New legal framework for business brings important changes to patents and trade names

Brazil’s Chamber of Representatives has approved the new Business Environment Statute, which aims to establish a new legal framework for doing business in Brazil. The text was approved by way of Provisional Measure 1040/2021 on 23 June 2021. The Federal Senate has until 9 August 2021 to analyse and deliberate on this matter. The provisional measure has great potential to improve the business environment in Brazil and to have a positive impact on Brazil’s position in the World Bank’s Doing Business ranking.

This new legal framework is a Ministry of Economy initiative and focuses on providing measures to reduce bureaucracy, increase legal certainty and modernise and improve the Brazilian business landscape, by doing the following:

• facilitating the opening of companies;
• facilitating foreign trade and the recovery of assets; and
• protecting minority shareholders.

Two important changes would also affect patents and trade names.

Patents

The provisional measure revokes Article 229-C of the Patent Statute to establish that the National Health Surveillance Agency (ANVISA) must provide prior approval of patents claiming pharmaceutical inventions. This has been subject to heated debates and lawsuits in the past few years and aims to clarify ANVISA’s role and reduce the Brazilian National Institute for Industrial Property’s (INPI’s) backlog for patent applications.

In addition, the measure would remove Article 40 of the Patent Statue, according to which the 20-year patent term, which begins when an application is filed, cannot be less than 10 years from the patent grant. This mechanism was introduced in 1996 to compensate for the INPI’s significant delay in examining patent applications (see here).

Trade names

Under the provisional measure, when a company is set up, the Registry of Commerce and other registration bodies must inform it as to the availability of a trade name. The measure also states that an entrepreneur or a legal entity may choose to use its Brazilian taxpayer number as a trade name. In addition, it prohibits the registration of companies with a trade name that is identical to an existing one.

Finally, it establishes that potential conflicts between trade names may be through an appeal to the National Department of Business Registration and Integration under the Ministry of Economy by interested parties at any time.