IP LICENSING
in relation to net sales. Tese percentages were originally established for the purposes of tax deduction and may vary in accordance with the industry or technology area involved.
Te BIPL prescribes that both the rights holder and the applicant may enter into a licensing agreement. However, payments will only be allowed aſter the licensed right has been duly patented or registered by INPI. Moreover, although our legal system generally accepts that the parties are free to determine the term of the licence, 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 accepted by INPI.
INPI adopts a more liberal approach in the examination of franchise agreements, when compared to other technology transfers. For instance, unlike with basic trademark or patent licences, it is possible to include applications in a royalty-bearing franchise agreement. Tis is acceptable because remuneration on franchise agreements is not restricted to the licence itself. Rather, the franchisee is expected to pay initial affiliation fees, advertising fees and other periodical charges for the use of the system or in return for technical assistance and other services effectively rendered by the franchisor.
Agreements not subject to prior government scrutiny
Te Brazilian Copyright and Neighbouring Rights Law determines that the economic rights over a work of authorship may be wholly or partly transferred by means of licence agreements. Te same applies to phonograms, performances and broadcasts. In contrast, the moral rights of the author are inalienable and irrevocable, meaning they cannot be licensed or waived.
Copyright protection in Brazil is not subject to registration, notice or any other formality. Te granting of copyright is automatic upon creation of an original work of authorship, even if the work is not fixed in a tangible medium. Nonetheless, optional registration is still recommended to demonstrate the date of creation of the work.
Specifically in relation to the licensing of computer programs, provisions are found in the Brazilian Soſtware Law. Tis law determines that licences relating to soſtware of foreign origin must clearly state responsibility for payments of taxes and charges. Te validity of licences of
soſtware per se does not depend on prior official registration. However, technology transfer agreements involving soſtware will be subject to the approval of INPI.
It is also possible to negotiate authorisations to use one’s image, likeness, voice and name (commonly referred to in other jurisdiction as ‘rights of publicity’). Tese 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.
Although the validity of copyright and soſtware licences and of authorisations deriving from personality rights does not depend on prior official registration, it is advisable that such agreements are entered in the competent registry of deeds and documents. Furthermore, if copyright or soſtware licences are agreed between a foreign licensor and a related local subsidiary, transfer pricing restrictions may apply.
General dispositions affecting international agreements
Te Brazilian Civil Code provides for two major principles in relation to contractual relationships: the freedom to negotiate shall be based upon and limited by social purposes; and during the conclusion and performance of the contract, the parties must observe the principles of honesty and good faith.
Tese general rules may serve as the 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 dispositions.
Following provisions set by Decree Law No. 4,657 of 1942, legal commentators understand that the parties are not free to choose the governing law of the licensing arrangement. Due to the risks affecting choice of law rules, it is recommended that the parties agree to arbitration instead of resorting to the courts.
Pursuant to the Brazilian Arbitration Law, parties may freely choose the rules of law to be applied in arbitration, as long as there is no violation of good customs and public order. 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.
26 World Intellectual Property Review May/June 2011
Alysson H. Oikawa is a Brazilian copyright and trademark attorney and an associate at Bhering Advogados since 2003. He holds a communications degree from the Pontificia Universidade Catolica do Parana and a law degree from the Universidade Federal do Parana in Brazil. Oikawa obtained an LLM degree from the University of Illinois at Urbana-Champaign in the United States. His professional practice extends to advising domestic and international clients on marketing law, unfair competition and the draſting of licence agreements. He is also an adjunct professor at Centro Universitario Curitiba and a visiting instructor at other institutions teaching IP-related courses.
Court judgments or arbitral awards from other jurisdictions are enforceable in accordance with local norms and international treaties. Brazil is party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
If one of the parties is a non-resident, the respective signature in the licensing agreement will have to be confirmed by a notary public in accordance with the norms of that jurisdiction. Te notarisation will 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 co-operation treaties in judiciary matters.
As a final note, foreign owners should 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. Non-compliance may result in the cancellation of the local IP right by the competent authorities.
Alysson H. Oikawa is a Brazilian copyright and trademark attorney and an associate at Bhering Advogados. He can be contacted at:
bhe@bheringadvogados.com.br
www.worldipreview.com
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