement.

As far as copyrights are concerned, the economic rights of the author may be wholly or partly transferred by means of a licence agreement.

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In accordance with the BIPL, the INPI shall register any limitation or onus that applies to applications, registrations or patents. The recordal of such limitations becomes effective with regard to third parties on the date of publication in the Official Gazette. It must be highlighted that the recordal by the INPI is not a condition for the licence agreement to be valid between the contracting parties.

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A foreign owner or licensor may institute such proceedings without joining the local licensee. On the other hand, the licensee may be contractually invested with powers to enforce the licensed right. In relation to patent, trademark and other technology transfer licences, the agreement will have to be registered by the INPI in order to legitimise a licensee’s standing to bring suit.

Without the express consent of the owner or licensor, the licensee will not be able to institute proceedings against an infringer. The licensee can also be contractually prohibited from doing so. It is advisable, however, that the licence agreement determines an obligation for the licensee to cooperate with the licensor to cease third-party infringements. Even when the licensee lacks standing, it would be possible to intervene in the form of assistant (amicus curiae) to the foreign owner or licensor.

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Sub-licensing would only be acceptable if provided for in the original licence agreement. As a rule, the right to sub-license does not exist statutorily and must be granted contractually.

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In regard to the patents, the BIPL only indicates, in paragraph 3 of article 6, that the patent created jointly by two or more inventors may be applied for by all or one of them, by means of naming and identifying the others, to safeguard the respective rights. Since the BIPL does not provide further rules regarding co-ownership, provisions of the Brazilian Civil Code for condominium ownership are usually applied. In this sense, although there are some discussions on the application of such prescriptions to patents, the majority understands that the object of the patent cannot be freely licensed by one of the co-owners without the consent of the other co-owners, nor be partially sold to third parties when the other co-owners are interested in acquiring it. However, the majority also understands that each one of the co-owners of the patent can exploit the object without the consent of the other co-owners. A private contract among the co-owners may alter these rules.

As for trademarks, the Brazilian Patent and Trademark Office prohibits co-ownership. However, the simultaneous use of a trademark through licence agreements is allowed, and the terms of such agreement can be freely stipulated among the parties.

In relation to copyright, the BCL prescribes in paragraph 2 of article 15, that any joint author whose contribution can be used separately shall enjoy all the faculties inherent in its creation as an individual work, provided that any use liable to prejudice the exploitation of the whole work is prohibited. Moreover, article 32 of the BCL, prescribes that, when a work of joint authorship is not divisible, co-authors cannot publish nor authorise publication of the work without the consent of the other co-authors, under the penalty of having to pay damages. In this specific case, the BCL prescribes particular rules (ie, in case the co-authors are in disagreement, they shall decide by majority vote; any dissenting co-author shall retain the right not to contribute to the cost of publication), on the understanding that he or she then renounces his or her share in eventual profits, and also the right to refuse to be named on the work; and each co-author may, independently and without the consent of the others, have the work registered and assert his or her own rights against third parties. The co-authors of a copyrightable work can, according to the provision of article 23, of the BCL, exercise their rights over the work by common consent (ie, as established in a contract).

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Brazil follows a ‘first to file’ system in relation to both patents and trademarks. Some specific exceptions are prescribed by the BIPL. For instance, a person who, in good faith, prior to the filing or priority date of a patent application, was exploiting the object thereof in Brazil may assert the right to continue the exploitation in the same manner and under the same conditions as before.

Another exception is found in relation to trademarks. Pursuant to the BIPL, a person who, in good faith, had been using an identical or similar mark in Brazil for at least six months prior to the filing of the application may claim the right of preference for the registration.

A foreign licensor may license the use of an invention subject to a pending patent application. The licensor will not be able to receive royalties until the patent is granted.

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The BIPL expressly forbids patents over commercial, accounting, financial, educational, advertising, lottery and inspection schemes, plans, principles or methods. It also excludes from protection living organisms, in whole or in part, as well as biological materials found in nature, even if isolated therefrom. In contrast, the BIPL allows patents over transgenic microorganisms, which are defined as organisms that express, by means of direct human intervention in their genetic composition, a characteristic normally not attainable under natural conditions.

Software per se is protected under copyright, not patent. However, the INPI has admitted patents that include software for processes or that integrate diverse equipment, provided that the patentability requirements of novelty, inventive step and industrial application are met.

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Trade secrets are protected under unfair competition provisions found in the BIPL. Among other conduct, a crime of unfair competition is committed by any person who discloses, exploits or uses, without authorisation, confidential knowledge, information or data that could be used in industry, commerce or service rendering, unless such knowledge, information or data is public knowledge or obvious to an expert in the relevant subject. The violator must have gained access to the trade secret through fraud or by means of a contractual or employment relationship, even after its termination. Therefore, if the object of the trade secret is discovered or developed by licit independent means, no infringement will generally be found.

Know-how is not clearly defined by specific legislation. It is generally understood by local administrative and judicial authorities as knowledge or techniques not covered or registered as industrial property rights, which are used in the manufacture of goods or in the rendering of services.

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Foreign licensors should be aware that the INPI does not admit temporary licensing of know-how. Rather, the predominant understanding is that non-patented technology is only subject to disclosure or permanent acquisition. Therefore, the INPI will not approve contractual dispositions prohibiting the local licensee to continue exploring the transferred know-how.

Non-disclosure clauses are generally admitted during the term of the licence agreement and for a reasonable period after termination. In many cases, the INPI has considered five years after termination as a reasonable confidentiality period.

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Copyright constitutes an arrangement of economic and moral prerogatives that the law recognises to creators of original works of authorship. The Brazilian Constitution determines that authors shall have the exclusive rights of use, publication and reproduction over their works. These exclusive economic rights may be transferred to the author’s successors, for a time fixed by law.

Traditionally, the author’s rights in Brazil were conceived as a part of the general legal branch of civil law, regulated in the former Civil Code of 1916. The protection was later regulated in specific norms; the most recent and in force are the BCL and the BSL.

In accordance with the BCL, intellectual works subject to protection are original creations of the mind, whatever their mode of expression or the medium in which they are fixed, tangible or intangible, known or capable of invention in the future. Such protectable creations include literary works, musical compositions, films, photographs, drawings, paintings, sculptures, illustrations, animations, adaptations, translations, collections, compilations and computer software.

As a general rule, the BCL sets the duration of economic rights for a period of 70 years counted from 1 January of the year following the author’s death. The BSL sets the duration of the rights associated with computer software for a period of 50 years counted from 1 January of the year following publication or creation.

Protection of copyright in Brazil is not subject to registration, notice or any other formalities. The granting of copyright is automatic upon the creation of an original work of authorship, even if the work is not fixed in a tangible medium. Nonetheless, optional registration is recommended to evidence authorship and the date of creation of the work. Registration is performed by different official organisations, depending on the nature of the work. For instance, the registration of literary works may be filed at the Copyright Office of the Brazilian National Library, and the registration of computer software is requested at the INPI.

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The Brazilian Software Law does not provide specific restrictions on perpetual software licences.

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There is no general requirement to be complied with for one to be able to register or license software in Brazil, nor there is any import or export restriction. However, the Brazilian Software Law determines that all acts and agreements for the licensing of commercialisation rights relating to software programs of foreign origin must establish, as regards the payable taxes and charges, the liability for the respective payments. As mentioned in question 13, the validity of common software licences does not depend on prior official registration. In the cases of transfer of technology of a software program, the INPI must approve and register the respective agreements.

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Yes. The BSL brings, in its article 6, the limitations imposed on the owner of a software (licensor) in Brazil, indicating that they do not constitute an offence to its rights:

• the reproduction, in one single copy, of a legitimately purchased copy, provided the copy is intended as backup copy or electronic storage, in which case the copy shall be used as a backup copy;
• partial quotes of the software, for teaching purposes, provided the software and the owner of the respective rights are duly identified;
• the similarity of the software with another, pre-existing, software, when this occurs by virtues of the functional characteristics of its application, compliance with normative and technical precepts, or alternative limitation on its expressions; and
• the integration of a software, maintaining its essential characteristics, with an application or operational system, technically indispensable for user needs, provided it be for the exclusive use of the person who effected it.

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As mentioned in question 3, the INPI sets various restrictions in relation to payments resulting from an international licensing relationship. It should also be noted that Brazilian law distinguishes the compensation of know-how agreements (commonly referred to as ‘technical assistance’ or ‘non-patented technology’). According to the tax norms in force, payments resulting from know-how agreements are technically designated as ‘remuneration’. The expression ‘royalties’ is more commonly applied to the licensing of trademarks, patents or copyrights and franchise agreements.

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Pursuant to the Brazilian Foreign Capital Law (Law No. 4,131 of 3 September 1962) and other applicable provisions (Ordinance No. 436 of the Ministry of Finance, Law No. 4,506 of 1964, Law No. 8,383 of 1991, Decree No. 55,762 of 1965 and Decree No. 3,000 of 1999), foreign investments must be registered with the Central Bank of Brazil to allow the remittance abroad of dividends, interest on equity and funds related to repatriations of capital. Foreign capital receives the same legal treatment given to national capital, in identical conditions. Any distinction not provided by law is prohibited.

Remittances related to foreign capital duly registered with the Central Bank may be effected at any time without preliminary approval of that official institution, provided that other corporate and tax requirements are met. In relation to the remittance of royalties or other fees or costs resulting from technology transfers, the relevant agreement must be approved by the INPI prior to registration with the Central Bank.

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A foreign licensor that has not established a local operation in Brazil would only be taxed on the income generated in our jurisdiction. As a general rule, payments from sources located in Brazil to companies abroad are subject to withholding income tax. Payments resulting from technology transfer agreements and other intellectual property licences are subject to a withholding income tax currently levied at a general rate of 15 per cent, unless a lower rate is provided for in an international treaty. Brazil has signed treaties to avoid double taxation with many countries, including Argentina, Austria, Canada, Chile, China, France, Israel, Italy, Japan, Mexico, Portugal, South Africa, South Korea, Spain and Sweden. Licensing agreements are subject to other taxes, such as the contribution for intervention in the economic domain, service tax and the contribution to the social integration programme and contribution for social security financing on importation. However, only the responsibility for payments of the withholding income tax may be subject to negotiations of the contracting parties.

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The Brazilian Antitrust Law (Law No. 12,529 of 30 November 2011) expressly prohibits business practices that potentially restrict trade. The Brazilian Administrative Council for Economic Defence is the authority legally responsible for examining the impact of suspicious behaviour, including contracts for the use or exploitation of IPRs.

The competition authorities are able to restrain certain types of behaviour, if they produce or are capable of producing the following effects:

• limiting, restraining or in way harming competition or free enterprise;
• controlling the relevant market of certain products or services;
• increasing profits arbitrarily; and
• abuse of a dominant position.

These are essential requisites for the classification of business behaviour as anticompetitive, as well as it being necessary to analyse its object, marketing structure and peculiarities, and their generated consequences.

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There is no provision in Brazilian law relating to specific conditions that must be taken into account when analysing licence agreements in respect of competition issues. Following the rule of reason, there is no contractual clause deemed anticompetitive per se. The principle of effective competition, foreseen in the Brazilian Constitution, shall guide the analysis of licence agreements.

To be considered illegal, practices must result in the anticompetitive effects mentioned in question 32. In order to ascertain the existence of said effects, licence agreements shall be analysed on a case-by-case basis within the economic context of the contracting parties and their relevant market.

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Yes. Brazilian judicial courts have issued decisions condemning corporations, for example, for bad faith and sham litigation for filing lawsuits with the objective of extending the term of protection of their patents. Some of these cases have been reverted in second instance. In addition, there is a recent case in Brazil in which the Brazilian Anti-Trust Agency (CADE) considered that a pharmaceutical company had an anticompetitive posture in performing several actions called ‘contradictory and misleading’ by CADE with the objective of maintaining its exclusive rights over the production and commercialisation of a medication product, imposing some restrictive measures and a fine to such company.

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Such provisions are enforceable, and insurance cover to protect a foreign licensor is available in support of an indemnification provision with respect to acts and omissions of the licensee.

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Limitation of liability is generally enforceable, provided that principles of good faith and of the social function of the contract are respected. As a result, limited liability may not be accepted in cases of proven wilful misconduct, gross negligence or another wrongful act. One of the main exceptions that may affect international licensing is found in the Brazilian Consumer Protection Code (BCPC) (Law No. 8,078 of 11 September 1990). The BCPC declares provisions abusive that prevent, exempt or otherwise reduce liability of a supplier of goods or services for defects or damages of any nature. The inclusion of such provisions on consumer agreement is therefore prohibited, except when the consumer is a legal entity and in justifiable situations.

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It is generally understood that agreements with indefinite terms may be terminated by any party, on condition that reasonable prior notice is given. Pursuant to the Brazilian Civil Code, if, given the nature of the agreement, one party has made significant investments for its execution, unilateral termination will only take effect after a period that is reasonable for the nature and amount of the investments.

The Civil Code also determines that the debtor may request the termination of the agreement when the contractual obligations become excessively onerous, with great advantage to the other party, owing to exceptional and unforeseeable events. If the contractual obligations fall upon only one party, he or she may plead the obligation to be reduced or changed, in order to avoid excessive financial burden.

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In principle, termination or expiration of a licence agreement would cause the cessation of any legal effect regarding sub-licences granted by the licensee. Should a contractual provision authorise the sub-licensing after the termination or expiration of the licence agreement, it would be enforceable if it is clear in addressing this issue (ie, if the clause contains specific authorisation for the continuation of the sub-licensing and also contains a term of validity for such sub-licensing).

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Pursuant to the Brazilian Bankruptcy Law (Law No. 11,101 of 9 November 2005 (BBL)), contracts are not automatically terminated by bankruptcy. In fact, the trustee may continue the performance of the agreement when necessary to maintain and preserve the assets of the bankrupt estate. If there is no contractual provision for termination in the event of bankruptcy, the agreement remains in force. As a result, it is very common and highly advisable to include such provision in an international licensing agreement. The contract would terminate not as a result of the bankruptcy itself, but by virtue of the will of the contracting parties.

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According to the BBL, contracts are not automatically terminated by bankruptcy. Rather, it is up to the person designed as judicial administrator to decide whether to fulfil, or not, said contracts. In order to make such decision, the judicial administrator will consider if this either reduces or avoids an increase in the bankruptcy estate’s liabilities, or if it is necessary to maintain and safeguard the bankruptcy estate’s assets. As a result, sub-licences will be affected by the judicial administrator’s decision regarding the termination of the contract between the licensor and the licensee.

If the judicial administrator chooses to terminate the contract between the licensor and the licensee, the licensee will be able to claim damages through ordinary judicial proceedings. Once the licensee is granted a positive judicial award, he or she will be able to apply for the payment of the award in the course of the bankruptcy proceedings.

In regard to the steps that can be taken to protect the interests of the licensee, a few points have to be considered. It is important to mention that the BBL is considered public policy. Therefore, any contractual dispositions that go against this law are deemed to be void. Hence, a contractual provision stating that the licence agreement cannot be terminated, under any circumstances, upon the declaration of bankruptcy of the licensor is of no legal value. Taking this into account, some scholars advocate that a prudent (and valid) measure is to set a penalty for premature termination in the licence agreement.

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Following provisions set by the Introductory Law to the Brazilian Civil Code (Decree-Law No. 4,657 of 4 September 1942), in order to qualify and govern agreements and other kinds of obligations, the law of the country where they are constituted will apply. It further stipulates that the obligation resulting from an agreement is presumed to be constituted in the place of residence of the party that makes the proposal. In view of these provisions, it is generally understood by legal commentators that the parties are not free to choose the law that will govern the licensing arrangement.

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Yes. Pursuant to the Brazilian Arbitration Law (Law No. 9,307 of 23 September 1996), the parties may freely choose the rules of law to be applied in arbitration, as long as there is no violation of good morals and public policy. Arbitration proceedings may be conducted in any jurisdiction. If, however, the arbitration clause in a given agreement makes reference to the rules of a particular arbitral institution or specialised entity, the arbitration shall be instituted and conducted in accordance with such rules, unless otherwise agreed by the parties. Moreover, to be enforced in Brazil, the decision issued by a foreign arbitral body must be homologated (recognised) by the Brazilian Superior Court of Justice, which is limited to the verification of the compliance with the formal requirements, and does not analyse the merits.

Many factors come into play when choosing the ‘most favoured’ arbitration body for a case. Therefore, a case-by-case analysis should occur in determining which court is appropriate. The most popular choices are the following, each one with its particularities:

• the International Chamber of Commerce;
• the London Court of International Arbitration;
• the World Intellectual Property Organization; and
• the American Arbitration Association.

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Court judgments or arbitral awards from other jurisdictions are enforceable in accordance with local norms and international treaties. Brazil is party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).

In order to be recognised and enforceable in Brazil, foreign judgments or arbitral awards must be submitted to the approval (homologation) of the Superior Court of Justice (STJ), the highest Brazilian appellate court for non-constitutional matters. The STJ will not examine the merits of the foreign decision, but will check if it complies with the following formalities:

• the foreign decision must have been rendered by a competent judge;
• the parties must have been served proper notice of process or arbitration;
• the judgment or award must be final and in proper form for its enforcement in accordance with the laws of the jurisdiction where it was rendered;
• the foreign decision must be legalised by the competent Brazilian consulate and must be submitted to the STJ with a sworn translation; and
• the judgment or award must not be contrary to Brazilian national sovereignty, public policy or good morals.

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Injunctive relief is available in Brazil. It requires demonstration of sufficient legal basis together with probable success on the merits, as well as of risks that the delay would deprive the legitimate exercise of the violated right and cause irreparable harm. The new Brazilian Code of Civil Procedure allows the parties to change the procedure to adapt it to the specificities of the case, which could be interpreted as an allowance to renounce the right to injunction relief. Nevertheless, the Brazilian Federal Constitution establishes the right to bring suit within the category of fundamental rights and guarantees. A contractual waiver of injunctive relief would be considered null and void. Pursuant to the Federal Constitution, the law shall not exclude from judicial examination any violation of or threat to a right. This legal principle poses a significant obstacle to the enforceability of contractual waivers of injunctive or other equitable relief on judicial proceedings, particularly when related to matters of public policy. The right to seek relief would be within the discretion of the court. Alternatively, if the parties contractually agree to arbitration instead of resorting to the courts they may, in principle, freely choose the rules of law to be applied in arbitration proceedings (see question 37).

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On 8 February 2018, Decree No. 9,283 was published in the Official Gazette that establishes measures for incentivising innovation and scientific research on the productive environment, and regulates the Brazilian law that brings norms related to such a theme (Law No. 10,973/2004). According to the Decree, the Public Administration will be able to provide incentives to the development of cooperative projects among companies, scientific, technological and innovation institutions, and non-profit private institutions to try to stimulate the creation of innovative products, processes and services, as well as the transfer and diffusion of technology. In these cases, the parties shall specify in the contract the owner of the IP rights over the creation, and also the percental, of participation on the results of the commercial exploitation of the creation that each party involved will possess.

The same rules apply to contracts involving technologies made to order, which can also prescribe rules about the assignment of IP rights over the creation, licensing and technology transfer. Moreover, the scientific, technological and innovation institutions shall present an annual report to the Ministry of Science, Technology, Innovations and Communications on their IP policies, the creations developed, the protections required and offered and the licensing or technology transfer contracts, among others. The President of the Brazilian Patent and Trademark Office (BPTO) stated that this Decree reinforces the Brazilian innovation system by determining the definition of IP rights in contracts related to partnerships for research and development, as well as to technologies made to order. According to a report issued by the BPTO in early 2018, the number of contracts registered with it decreased 19.1 per cent in 2017 when compared to the numbers of the same period in 2016. This is the third consecutive year in the reduction of requests for the registration of contracts, which is explained by the BPTO as owing to the waiver of the requirement to register contracts involving services of assembling, installing, maintaining and repairing of machines and equipment since 2015. From the 555 contracts registered with the BPTO in 2017, 85 per cent were importation contracts, for which registration is necessary for the remittance of payments abroad and for obtaining tax deduction.

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