Abstract
This chapter addresses transactions related to intellectual property (“IP”) where IP rights serve as a security for the credit. Since there is no specific statutory provision in Brazil regulating security over IP rights, this chapter will address the general rules that are relevant to this matter in the country. Among other topics, this chapter encompasses an overview of IP rights in Brazil; the categories of security rights; the structure of the related transactions; the priorities of a security right in insolvency processes; enterprise charges; rights before default; enforcement; typical costs; and legal and practical challenges in this matter.
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Notes
- 1.
The Brazilian system follows the French-based Civil Law “droit d´auteur” system, as opposed to the Common Law copyright system. The term “copyright” will be used in all references to authors’ rights for the purposes of consistency with the other jurisdictions.
- 2.
Article 6: “The author of an invention or a utility model shall be granted the right to obtain the patent that ensures property thereof, under the conditions set forth in this Act.”
- 3.
Article 42: “A patent confers on its holder the right to prevent a third party from, without such holders’ consent, producing, using, offering for sale, selling or importing for the aforementioned purposes: (I) any product that is the object of the patent; (II) any process or product directly obtained through a patented process.”
- 4.
Article 11 of the LIP: “An invention and a utility model are considered to be new if they are not part of the state of the art.”
- 5.
Article 122 of the LIP: “Any distinctive, visually perceivable, sign that is not included in legal prohibitions may be registered as a trademark.”
- 6.
Article 5: “(1) Authors shall be entitled to, as to the works in respect of which they are protected under this Convention, in countries of the Union other than the country of origin, the rights that those countries’ respective laws currently grant, or may grant in the future, to their nationals, as well as the rights specially granted by this Convention. (2) The entitlement to and the exercise of these rights shall not be subject to any formality; such entitlement and such exercise shall be independent of the existence of protection in the country of origin of the work. Consequently, apart from the provisions of this Convention, the extent of protection as well as the procedural means afforded to the author to protect its rights shall be governed exclusively by the laws of the country where protection is claimed.”
- 7.
Article 18: “The protection of the rights to which this Act applies does not depend on registration.”
- 8.
See Article 19 of the Copyright Act and Article 17 of Law No. 5 988 of December 14, 1973 (the former copyright act, which has been superseded by the Copyright Act except for its Article 17).
- 9.
The primary purpose of registering a Brazilian audiovisual work with Ancine is not related to IP protection. It is related to the organization of the Brazilian audiovisual market and to taxation (the so-called “Condecine tax“), as provided for by Executive Order No. 2 228-1 of September 6, 2001 and by Law No. 12 485 of September 11, 2011. However, such registration may be understood as creating a rebuttable presumption concerning the paternity of Brazilian audiovisual works.
- 10.
Article 22 of the Copyright Act: “The moral and economic rights in the work shall belong to the author who created it.”
- 11.
Article 27 of the Copyright Act: “Moral rights are inalienable and irrevocable.”
- 12.
Article 2: “The regime of IP protection of software is the one applicable to literary works under copyright law in force in the country, pursuant to the terms of this Act.
(…)
§ 3. The protection of the rights to which this Act applies does not depend on registration.”
- 13.
The INPI enacted (a) Normative Instruction No. 071/2017 on April 28, 2017 to provide for the applicable rules and procedures for software registration and (b) Resolution PR No. 61 on March 18, 2013 to regulate the filing of applications for the registration of software and the procedures for numbering these applications.
- 14.
The Paris, Berne, and Rome conventions are administered by the World Intellectual Property Organization (“WIPO“). The Universal Copyright Convention is administered by the United Nations Educational, Scientific and Cultural Organization (“UNESCO”). The TRIPS Agreement is an international agreement among the member nations of the World Trade Organization (“WTO”) that was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade, spanning from 1986 to 1994. WIPO, UNESCO and the WTO are specialized agencies of the United Nations.
- 15.
United Nations Commission on International Trade Law (2011). See especially paragraph no. 35.
- 16.
Article 1 431 et seq. of the Civil Code.
- 17.
“Rights can also be pledged, because the pledge, as modern doctrine acknowledges, is one of the few in rem rights that can be created over intangible assets.“ Gomes (2012), p. 366.
- 18.
Article 1 361 of the Civil Code: “Fiduciary transfer is the terminable ownership of a non-fungible movable good that a debtor transfers to a creditor to serve as collateral.”
- 19.
Fiduciary transfer was developed in the context of the financial and capital markets to foster the acquisition of consumer goods such as vehicles, but its use has been widespread. The broadened scope of this security interest was affirmed long ago by the Superior Court of Justice upon issuing the Uniform Precedent (“Súmula”) No. 28: “The fiduciary transfer agreement may encumber a good that already was debtor’s property.”
- 20.
CPC is the Brazilian standard-setting body engaged in the study, development and issuance of accounting standards, interpretations and guidance for Brazilian companies.
- 21.
Burton et al. (2014).
- 22.
Article 1 432 of the Civil Code: “The pledge agreement shall be registered by any of the parties; the common pledge agreement shall be registered with the Registry of Deeds and Documents”. Article 1 452 of the Civil Code: “The pledge of rights is constituted upon registry of the deed or private contract with the Registry of Deeds and Documents.”
- 23.
Article 1 361 first paragraph of the Civil Code: “The fiduciary ownership is constituted upon registry of the relevant agreement, be it a deed or a private contract, with the Registry of Deeds and Documents (…).”
- 24.
Article 129 of Law No. 6 015 of December 31, 1973.
- 25.
Notarial services at federal level are regulated by Article 236 of the Constitution and by Law No. 6 015/73. Such services are provided by notaries and registrars, whose activities are also regulated by state laws and overseen by state authorities.
- 26.
Personal bankruptcy (“insolvência civil”) is regulated by Law No. 5 869 of January 11, 1973. Financial institutions, insurers, pension funds, and credit cooperatives are subject to industry-specific statutes. Neither of those cases is addressed in this chapter.
- 27.
Appeal No. Resp 1,532,943-MT, 3rd Chamber, Justice Marco Aurélio Bellizze, ruled on September 13, 2016.
- 28.
In accordance with the price table available at https://www.cetip.com.br/comunicados-documentos/unidadetitulos/tabela-de-precos. Accessed May 5, 2017.
- 29.
Article 1 431: “A pledge is constituted by the effective transfer of possession of a movable thing that is susceptible of conveyance, made by debtor or someone on its behalf to creditor or its representative, as a debt collateral”.
- 30.
Exception is made for works of art such as paintings and sculptures.
- 31.
The sole paragraph of Article 1 431 sets forth that in rural, industrial, and mercantile pledges and in pledges of vehicles, the debtor will retain possession of the goods and must safeguard and maintain them. The solution proposed for IP rights would therefore not be inconsistent with the law.
- 32.
Caio Mário da Silva Pereira states that “if the pledged good generates profits, it shall be returned together with its profits that have not been received yet by the debtor during the [pledge] agreement”. da Silva Pereira (2017), p. 11.
- 33.
Loureiro (2018), p. 1 467.
- 34.
See Article 1,428 of the Civil Code.
- 35.
Loureiro (2018), p. 1 464.
- 36.
Article 1 361, second paragraph of the Civil Code: “Upon constitution of fiduciary transfer, possession shall be split and debtor shall become the direct possessor of the good.”
- 37.
See Article 2 of the Decree-law No. 911/69 and Article 1 364 of the Civil Code.
- 38.
House Bill No. 6 454/2013.
- 39.
“One might argue that, in theory, there would be no need for legislation authorizing official development agencies to accept intellectual and industrial property rights as collaterals. If it is not forbidden, it would be automatically authorized. However, we are aware that the financing policy of the development agencies tends to be very conservative, especially when it comes to the choice of collaterals of the transaction. It can be very risky for a manager to accept as collateral less traditional assets in financing operations (… .). The scope of the legislation, therefore, would be to make clearer the rule that, provided that there is a rational analysis of how enforceable the collateral based on intangible assets is, such as patents, nothing should hinder credit approval by official development agencies. This would avoid contestations by supervision bodies about the reasonableness of collaterals based on intangible assets per se.”
References
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da Silva Pereira CM (2017) Instituições de Direito Civil, Vol IV, 25th edn. Forense, Rio de Janeiro
Gomes O (2012) Direitos Reais, 21th edn. Updated by Luiz Edson Fachin. Forense, Rio de Janeiro
Loureiro FE (2018) Livro III - Do direito das Coisas. In: Coordenador Ministro César Peluso (ed) Código Civil Comentado, 12th edn. Manole, Barueri/SP
United Nations Commission on International Trade Law (2011) UNCITRAL Legislative Guide on Secured Transactions – Supplement on Security Rights in Intellectual Property. United Nations Publication. http://www.uncitral.org/pdf/english/texts/security-lg/e/10-57126_Ebook_Suppl_SR_IP.pdf. Accessed 10 Dec 2018
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Nunes, S.L. (2020). Security Rights in Intellectual Property in Brazil. In: Kieninger, EM. (eds) Security Rights in Intellectual Property. Ius Comparatum - Global Studies in Comparative Law, vol 45. Springer, Cham. https://doi.org/10.1007/978-3-030-44191-3_5
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