It’s no surprise to the corporate world that Brazil is a breeding ground for business. Not for nothing, the country registers an increase in demand for industrial property registrations in succession. In 2024, for example, there was growth of 10% compared to the previous year. And many foreign companies, especially American and Chinese, landed in Brazilian territory.
Of the 166,000 trademark registrations made in the country, more than 1,600 were requested by companies in the United States, which demonstrates the interest in expanding business in South America’s main economy.
However, this positive scenario depends on some care. The main one is the sense of urgency to register a trademark in Brazil. Contrary to what happens in the USA, the Brazilian system operates under the principle of first to file, that is, the applicant of the registration is the one who gets the concession first.
The problem is that this has opened a window for malicious businesses or bad actors. Recently, the Brazilian PTO (INPI) – the federal agency responsible for the analysis and granting of trademarks in Brazil – managed to annul 176 registrations that were being used illegally.
According to a statement on its official website, the company Romper Administradora de Marcas “accumulated 176 trademark registrations in force, in more than 30 distinct classes of the Nice International Classification, with no real link to its activities”.
This violates article 128 of the Brazilian Industrial Property Law (No. 9217/96), which determines in its paragraph 1 that “persons governed by private law may only apply for trademark registration related to the activity they effectively and lawfully carry out, directly or through companies that they directly or indirectly control, declaring, in the application itself, this condition, under the penalties of the law”.
Okay, this is a problem for the Brazilian company. But the reason it does not use the trademarks for their proper purpose is what directly affects foreign companies with the desire to enter the Brazilian market.
According to the lawsuit that annulled the 176 trademarks, the registrations were used as a “trademark bank” for future commercialization and even to request undue advantages from businessperson who made lawful use of similar signs.
As a practical example, we can imagine that you own a trademark in the USA and want to take it to Brazil. When you try to file it before the Brazilian PTO, you discover that there is already a registration identical to yours made by another company or person. In this specific case, for you to regain your right to the trademark in Brazil, you would have to buy it from the company that got the registration first. Or fight in court to get it back.
In 2023, CNV helped a Chinese company regain its trademark in Brazil
The annulment of the 176 registrations on behalf of a single Brazilian company is not an isolated case when it comes to industrial property in Brazil. In 2023, CNV helped a Chinese client regain its trademark, which had already been registered by another local company.
In Brazil, the term for judicially oppose a trademark concession is 5 years. As that registration was granted in 2019, CNV suggested a lawsuit, which could be filed by 2024.
But the client was in a hurry and preferred to go the easy way: he paid almost $22,000 to recover a right that should have been his.
As the trademark is an intangible and movable asset, it is normal to trade it. The problem in this case is that the strategy was motivated by bad faith. The registration of a Chinese trademark by a Brazilian company was intended to anticipate a global market movement and profit a lot from it, and not to use the trademark for a real activity in the country.
However, CNV managed to assign (transfer) the trademark to the client in just 25 days. If the case went to court, it could take years.
How to prevent your trademark from being registered by another company in Brazil?
The safest, most economical and fastest solution to ensure the registration of your trademark in Brazil is to be in a hurry. Yes, if you have plans to expand your business and invest in Brazil, tip number 1 is to do it as soon as possible.
As we have already said at the beginning of this text, Brazil uses the rights allocation system. The right is granted to whoever first makes the application for trademark registration and meets all the requirements provided for in Brazilian law.
Therefore, it is necessary to have a sense of urgency to ensure the normal processing of a trademark registration in Brazil by the Brazilian PTO. As a result, in addition to guaranteeing all rights related to the concession of industrial property in the country, the foreign applicant will still save much more.
After all, as we showed above, buying a right that should be yours and paying much more doesn’t seem fair. And it is also not pleasant to wait for a judicial solution, which can last for years.
The easiest and most economical option is for your company to anticipate and file a trademark application in Brazil through the normal channels. And, of course, having a legal representative with credibility in the country – one of the main requirements for foreigners who want to register their trademark in Brazil.
Have you noticed how much simpler, safer and more economical it can be to guarantee rights and protect your main intangible asset in Brazil? If you have any questions about how to register your trademark in Brazilian territory, we can guide you. Contact CNV.