Washington – A new report highlights the growing importance of Standard Essential Patents (SEPs) to Brazil’s digital and industrial transformation, while warning that the country’s current legal framework is ill-equipped to address their unique economic and competitive dynamics.
For an overview of the study, see the Executive Summary here.
As Brazil accelerates investment in 5G, connected devices, and digital infrastructure, SEPs, patents indispensable to implementing widely adopted technical standards, have become foundational to innovation and market access. However, the report finds that Brazilian courts continue to treat SEPs like ordinary patents, issuing injunctions against implementing patents in actual products used by Brazilian consumers and businesses without accounting for the patents’ essentiality, licensing commitments, or broader market impact.
As the implementer offering an actual product made real investments with ongoing costs, the injunction brings their revenues to zero while costs continue accumulating. Commonly, the other party is a non-practicing entity with no related business apart from suing over patent disputes, and no cost pressures.
This approach, the report argues, risks enabling the strategic use of litigation to extract excessive royalties and distort competition, rather than promoting innovation and fair access to standardized technologies. Brazilian consumers and businesses can end up paying the price through higher prices or delayed access to new products.
The following can be attributed to Trevor Wagener, Chief Economist and Research Center Director, CCIA:
“Standards play a critical role in enabling interoperability and innovation, but they also require safeguards that prevent patent injunctions from being used as leverage to obtain extortionate ‘hold-up’ royalties. A more predictable, effects-based framework for standard essential patents in Brazil’s courts would better protect innovation, competition, and consumer access to the technologies that power Brazil’s economy.”
