Brazil

• Pages: 141-179

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Chapter V

BRAZIL

A. Introduction

This chapter provides an overview of the antitrust and intellectual

property laws currently in force in Brazil, and how conflicts between

such laws, whether real or apparent, are resolved. As explained herein,

constitutional, legal and administrative guidelines provide a framework

to ensure the harmonious relationship between these fields of law.

In Brazil, the protection of intellectual property rights is not absolute.

The rules governing such rights do not explicitly or tacitly imply any

derogation to antitrust laws. The Brazilian intellectual property laws

have the objective of fostering competition by encouraging innovation

and safeguarding investments in technology and in the development of

the reputation of certain products and services. Intellectual property laws

seek to achieve this goal by ensuring privileges of utilization, and

thereby protect such innovations against free-riding.1 Remedies for

violations of such rights include injunctive and monetary relief.2

1. This goal is explicit in Article 5 of the Brazilian Constitution, Art.

5(XXIX), as well as in Article 2 of Brazil’s Industrial Property Law. See

Constituição Federal [C.F.] [Constitution] art. 5 (Braz.); Lei da

Propriedade Industrial, Lei No. 9.279, de 14 de maio de 1996, D.O.U. de

15.05.1996 [Industrial Property Law, Law No. 9.279 of May 14, 1996]

[LPI].

2. Holders of intellectual property rights may go to court to seek (i) the

cessation of infringement and other protective measures potentially

required to protect such rights (e.g., seizure of counterfeit goods, etc.),

using the measures and observing the conditions set forth in the Civil

Procedure Code, (ii) indemnification for material and moral damages

suffered as a result of such infringement pursuant to the requirements

established in Articles 207-10 of the Industrial Property Law and Article

927 of the Civil Code; and (iii) criminal complaints against violators

pursuant to Article 199 of the Industrial Property Law. See Código de

Processo Civil, Lei No. 5.869, de 11 de janeiro de 1973, D.O.U. de

17.1.1973 [Civil Procedure Code, Law No. 5,869 of Jan. 11, 1973] ; LPI,

arts. 199, 207–10; Lei No. 10.406, de 10 de janeiro de 2002, D.O.U. de

11.1.2002 [Law No. 10,406 of Jan. 10, 2002] (article 927 of the Civil

Code). Regarding the criteria for indemnification of industrial property

142 Antitrust Issues in International IP Licensing Transactions

Brazilian antitrust laws seek to prevent the abusive use of intellectual

property rights if such rights grant market power and a dominant position

to their holders.3 The tension present in such situations is discussed in

the sections addressing the resolution of potential conflicts between

antitrust and intellectual property laws.

B. The Sources and Basics of Brazilian Antitrust Law

Free competition is one of the cardinal principles of economic order

mandated by the Brazilian Constitution of 1988,4 which charges the

federal legislature with the prevention and punishment of abusive

behavior resulting from business combinations.5

The Brazilian Antitrust Law (Lei de Defesa da Concorrência -

LDC)6 provides the organizational framework to what is known as the

Brazilian Economic Defense System (Sistema Brasileiro de Defesa da

Concorrência - SBDC), and is the main source of legal provisions

rights, see the following decisions of the Superior Tribunal of Justice

[STJ]: S.T.J., No. 2004/0176654-1, Reporting Justice: Luis Felipe

Salomão, 02.02.2010, RESP No. 710.376; S.T.J., No. 2002/0104945-0,

Reporting Justice: Nancy Andrighi, 04.08.2003, RESP No. 466.761;

S.T.J., No. 1996/0044197-9, Reporting Justice: Sálvio de Figueredo

Teixeira, 11.09.2000, RESP No. 101.118). See also LPI Arts. 183–86

(crimes against patents); id. Arts. 187–88 (crimes against industrial

designs); id. Arts. 189–90 (crimes against marks); id. arts. 192–94

(crimes against geographic designations and other designations); id. Art.

195 (unfair competition crimes).

3. Lei de Defesa da Concorrência, Lei No. 12.529 de 30 de novembro de

2011, D.O.U. de 1o de dezembro de 2011, Art. 36 [Antitrust Law, Law

No. 12.529 of November 30, 2011] [LDC]. The Law No. 12.529 enters

into force on May 29, 2012 and revokes the former Brazilian Antitrust

Law, Lei No. 8.884, de 11 de junho de 1994, D.O.U. de 13.06.1994, Arts.

20, 21 (XVI) [Former Antitrust Law, Law No. 8,884 of June 11, 1994].

4. Article 170 of the Brazilian Constitution provides: “The economic order,

founded on the appreciation of the value of human work and free

enterprises, is intended to ensure everyone a life with dignity, in

accordance with the dictates of social justice, with due regard for . . . free

competition.” Constituição Federal [C.F.] art. 170.

5. Article 173, §4 of the Brazilian Constitution states: “The law shall

repress the abuse of economic power that aims at the domination of

markets, the elimination of competition and the arbitrary increase of

profits.” Constituição Federal [C.F.] art. 173, §4.

6. See LDC.

Brazil 143

governing anticompetitive practices. The LDC contains general antitrust

principles, which are supplemented by industry-specific laws that

regulate various economic sectors.7

1. Institutional Structure

The SBDC agencies are responsible for implementing the LDC.

They consist of two agencies: (i) the antitrust division of the Treasury

Department (Secretaria de Acompanhamento Econômico - SEAE); and

(ii) Brazil’s antitrust administrative tribunal (Conselho Administrativo de

Defesa Econômica - CADE).

SEAE’s role is basically advocacy.8 This agency analyzes and issues

non-binding opinions concerning the competitive aspects and possible

antitrust impacts arising from proposed regulation and bills. SEAE also

has general powers to elaborate studies on the competitiveness in various

economic sectors.

CADE is the main agency of SBDC. It is composed by three bodies:

an economic analysis department (Departamento de Estudos

Econômicos - DEE), 9 a general superintendency (Superintendência-

Geral - SG),10 and an administrative tribunal (Tribunal Administrativo

de Defesa Econômica - Tribunal).11 DEE analyzes and issues economic

opinions on specific antitrust cases under the Tribunal’s review at its

own discretion or upon request from SG or Tribunal’s commissioners

7. Examples of such regulated industries include telecommunications, oil

and gas, and ground and water transportation. See Lei Geral das

Telecomunicações, Lei No. 9.472, de 16 de julho de 1997, D.O.E. de

17.07.1997 [Brazil’s General Telecommunications Law, Law No. 9.472

of July 16, 1997]; Norma da ANATEL No. 4, de 24 de de dezembro de

1998 [ANATEL Norm No. 4 of Dec. 24, 1998] (business combinations);

Norma da ANATEL No. 7, de 7 de setembro de 1999 [ANATEL Norm

No. 7 of Sept. 7, 1999] (conduct); Resolução da ANATEL No. 58, de 24

de setembro de 1998 [ANATEL Resolution No. 58 of Sept. 24, 1998];

Article 10 of Brazil’s Petroleum Law, Lei No. 9.478, de 6 de agosto de

1997, D.O.U. de 07.08.1997, art. 10 [Law No. 9.478 of Aug. 6, 1997];

Article 31 of Lei No. 10.233, de 5 de junho de 2001, D.O.U. de

06.06.2001, art. 31 [Law No. 10.233 of June 5, 2001] (ground

transportation and water transportation).

8. See LDC art. 19.

9. See LDC art. 12.

10. See LDC art. 17.

11. See LDC arts. 6, 7, 8, 9, 10 and 11.