The Office of the US Trade Representative (USTR) has initiated a sweeping Section 301 investigation into Brazilian trade practices, citing concerns that span from inadequate IP protection to restrictions on digital commerce.
The investigation, launched under Section 301 of the Trade Act 1974, marks a significant escalation in trade tensions between Brazil and the United States. However, local IP experts opine that, while there are structural challenges commonto developing nations, the country’s IP enforcement mechanisms are robust.
Brazilian legal community disputes IP enforcement claims
The USTR 's allegations of inadequate IP protection have drawn measuredresponses from leading IP practitioners in Brazil. As a signatory to several international IP agreements (eg, the Paris Convention, theTRIPS Agreement and the Madrid System), “Brazil has fully aligned its IP law withinternational standards”, insists Rafael Rocha , partner at Daniel Law.
“Certain particularities” of the Brazilian system even benefit international IP owners,he contends. “These include the broad availability and historically low threshold forobtaining preliminary injunctions in civil litigation, even in complex matters such astrade dress, industrial designs, 3D trademarks and patents.”
Elsewhere, Brazil’s anti-counterfeiting law “is above standard in internationalcomparison”, argues Gabriel Leonardos, senior partner at Kasznar Leonardos. Notonly does it clearly state that the infringement of any IP right is a criminal office, but ex part e preliminary injunctions are available to IP owners, he notes.
Customs authorities are also empowered to seize and destroy counterfeit goods“without the need of a court decision”, Leonardos explains. This means that “theprocedures for organising police raids to seize counterfeit goods are generallystreamlined and do not involve overly complex court proceedings”, Rocha adds.
Recent years have seen a “significant increase” in engagement from lawenforcement authorities, Rocha says. Despite the “widespread presence” ofcounterfeit goods in Brazil, “hundreds” of actions seizing “millions” of infringingproducts take place each year, he insists.
Geographical and structural enforcement challenges
But challenges remain.
"Relatively low criminal penalties for IP infringement" have a limited deterrent effect,Rocha admits. “Criminal penalties for IP crimes (eg, counterfeiting) are generally lowand rarely result in imprisonment,” he says. "The time frame to get a final decision in our courts and the low amount normallydetermined as compensation" are also primary challenges for trademark owners,says Luiz Edgard Montaury Pimenta, senior partner at Montaury Pimenta, Machado& Vieira de Mello.
The complexity of Brazil's enforcement landscape extends beyond legislativeframeworks to geographical realities, too. “One of the major challenges of trademarkenforcement in Brazil is the lack of adequate supervision of the amazingly long Brazilian land border, mostly inside the tropical forest, and with a total length of16,800km,” observes Leonardos.
This geographical challenge is compounded by sophisticated counterfeitingoperations. “Falsified goods are in the vast majority imported (or smuggled) intoBrazil, and not locally produced, with several layers of smokescreens: companiesthat exist only on paper, falsified invoices, phony addresses,” Leonardos notes.“Behind all that, there are often large crime organisations that either profit directly orsell ‘protection’ to such activities.”
Standardisation and reform on the horizon?
Through all of this, Customs is perceived to have generally effective mechanisms,albeit with room for standardisation. Customs mechanisms "normally work quite well and are very effective”, saysMontaury Pimenta. “The main issue that needs to be adjusted is the differentprocedures adopted by the different customs authorities’ offices for the same type ofretention.” Rocha agrees: “Most customs units now handle seizures administratively, withoutthe need for a court order, through a faster and more cost-effective process.However, challenges remain in standardising this procedure.”
“Customs units still operate with a high degree of discretion and may adopt differingapproaches... Furthermore, certain customs units remain reluctant to disclose theidentity of infringers, often due to a misinterpretation of tax confidentiality rules,”Rocha expands. “Revising customs legislation to standardise administrativeprocedures for seizing counterfeit imports would enable more effective bordercontrol.” Practitioners report more encouraging developments when it comes to onlineenforcement. Despite ongoing debates over platform liability, Brazil’s major onlinemarketplaces “have implemented relatively effective brand protection programmes”,says Rocha, who has seen first-hand “the fast review and removal of infringingcontent, with a high success rate”.
However, the reactive nature of these platforms means that “a large volume ofcounterfeit-related advertisements continues to circulate online”, he admits.
“Increasing the severity of criminal penalties for IP infringement would undoubtedlyhave a significant impact on enforcement strategies in Brazil, helping to reduce theavailability of counterfeit products and effectively disrupt counterfeiters’ supplychains,” Rocha suggests. Both this and customs standardisation are already under discussion in the BrazilianCongress, he says. But a “lack of political prioritisation” means “there is currently noclear timeline for their implementation”.
For Leonardos, though, meaningful improvements may not require legislativechange. An increase in dedicated federal and state police personnel could result in“immediate, better results”, he says. While police officers are “professional andcompetent”, staffing shortages remain, “due to the general lack of funding in mostareas of fighting crime in Brazil, a natural consequence of the fiscal challenges of adeveloping country”, Leonardos says.
Investigation's broader trade implications
The Section 301 investigation encompasses other areas of concern beyondintellectual property, including digital trade restrictions, alleged “unfair, preferential”tariffs and anti-corruption enforcement.
The USTR alleges that Brazil may be "retaliating against [US companies] for failingto censor political speech or restricting their ability to provide services in thecountry" through digital trade. The agency also claims that Brazil providespreferential tariff rates to certain trading partners while disadvantaging US exports.
Yet local practitioners are cautiously optimistic about the impact the investigationmay have for IP enforcement. “At this early stage, it is difficult to assess the full impact of the investigation,”admits Rocha. “Possible penalties may jeopardise diplomatic efforts. However, if thesituation helps generate greater political interest in advancing the review of IPlegislation, particularly regarding penalties for IP crimes and customs procedures,the outcome would be favourable to the interests of US companies and IP ownersmore broadly.”
“This may bring tension in relation to issues that may be of interest to US IP owners,but on the other hand this may bring stronger actions in relation to combattingcounterfeiting in places that are well known by the Brazilian authorities,” addsMontaury Pimenta. For Leonardos, however, the investigation may be an overreach. “The general view inBrazil is that this investigation, as far as IP enforcement is concerned, is anexaggeration of the shortcomings of Brazil in this area,” he says. “We hope thismisunderstanding between the two countries can be quickly resolved. Brazil isstrongly committed to enforcing IP rights, and not because of foreign pressures, butbecause in the last 20 years Brazilians have come to realise that IP protection bringssocial justice, innovation and technology and improvement to the Brazilian people’slife conditions.”
The USTR has requested consultations with Brazil in connection with theinvestigation. It is due to hold a hearing on 3 September 2025. Interested partieshave until 18 August 2025 to submit written comments and hearing requests.
