Software Protection in Brazil – Register or Not?

*Eduardo Ludmer

Brazil is home to a thriving software industry which generates more than US$ 60 billion per year. Brazilian developers are reckoned as creative and smart, responsible for coming up with great solutions for easing the hurdles of daily life faced by Brazilians and other foreign nationals. One question, however, still beats them: should they register that perfect software that they put so much effort into it and makes them so proud?

The question is not uncommon to other software owners/developers worldwide as registration usually requires the disclosure of part of the source code, the mere thought of which makes one tremble. So register or not, that is the question.

Under Brazilian law a computer program is considered a literary work. Article II of Law # 9,609/1998 (known as the “Software Act”) explicitly provides that the legal framework applied to a computer program is that conferred to the literary works by copyright and neighboring rights law.

Article 18 of Law # 9,610/1998 (known as the “Copyright Law”) provides that the rights protected under the Copyright Law (including computer programs) are protected, regardless of their registration. Such rule is replicated by Article II §3 of the Software Act. In turn, Federal Decree # 2,256/1998 provides that the registration of software, if desired by the holder, will be effected before the Brazilian Patent and Trademark Office (“BPTO”).

As the law provides no clear cut instruction as to whether one should reveal to the government part of his/her/its precious software, we turn to the courts´ rulings as they may shed some light on the matter:

Recently, in 2016, the Brazilian Superior Court of Justice (“SCJ”) handed down 2 decisions by Justice Maria Isabel Galloti dealing with the matter: The first one included in the decision excerpt that “the software is protected since its creation, and that its late registration before the BPTO, which is optional, does not prejudice the protection arising out of the novelty and creativity of the intellectual work”. It further established that: “…evidenced that the plaintiff had its exclusive work, which was registered before the BPTO, unlawfully reproduced by third parties, the plaintiff has the right to be indemnified for such violation” (SCJ – Interlocutory Decision # 1,392,095. Reporting Justice Maria Isabel Galotti. Published on 04/02/2016).

The second decision, in a similar fashion, when establishing that the plaintiff was the owner of the software, reasoned that the hiring of the plaintiff was made prior to the entering into effect of the Software Act and therefore there was no possibility of registering the software before the BPTO, also noting that under the Software Act the registration is optional (SCJ- Clarification Motion on Special Appeal # 1379861. Reporting Justice Maria Isabel Galo. Published on 05/02/2016 tti).

This same rule (which is not very helpful to determine whether to go ahead with the registration), was replicated by the courts of the different states across Brazil when ruling on claims in connection with software violation.

In turn, in particular with regards to foreigner companies, when arguments challenging the ownership of the software were raised, (which would then trigger the lack of standing of the plaintiff) the courts have generally found, anchored on Art. 2 §4 of the Software Law (which confers foreigners the same rights afforded to Brazilian nationals by the Software Act), that the registration of the software in Brazil should not constitute a prerequisite for claiming damages (conversely to what happens in the U.S.) for copyright violation. These rulings also established that the previous registration of the software with the competent registration body where the software owner is located such as the U.S. Copyright Office constitutes enough evidence of ownership.

Another factor that should be weighed in deciding whether to go forward with the registration is that there are no records of any unlawfully leak/disclosure of any classified/secret information by the BPTO, until this date, which would raise suspicions on its credibility. Further, the whole registration process should take no longer than 90 days from the date of request and the cost thereof is currently approximately R$ 500,00, currently less than US$ 150,00 (including the request for secrecy).

Disclosing part of one´s most precious secret is not a simple decision to make, especially when not required by the law. When it comes to foreign companies doing business in Brazil, it seems that the registration in their country of origin would be sufficient for providing the desired protection. For Brazilians however, although there are some technological tools available to prove authorship such as code signing, the registration with the BPTO is likely to grant a more substantial protection, especially if an eventual lawsuit should be ruled by a judge not very familiarized with Software Law. In such cases, you better be registered than sorry!

*Eduardo Ludmer is an associate in the Corporate M&A team.

Azevedo Sette Advogados