In June, ACT | The App Association partnered with the Brazilian research association Lawgorithm to host the timely webinar series “Core Principles for Licensing Standard-Essential Patents.” Over three sessions, experts discussed the challenges that Brazil is facing in regulating a developing standard-essential patent (SEP) licensing landscape and the opportunity to build a strong approach to anticompetitive practices based on the lessons learned in other jurisdictions. The series brought together experts from law, policy, academia, and industry to contribute to the ongoing dialogue around innovation policy in Brazil.

Webinar Week 1: FRAND Licensing Principles and Practices

To kick off the series, “FRAND Licensing Principles and Practices” set out the foundational framework for licensing SEPs and the adoption of the voluntary fair, reasonable, and non-discriminatory (FRAND) commitment. The webinar included a presentation by Professor Fernanda Galera, PhD, at the University of São Paulo, who discussed the history and importance of the voluntary FRAND commitment made by SEP holders and how practices that undermine this commitment threaten the health of a vibrant digital economy. Using standards in the telecommunications sector as an example, Professor Galera highlighted the importance of good licensing practices and the current tension between patent protection and the social function of patents. She emphasized the importance of SEPs and anticompetitive tactics while referencing the ongoing investigation into Ericsson’s licensing practice conducted by Brazil’s Administrative Council for Economic Defense (CADE). Importantly, this case considers a SEP licensing negotiation between Ericsson and Lenovo (the parties) that was adjudicated in multiple jurisdictions, including Brazil. After the parties settled, CADE continued its investigation because of the broader public interest concerns. If SEP holders are allowed to engage in anticompetitive SEP licensing tactics, they could exclude Brazilian innovators or increase product costs to Brazilian consumers.

The presentation was followed by a panel discussion moderated by Beatriz de Sousa, a researcher at Lawgorithm, and featuring Professor Galera, Bernardo Cascão, partner at the law firm BMA Advogados, and Ademir Antonio Pereira Júnior, co-head of the antitrust/competition practice at Advocacia José Del Chiaro. The panel underscored the need for predictability, access, and balanced technological development while expressing the vital role that CADE and other entities within the Brazilian government can play in protecting competitive terms in the licensing of SEPs.

Webinar Week 2: Introduction to CWA 95000 and Its Relevance to Brazil

Building on the foundation laid during the first webinar, “Introduction to CWA 95000 and Its Relevance to Brazil,”provided an overview of the “CEN/CENLEC 95000 Workshop Agreement: Core Principles and Approaches for Licensing Standard Essential Patents (CWA 95000).” This document defines clear principles for SEP licensing negotiations that aim to promote balance between patent licensors and innovative licensees. Since the document’s enactment, it has garnered worldwide interest from judicial and public policy experts. The CWA 95000 guidelines were developed out of lessons learned from decades of SEP licensing abuse by a cross-section of technology standards participants. It serves as a foundation for policymakers to establish a healthy SEP licensing ecosystem and prevent the stifling of a standardized innovation landscape. This webinar featured presentations from:

Brian Scarpelli, senior global policy counsel at ACT | The App Association, who provided an overview of the CWA 95000 guidelines, including an explanation of the logic of technological standards and highlighting the interoperability of products and services such as in the case of Wi-Fi networks.

Celso Santos, a federal judge serving in the Regional Federal Court of the 2nd Region in Brazil, who contributed a practice perspective from the Brazilian judiciary. He explained that the judiciary is making progress and moving towards change, now requiring a demonstration of good faith in negotiations, where previously approval was granted based solely on ownership of the patent.

Alexandre Miura, associate with FAS Advogados, who offered a contextual understanding of the Brazilian public policy climate, highlighting the dilemma that Brazil is facing when developing an approach to SEPs. Miura explained that Brazil has an opportunity to follow a liberal approach, as seen in the United States, or follow a model that is more interventionist, like that of European standards.

Tatiana Lima, assistant economist at CADE, who addressed potential implications to antitrust law, discussing a current CADE study on the impacts of SEPs and FRAND practices in the Brazilian market. The completed study will function as a tool to be used in legislative, judicial, and administrative decisions moving forward.  Additionally, Lima further advanced the notion that the judiciary is the main operating stage for resolving such disputes.

The participants emphasized the importance of good faith in the FRAND negotiations, observed the impending path of Brazil’s regulatory approach to SEPs, and noted the potential for Brazil to learn from the experiences and mistakes of other jurisdictions.

Webinar Week 3:  Transparency and Anticompetitive Practices in SEP Licensing

The third and final webinar of the series, “Transparency and Anticompetitive Practices in SEP Licensing,” included a panel, moderated by the App Association Senior Intellectual Property Policy Counsel Priya Nair. With exhibitions by David Katz, PacTech Attorney, Enrico Bonadio, law professor at City St. George’s University of London, Jemma Trainor, senior associate at Hogan Lovells, Taranah Maghamé, founder and principal of Maghamé IP,  and Christian Helmers, professor of economics at Santa Clara University, this webinar highlighted the urgent need for institutional measures to deal with the challenges of SEP licensing in Brazil. David Katz presented his analysis on the risks of competitive abuses in SEP licensing and recommended increased transparency of licensing practices and incentives for independent assessments of essentiality. During the panel experts highlighted policy proposals and recommendations for improving SEP licensing practices in Brazil including:

    • Normative recognition of the sui generis nature of SEPs,
    • Adoption of judicial or administrative mechanisms to define FRAND rates,
    • Strengthening the role of CADE as a guarantor of competition and consumer protection, and
    • The promotion of transparency in licensing practices and the inclusion of small businesses in the innovation market.

This webinar series represents a first step in contributing to the conversation surrounding SEP licensing in Brazil. The App Association is committed to continuing to bring foundational education and experienced global perspectives to the government of Brazil in order to foster a leading approach to SEP licensing in Latin America.