August 6, 2025
The Brazilian Administrative Council for Economic Defense (CADE) has released today its study "Contribuições do Cade: Patentes Essenciais," providing an examination of Standard Essential Patents (SEPs) considering the ever-growing importance of the Brazilian jurisdiction in cases involving SEPs. The study was requested by the Interministerial Intellectual Property Group (GIPI), coordinated by the Secretariat of Competitiveness and Regulatory Policy of the Ministry of Development, Industry, Commerce and Services (MDIC).
The study underscores the role of SEPs in driving technological progress and highlights the importance of robust patent protection to foster innovation and ensure a fair return on significant research and development investments. For patent holders and technology developers, CADE's study reinforces the foundational principles that underpin the global innovation ecosystem.
While the study addresses potential antitrust concerns, it also recognizes the need to safeguard the legitimate rights of SEP holders. The discussion around "hold-up" scenarios, where implementers might face excessive demands, is balanced by the critics of the harmful effects of "hold-out" - where implementers delay or refuse to take a license, effectively free-riding on the patent holder's innovation - and the understanding that “it can be far more detrimental to innovation, because, in this case, if the implementers resist investing in a standard (for example, due to the lack of agreement on the royalties), innovators will struggle to economically justify their innovation.” (quote from page 47 of the study).
CADE's analysis, particularly in its review of global cases, highlights the importance of ensuring that patent holders have effective mechanisms to enforce their rights and secure fair compensation in order to keep the incentives for R&D and the contribution of patented inventions to global standards.
The study's approach also touches upon the role of Non-Practicing Entities (NPEs), often mischaracterized as "patent trolls." It is vital to recognize that many NPEs play a legitimate and valuable role in the innovation lifecycle, enabling smaller inventors, universities, and specialized R&D firms to monetize their intellectual property. Their ability to assert patents ensures that even those who do not manufacture products can contribute to and benefit from the patent system, fostering a more dynamic and competitive market for ideas.
CADE's review of international jurisdictions reveals a diverse regulatory landscape, yet a consistent underlying recognition of patent rights. While some regions, like China, Japan, and South Korea, have introduced specific guidelines for SEP negotiations, and the EU continues to refine its approach, the fundamental principle remains: patent holders deserve fair compensation for their essential contributions – which CADE rightfully acknowledged is being considered in judicial decisions. The withdrawal of the EU's proposed SEP Regulation, as noted in the study, can be seen as a cautious step away from over-regulation that might inadvertently stifle innovation by diminishing the value of SEPs.
Judicial trends, both globally and in Brazil, are increasingly concerned with abuses from implementers that refuse to engage in good-faith negotiations and respect the intellectual property rights of SEP holders.
In Brazil, much like other countries, there’s no discrimination of SEPs amongst the patents granted by the BRPTO. CADE’s study points to a maturing jurisprudence that provides adequate treatment to disputes involving essential patents. The evolving stance of the Rio de Janeiro State Court signals a recognition that implementers who prevail in litigation have been demonstrating a genuine willingness to license on FRAND terms. This includes engaging in timely negotiations and providing appropriate compensation. The CADE's study analysis of the Motorola/Lenovo v. Ericsson case, highlighting the "hold-out" behavior of implementers and the possible abuses at the negotiation stage, further underscores the importance of ensuring that patent holders are not unfairly deprived of their rightful royalties.
Licks Attorneys is committed to empowering patent holders to protect and leverage their valuable intellectual property. Our firm represent 100% of the patent holders in all SEP cases filed in Brazil since 2012, possessing deep expertise in navigating the complexities of SEP licensing, enforcement, and competition law, both in Brazil and globally. Our partners stand ready to assist our clients in developing robust strategies that safeguard their innovations and ensure their rightful place at the forefront of technological advancement. Please reach out to us for a detailed discussion on how these insights apply to your specific portfolio and business objectives.
