The Antitrust Review of the Americas 2009

Antitrust Law and Intellectual Property Rights in Brazil

The interaction between antitrust laws and intellectual property rights is a well-known and traditionally discussed topic worldwide. In Brazil, however, the experience is relatively recent and the main cases are currently under the analysis of the authorities. Disputes involving both institutes are a recent phenomenon in Brazil, especially due to structural difficulties faced by innovators to enforce their intellectual property rights. Nevertheless, the Brazilian experience is showing that the enforcement of intellectual property rights is being intensified. Such a new scenario has, undeniably, created incentives for those who assert property rights as a result of their innovation, as much as for those who dispute third parties' property rights assertions. Innovation is essential in the economic development process. The dynamic changes and innovation, fostered by the protection of intellectual property rights, are important drivers of the economic activity and productive gains and, in many cases, are the most important indicia of competition. While antitrust laws shall prevent abuses of market power, intellectual property laws shall support innovation, even by creating or increasing innovators' market power. Although the objectives described may suggest an apparent conflict, a careful analysis further elucidates the rationality behind the balance between these two important social values. Therefore, authorities worldwide have the important and complex challenge of balancing enforcement of antitrust and intellectual property rights. On the one hand, innovators shall receive a precise measure of protection of their investments, sufficient for creating and perpetuating the necessary incentives for future innovation. On the other hand, innovation shall serve the social purpose of promoting consumer welfare. Enforcing antitrust laws to privilege short-term social welfare may undermine incentives for innovation, thus preventing long term dynamic efficiency. In view of that, authorities must be careful in balancing both aspects in their decisions, so to avoid promoting a distorted analysis of the effects of a case in the market. Despite latest year's trials to construct a consistent body of jurisprudence, the Brazilian competition system still lacks the appropriate measure of legal certainty. In general terms, there are few guidelines that contribute to this regard as much as steers the administrative and judicial review. It is no different with respect to the subject matter. Although there is no consistent jurisprudence involving antitrust and intellectual property rights, the Brazilian authorities now have a great opportunity to define the limits and the interaction between these institutes.

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