The Brazilian PTO has changed its understanding regarding trademark license agreements executed between parent and subsidiaries companies.
In the past, the Brazilian Patent and Trademark Office used to not record trademark, patent and non-patentable technology license agreements between parent and subsidiary companies as charged licenses. Instead, the BPTO used to designate them as royalties-free ones.
This understanding had been adopted for several years and used to make impossible the remittance of payment of the royalties generated by the license through the Brazilian Central Bank. Nonetheless, if the charged license agreement was not recorded before the BPTO, it would not be eligible for payment of royalties.
The BPTO’s understanding was based on a restrictive interpretation of Article 50 of the Law No. 8,383/91.
The mentioned legislation provides the permission of the remittance of royalties arising from license agreements executed between relative companies. However, the BPTO has never extended this permission to trademark registrations covered by agreements executed before 1992.
In the meantime, the BPTO has changed its interpretation in relation to this issue and now allows the recordal of charged trademark license agreement between relative companies executed prior to 1992, provided that an amendment to the existing agreement or a new agreement be executed and recorded.
Nevertheless, the parallel prohibition of the payment of royalties derived from trademark, patent and non-patentable technology in the same agreement – or in another one – will remain in force.
This being said, if trademark registrations that have been licensed prior than 1992, are also included in other charged patents and/or non-patentable license agreements or contingently coexists with those ones – and as long as those agreements are still in force -, it will not be possible to amend or execute a new agreement.
Like in ordinary agreements executed between parent and subsidiary companies, the remittance of royalties will be limited up to 1% of the gross sales price of the licensed products or services rendered. This restriction is related to the limitation ruled by the Brazilian Regulation 436/58 and is also applied for Licensee’s tax deductibility.
