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Procedure in patent enforcement and invalidity actions

Patent infringement actions, for both civil and criminal proceedings, are filed before state courts. Some states (such as São Paulo and Rio de Janeiro) have lower civil courts and chambers specialised in corporate law, which also includes industrial property matters (such as patent litigation). Otherwise, the majority of judges are not familiar with these matters.

Patent invalidity actions are filed before federal courts, with the necessary participation of the BPTO as a defendant. For invalidity actions filed exclusively before the Federal Court of Rio de Janeiro, the court issued an Ordinance stating that the BPTO will figure, in principle, as a defendant. The BPTO has no jurisdiction over patent invalidity actions, which are decided exclusively by federal judges. If invalidity is granted, the BPTO will publish the cancellation of the patent in its Official Gazette. The parties are also allowed to hire their own technical assistants.

Only lawyers duly registered before the Brazilian Bar Association can represent parties before the courts.

The following can bring an infringement action:

  1. the patent holder;
  2. an exclusive or non-exclusive licensee (with powers to enforce the patent);
  3. distributors (with specific powers to enforce the patent); and
  4. any party that has a procedural interest to defend the patent (such as a commercial representative, franchisee, etc.) and is formally invested by the patent holder with the powers to defend the patent.

Invalidity actions can be filed by the BPTO or any party with 'lawful interest', who is defined as any party affected by the exclusivity given by the patent.

i Statutes of limitation

The patent owner will be barred from collecting damages for its unwarranted exploitation for five years following the occurrence of the infringement act, by express disposition of the IP Law. With respect to an inhibitory order, the term will be 10 years upon the occurrence of the infringement act. In certain cases, judges understand that the statute of limitations begins when the patent owner becomes aware of the infringement act. However, another doctrinal line understands that patent infringement is a constant act, so the statute of limitations period is continually renewed while illicit acts are practised, thus lengthening the end of the deadline for filing a lawsuit.

The Brazilian IP Law also establishes that a nullity action may be filed at any time during the validity of the patent.

ii Level of proof

The assessment of patent infringement is made through a technical comparison between the patent claims and the product, process or service put on the market by the infringer. The parties, their technical experts and the court expert present their technical reports. The judge is not obliged to follow the opinion of the court expert and can decide, based on other evidence attached to the records, as long as they explain the reasons for such adoption.

According to the most recent jurisprudence, the damages for patent violation are presumed (in re ipsa) once the patent violation is evidenced. The injured party will only need to prove the extent of the damages for the purposes of calculating the indemnity amount.

For granting of injunctions to compel the defendant to immediately cease exploitation of the patent, the patent owner must show the infringement beyond a reasonable doubt. Considering the technical aspects involved in patent infringement cases, injunctions are more difficult and granted only when the judge is convinced by the technical reports attached by the plaintiff.

In invalidity actions, the plaintiff must prove the lack of fulfilment of the legal requirements or the violation of any section of the IP Law by the patent. A court expert will be listened to, together with technical experts speaking on behalf of the parties. The BPTO will also bring its own technical opinion, based on its analysis during the administrative process.

There is no discovery in Brazil.

iii Amendments

Any claims amendments must be filed before the request for examination. According to the IP Law and BPTO Resolutions, after the request for examination of a patent application, amendments (voluntary or not) to the claim set that broaden the scope of the claimed subject matter will not be accepted and these amendments will be refused, even if just one claim was broadened.

iv Time and costs

Apart from the fees privately agreed between a party and its lawyer, the official fee for filing a lawsuit in Brazil varies from state to state and is around 1 per cent of the total value of the lawsuit, as indicated on the claimant's complaint. There are minimum and maximum caps on this fee, independent of the percentage.

In addition, there is a mandatory loss of suit fee, payable to the winning party's lawyer, fixed by the judge and ranged between 10 per cent and 20 per cent of the total value of the lawsuit.

There are additional non-regular expenses; for example, the remuneration of technical experts and fine for bad faith litigation.

To conduct a patent infringement or invalidity lawsuit in Brazil, that runs through all instances, we estimate that around US$150,000 could be spent. This amount will vary depending on the complexity of the case value and comprises the attorney fees, the court costs (as the official fee for filing a lawsuit, among other things), the official expert's and one particular expert's fees. If the case involves two or more technical evidences then the costs will be higher.

These fees (except for the fees privately agreed between a party and its lawyer) are recoverable from the losing party, at least in part. The judge will fix the sums due by the defeated party in the final decision.

Nowadays, as most courts have already adopted electronic proceeding, a lawsuit could last about one to two years to be judged in the first instance, depending on the level of proofs, the need to produce expert evidence, etc. At the court of appeals, the lawsuit could last another one to two years until a final decision. If the lawsuit is sent to the superior courts, the average time for a final judgment is about two to three years.

v Injunctions

There are two types of preliminary orders in Brazil: evidence-supported relief and urgent relief.

An urgent relief is granted to protect a right that must be fully confirmed by a final decision. The urgent relief can be requested in advance of or during the lawsuit. The urgency must be contemporary with the filing of the lawsuit. The plaintiff will only request the granting of the urgent relief, without indicating the basis for the main proceedings in the first instance. After that, if the urgent relief is granted in advance, the plaintiff will have 15 days from the granting to start main proceedings to confirm the measure. In addition, the defendant will have the same deadline to appeal against the decision. If the defendant files no appeal, the decision will become final and unappealable, and the urgent relief will stabilise and become definitive, without the need for the plaintiff to file for main proceedings.

To obtain an urgent relief during the lawsuit, the claimant must start the main proceeding and request the judge to anticipate some parts of the final decision. The requirements for an urgent relief are:

  1. unequivocal evidence of the likelihood of the rights invoked;
  2. grounded fear of irreparable, or hardly repairable, injury (urgency); and
  3. the injunction requested cannot be irreversible.

Preliminary injunctions can be granted without hearing the other party (ex parte) when there is a real risk that this party can frustrate the hearing, or in cases where urgency is so great that it is not possible to wait for a hearing of the other party. The judge has discretion to require the posting of a bond or another fiduciary guarantee as a condition for the injunction.

In patent invalidation actions, it is also possible to request a preliminary injunction order to stay the effects of the patent until the issuance of a final decision. However, injunctions are rarely granted in these actions, as the existence of the right relies on the patent owner, who followed all administrative procedures for granting of the patent by the BPTO. Therefore, the patent is prima facie valid.

Finally, there is the evidence-supported relief, granted by the judge regardless of urgency, based on the following grounds:

  1. it is characterised as the abuse of the right of defence or manifest interest in extending the lawsuit by a party;
  2. when the allegations are proved only with documents and there is an identical precedent (this is very hard to admit in patent infringement actions, owing to the need to produce independent technical evidences); and
  3. when the initial petition is instructed with sufficient documentary evidence to prove the plaintiff's right, and the defendant does not present other evidence capable of generating reasonable doubt in the judge's conviction (this is also very hard to admit in patent infringement actions owing to the need to produce independent technical evidence).

Patent holders could face liability for threatening infringement proceedings if they falsely accuse the other party, bringing a lawsuit for an infringement that has not occurred, or even if they misrepresent the other party's customers. In this case, an indemnification action could be filed.