Search

Region
Jurisdiction
Firm
Author
Date
to
Keywords
Search

Brazilian Courts and Preliminary Injunctions in SEP Infringement Lawsuits

Montaury Pimenta, Machado & Vieira de Mello Brazil


Over recent years, Brazil has seen an intensification in patent litigation involving SEPs, with an exponential increase in lawsuits brought by both patent holders, NPEs (non-practicing entities), and some other companies that both hold essential patents and implement them.

 

Brazil is in the spotlight for its approach to patent litigation, being selected by patent holders to enforce their patents in Brazilian courts, mostly in the Rio de Janeiro business courts. Preliminary injunctions (PIs) are frequently granted on an ex parte basis and without an independent expert report, aiming to put pressure on ongoing global licensing negotiations.

 

Many patent holders involved in the Brazilian judicial disputes were already litigating outside Brazil as well. The favorable scenario for patent owners in the country encourages the filing of such lawsuits, since obtaining a preliminary injunction – normally accompanied by a daily fine for non-compliance – places the patentees in a stronger position in a worldwide license negotiation.

 

The Rio de Janeiro Court of Appeals has been confirming preliminary injunctions based on unilateral reports attesting that the technology covered by the patent is essential and that infringement is a logical consequence thereof. Such preliminary injunctions were being granted before the presentation of unbiased technical evidence – which is mandatory in Brazil, as judges commonly lack technical expertise.

 

Until very recently, specialized IP courts, with some exceptions, did not distinguish essential and non-essential patents, applying legal provisions that guarantee the possibility of granting ex parte preliminary injunctions based exclusively on unilateral reports attesting the existence of SEP infringement presented by the Plaintiff.

 

It is a fact that neither the Brazilian Code of Civil Procedure nor the Brazilian Industrial Property Law establish a distinction between essential and non-essential patents. However, it is unequivocal that the particularities of such microsystem and the way such lawsuits are developing in Brazil have attracted the attention of an increasing number of patent owners.

 

In spite of the provisions that set forth the possibility of ex parte preliminary injunctions in SEP lawsuits in Brazil, two recent court decisions issued by Judge Victor Augustin, now seated at the 6th Business Court of Rio de Janeiro, have been introducing other criteria for granting preliminary injunctions in such lawsuits.

 

One of these cases concerns a lawsuit (1) filed by a patent owner against a major worldwide telecom player, in which the prior judge granted a preliminary injunction without an independent court-appointed expert opinion. After almost two years, the new judge not only revoked the preliminary injunction previously granted but also dismissed the lawsuit - now based on an independent court-appointed expert opinion confirming the lack of patent infringement - and sentenced the Plaintiff to pay compensation for bad faith litigation plus court and attorneys’ fees.

 

Another recent court decision issued by Hon. Judge Victor Augustin of the 6 th Business Court of Rio de Janeiro (2) established the following criteria for granting a preliminary injunction in a SEP patent infringement lawsuit:

 

1. In order to claim a preliminary injunction, the patentee must prove adherence to FRAND (Fair, Reasonable, and Non-Discriminatory) conditions for settlement - meaning that whoever claims to hold an essential patent for such a standard must license to third parties under the referred terms.

2. Ex parte injunction will be conditioned upon a concise, unbiased opinion, in which the expert will initially answer some queries submitted only by the judge to a skilled expert appointed by the court, even if a more comprehensive report is provided later.

3. Confidentiality of the court files will be limited to trade secrets explicitly identified by the interested party. Such provision aims to facilitate the public dissemination, in line with Brazil’s general civil procedure rule that requires that lawsuits must be public and fully disclosed to society.

4. A judicial bond has to be posted by the Plaintiff.

 

Such decisions provide a clearer scenario for a highly technical and complex discussion that is only now being matured by the Brazilian judiciary.

 

Thus, as per the above highlights, despite such recent rulings, Brazil continues to be an attractive venue for SEP-related legal disputes.

 

While preliminary injunctions are still frequently granted to SEP holders, judges are becoming increasingly well-versed in the complexities of technological standards and their associated particularities. They are now more mindful of the rights and obligations of both SEP holders and implementers and aware of the FRAND terms that may set the tone in royalty negotiations.

 

As it can be seen, Brazilian courts remain committed to their judicial duty of safeguarding intellectual property rights. As SEP cases become more frequent in the country annually, it is natural that the disputes are handled by judges with even greater scrutiny and care, with the courts striving to balance the interests of all parties involved and the specific circumstances of each case.

 

(1) Parties and court files number are under sealed.

(2) Decision issued when the court files were public (now are under sealed): DivX, LLC vs. Gorenje do Brasil Importação e Comercio de Eletrodomésticos Ltda., Toshiba do Brasil Ltda. and Multilaser Industrial S.A. - Court files no. 0834763-49.2024.8.19.000, on May 17, 2024, 6 th Business Court of Rio de Janeiro State Court

 

Montaury Pimenta, Machado & Vieira de Mello



About the Firm

Montaury Pimenta, Machado & Vieira de Mello

AddressAv. Almirante Barroso, 139 – 7th Floor, Downtown - Rio de Janeiro, Brasil - 20031.005
Tel55-21-2524 0510
Fax
Contact PersonClarissa Jaegger
Emailclarissa@montaury.com.br
Linkwww.montaury.com.br


Related Articles