The litigation of Standard Essential Pat- ents (SEPs) is rapidly evolving in Brazil, mirroring a global dispute trend. Over the past few years, the country has witnessed a surge in infringement lawsuits, particu- larly in the Rio de Janeiro State Courts, which have emerged as the preferred jurisdiction for SEP disputes. Despite its growing relevance, SEP litigation in Brazil still lacks specialized legal frameworks distinguishing essential from non-essen- tial patents in an in-depth manner. As a result, courts tend to handle SEP cases similarly to conventional patent disputes, creating complexities for both patent holders and implementers.
This article provides an overview of the SEP litigation landscape in Brazil, cover- ing key issues such as forum shopping, litigation transparency, injunctions, damages, NPE and implementer risks, foreign-entity considerations, and the role of invalidity claims.
Brazilian SEP Litigation Hubs
Many companies involved in Brazilian judicial disputes are concurrently liti- gating in other jurisdictions. The favor- able landscape for patent holders in the country has been perceived as an invitation to file infringement lawsuits as a means of exerting pressure in on- going negotiations abroad. Patent hold- ers, typically filing such lawsuits before the Rio de Janeiro State Court venue,
often request ex parte preliminary in- junctions to enjoin defendants from al- legedly using their patented technology before any impartial technical evidence has been produced. These orders are frequently accompanied by substantial fines for non-compliance, strengthening the patentee’s position in global licens- ing negotiations.
Although neither the Brazilian Code of Civil Procedure nor the Brazilian Industri- al Property Law distinguishes between. essential and non-essential patents, the peculiarities of this framework and the way these lawsuits are unfolding have drawn increasing attention. Courts, re- lying on Article 42 of the Brazilian IP Law-which grants patent owners the right to prevent unauthorized commercial practices without differentiating Injunctions and Damages in SEP Cases between essential and non-essential
patents have frequently granted pre- liminary injunctions before defendants can present arguments on non-infringe- ment or non-essentiality. Allowing such arguments at the outset could better balance the rights of both parties and give judges a broader perspective when assessing injunction requests.
Decisions granting injunctions typically hinge on two key elements: proof of pat- ent ownership and evidence the patent has been declared essential to a specific standard (e.g., 5G). This leads to aggres- sive rulings, often without considering broader international FRAND negotia- tions, hold-up or hold-out practices, nor the impact on parallel disputes in other jurisdictions.
As the Rio de Janeiro State Court estab- lishes itself as a favorable venue, other key practices in these suits are emerging:
Coordinated NPE Litigation: Non-Prac- ticing Entities (NPEs) often work with litigation-oriented firms, leveraging prec- edents in SEP enforcement.
Validity Lawsuits in Brasília Federal Court: To avoid stay of infringement cases due to validity challenges, some litigants initi- ate parallel validity suits in Brasília.
As ICT and loT developments advance, it is crucial for Brazilian courts to consider this microsystem’s particularities to pre- vent technological lock-in.
Litigation Transparency Challenges
One of the major hurdles stems from the lack of transparency due to confi- dential court proceedings. Unlike in com- mon-law jurisdictions where case law is widely accessible, in Brazil:
Courts do not mandate full disclosure of all interested parties in SEP disputes.
Many lawsuits remain sealed, pre- venting industry players from analyz- ing precedents.
Defendants often lack access to crit- ical case-law information, making it difficult to predict litigation trends or formulate defense strategies.
This opacity creates significant challenges for telecom companies, as they struggle to anticipate legal risks tied to SEPs.
SEP holders frequently seek preliminary injunctions as a mechanism to compel implementers into licensing agreements, since Brazilian courts allow Ex Parte In- junctions (granted without hearing the de- fendant). Preliminary injunctions can gen- erally be classified into two categories:
Conditional Injunctions: contingent on confirmation of infringement by an unbiased court-appointed expert, imposing retroactive daily fines once infringement is established but lack- ing immediate practical effects. i. Unconditional Injunctions: taking im- mediate effect by ordering the de- fendant to cease the alleged infringe- ment and withdraw products from the market without awaiting further technical assessment.
These injunctions can disrupt commer- cial activities, forcing quick settlements. Damages awards for SEP infringement follow methodologies established by Article 210 of the Brazilian IP Act:
Lost Profits (compensating patentees for potential market losses).
Infringer’s Profits (disgorging unlawful gains).
Reasonable Royalty (calculated based on FRAND principles or expert assess- ments).
While most disputes have been settled prior to expert technical assessment, others remain in evidentiary or appeal phases, yet to reach quantification.
Defense Strategies for Defendant Companies
Companies facing SEP litigation must consider key defense strategies, includ- ing challenging essentiality, since Brazil- ian courts do not routinely differentiate between essential and non-essential patents. As essentiality declarations are self-certified, defendants may argue a patent is not truly essential, weakening the plaintiff’s case. Additionally, initiating a patent invalidity lawsuit before a Feder- al Court-with the Brazilian Patent Office as co-defendant—is a key strategy. Many telecom patents in Brazil have undergone limited substantive examination, and such challenges have led to partial or full invalidations in several cases.
Best Practices When Requesting Preliminary Injunctions: The FRAND Importance
Although Brazilian courts have yet to com- prehensively address FRAND terms, a re- cent ruling by Hon. Judge Victor Agustin Torres highlights evolving trends. In his decision, the judge recognized inconsis- tencies in SEP-related injunctions, noting:
“There has been a lack of uniformity re- garding urgent relief measures, some being granted without prior expert eval- uation, others requiring simplified expert hearings.”
Judge Torres stressed the importance of predictability and legal stability, emphasiz- ing courts should serve as forums for ne- gotiation and rebalancing of commercial conditions, rather than imposing immedi- ate prohibitions. His ruling signals a trend toward minimizing judicial intervention and promoting structured FRAND nego- tiations before extreme legal measures.
In this evolving context, companies ne- gotiating FRAND licenses in Brazil should adopt these strategic approaches:
Meticulously document all negotia- tions (emails, licensing history, rate discussions) to demonstrate FRAND compliance in litigation.
Ensure transparency in FRAND offers to mitigate litigation risks, especially given Brazil’s increasing scrutiny over licensing practices.
WIPO’s 2024-2026 Strategy and Its Implications for Brazil
The World Intellectual Property Office (WIPO) has outlined a three-year strategic plan in SEPS for 2024-2026 aimed at im- proving global SEP frameworks. WIPO’s strategy focuses on:
Enhancing dispute resolution mecha- nisms to reduce litigation. Tracking SEP enforcement trends to identify emerging risks. Promoting greater transparency in SEP cases.
Brazil’s judiciary is gradually aligning with these goals, introducing stricter require- ments for injunctions and FRAND assess- ments. However, challenges persist― particularly regarding case transparency, as confidential lawsuits prevent tracking SEP enforcement trends to identify risks.
