Brazil’s Biodiversity Law No. 13,123 (Biodiversity Law) was signed into law on May 20, 2015.  Decree No. 8,772 (Decree) was issued on May 11, 2016 to implement the statute which repealed provisional measure 2,186-16 adopted by President Fernando Henrique Cardoso in 2001 (2001 Provisional Measure). The 2001 Provisional Measure has been criticized as overly complex and bureaucratic.  Nonetheless, one of the consequences of the Biodiversity Law and the Decree was the creation of several new obligations relating to the research and development of plant varieties in Brazil, particularly those resulting from the access to national genetic heritage and associated traditional knowledge.

As a result, on October 24, 2016, the Brazilian Plant Variety Protection Office (PVP Office) implemented several new procedures relating to the filing and examination of PVP applications in order to comply with the provisions of the Biodiversity Law and Decree.  These new procedures can be found in English here: englishpvpprocedures.

One of the new procedures is the requirement of a declaration of access or non-access to national genetic heritage samples or associated traditional knowledge (access declaration) that might have occurred during the development of a new plant variety.  An access declaration must be submitted for any new plant variety that resulted from research where access to Brazilian genetic heritage or associated traditional knowledge might have occurred as of June 30, 2000.  For new applications, an access declaration will be required at the time of filing of an application.  The same applies for pending applications. The PVP Office will issue an Office Action requiring the submission of the declaration before granting protection.

The PVP Office has proposed two different wordings for an applicant’s access declaration:  (i) “The applicant declares that a genetic heritage or a traditional knowledge were accessed for the present protection request”; and (ii) “The applicant declares that neither a genetic heritage nor an associated traditional knowledge were accessed for the present protection request”.

In those instances where access to national genetic heritage samples occurred during the development of a new variety, the applicant must register the new variety at the Board of Management of Genetic Heritage – Brazilian Ministry of Environment (CGEN) prior to the filing of a PVP application.  Failure to do so will result in the shelving of the application by the PVP Office (Article 110 of the Decree).  Moreover, information relating to the registration at CGEN must be submitted at the time of the filing of the application along with the access declaration.  Despite having an integrated system, the Ministry of Agriculture’s CGEN electronic filing of documents is not yet available. The PVP Office has stated that Articles 37 and 28 of the Biodiversity Law will be disregarded and applicants will have more time than the one (1) year transitional period to provide the registration information to the office.

Any use of associated traditional knowledge requires prior and informed consent from the native community providing such knowledge (Article 9 of the Biodiversity Law).  Specifically, the community must be made aware of the social, cultural and environmental impact of providing such knowledge and must also be informed that it has the right to refuse the users access request (Article 16 of the Decree).

Applicants must comply with every requirement of the Biodiversity Law and Decree. Violations can result in several administrative sanctions, including fines, cancellation or shelving of an application, product seizure, interdiction of the offending applicant, etc.  Specifically, the fines provided by the Decree are as follows:

1. Accessing traditional knowledge without the community’s prior approval:  From approximately USD 30,000 to approximately USD 3 million (Article 83 of the Decree);
2. Failure to notify the CGEN of the marketing of finished products or reproductive materials:  From approximately USD 9,000 to approximately USD 3 million, which can be doubled in case of international marketing (Article 78 of the Decree);
3. Sending genetic heritage abroad (outside of Brazil) without previous registry:  From approximately USD 30,000 to approximately USD 3 million, which can be tripled in the case endangered species are used (Article 79 of the Decree);
4. Filing for patents in Brazil or abroad without previous registry:  From approximately USD 6,000 to approximately USD 3 million (Article 80 of the Decree);
5. Disclosing results without previous registry:  From approximately USD 15,000 to approximately USD 150,000 (Article 81 of the Decree); and
6. Failing to register the access before the marketing of intermediary products:  From approximately USD 15,000 to approximately USD 150,000 (Article 82 of the Decree).

Access and benefit sharing (ABS) agreements are required for any economic use of varieties originating from access to genetic heritage or associated traditional knowledge. ABS agreements are mandatory, even if the new variety is manufactured abroad.  The ABS agreements fall into two categories:

1. Financial:  Requirement of payment to the National Fund for Benefit Sharing (FNRB) of 1% of the annual net income originating from the economic use of the genetic heritage. This amount may be reduced by up to 90% (0.1% of the net income) by filing a petition before the Environment Ministry (MMA); and
2. Non-financial: Technology transfer, disclosure of the product to public domain, royalty-free licensing, etc.

Continue to watch the BRIC Wall Blog for continuing updates on Brazil’s Biodiversity Law.

This post was written by Lisa Mueller and Brenno Telles from Licks Attorneys.