ANPD PUBLISH THE RULES FOR THE APPLICATION OF SANCTIONS IN CASES OF VIOLATION OF LGPD

Posted by & filed under Não categorizado.

On February 27, 2023, the Directing Council of the Brazilian National Data Protection Authority (ANPD) published the Resolution CD/ ANPD No. 04/2023 that rules the application of sanctions and the methodology for calculating fines for violation of the Brazilian General Data Protection Law (LGPD).

The resolution states the situations and methods for applying administrative sanctions provided in Article 52 of the LGPD, as follows:

  • A one-time fine of up to 2% of the company’s revenue, limited to BRL 50 million per breach;
  • A daily fine, limited to BRL 50 million;
  • Official warnings;
  • Publicly disclosing the infraction;
  • Blocking access to the personal data in question;
  • Destroying the personal data in question;
  • Partially suspending the activities involving the database concerned for up to six months (extendable for an equal period) until the situation is resolved;
  • Suspending personal data processing activities for a maximum of (6) six months (extendable for an equal period);
  • A partial or total prohibition of conducting data processing activities.

And, among other criteria, it considers damage or harm to data subjects resulting from data processing agents’ non-compliance with the LGPD.

The LGPD violations will be classified considering the severity and type of the law infraction and the rights affected:

Medium Infraction: when the violation can significantly affect fundamental rights of personal data subjects, in other words: whenever the infraction significantly causes obstruction and restriction of the personal data subjects’ rights or use of services, as well cause material or moral damages, such as discrimination; violation of physical integrity; violation of right to image and reputation; financial frauds or unauthorized use of a person’s identity if it is not classified as high)

High Infraction: when there is obstruction of the inspection activity or when it happens to be a hypothesis describes as medium combined with at least one of the following cases:

  • It involves processing of personal data in large scale;
  • The offender earns or intends to gain economic advantage because of the infraction committed;
  • There is risk to the lives of the data subjects;
  • It involves processing of sensitive data or personal data of children, adolescents, or the elderly;
  • There is unlawful processing of personal data (without legal basis provided for in the LGPD);
  • There are unlawful or abusive discriminatory effects of the data processing; or
  • There is systematic adoption of irregular practices by the offender.

Light Infraction: when the violation cannot be classified in any of the medium or high hypotheses.

In the case of application of the fines, to define the amount, in addition to this classification of severity, the ANPD will consider elements such as the violator’s billing in the last financial year prior to the application of the sanction. If information regarding the branch of activity in which the violation occurred is not available, the authority will consider the total billing of the group or conglomerate of companies in Brazil.

The economic condition of the agent may aggravate the penalty or be a mitigating factor. In addition, other possible factors, according to the new ANPD rule, would be non-recurrence, the agent’s good faith and the advantage gained or intended with the violation.

The resolution details the application of the formula in which the agent must follow a few steps:

  • Determine the applicable tax rate (light, medium or right);
  • Determine the degree of the injury/damage: on a scale of 0 to 3;
  • Determine the base amount: multiplying the tax rate by gross income (-taxes);
  • Determine the fine: applying the aggravating or mitigating circumstances;
  • Determine the maximum and minimum value of the fine.

The main objective of such details is to guarantee that the sanctions are in proportion with the seriousness of agent’s conduct, in addition to provide legal security to inspection processes and guarantee the right to due process and adversarial proceedings.

The new regulation is already in force and the ANPD should start judging the first cases, the expectation is that the first decisions will be issued soon. From now on, the monitoring of the decisions of ANDP will be even more important given the creation of jurisprudence that will shed further light on the interpretation and enforcement of sanctions.

CENTRAL BANK STATEMENTS

Posted by & filed under Não categorizado.

The Brazilian Central Bank (“BACEN”) has throughout the past years been vigorously acting on the monitoring of compliance with the several ancillary obligations under its supervision (late transmission and/or incongruences on the information transmitted may subject Brazilian companies to the application of penalties), starting, when applicable, punitive administrative proceedings, as well as applying precautionary measures such as the suspension of registrations.

For such reasons the attention to the deadlines and details on information to be provided becomes even more important. Below follows details on the main ancillary obligations to be fulfilled in the calendar year of 2022.

Foreign Direct Investment (RDE-IED)

Brazilian companies receiving foreign direct investment that have Total Assets or  Net Equity values equal or greater than R$250.000.000,00 (two hundred and fifty million reais) shall, until the date of December 30th, 2022, submit the corresponding Economic-Financial Statement encompassing data on variations (e.g., Total Assets and Net Equity) and flow (e.g., profit or loss in the quarter), pertaining to the reference date of September 30th, 2022, before the Foreign Direct Investment Modul of the Electronic Declaratory Registry (RDE-IED) of the Central Bank Information System — “Sisbacen”.

CENTRAL BANK STATEMENTS

Posted by & filed under Não categorizado.

Annual Census of Foreign Investments

The deadline for the submission of the Foreign Investments Annual Census Statement (“Statement”) approaches and is to be delivered by August 15th, 2022.

This year the following are obliged to deliver the Statement:

(a) Brazilian companies receiving foreign direct investment which had, on December 31, 2021, a net worth value equivalent to or greater than USD100,000,000.00 (one hundred million United States Dollars);

(b) Brazilian investment funds with non-resident quota holders and with, on December 31, 2021, a net worth value equivalent to or higher than USD100,000,000.00 (one hundred million United States Dollars); and

(c) Brazilian companies with a balance of short-term commercial accounts payable (i.e., payable within 360 days) with foreigners, on December 31, 2021, exceeding USD10,000,000.00 (ten million United States Dollars).

The Statement shall be transmitted via the Foreign Investment Census Module of the Central Bank’s Information System – “Sisbacen”.

The late transmission of the Statement and/or incongruences on the data transmitted may subject the Brazilian entities to the application of penalties by the Central Bank of Brazil.

CENTRAL BANK STATEMENTS

Posted by & filed under Não categorizado.

Annual Census of Foreign Investments

The deadline for the submission of the Foreign Investments Annual Census Statement (“Statement”) approaches and is to be delivered by August 15th, 2022.

This year the following are obliged to deliver the Statement:

(a) Brazilian companies receiving foreign direct investment which had, on December 31, 2021, a net worth value equivalent to or greater than USD100,000,000.00 (one hundred million United States Dollars);

(b) Brazilian investment funds with non-resident quota holders and with, on December 31, 2021, a net worth value equivalent to or higher than USD100,000,000.00 (one hundred million United States Dollars); and

(c) Brazilian companies with a balance of short-term commercial accounts payable (i.e., payable within 360 days) with foreigners, on December 31, 2021, exceeding USD10,000,000.00 (ten million United States Dollars).

The Statement shall be transmitted via the Foreign Investment Census Module of the Central Bank’s Information System – “Sisbacen”.

The late transmission of the Statement and/or incongruences on the data transmitted may subject the Brazilian entities to the application of penalties by the Central Bank of Brazil.

TRADEMARK VS SEARCH ENGINES IN BRAZIL

Posted by & filed under Não categorizado.

The use of competitor’s trademarks aiming to enhance results in search engines and sponsored advertisements has sparked controversy in several jurisdictions around the world. In Brazil, it has been witnessed an increase of cases involving enquires, extrajudicial notifications and court disputes.

Search engines as Google Ads sort the search results to prioritize a paying advertiser’s website over other possible results. An advertiser purchases the keywords with which it wants its website to be associated with and is also able to block others, among other possibilities.

The controversy involving search engines emerge from the practice of allowing an account holder to include a registered trademark keyword even if the account holder does not own the rights to that trademark.  Search engines usually (e.g., the use policies of Google Ads) do not check the trademark status of a keyword at the time of selection, but instead investigate claims of infringement only after receiving a complaint. Moreover, search engines may apply different policies to the selection of a trademark as a keyword depending on the region/country in which the trademark is registered.

In short, search engines may allow advertisers to promote and direct consumers to determined website via using keywords containing trademarks or trade names of third parties (including of competitors). The results usually appear at the top of a search page on the search engine because they have been sponsored or paid.

In Brazil, despite the still scarce number of rulings and absence of decisions from the courts of appeals and superior courts on the merits, in addition to the subjectivity in analyzing the matter, the courts position has been shifting (mainly in decisions vis-à-vis injunction orders) towards the understanding that the use of a registered trademark from a third party as keyword in search engines may, depending on the circumstances, be construed as a trademark infringement, and, ultimately, unfair competition.

Another common scenario which entails higher risks of a trademark infringement being characterized (based on the circumstance of misleading of consumers) occurs when, for example, Company XXX would hire a sponsored link for the expression YYY, which is already a registered trademark of the competitor. In this case, every time a consumer searches for the expression YYY it would be shown company XXX’s website first, many times accompanied by the expression ‘’buy here’’.

Within this context, and, mainly, while there is not a clearer outlining (via passing of legislation or maturing of the jurisprudence) of the requisites and parameters vis-à-vis such market practices, entrepreneurs shall keep special attention to the protection of its intellectual property rights against, depending on the circumstances, unlawful/abusive purchasing of sponsored links and/or keywords in search engines.

Even sales agents and/or authorized resellers, except when holding the express authorization for the use of third-party trademarks, may incur in infringement of intellectual property rights.

It is undoubtful that the use of search engines is essential in the development of a strong marketing strategy, however being required special attention to the scope of application of the protection granted by the trademarks law (Law 9,279/1996) and other applicable regulations.

NEW RULES FOR SOFTWARE AS A MEDICAL DEVICE APPROVED BY ANVISA

Posted by & filed under Não categorizado.

The Brazilian Health Regulatory Agency (ANVISA) agency with a mandate to promote the protection of the population’s health by executing sanitary control of the production (including facilities, processes and raw materials), marketing and use of products and services subject to health regulation, published on the Union’s Official Gazette, of March 24th, 2022, RDC 657/2022 approved by its Collegiate Board which addresses the regularization of software as medical devices (the so called “SaMD”).

This new regulatory framework enters into effect on July 1st, 2022 and is the result of the Public Consultation 1.035/2021, ended in June 2021, which received more than 400 contributions.

Before the new regulatory framework, ANVISA applied to this matter RDC 185/2001, which governed medical devices in general. The text of the former Resolution had a content primarily focusses on physical products (tangibles), not digital ones (intangibles), thus, under a paradigm different from the deep ongoing digitization process in health, far from current standards.

In order to create a favorable background for the creation of the new rules, ANVISA prepared a   Regulatory Impact Analysis Report comprising the specificities of software as a medical device, emphasizing the increasing growth in the use of technology in the healthcare sector and also the growth and constant advances in this area.

The new RDC 657/2022 is consistent with practices from other international health authorities, such as in the European Union and United States, placing Brazil in a position to achieve stronger cooperation agreements with such health authorities.

The first section of the new regulation clarifies which types of software the rule does not apply to, inter alia:

– software used for well-being: those projected to encourage and maintain the well-being including healthy activities as physical exercises, health control and monitoring and a healthy lifestyle that are not intended for diagnosis, treatment, or rehabilitation;

– listed in a list of non-regulated products, as published by ANVISA;

–  used exclusively for administrative and financial management in health services;

– that processes demographic and epidemiological medical data, without any clinical diagnostic or therapeutic purposes;

– embarked in a medical device already regulated by ANVISA.

The second section is dedicated to important definitions of terms associated to SaMD.

The requisites on use and labeling comprised by RDC 185/2001 and RDC 431/2020 remain in force, with the new norm encompassing a Chapter with the inclusion of several relevant information as i)  alerts and warnings; ii)  minimum hardware and software requirements; and iii) cybersecurity information.

The expected outcome is that the new regulatory framework will help to simplify classification and registration of those types of medical devices, offering greater legal stability, strengthening the use of such mechanisms and fostering innovation by software developers.

ANNUAL APPROVAL OF MANAGEMENT ACCOUNTS – LIMITED LIABILITY COMPANIES AND CORPORATIONS

Posted by & filed under Não categorizado.

In accordance with articles 124 and 132 of Federal Law no. 6,404/1976 (Corporations Act – LSA) and article 1,078 of Federal Law no. 10,406/2002 (Brazilian Civil Code), corporations and limited liability companies shall start the procedures required for the analysis and further approval of management accounts, aiming at assessing, discussing and voting on the financial statements, deliberating on the destination of profits and distribution of dividends.

Such approval shall take place at an annual quotaholders’ meeting, for the limited liability companies, and at an ordinary general meeting, for the corporations. In both cases, the minutes containing the resolutions from the respective meeting shall be registered before the Commercial Board. As an example, minutes dated of April 30th may be filed with the Commercial Board until May 30th, without disadvantages to the companies.

The meeting shall be done presentially, semi-presentially, in case of allowing the participation and voting in person or by distance, or totally by distance, in case of allowing the participation and voting just by distance. The participation and voting in these cases shall occur upon sending the voting list digitally and/or upon by distance participation, via electronic systems. The call instrument for the meeting shall inform, in highlight, if the meeting will be done semi-presentially or fully by distance, as well detail the manner that the participation and distance voting will occur.

For corporations, the financial statements, management report and other relevant documents, must be prepared according to the standards of the LSA, being made available to shareholders and published. According to the modifications promoted by Complementary Law 182/2021 (the Startups Act) and Federal Law 13,818/2019, for this year of 2022 the corporations with up to R$78.000.000,00 (seventy-eight million reais) of gross revenues may carry out their publications electronically via the Central Balance Sheet Database of the Public System of Digital Recording, and the others shall carry out the publication on a newspaper with large circulation of the same location of the corporation’s headquarters, being henceforth lifted official gazette publication.

For limited liability companies, the financial statements shall be made available to the quotaholders in accordance with the Articles of Organization and the Brazilian Civil Code. In accordance with Federal Law no. 11,638/2007, to the limited liability companies that are considered large-sized – the company or group of companies under common control that has, in the previous fiscal year, total assets exceeding R$240.000.000,00 (two hundred and forty million reais) or an annual gross revenue higher than R$300.000.000,00 (three hundred million reais) – are applicable the provisions of the LSA governing the preparation of financial statements.

Under such context, Similarly to regulations from other States, such as Rio de Janeiro, Minas Gerais and Amazonas, limited liabilities companies headquartered in the State of São Paulo, except for the possibility of judicial discussion, shall also observe the provisions of Deliberation no. 02/2015 of the Commercial Board of the State of São Paulo – JUCESP, which sets forth as preconditions for the registration of the corresponding minutes of quotaholders’ meeting approving the accounts: (i) for companies that meet the criteria of large-sized of Federal Law no. 11,638/2007 described above, the publication of the financial; or (ii) for companies that do not fall under the category of large-sized, a statement attesting such fact

CENTRAL BANK STATEMENTS (2022)

Posted by & filed under Não categorizado.

The Brazilian Central Bank (“BACEN”) has throughout the past years been vigorously acting on the monitoring of compliance with the several ancillary obligations under its supervision (late transmission and/or incongruences on the information transmitted may subject Brazilian companies to the application of penalties), starting, when applicable, punitive administrative proceedings, as well as applying precautionary measures such as the suspension of registrations.

For such reasons the attention to the deadlines and details on information to be provided becomes even more important. Below follows details on the main ancillary obligations to be fulfilled in the calendar year of 2022.

FOREIGN DIRECT INVESTIMENT (RDE-IED)

Brazilian companies receiving foreign direct investment shall, until the date of March 31st, 2022, submit the corresponding Annual or Economic-Financial Statement (depending on its assets and net equity values) encompassing their net equity, amount of paid-in corporate capital, and equity interest held by foreign entities, pertaining to the reference date of December 31st, 2021, before the Foreign Direct Investment Modul of the Electronic Declaratory Registry (RDE-IED) of the Central Bank Information System — “Sisbacen”.

ANNUAL CENSUS OF FOREIGN INVESTIMENTS

Brazilian companies receiving foreign direct investment (regardless of the amount) and investment funds with non-resident quota holders with net equity value equal or exceeding US$100,000,000.00 (one hundred million United States Dollars) on December 31st, 2021; as well as Brazilian companies which short-term commercial debts (i.e., payable within 360 days) with foreigners exceed US$10,000,000.00 (ten million United States Dollars) shall deliver, until the date of August 15th, 2022, the corresponding Foreign Investment Annual Census Statement, encompassing information on internal accounting data and on its foreign creditors, referring to the base date of December 31st, 2021, before the Foreign Investment Census Module of Sisbacen.

BRAZIL BEGINS TO ACCEPT FILINGS FOR DEPOSIT OF POSITION TRADEMARKS

Posted by & filed under Não categorizado.

The Brazilian Patent and Trademark Office (INPI) carried out a Public Consultation on the examination of applications for registration of position trademarks within April 13th, 2021 and June 12th, 2021 aiming at receiving inputs and ideas related to the examination and procedures for deposits of such kind.

As a result of the public consultation, in the Industrial Property Official Gazette 2646 of September 21st, 2021, the INPI published the Ordinance INPI/PR no. 37/2021, which authorizes henceforth, in accordance with the rules outlined therein, the acceptance of deposits of position trademarks as of October 1st, 2021.

According to first Article of such Ordinance: “…will be registrable as a position mark a distinctive set able to identify goods or services and distinguish them from others that are identical, similar or alike, as long as formed by the application of a sign in a singular and specific position of a given support; and the application of the sign in a said position of the support may be dissociated from the technical or functional effect”.

Nevertheless, the trademark applications filed before the publication of the Ordinance, which met the criteria of the new regulation, might be amended within the window period counted from October 01st, 2021, until December 30th, 2021.

PATENT APPLICATIONS INVOLVING COMPUTER-IMPLEMENTED INVENTIONS IN BRAZIL

Posted by & filed under Não categorizado.

In the age of smartphones, internet of things and cloud computing, it is no longer possible to imagine large parts of technology without software. Accordingly, many of the current innovations are made in the field of digital data processing and may have a minimum of one feature that is implemented using – at least partially – a computer program.

However, under the Brazilian Industrial Property Law (Federal Law 9,279/96), computer programs for data processing units as such are expressly excluded from patent protection. Thus, the fact that a data processing unit is controlled via a program to achieve a certain result is not sufficient for the program to be patented in Brazil.

On the other hand, patents for computer-implemented inventions are still allowed. Different from the protection of the software per se, a computer-implemented invention involves the use of a computer or other programmable apparatus, where one or more features are processed wholly or partly by means of a computer program.

On December 29th, 2020, the Brazilian Patent and Trademark Office (INPI) published an updated version of the Guidelines for Examination of Patent Applications Involving Computer Program-Implemented Inventions. This updated version has been in force since January 1st, 2021.[1]

The publication updates the former Guidelines and, among other matters, better define the scope of some terms such as “algorithm”, “computer programs”, “set of instructions” and “expression of a set of instructions”.

Another well received addition to the Guidelines relates to protection of datasets, a relevant feature in connection with Artificial Intelligence related inventions. Although the Guidelines establish that data structures per se are not considered an invention, it is outlined that a creation that uses or generates data structures may be considered an invention.

Some highlights from the new Guidelines also include detailed explanations about the non-patentable creations which comprise mathematical methods; business, accounting, financial, education, publicity, lottery, and supervision or auditing methods; diagnostic or therapeutic methods applied directly to a body; and the presentation of information, in the case when such techniques are implemented by a computer. The Guidelines also foresee exceptions to each of the existing prohibitions (hypotheses where a patentable invention would not be recognized), appointing that the restrictions are not absolute and can be circumvented under certain circumstances.

 

[1] Available at: < https://www.gov.br/inpi/pt-br/servicos/patentes/pagina_consultas-publicas/arquivos/2020_11_16___diretrizes_iic___versao_final.pdf >. Checked on September 30th, 2021.