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February 12, 2015

Newsletter 2015.03 – Brazilian Antitrust Authority expected to decide cases of “sham litigation” involving patents in 2015

It is expected that, in 2015, the administrative court of the Brazilian antitrust authority (Conselho Administrativo de Defesa Econômica – CADE) rules some important cases involving the sham litigation doctrine applied to intellectual property. It is expected that these cases will more accurately indicate what CADE understands as anticompetitive behavior and infringement of the economic system concerning the abuse of intellectual property rights.
 
CADE’s administrative court is a federal nonjudicial instance encharged with enforcing the constitutional economic principles, such as free enterprise, freedom of competition, social role of property, consumer protection and the restraining of abusive behavior. Among its institutional competences it can be mentioned the legally required prior consent to “acts of economical concentration”, such as mergers and acquisitions, and the application of sanctions to infringements of the economic order.
 
It is always worth remembering that the current Brazilian antitrust Act, differently from its predecessor, expressly considers the possibility of undue use of intellectual property rights as a hypothesis of infringement of the economic system. The administrative court forthcoming decisions this year will help to clarify what CADE understands as an abusive use of intellectual property rights.
 
The American doctrine of sham litigation, which forbids the abusive use of the judicial system as a way to constrain competitors by the lawsuit itself, regardless of the merits’ pertinence or chances of success, has already been applied by CADE in past decisions. The novelty this time falls within its application to intellectual property related cases.
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