BRAZIL Law and Practice Contributed by: Ana Paula Affonso Brito and Maria Eduarda de O Borrelli Junqueira, Montaury Pimenta, Machado & Vieira de Mello
In terms of material damages, compensation has the purpose of restoring the status of the injured party to what it was prior to the violation. Brazil - ian law does not provide for punitive damages. Under Section 210 of the Brazilian Industrial Property Act, a patentee or exclusive licensee can file a civil complaint to cease the infringe - ment and request compensation for its losses. The damages (ie, loss of profits) will be calcu - lated based on criteria most favourable to the injured party, considering the following: • the benefits that would have been gained by the injured party if the violation had not occurred; • the benefits gained by the infringer of the rights; and • the remuneration that the infringer would have paid to the right’s holder for the granting of a licence that would have legally permitted the infringer to exploit the subject’s rights. The Quantification Phase It is important to keep in mind, however, that the quantification phase in Brazil is a separate proceeding, started only after the trial court has already rendered a merits decision on the infringement and generally, after the decision is no longer appealable. Moral damages (if appli - cable) will be fixed in the trial court decision. After the quantification phase is started by the plaintiff, the judge will appoint an unbiased expert accountant with the task of examining the accounting information provided by the parties, in order to decide on the final figures of material damages. Thereafter, the parties can nominate their own accounting assistants, and each will submit queries to the expert.
The expert analysis is comprised of a report with the answers to the queries, and the final amount of damages due on the grounds of the merits decision. The parties can challenge both the report and the trial court decision confirming the expert’s assessments, through an interlocu - tory appeal. This means that the quantification phase can take significant time, but by having the constitu - tional right to challenge the arguments/evidence of all the parties involved in the dispute, the par - ties are guaranteed that the due process of law is being applied at all stages of the dispute. Decisions of the São Paulo State Court Common questions relate to how much is recov - erable in damages, under which parameters, and how long it will take to receive the amount related to a damages award. Based on case law analysis, the decisions rendered by the São Pau - lo Court of Appeals have been setting the tone. Infringement lawsuits need to be filed with the state courts. The São Paulo State Court receives many disputes, since most major companies are established in the State of São Paulo, which has IP-specialised judges and chambers that fre - quently address the applicability of Section 210 of the Brazilian Industrial Property Act. On the grounds of the parameters established in Section 210, the expert will calculate the dam - ages, using the criteria most favourable to the injured party. In this sense, the São Paulo Court of Appeals considers that, for the purpose of quantification, the net value of the infringing products will guide the expert in determining the damages. Although the quantification phase can be quite lengthy, the IP holder can expect that, in Bra -
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