Brazilian company need not indemnify multinational software manufacturers for the use of unlicensed software

Brazilian company need not indemnify multinational software manufacturers for the use of unlicensed software

by Esther Flesch and Bruno Maeda

The Superior Court of the State of Minas Gerais has ruled that a Brazilian engineering company was not required to indemnify two large US-based software companies for the use of unlicensed software. The lawsuit was filed by one of the multinational software companies and by an organisation (representing the other software manufacturer) against a Brazilian entity as a result of the seizure of more than one hundred unlicensed software programs from the latter. The first level court required the Brazilian defendant to cease using the software programs unless it acquired the corresponding licences and also condemned the defendant to pay two and a half times the total value of the software programs seized. This decision was based on the Brazilian Software Law (Law No. 9,609/1998) which affords intellectual property protection to the software of foreigners who are domiciled in a country that recognises the same rights to Brazilian and foreigners domiciled in Brazil. The Superior Court of the State of Minas Gerais, however, ruled that the plaintiffs have not proved such reciprocity of protection and therefore decided that they are not entitled to the protection of their rights in Brazil.

The plaintiffs had presented a statement from the US Copyright Office alleging that "US copyright law grants the same protection to Brazilian and US works." But the Brazilian defendant claimed that the US does not assure the same rights to Brazilian entities since its copyright law was amended by the WIPO Copyright Treaty, which Brazil is not yet a contracting party. The Court held that the statement of the US Copyright Office is not sufficient to attest to the existence of equivalent rights since it is also necessary to prove the law's application. The plaintiffs presented evidence to demonstrate that past decisions on the same matter in the US have ruled in favour of foreign entities. Additionally, the plaintiffs argued that reciprocity does not have to be proved since Brazil and the US are members of the Berne Convention and already provide protection to computer software in their national laws. The plaintiffs have already filed an appeal against the Superior Court decision. For further information, please contact Esther Flesch and Bruno Maeda.

 

Esther Miriam Flesch practices general corporate and commercial law. She received her master of laws degree from the University of Michigan Law School in Ann Arbor, and obtained her doctorate from the Universidade de Sao Paulo Law School. Ms. Flesch is registered at the Brazilian Bar Association, Sao Paulo chapter.

Practice Focus

Ms. Flesch focuses on legal issues involving compliance, entertainment, information technology, intellectual property protection, as well as licensing and technology transfer agreements. She also advises clients on pharmaceutical and healthcare matters, telecommunications law and media-related transactions.