The Brazilian National Institute of Industrial Property (“INPI”) recently issued new regulations regarding the registration and analysis process for technology transfer agreements. The main new rules are provided by the Normative Instruction INPI/PR 70/2017 (“INPI/PR 70”), which came into force on 1 July 2017, and Resolution INPI/PR 199/2017, which came into force on 11 July 2017 (“Resolution”).
As the body responsible for intellectual property matters, the INPI is also responsible to review and register certain contracts involving intellectual property rights to allow the remittance of royalty payments abroad, to guarantee the enforceability of the contracts against third parties and to allow for tax deductibility of royalties by the Brazilian party.
The agreements that are subject to registration at the INPI are:
- agreements for the licensing, sublicensing and transfer of intellectual property rights (trademarks, patents and industrial designs);
- franchise agreements; and
- agreements for the acquisition of know-how.
Before the INPI/PR 70, the INPI would not only analyse the intellectual property aspects of an agreement, but also had to take into account the tax and foreign exchange rules applicable when assessing the registration of these agreements.
The main change introduced by the INPI/PR 70 is that the INPI will no longer analyse the tax and foreign exchange aspects of agreements, rather it will only focus its analysis to the intellectual property requirements.
Due this change, the following disclaimer note was added to the certificate of registration issued by the INPI: “The INPI did not analyse the agreement in light of fiscal, tax and under the legislation relating to the remittance of capital abroad.”
The Federal Revenue Department, however, has not yet pronounce how it will analyse the agreement and ensure compliance with the tax rules. The Brazilian Central Bank issued the Circular 3,837/2017 merely stating that will no longer require INPI’s approval for remittance of royalty payments abroad.
Last modified: September 2, 2020