Newsletter Edition 36 - May 2022


Patents and economic development fine-tuned

In 2021, according to the BPTO, of the 26,921 patent applications in Brazil, only 19% were from residents, which means that foreign countries, led by the United States, dominate patent registrations in the country. For the president of ABPI, Gabriel Leonardos, the problem is not just the low patenting among residents but the poor performance of Brazil among the world’s patent applicants, whether Brazilian or foreign. Changing this scenario, he points out, depends on broader economic opening, promotion of the domestic market, and the insertion of Brazil into global production chains.

ABPI News: Is the lack of interest of Brazilian companies in the patent system just because they are unaware of the benefits of the IP system?

Gabriel Leonardos: This is definitely one of the reasons, but it is not the main one. This ratio of approximately 80%/20% between deposits from non-residents and residents in Brazil has been constant over the last 30 years. The problem is not this low percentage among residents, but the progressive drop in patent applications in Brazil, either from residents or non-residents, which indicates the country’s technological gap. It is important to point out that it is not unusual for a country to receive more patent applications from non-residents than from residents; after all, there are 193 member countries in the WIPO (World Intellectual Property Organization), and, understandably, the sum of deposits from all other countries is greater than the sum of deposits from Brazilians. It also happens in the US, for instance, where foreigners account for 55% of total deposits. It is rare for countries such as Germany, where most deposits (68%) are from nationals (all data are from 2020, according to WIPO). The more open a country’s economy, the larger the domestic market, and the more that country is inserted into global production chains, the greater the interest of foreigners in protecting their patents in that territory.

ABPI News: Does the same cause explain the leadership of universities and Petrobras (and not private companies) in patent applications among residents?

GL: The virtual absence of Brazilian private companies among the leading patent applicants in Brazil is proof that current policies are wrong or, at the very least, insufficient. The Innovation Law (Law No. 10,973, of 12.02.2004, later modified by Law No. 13,243, of 01.11.2016) fostered the interest of Brazilian public universities in filing patents. Patents contribute to the dissemination of information technology (as they are accessible through several public databases) and have the potential to generate royalty income for universities. However, one cannot omit that in the most developed economies, the leading applicants are private companies, as they are the ones with the immediate economic interest in the market exclusivity guaranteed by the patent. It should be noted that we do not advocate a reduction in the number of patents filed by public research entities – this number, compared to other countries, is not even that high, but a substantial increase in the number of patents to be applied for by Brazilian private companies. The conclusion is that, unfortunately, the Innovation Law, with all its qualities, is widely insufficient for the needs of our country.

ABPI News: Why is the low volume of residents in the IP system not related to trademark registration, which grew during the pandemic?

 GL: Brazilians are creative and love novelties. The relaunch of old products, or new products, even without considerable technological advances, is constant and invariably demands new brands. But new brands, as much as they increase the commercial attractiveness of products, do not necessarily mean that new technologies are being incorporated and made available to national consumers.

ABPI News: Can the low volume of patent applications by residents be directly associated with Brazilian economic development?

GL: As economist Zeina Latif explained in a recent presentation promoted by ABPI, Brazil has been trapped for decades in the middle-income trap, which is difficult to escape. Without strong incentives for innovation — and fighting the copy industry — we will not overcome this challenge. There are more than 20 times the total annual number of patents in the US than in Brazil (in the US, there were 597,172 filings in 2020!), and this should be an immense concern for our authorities: the progressive technological distance between Brazil and more advanced countries. We have few national patents, and foreigners have also lost interest in us. In Brazil, we grow soybeans that feed the pigs served at lunch to Chinese scientists developing 6G technology and artificial intelligence. We must encourage agribusiness, of course, because it is a great national wealth, in which we have indisputable comparative advantages relative to almost all countries in the world. But only with industrial innovation will we be able to create a sophisticated society that adds value to goods and services produced here.

ABPI News: Is ABPI’s Corporate Committee in this spirit of showing the benefits of the IP system for the private sector?

GL: Yes, our Corporate Committee is working with very intense concern to alert the authorities to the need to foster innovation within companies established in our country.

ABPI News: What are the expectations regarding the Brazilian GIPI (Interministerial Intellectual Property Group of the Ministry of Economy). Is it a light at the end of the tunnel of low Brazilian innovation?

GL: The Brazilian GIPI is open to society and working intensively to improve the Brazilian legal and regulatory environment. We hope there will be continuity in these efforts and that intellectual property policy will become a state policy, not linked to this or that government. We will achieve nothing if we do not have continuity and pursuit of a uniform strategy over decades. The Brazilian ENPI – National Intellectual Property Strategy and the ENI – National Innovation Strategy, developed and published in recent years, are critical steps in this direction.