Our office stands ready to assist information technology companies in all legal matters related to the digital economy, particularly as regards non-material and intangible assets such as intellectual property.
Presentation made by the attorneys Iris Bennett, Partner of the US Law Firm Smith Pachter McWhorter PLC, and her associate Paulo Gusmão, together with André de Almeida and Leonardo B. Leite, partners of Almeida Advogados.
According to the Ministry of Science and Technology, worldwide economic shifts have forced countries (including Brazil) to implement a new development strategy based on human capital, technology and institutional flexibility.
In order to attract foreign investment and encourage joint ventures, the information technology sector must open itself to the global economy.
Throughout the 1990s, information technology policy in Brazil changed significantly, with import taxes on a number of items significantly reduced and market access liberalized. In addition, various laws were enacted (most notably, Law 8248/91, which creates tax incentives for information technology) to support domestic industry while attracting foreign capital.
The Brazilian government also invested in research and development, encouraged greater private sector participation and promoted expanded information technology. Similarly, it stimulated the use of information technology resources as a means of modernizing other industrial and service sectors.
In 2010, software production in Brazil is estimated to generate one hundred thousand new employment opportunities and increase exports by over US$3.5 billion, thus netting approximately US$1 billion for the information technology sector.
In order to ensure development of information technology, government policies became focused on structuring and based on essential factors for Brazilian growth.
For example, National Information Technology Policy called for including Brazil among worldwide software producers. Having experienced annual average growth of 19% throughout the 1990s, the Brazilian software market was valued at over US$3 billion in 2001. When calculating technical services for information technology, that amount reached US$7 billion.
Despite the sector’s growth and expansion, the National Board against Illegal Copyrighting, under the Brazilian Ministry of Justice, calculated that (as confirmed by Interpol) illegal copying of information technology costs an estimated US$600 billion a year. In addition, the National Union of Tax Auditors at the Federal Revenue Secretariat estimates that illegal copying in Brazil generates R$30 billion in lost tax revenue. Finally, the State University of Campinas determined in a study that illegal copying has eliminated two million jobs.
Thus, illegal copying of software provoked losses of US$47.8 billion in revenue last year for worldwide companies, a 20% jump over 2006, according to a study published by a respected trade journal. In order to counter these losses, Brazil has implemented a National Plan against Illegal Copying, albeit with limited results.
Given the importance of non-material and intangible assets for information technology companies, continued development of solutions to intellectual property theft remains essential. Our firm applies its years of experience and extensive resources in servicing clients from that industry.