An International Guide to
Patent Case Management for Judges

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3.11.1 Licenses

The various types of licenses allowed under Brazilian legislation are provided for in Articles 61–74 of the LPI. Voluntary license

Voluntary license is provided for in Articles 61–63 of the LPI. Under the legislation, the patent holder or the applicant may enter into a license contract for exploitation (Article 61 of the LPI). The license contract must be registered with the INPI so that it can produce effects in relation to third parties from the date of its publication (Article 62 of the LPI). However, for the purpose of validating evidence of use, this registration is not required (Article 62(2) of the LPI).

The licensee may be vested by the holder with all powers to act in the defense of the patent (Article 61(1) of the LPI). The improvement introduced in a licensed patent belongs to the one who makes it. However, the other contracting party is assured the right of first refusal for its licensing (Article 63 of the LPI). Offer of license

Articles 64–67 of the LPI provide for the offer of license. A patent holder may request the INPI to place the patent on offer for exploitation purposes (Article 64 of the LPI). The INPI will then arrange the publication of the offer (Article 64(1) of the LPI). The holder may, at any time, before the express acceptance of its terms by the interested party, withdraw the offer (Article 64(4) of the LPI).

No voluntary license contract of an exclusive nature can be registered with the INPI without the holder having desisted from the offer, nor can it be offered (Article 64(2)–(3) of the LPI).

In the absence of an agreement between the holder and the licensee, the parties may request the INPI to arbitrate the remuneration (Article 65 of the LPI). The remuneration may be reviewed after one year from its establishment (Article 65(2) of the LPI).

The patent holder may request the cancellation of the license if the licensee does not begin effective exploitation within one year of the grant, interrupts exploitation for a period exceeding one year or if the conditions for exploitation are not met (Article 67 of the LPI). Compulsory license

Finally, Articles 68–74 of the LPI provide for compulsory license. A patent holder is subject to having the patent licensed compulsorily if they exercise their rights in an abusive manner or engage in abuse of economic power, evidenced pursuant to the law, by means of an administrative or court decision (Article 68 of the LPI). Such licenses are always be granted on a non-exclusive basis, and sublicenses are not permitted (Article 72 of the LPI). Compulsory license for lack of exploitation, commercialization, manufacturing full use or for insufficiency

Article 68 of the LPI, lists, as examples, certain situations that occasion compulsory licensing:

Paragraph 1. […]:

I – the non-exploitation of the subject matter of the patent in the Brazilian territory due to lack of manufacturing or incomplete manufacturing of the product, or, further, the lack of full use of the patented process, except in cases of economic impracticability, when import will be allowed; or

II – the commercialization that does not meet the market’s needs.

Paragraph 2. The license can only be requested by a person with a legitimate interest and who has the technical and economic capacity to efficiently exploit the subject matter of the patent, which must be intended, predominantly, for the domestic market. Patent-dependent compulsory license

The compulsory license will also be granted when, cumulatively, the following circumstances are verified:

I – a situation of dependence of one patent on another is characterized;

II – the subject matter of the dependent patent constitutes substantial technical progress in relation to the previous patent; and

III – the holder does not reach an agreement with the holder of the dependent patent to exploit the previous patent. (Article 70 of the LPI)

The legislation defines a “dependent patent” as a patent for which exploitation obligatorily depends on the use of the subject matter of a previous patent (Article 70(1) of the LPI). A process patent may depend on its respective product patent or vice versa (Article 70(2) of the LPI). The holder of a patent licensed under the terms of this provision is entitled to a cross-compulsory license of the dependent patent (Article 70(3) of the LPI). Compulsory license for national emergency or public interest

In cases of national emergency or public interest, declared in an instrument of the federal executive branch, and provided that a patent holder or their licensee does not meet the need, a temporary, nonexclusive compulsory license may be granted, at the judge’s own initiative, for the exploitation of the patent, without prejudice to the rights of the holder (Article 71 of the LPI). In these cases, the instrument for the granting of the license establishes its term and the possibility of extension (Article 71(1) of the LPI). Cases for not granting the compulsory license

The compulsory license will not be granted if, on the date of the application, the holder:

I – justifies the non-use for legitimate reasons;

II – proves that serious and effective preparations for exploration have been carried out; or

III – justifies the lack of manufacturing or commercialization on the grounds of an obstacle of legal nature. (Article 69 of the LPI) Administrative request

The request for a compulsory license must be made indicating the conditions offered to the patent holder.

Paragraph 1. Once the license request is presented, the holder will be notified to present his opinion within sixty (60) days, after which, if he does not present his opinion, the proposal will be considered accepted under the conditions offered.

Paragraph 2. The license applicant that invokes abuse of patent rights or abuse of economic power must attach documentation that evidences it.

Paragraph 3. [and, if the license is] requested on the grounds of lack of exploitation, the patent holder will be responsible for evidencing exploitation. (Article 73 of the LPI)

In the event an answer to the request is presented, the INPI may take the necessary measures, as well as designate a commission, which may include specialists who are not members of the INPI’s staff, to decide on the compensation to be paid to the holder (Article 73(4) of the LPI). The bodies and entities of the direct or indirect federal, state or municipal governments will provide the INPI with the information requested for the purpose of basing the decision on the compensation (Article 73(5) of the LPI). Once this information has been provided, the INPI will decide on the granting and conditions of the compulsory license within 60 days (Article 73(7) of the LPI). An appeal against a decision granting the compulsory license does not have an effect of supersedeas (Article 73(8) of the LPI).

Except for legitimate reasons, the licensee must begin exploiting the subject matter of the patent within one year of the license being granted, though an interruption for the same period is permitted (Article 74 of the LPI). If this does not happen, the patent holder may request the revocation of the license (Article 74(1) of the LPI).

A licensee is vested with all powers to act in the defense of the patent (Article 74(2) of the LPI). After the compulsory license is granted, its assignment is only allowed when performed jointly with the assignment, disposal or leasing of the part that explores it (Article 74(3) of the LPI).

Where a compulsory license is granted due to an abuse of economic power, the licensee, who proposes local manufacturing, is granted a term, limited to one year, to import the object of the license, provided that it has been placed on the market directly by the holder or with their consent (Article 68(3) of the LPI). In the case of such import or import for patent exploitation, the import by third parties of a product manufactured in accordance with a process or product patent is also admitted, provided that it has been placed on the market directly by the holder or with their consent (Article 68(4) of the LPI).