Progress at last: Brazilian IP reform

The Brazilian Patent and Trademark Office (INPI) has been engaged in an ongoing process of implementing technical and practical measures aimed at substantially reducing the backlog of work at the patent and trademark divisions. It has also been working on major new projects and has taken steps to streamline and formally set out its position on certain controversial issues in the field of trademarks.

So far as trademarks are concerned, the INPI launched an online filing system in 2006, as part of its campaign to tackle the application backlog and related delays. This has proved to be an effective measure. In 2006, shortly after the system was introduced, only 12 percent of applications were filed online. By 2012 online applications made up 74 percent of the total.

Trademark applications filed online are dealt with more rapidly, and at a lower cost to the applicant compared to paper applications. However, the specification of products and services for online requests must fall into pre-determined categories provided by the INPI, ie, applicants do not have a completely free rein in describing such products/services. Nowadays, all formal requests to the INPI may be submitted online.

In addition, an INPI recruitment drive (also aimed at reducing backlog) led to the appointment of several new examiners and support staff, with a consequent significant and continuing increase in the number of decisions rendered. Between 2004 and 2006, 62,790 trademark applications were granted (an average of 20,930 per year), whereas between 2010 and 2012 the number of grants increased almost threefold to 180,339, representing an average of 60,113 per year.

In July 2013, as part of its modernisation drive, the INPI introduced a remoulded trademark search mechanism on its website as well as a new layout for official publications (the Official Gazette). Decisions are now published as text instead of in codes and are grouped according to the type of decision. Moreover, the Official Gazette is now available for download both in PDF and XML formats.

With the new streamlined online procedures and increased number of examiners and support staff, the INPI has made major advances in tackling the backlog and has declared that it is now prepared for Brazil’s (possible) accession to the Madrid Protocol. In recent years, there have been positive moves towards accession. The draft Accession Agreement is currently before the Office of the Presidential Chief of Staff (Casa Civil), pending submission to the National Congress.

New guidelines

Further in relation to trademarks, the INPI published fresh guidelines for the examination of applications in December 2012, setting out in general terms the manner in which the Trademarks Directorate is to examine requests for registration and deal with conflicts between trademarks.

One of the main innovations in the guidelines is the inclusion of a clear directive on the INPI’s new position on coexistence agreements. The guidelines state that the INPI will continue to allow the filing of coexistence agreements in support of trademark applications and will pay heed to them, but will not automatically grant a trademark registration on the basis of such agreements.

Coexistence agreements are therefore to be taken into consideration during the examination of trademark conflicts, but are not binding on the examiner. The INPI has adopted this position in line with its view that private interests cannot outweigh those of the public interest.

The guidelines feature further important provisions as to the time at which a preferential right to registration must be asserted. In Brazil, as a general rule, the ownership of a trademark is acquired by means of a validly granted registration, following which the titleholder has an established right to exclusive use of the trademark throughout national territory. In some specific circumstances, the Brazilian Industrial Property Law also provides protection for the owners of trademarks who have not yet filed or registered the mark with the INPI.

An example of this is the right to prior use. This right establishes that a person (or legal entity) may challenge an application for registration if the challenger has been using a similar mark. The prior use must have been carried out in good faith, in Brazil, for at least six months prior to the date of the application for registration of the trademark (or such other legally established ‘priority’ date).

The prior use of the mark must have been relied upon to distinguish or certify a product or service identical or similar to the object of the application. Based on this provision, it is possible for the owner of a trademark which has not yet been filed or registered in Brazil to challenge third parties who attempt to register similar or identical trademarks.

"The INPI has also taken a clear stance on important issues, effectively putting an end to considerable legal and practical uncertainty on certain key questions."

There has been considerable debate as to whether a preferential right based on prior use can be asserted only at the time of the filing of an opposition to a trademark application or whether it can also be asserted at the time of filing of an administrative nullity action before the INPI or even of a nullity court action. The INPI guidelines now conclusively establish that a third party can claim a preferential right based on prior use only at the time the opposition is filed.

It is also important to note that, in recent years, there have been moves to alter the procedure for obtaining the status of famous trademark. According to Resolution 121/05, which governs the examination of famous marks in Brazil, a request for the special protection given to famous marks can be made to the INPI only as an ancillary application to an opposition or administrative nullity action against a conflicting trademark application or registration.

Consideration is, however, currently being given to possible fresh procedural rules enabling standalone (autonomous) applications for famous mark protection.

Patents

Turning now to patents, the INPI has taken decisive action to tackle the backlog of patent applications and related delays, hiring more examiners (there were 273 examiners in 2010 as opposed to just 112 in 2005). The number of applications examined consequently jumped from 9,643 in 2005 to 15,904 in 2010.

Recently, the patent office announced its intention to hire a further 455 examiners by 2014, taking the total to 728. It also recently (March 2013) introduced a system for the electronic filing of patent applications, based on the system adopted by the European Patent Office. The INPI expects that the substantial increase in the number of examiners and the launch of the online system will halve the average time for a final decision on a patent application, from eight-and-a-half years to four.

On a more general note we can report that in a drive to foster swifter resolution of IP disputes, the INPI, in partnership with the World Intellectual Property Organization (WIPO), established earlier this year a Dispute Mediation Centre.

The pilot project is set to hear 50 applications for mediation between July 15, 2013 and the end of December 2013, relating to trademark applications already underway before the INPI. Mediation services for patent disputes are to be introduced as a second phase.

In the light of the above we can see that the INPI has clearly signalled its firm commitment to tackling the backlog of patent and trademark applications and related delays and has acted accordingly. While there is still room for improvement, the positive effects of these initiatives are clearly perceptible.

The INPI has also taken a clear stance on important issues, effectively putting an end to considerable legal and practical uncertainty on certain key questions.

Furthermore, its introduction of wide-ranging and innovative projects for the development and improvement of the Brazilian system for the grant and protection of IP rights are a significant step in the right direction.

Philippe Bhering is a partner at Bhering Advogados. He can be contacted at:  philippe.bhering@bhering.adv.br