Enforcing Patents in Brazil: An Injunction Paradise?
In the Americas, Brazil is the second largest country in both GDP and population, and the third in territorial extension. Although the amount of patent litigation in Brazil is rather small in comparison to the U.S., patent infringement actions are common and an effective measure against infringers, because preliminary injunctions are widely available. This makes the Brazilian jurisdiction very attractive as an additional battlefield in worldwide patent disputes.
Brazil has a truly independent judicial system, and judges are doing their best to enforce the rule of law. Different from other BRIC countries, there is no bias against foreign companies in Brazil. A great number of infringement actions initiated against local companies are filed by foreign entities, and their chances of prevailing are essentially the same as any other plaintiff.
In comparison to the U.S., the standards for obtaining injunctive relief in Brazil are much lower than one might expect. For instance, there is no need to give notice to the defendant and the parties are allowed to have ex parte, in-chambers meetings with judges. Plaintiffs are often able to obtain preliminary injunctive relief even before defendants are served with a summons. In certain venues, like the State of Rio de Janeiro, for example, plaintiffs are able to obtain injunctions more often than not, generally in about 69% of cases.
Moreover, obtaining preliminary injunctive relief is possible even if the asserted patents cover standard essential technology, as occurred in Vringo v. ZTE and Ericsson v. TCT: in both cases, defendants were prevented from manufacturing, using, selling, offering and importing the infringing goods in Brazil. A preliminary injunction may also include search and seizure measures or many other evidence-gathering requests presented by plaintiffs.
Hence, there is nothing similar to the eBay v. MercExchange case in Brazil. NPEs or patent assertion entities are equally capable of obtaining preliminary ex parte injunctive relief. The fact that the plaintiff merely licenses its patents does not bar the granting of preliminary injunction. A few courts have taken into consideration the fact that the patent only covers a small component of the infringing product when deciding certain requests for preliminary injunctions, but most judges simply ignore this issue.
Generally, in order to obtain injunctive relief, the plaintiff must present sufficient documentary evidence to establish (i) the likelihood of eventually prevailing on the merits and (ii) that the result sought with the lawsuit could be frustrated or harmed if an injunction is not granted (i.e., the plaintiff must establish that granting the PI is an urgent matter). Alternative possibilities of obtaining preliminary injunctions occur when the plaintiff is able to establish that the defendant is presenting defenses and objections in an abusive way, that the defendant is trying to delay the proceedings, or the defendant is not able to create reasonable doubt regarding the facts alleged by the plaintiff.
Additionally, in order to maximize the chances of obtaining an injunction, it is usual for plaintiffs to present several technical opinions from local and foreign experts, typically professors teaching at renowned universities, in support of their arguments. Such opinions are well regarded by judges when deciding the requests for injunctions because they usually provide them with enough grounds to grant the request.
As a general rule, foreign plaintiffs are required to post a small bond at the beginning of the suit in order to secure the payment of court costs and other expenses to the defendant in case the plaintiff eventually loses the case, unless the Brazilian subsidiary joins the litigation as a co-plaintiff. This requirement, however, is unrelated to the granting of a preliminary injunction, as paying a bond is not a legal requirement for obtaining injunctive relief. Finally, upon a finding of infringement, a permanent injunction is the typical remedy, in addition to damages.
In a nutshell, the lower standards for obtaining injunctive relief makes the Brazilian jurisdiction a very favorable battleground to enforce patent rights in global litigation. This favorable standard represents a substantial risk for multinational companies that are often sued for patent infringement, but also an opportunity for non-practicing entities.
Ricardo Nunes also contributed to this article.