Technology Contracts in Brazil: The Patent Office Screening Rôle

Abstract

Since the late 60's, Intellectual Property licenses and other technology contracts have been subject to Government screening in Brazil. Initially such analysis concerned the tax and exchange aspects of such agreements; eventually the screening of restrictive business practices was included. When the INPI (Brazilian Patent and Trademark Office) was created in 1970, the powers to screen such contracts were delegated to the new agency, and new discretionary powers, including the possibility of rejecting the agreement on the basis of Brazilian industrial policy, were added to the prior ones. A Supreme Court Case declared the news powers constitutional. According to the 1996 Industrial Property Law, the discretionary powers were excluded from INPI purview. This study describes the present scope of the INPI enablement in connection to such agreements, including the case law related to the issue. Although now deprived from discretionary powers, the Brazilian PTO has kept an extensive role, and the exact understanding of such Governmental action may be particularly important to some investment decisions regarding Brazil.