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Technology Contracts in Brazil

By: Patricia Falcao

April 25, 2023

In Brazil, the registration or registration of Technology Contracts is regulated by Law No. 9,610 of February 19, 1998, Industrial Property Law – IPL.

Under Article 211 of the IPL, the Brazilian National Institute of Industrial Property – INPI-BR is the body responsible for technology transfer contracts, i.e., the licensing of industrial property rights, such as marks, patents, industrial designs and topography of integrated circuits, technology transfer of know-how, technical assistance services and franchises, for such contracts to produce effects before third parties.

Furthermore, under the terms of Article 211 of the IPL and by Resolution No. 156/15 of the INPI, some specialized technical services are exempt from registration by the Autarchy, since they do not characterize technology transfer. The list of services is contained in the aforementioned resolution.

It should be noted that the BPTO has a specific Board of Directors in charge of the registration and filing of technology contracts.

The registration or registration of Technology Contracts before the INPI is a condition to produce (i) effects before third parties; (ii) legitimize the remittance of royalties abroad; and (iii) allow the licensee’s tax deduction on the amounts paid as royalties and technical assistance.

Contracts to be registered/registered before the INPI may have as their object the licensing of industrial property rights and the acquisition of knowledge, each of which is subdivided into three types of contracts:

i.- Licensing of industrial property rights:

A) License agreements for the exploitation of patents (EP)

B) License agreements for the exploration of industrial design (EDI)

C) Trademark license agreements (UM)

ii.-Knowledge acquisition:

A) Technology supply agreement (TF)

B) Technical Assistance Service Agreement (TAS)

C) Franchise Agreement (FRA)

When negotiating a technology contract, the parties involved shall observe the peculiarities of those registrable at the INPI.

A) License agreements for the exploitation of a patent and/or industrial design are intended to authorize a third party to exploit the object of a given patent and/or industrial design, which is regularly filed as an application and/or granted before the INPI-BR.

These contracts are registrable for a maximum of the duration of the patents and/or industrial designs.

In the case of patent and/or industrial design applications not yet granted, as soon as the INPI publishes its grant, the licensor or licensee shall apply for an amendment of the notation certificate before the Board of Contracts of the Autarchy.

(B) The trademark license agreement is intended to authorize a third party to use a particular mark regularly filed and/or registered before the INPI.

This type of agreement is registrable at most during the term of the marks. And in the same way as the previous contractual modality, in the case of mark registration applications, as soon as the registration is published by the INPI, the Company shall request an amendment of the Guarantee Certificate.

(C) The purpose of the franchise agreement is to temporarily authorize third parties in rights involving the use of marks or patents, the provision of technical assistance services, jointly or not, with any other modality of technology transfer that is necessary for its realization.

Franchise agreements are registered until the term of the marks/patents involved in the franchise.

D) The purpose of the technology supply agreement, commonly known as a know-how agreement, is to allow a third party to acquire knowledge and know-how not supported by rights, intended for the production of industrial goods and services, including knowledge and know-how not supported by industrial property deposited or granted in Brazil.

Under the provisions of Article 12, paragraph 3 of Law No. 4,131/62, the Certificates of Registration of Technology Supply Contracts issued by INPI are valid for five (5) years, and the assignee company may request a term extension for another five (5) years, provided that the need for the extension is evidenced.

(E) The purpose of the Technical Assistance service contract is to provide the Brazilian technician with the conditions for obtaining techniques, planning, and programming methods, as well as research, studies, and projects aimed at the execution or rendering of specialized services, always related to the final activity of the company.

NOTE: The INPI only registers one technical assistance service contract to be executed in Brazil, by a service provider domiciled abroad. Therefore, domestic and export contracts for technical assistance services, whose service provider is a company domiciled in Brazil, are not registered in the INPI.

The BPTO requires the detail of the number of hours/days worked by each technician, daily (rate/hour or day) by type of technician, and the total value of the service rendered, even if it is estimated to register an SAT contract. Also, this type of contract is recorded for the period that is foreseen for the performance of the service or proof that they have already been performed (Invoices).

To accelerate the analysis of contract registrations, so important for technological and economic development, in December 2022 the BPTO approved a series of changes in administrative practice.

Thus, it should be noted that in cases involving the use of digital signatures, consular apostille/legalization will no longer be required. Electronic requests referring to all acts performed by the applicant for registration or notation shall contain a specific field in which its attorney declares to be responsible for the veracity of both the information provided and the documents attached, as already occurs in the Trademark and Patent Departments. The inclusion of two witnesses is no longer required in technology contracts; there is no longer a requirement for the presentation of statutes or instruments of incorporation of the legal entity and the last consolidated contractual amendment, as well as the legal representation of the legal entity of the assignee, franchisee, or licensee, domiciled or resident in Brazil. There will be an unequivocal acceptance of the licensing of non-patented technology, also known as know-how licenses; and royalty payments in contracts involving patent, industrial design, and mark applications are established through contradictory agreements and will not be hindered by the INPI, making the payments agreed between the contracting parties unfeasible.

However, it should be noted that, in practice, one still sees decisions and requirements based on the old interpretations of autarky. That is why ClarkeModet Brazil seeks to remain conservative in its advice until the understanding of the PTO is standardized.

If you are interested in transferring technology or obtaining more information, ClarkeModet Brazil has qualified professionals in the field, who, based on the understanding of the client’s specific situation, outline strategies that aim to keep the client in compliance with the regulatory provisions and avoid future dead ends.

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