CADE holds seminar on essential patents and technology standards

On 25 September, the Administrative Council for Economic Defense (CADE) hosted a new edition of the Economics & Competition Defence Seminar organised by the Department of Economic Studies (DEE). It focused on essential patents and their impact on innovation and competition, both in Brazil and internationally.

It was a live-streamed Zoom event open to the public, which could also be attended in person. The simultaneous interpreting into English broadened the participation of experts and interested parties from different regions and sectors.

The seminar gathered CADE’s authorities as well as experts in intellectual property and regulation to discuss the challenges involving Standard Essential Patents (SEPs), considered indispensable for the implementation of widely adopted technology standards, such as those used in mobile networks, smart devices, and Internet of Things (IoT) technologies.

The initiative was motivated by the study CADE’s Contributions on Standard Essential Patents elaborated by the DEE and released in August. The document seeks to deepen the understanding of the risks of SEPs, which, although essential for protecting innovation, can also promote anticompetitive practices.

During the opening session, Mr Gustavo Augusto, president of CADE, highlighted that “the patent system is fundamental to encouraging innovation, but essential patents require extra care to avoid market distortions. By granting this exclusive power, SEPs can prevent competitors from entering the market, which results in monopolies that are detrimental to competition and innovation."

Incentives and market control

According to Mr Gerson Benia, Coordinator of Market Studies and Competition Advocacy at the DEE patents generally grant the inventor the exclusive right to commercially exploit the invention for a fixed period. Thus, this exclusivity is an incentive for research and development.

However, as Mr Benia showed during his presentation, the picture changes when a technology becomes mandatory for the implementation of a global technical standard. The holder of an essential patent gains significant influence over the market and may even impose high royalties or restrictive contractual conditions that hinder the entry of competitors.

The challenges in the Brazilian scenario

In Brazil, one of the largest consumer markets for technology, said issue has gained relevance. The accelerated digitalization of sectors such as telecommunications, retail, healthcare, and industry, triggers dependence on technologies based on global standards and, consequently, on essential patents.

During the seminar, experts highlighted the role of antitrust authorities in mediating conflicts involving SEPs. In jurisdictions such as the European Union, the United States, and China, antitrust authorities are already engaged in cases involving abuse of dominant position by SEPs holders.

Mrs Juliana Ghizzi, director of the Department of Intellectual Property Policy and Quality Infrastructure at the Ministry of Development, Industry, Trade, and Services (MDIC), emphasised the importance of sharing international experiences to improve the Brazilian regulatory environment.

“To understand international experiences and what has been done worldwide is very useful to reflect upon how it could be applied in Brazil. Even the Brazilian Intellectual Property Strategy (ENPI), already addresses concerns about essential patents and standard definitions. The topics are closely connected," she stated.

Next steps

The study “CADE’s Contributions on Standard Essential Patents”  is available for public consultation on CADE's website and should contribute to future discussions on public policy and technological development in Brazil.

Access the document here (in Portuguese only), and check the main topics discussed during the seminar.