Answer ... Non-infringement and invalidity: Because novelty and inventive step are legal requirements for a patent to be valid in Brazil, if the accused product or method can be taken to be fully embraced by the prior art or to be inferred therefrom in an obvious manner, this finding alone will preclude infringement because the patent will be invalid. The invalidity of a patent is expressly provided for in the law as a matter of defence in the course of an infringement action. If the invalidity defence succeeds in an infringement action, the decision has legal effect only between the parties.
Aside from arguing the nullity of the patent as a matter of defence in the course of an infringement action, an accused party may also file an invalidity lawsuit before a federal court requesting nullity of the patent, with the Brazilian Patent and Trademark Office as a co-defendant. If there is sufficient evidence of the invalidity of the patent in the nullity action, an injunction may be granted whereby the effects of the patent are suspended until a final decision on the merits has been issued. In this scenario, the infringement action will probably be stayed until the federal court has decided on the merits of the nullity action. However, the infringement action judge has complete discretion about whether to stay that action pending the federal court’s decision.
Brazilian law expressly provides for the following exceptions to the rights conferred by a patent:
- acts done privately and without commercial ends;
- acts for experimental purposes relating to studies or to scientific or technological research;
- the preparation of a medicine according to a medical prescription for individual cases; and
- acts of use after the domestic exhaustion of rights.
These exceptions include the principle of national exhaustion of rights. However, a patent owner will still be entitled to prevent third parties from the parallel importation of patented products.
Other statutory defences include the following.
Unenforceable due to inequitable conduct: Although there is no defence termed ‘inequitable conduct’ in Brazil, there is by law a duty of good faith and a patent can be invalidated if the applicant did not act in good faith during the prosecution of the patent application. This lack of good faith could be found in similar actions to those which constitute the basis for prosecution history estoppel: a party cannot make one argument to have its patent granted and then enforce its rights with opposing arguments. This is determined on a case-by-case basis – for example, where a party has not presented a document of which it had knowledge that would have precluded grant of the patent. No direct proof of intent to deceive is needed.
Compulsory licence: In Brazil, there is a specific possibility that compulsory licences to third parties will be ordered on request. A compulsory licence may be granted on the following grounds:
- a decision from an administrative or court proceeding concluding that there was an abuse of patent rights;
- non-exploitation of the subject matter of the patent in Brazil due to failure to manufacture or incomplete manufacture of the product, or due to lack of full use of a patented process, except where this is due to economic unviability, in which case importation will be admitted (after three years from grant of the patent); or
- commercialisation that does not meet the needs of the market (after three years from grant of the patent).
A compulsory licence will not be granted if, at the date of the request, the patent owner:
- justifies non-use for legitimate reasons;
- proves that serious and effective preparations for exploitation were carried out; or
- justifies a failure to manufacture or commercialise the patented products due to legal obstacles.
In cases of national emergency or public interest, declared through an act of the federal executive authorities, insofar as a patent owner or its licensee does not meet such necessity, a temporary ex officio non-exclusive compulsory licence may be granted, without prejudice to the rights of the patent owner.
Laches: There is no formal concept of laches in Brazilian law; but a patent owner may jeopardise its chance of obtaining a preliminary injunction to stop the infringement based on a concept similar to laches applied in the judge’s analysis of the conditions for granting the requested injunction.
Equitable estoppel: Brazilian law has a concept similar to that of ‘equitable estoppel’ in the United States. There is a general principle of good faith that can theoretically be used to justify such a defence if:
- the patent owner misled the infringer into inferring that the patent owner did not intend to enforce its patent;
- the alleged infringer reasonably relied on this misleading conduct; and
- the infringer would suffer damages if the patent owner were allowed to proceed with its claim.