Brazilian Courts and Preliminary Injunctions in SEP Infringement Lawsuits
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 lawsuit1 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.
