Articles and Information

On August 1st, 2023, the General Coordination of Technology Contracts of the Brazilian PTO published a Notice clarifying some points of the previously published Resolutions No. 26 and 27, both of July 7, 2023.

According to the Notice, the following changes were introduced in relation to some formal requirements for registration (recordal) of Contracts with the Brazilian PTO:

(1) Contracts digitally signed (meaning signed with any form of digital signature/certification) abroad no longer require notarization nor legalization/apostille (if, however, the contracts are “hand” signed abroad notarization and legalization/apostille are still required);

(2) documents digitally signed without Brazilian Certification (meaning a certification homologated in Brazil, such as ICP-Brasil) will be accepted;

(3) contracts signed in Brazil no longer require signatures of two witnesses (witnesses’ signature are still required for parties that execute the agreement abroad and the witnesses may also digitally sign the contract as per items 1 and 2, above);

(4) submission of copies of Brazilian companies’ Bylaws/Articles of Incorporation to the Brazilian PTO are no longer required;

(5) contracts no longer require the parties’ representatives to initial all their pages and annexes’; and

(6) Brazilian licensees will no longer be required to submit Identification Forms (FCE) to the Brazilian PTO, in order for the contract to be recorded.

The Notice also highlights two changes in relation to the technical examination of contracts, namely:

(1) Contracts whose object is non-patented technology will be accepted for registration in the category of “Technology Supply -FT”; and

(2) The “declared value” of Trademark License Agreements relating exclusively to trademark applications, will be indicated in the Certificate of Registration of the contract issued by the Brazilian PTO (payment of royalties for applied-for and not yet registered mark will be accepted).

We draw your attention to the fact that, while registration of contracts with the Brazilian PTO are no longer required for Brazilian licensees to remit payments abroad (although we do recommend contract registration/recordal for this purpose), registration/recordal of contracts are still required:

(i) for Brazilian licensees to deduct the royalties paid to the licensor (this issue is still pending a clear regulation from the Brazilian IRS);

(ii) when licensor invests licensee with special powers (such as to enforce the licensed rights before Brazilian courts); and

(iii) in general terms, to have legal effects against third parties.

Last but not least, royalty rates and royalty ceilings are no longer in place, meaning that the parties may freely agree contract royalties and payment structure, even when the companies are related (mother company and its local subsidiary, for example). Brazilian licensees will be able to deduct all royalties paid to the licensor, depending on how they (the licensees) opt to calculate and pay income tax internally, and also on the date on which the licensees adopt the new internal rules relating to “transfer price”.

Should you have any doubts or require further clarification on this matter, please do not hesitate to contact Guerra IP team.