When doing business in Brazil, foreign investors are normally concerned with the most common types of corporate vehicle for incorporation, taxation, funding alternatives and with other relevant issues that may affect the budget of the business model of the subsidiary. Among others, the protection of the corporate name and the trademark registration are matters of relevant interest.
The corporate name of the most used corporate forms by foreign investors to do business in Brazil (the limited liability company and the corporation), has its protection on a State level, with the registration of the articles of association or bylaws with the Commercial Registry that has jurisdiction over the head office of the legal entity. The protection of the corporate name may be granted on a Federal level, but is not automatic: relevant corporate documents of the legal entity must be filed with all Commercial Registries of all States of Brazil.
For limited liability companies the corporate name may contain firma or denominação social, followed by the term “Ltda.”. Firma shall comprehend the name of one or more partners and denominação social shall indicate the general purpose of the entity (or at least one of its activities), being also permitted the use of the name of (one of) the partners.
Corporations’ name may only be used as denominação social, followed by the term “companhia” or “sociedade anônima” (the first term may not be used in the end of the corporate name). The name of the founding partner may also be part of the denominação social.
Before applying for incorporation, it is recommended to carry out a research of the corporate name with the Commercial Registry Commercial Registry, since it may deny a new legal entity having the same (or similar) corporate name which is already registered for another company (having or not the same general purpose). At last, important to mention that the protection of the corporate name, either on a State or Federal level, does not grant any trademark protection.
Trademark protection is granted on a Federal level. Application for the registration of the trademark must be filed with the National Patent Office – INPI. Any interested party may apply for registration of a Brazilian trademark, whether Brazilian or foreign.
Besides the protection per se, the objective the trademark registration is to enable the Licensor of the trademark to receive royalties abroad. Royalties due under a trademark license may only be paid after registration, which the average term is 4 years. The registration of a trademark in Brazil is granted for a 10-year period as from the filing with INPI and may be renewed for more 3 successive periods of 5 years each.
The formal registration process ends with the issuance of the corresponding Certificate of Registration by the INPI. For remittances of royalties, a complementary registration with the Central Bank System (SISBACEN) is required and carried out after the issuance of the Certificate of Registration.
Effective use of a trademark is essential to its protection in Brazil. If no business is carried out under the trademark for which registration was granted within a five-year period after its registration may cause the cancellation of the registration. Also, interruption in the use for more than 5 years or if (in the same term) the trademark has been used with changes to its original character, the registration may also be cancelled.
André Garbuglio was an associate at Pacheco Neto Sanden Teisseire Law Firm.