New Regulations have gone into effect in Brazil, which remove the requirement to record a royalty-free trademark license when the respective parties to the license agreement are "related", as follows:
2) Recordation is also not required for the purpose of demonstrating evidence of use of a trademark when there is a parent/subsidiary relationship between the parties to the license agreement.
Pursuant to these Regulations, a cancellation action against a trademark registration, which is the subject of a license agreement, will not succeed where the cancellation action is based solely upon failure to record the license agreement.
However, recordation of a license agreement is still required to (a) pay and remit royalties, (b) effect fiscal deductions and (c) be effective against third parties [e.g., to permit the licensee to defend against trademark infringements, act against parallel imports, and preserve the licensee's rights of use subsequent to the assignment of a trademark.
Another Regulation removes the requirement to rerecord a license agreement upon the renewal of a trademark registration which is the subject of an agreement. If and when such trademark registration expires or is canceled, the license recordal will be automatically expunged.
June 1994 Index