After over ten years of dispute, this month the Administrative Council for Economic Defense (CADE) reached a decision about the complaint filed by the National Association of Automotive Parts Manufacturers (ANFAPE) alleging anticompetitive conduct and misuse of industrial property rights by automakers Volkswagen do Brasil, Fiat Automóvel S.A. (currently FCA Fiat Chrysler Brasil Ltda.) and Ford Motor Company Brasil Ltda. In a very tight vote, the majority of CADE counselors voted to dismiss the matter understanding that the automakers were simply exercising a right assured to them by the Industrial Property Law (Law 9.279/96), in which there is no prevision of limitation about the foremarket or aftermarket.
As noted in our previous Legal Update, Cade’s Reporting Commissioner Paulo Burnier voted in November 2017 to convict the automakers on the grounds that they had abused intellectual property rights regarding car replacement parts that are protected by industrial design proceedings and determined that they should stop attempting to keep Independent Auto-Parts Manufacturers (FIAP) from producing and selling these parts.
Arguing to dismiss the administrative proceeding, Commissioner Mauricio Maia stressed that there was no evidence that the automakers had abused their intellectual property rights and therefore exercised such rights legitimately.
Commissioner Alkmin Junqueira Schmidt agreed with Commissioner Maia and added that if there is an interest in changing this monopoly, which is allowed by law, this change must be requested through an appropriate judicial way, not through a CADE investigation.
CADE’s decision will be forwarded to the BPTO (the Brazilian Patent and Trademark Office) and the Secretariat for Productivity Promotion and Competition Advocacy.
Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.