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INNOVATION &COMPETITIVENESS IN IN IT UNDERSTAND 5 TH EDITION BRAZIL

1 The American Chamber of Commerce for Brazil, being the largest Amcham outside the is serving its members building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts are a key mission for Amcham. The “How To” guides published by Amcham Brasil are part of this initiative. With the support of some of our members and Brazilian States and cities, we are putting together strategic information on the most various aspects of doing business in Brazil and its opportunities. As part of BRICS (Brazil, Russia, , and South Africa) and representing the 9th largest economy of the world, and the 8th largest destination for foreign investment, Brazil has an intrinsic importance for the global market. More than ever it is a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read will contribute to your commercial and investment decisions linked to Brazil. Deborah Vieitas – CEO, Amcham Brasil

Brazil is currently the 10th highest earning country in the global IT and telecommunications market. Against this backdrop, expert legal services which understand this industry’s dynamics and are able to assist with respect to the specific industry issues are becoming increasingly more necessary. Properly understanding the Brazilian regulatory scenario from the standpoint of technology use and its consequences, encompassing aspects related to intellectual , tax and labor impacts, liability scope, consumer rights, online business and many other topics addressed in this project, is decisive for successfully setting up and running companies of any size. Thus, our mission for this title developed with American Chamber of Commerce for Brazil - AMCHAM support from Amcham is to provide entrepreneurs with an educational, to- International Affairs Department the-point handbook allowing them to understand the legal issues involved in Brazil, 2017/2018 the Brazilian technology business. Hélio Ferreira Moraes – Partner, Pinhão & Koiffman Advogados *This guide is part of the project CONTENT 02 01 13 12 11 10 09 08 07 06 05 04 03 ABOUT THESPONSOR NEW ITLEGISLATION CIVIL LIABILITY LABOR RELATIONS TECH TRENDS CIVILFRAMEWORK CLOUD BIG DATA IT TAXES E-COMPLIANCE ONLINE BUSINESS INTRODUCTION 20 07 05 34 33 29 27 24 22 18 17 13 12 economic developmentinthenearfuture. interestingprospectsforBrazil’screates very along withapopulationofover200million 2 1 currently accountingfor7%oftheGDP. growing abovethenationaleconomyrate, The technologysectorinBrazilhasbeen

 Brasileira dasEmpresasdeTecnologia daInformaçãoeComunicação(BRASSCOM). Brazilian AssociationofInformationTechnology andCommunicationCompanies(Associação Brazilian InstituteofGeography andStatistics(InstitutoBrasileirodeGeografia e Estatística –IBGE). INTRODUCTION – OUTLOOK INBRAZIL 1 That, 2

million peopleworkingintheITindustry. Comunicações –MCTIC),Brazilhasover1.6 (Ministério daCiência,Tecnologia, Inovações e Technology, Innovation andCommunication ofScience, According todatafromtheMinistry

CURRENT 01.

5 6 training investments. culture, flexibility, andprofessional especially duetoitshighlywesternized andrelatedservices, startsexporting once thecountry an IThubfortheAmericasandEurope Brazil hasgreatpotentialtobecome 3 of thepopulationin2017 remains lowinBrazil,reaching27.9% The penetrationoffixedbroadband entertainment purposes. andstreamingfor as cloudservices increase ofnewtechnologies,such demand isrisingduetothesignificant  Telecomunicações -Anatel) National CommunicationsAgency(AgênciaNacionalde 3 . However, ONLINE BUSINESS 02.

7 8 use ofarbitrationclauses. personal data,pricinginforeigncurrency, jurisdictionandapplicablelawforinternationalpurchases, However, someimportantissueswerenotaddressed,suchasspamming, processingofconsumers’ The threemainissuesregulatedbytheDecreeare: related tothismatter. Government enactedtheDecreeNo.7,932/2013todealwithsomeofmostimportantissues Codeinordertoaddresstherelationstakingplacevirtualenvironment,Federal While theNationalCongressisdiscussingmanylegislativebillsmeanttoupdateBrazilianConsumer ELECTRONIC COMMERCE and adequateinformationabout products, services andsupplier products, services The obligationtoprovideclear (e.g. physicaladdress) 1 The obligationtoprovideeasy customer service 2 The rightofregret 3 described ahead: consumer marketparticipantsisachievedbyguaranteeingcertainrightsandprotections, as is themostvulnerablepartyinsucharelationship.Assuch,goalofbalancinginterests ofthe Consumer DefenseCode,whichalsoappliestoe-commerce.Thislawstipulatesthattheconsumer Brazil hasspecificlegislationgoverningtherelationshipbetweenvendorsandconsumers,knownas CONSUMERS INTHEVIRTUAL ENVIRONMENT the event the product or service the eventproductorservice consumers and/orimmediately is foundhazardousafterithas in themarketposenorisksto sure thattheproductsplaced steps mustbetakento warn fungicides andpesticides.In except forthosenormaland consumers’ healthorsafety, or e-commerce,mustmake been placedinthemarket, through conventionaltrade remove itfromthemarket. predictable risks,suchas Life, HealthandSafety business inBrazil,either Vendors planningtodo International AgeRating Coalition according to itssystemmightbe Some contents,suchasvideos, classified accordingtotheage rating rules,inordertoprovide and clear, especially regarding about theamountofviolence, characteristics, components, sex, drugsandinappropriate consumers mustbesuitable Brazil followstherulesof the product or service quantity,product orservice games andapps,mustbe parents properinformation quality, priceandhazards. (IARC) andclassifications language. Inthisregard, Information providedto used directly inBrazil. Information must beaccurate,clear, precise, Portuguese, giventhatthedeal , amongotherthings, case ofoffers,theinformation is consideredwrongful.Inthe takes advantageoftheirpoor misleads consumers,incites clearly demonstrativeandin violence, exploitspeople’s fears orsuperstitions,and is bindingonthevendor. Advertising thatfeatures discriminatory content, discriminatory Advertising

9 10 been ratedasabusive,andthe Some businesspracticeshave law barsvendors,forinstance, of guilt.Itisalsoajointliability, vendor’s liabilityisobjectivein of a product or service tothe of aproductorservice consumer relations,meaning purchase ofanotherproduct that itdoesnotrequireproof from conditioningthesupply any ofthoseinvolvedinthe given consumersmaysue or service (i.e.tying).The or service manufacturing andsale Business Practices of theproduct. interpreted inawaythatismore scope. Shouldquestionsarise, the contentofcontracts,which opportunity toreadinadvance defects orallowingthevendor understand theirmeaningand manner thatmakesiteasyto to unilaterallychangeprices. liability forproductorservice need tobewritteninaclear exempting thevendorfrom their clauseswillalwaysbe be avoided,suchasthose favorable totheconsumer. Consumers musthavethe considered abusivemust Clauses thatmaybe products purchasedoutside a commercialestablishment The lawgrantsconsumers within 7days,regardless the righttoexchange of flawordefect. Regret with certainconditions. upon paymentofapplicablefeesandcompliance previously authorizedbyacompetentlocalagency all contests–exceptculturalonesmustbe However,their brands,productsandservices. Advertisers commonlyofferconteststopromote liability, aswell violationsandpenalties. principles, specialcategoriesofadvertising, Publicitária -CONAR),whichestablishesgeneral (Conselho NacionaldeAutorregulamentação the NationalCouncilofAdvertisingSelf- Brazilian AdvertisingSelf-RegulationCodefrom to advertising,advertisersmustabidebythe Although therearenolawsspecificallyapplicable the competitors’customers. against unfaircompetitioncausedbytargeting optimization), themainprecautiontobetakenis engines (sponsoredlinksandsearchengine In thecaseofadvertisingonsearch ONLINE ADS

11 12 information thatsustains thebusiness. reputation andsafeguarding thestrategic thecompany’sthere isalsothegoalofpreserving Besides theintentiontocomplywithlegislation, company’s valuesandgoals. and leadtopoliciesinaccordancewiththe environmental, socialsecurityandethicalissues, may involvelabor, tax,accounting,financial, applicable totheiractivitysector. Theserules and therules,regulationslegislation have agreaterconcernregardingcompliance Corruption Law, companiesoperatinginBrazil Since 2013,withtheenforcementofAnti- Data, Analytics andMachineLearning. that generate highcommercialvalue, suchasBig protection act,whichwill certainlylimitpractices of companies,suchas the proposeddata These couldseriouslyimpact thedailyroutine regulation oftheuse technological resources. are countlessotherlegislativeinitiativesinvolving andthelawtocombatbullying,there No. 12,965of2014),thelawagainstInternet In additiontotheCivilInternetFramework(Law BYOD (bringyouowndevice)method. possible tomentionhomeofficeandadopting the environment ofitscontributors.Asexamples,itis and whichareoftenrelatedtothepersonal increasingly presentinthecorporateenvironment and conceptstothetechnologicalresources The e-Complianceistheapplicationofthesegoals E-COMPLIANCE 03. IT TAXES 04 .

13 7  6  5  4  Cloud Computing Cloud Computing settled bythecourts. secure strategy, sincetheissuehasyettobe those operatinginthissectormustadopta Sales Tax), chargingthemaccordingly. Therefore, –ISS, tax(ImpostosobreServiços to theservice municipalities believethatsuchactivityissubject While BrazilianstatesseektocollectICMS(VAT), devoid ofquestionsonhowtotaxtheactivity. Online andmobileadvertisinghasnotbeen ONLINE ADVERTISING income tax, and Contribution for Intervention income tax,andContribution forIntervention Financiamento daSeguridadeSocial-COFINS), Social SecurityFunding(Contribuiçãopara de IntegraçãoSocial-PIS),Contributionfor collection ofSocialIntegrationProgram(Programa located mayleadtodifferentISStaxationand activity andtheactualcitywhereprovideris different location.Identificationoftheprevailing aside fromthefactthateachisprovidedata down forpurposesofofferingandcollection, of activitiesthatmayornotbebroken (SaaS) because itsmainforms–SoftwareasaService individuation forcollectionpurposes.Thatis where theyareprovided,andtheirpossible theplace about thenatureofservices, Platform as a Service (PaaS) Platform asaService creating anapp. (PaaS)model:users can develop,runandmanagewebapplications throughaplatform.Thereisnoneedforthecomplexity ofbuildingandmaintainingtheinfrastructure for Platform asaService (IaaS)model:users canaccessallavailabletoolsinstalledinthe physicalstructureofthecontractedcompany.Infrastructure asaService (SaaS)model:userscanaccesssoftwarethatisnotinstalledontheirownmachinebutrather onanonlinenetworktowhichtheyhavealoginandpassword. Software asaService Cloud Computing:remoteaccesstofiles,programs andapplicationsforcomputeruse,dependentuponInternetconnection. 5 , Infrastructure as a Service (IaaS) , InfrastructureasaService 4 taxationraisesdiscussions 7 – carry outavariety –carry 6 , and to ISS,thereforeconsideringtransactions subject computer softwareinthelistofservices license orassignmentoftherighttouse Law116/2003includedthe Supplementary completely settled. complex andlikelytotakeawhilebeforebeing the discussionaboutsoftwaretaxationisstill off-the-shelf software–aresubjecttoICMS, buy themlikeanyothergoods,theso-called created andsoldrandomlytocustomers–who customers aresubjecttoISS,andthatprograms computer programscustom-developedfor de Justiça-STJ)convergeinthesensethat the SuperiorCourtofJustice(SuperiorTribunal (SupremoTribunal Federal-STF)and Although decisionsbytheFederalSupreme SOFTWARE fiscal contingencies. levied ontheplannedactivitytoavoidpossible Hence, itisadvisabletoanalyzewhichtaxesare to settlethematter. decisions bythecountry’s maincourtshaveyet noDomínioEconômico–CIDE).The Intervenção Contributions(Contribuiçõesde Intervention in theEconomicDomain levied ontheseoperations. need forcautionwhendecidingwhichtaxesare finishes throughthosesamemeans.Hencethe starts viaelectronicmedia,progressesand undefined insuchatransaction.Theoperation concepts intheBraziliantaxsystem,are authority andjurisdiction,otherfundamental residence andpermanentestablishment,tax place viadownload.Keyconceptssuchastax majority ofcomputerprogramsalesbegantaking advance ofelectroniccommerce,thevast the taxation issuetoraisequestions.With Levying ISSorICMSisnottheonlysoftware sales, rekindlingthediscussioninBraziliancourts. continue tochargeISSonallcomputersoftware Asaresult,cities involving softwareasaservice. is thereforenotsubjecttoICMS. Accordingtothisposition,thetransaction service. of calculation,andmomentfortaxationsuch arise astotheexistenceofataxableevent,basis clearance unnecessary. Therefore,questions is importedviadownload,makingcustoms is “dematerialized”whenthatsamesoftware of thephysicalproduct.Theproduct Industrializados -IPI),andICMSismerelytheprice on industrializedproducts(ImpostosobreProdutos channels, thebasisforcalculationofimporttax,tax When acomputersoftwareisimportedviaregular ICMS applies. exchange ofgoods,todecidewhetherISSor oran whether theoperationisdeemedaservice occasional fiscalcontingency, onemustassess made softwaredownloads,inordertoavoidan regardingBrazilian- highest courtsinthecountry Considering thedecisionsrenderedby

15 16 the employer’s socialsecuritycontribution. which isthebesttaxcollectionregimeregarding Hence, itisadvisabletoanalyze,onayearlybasis, considering legallypermittedexemptions. 4.5% overthevalueoftheirgrossrevenue, with theapplicationofaratebetween2%and maybereplaced(attaxpayer’sservices, discretion) Information andCommunicationTechnology (ICT) for companiesthatexclusivelyprovideITand employees, free-lancers,andindividualtaxpayers, contribution, calculatedovertotalpayrollfor that the20%basicemployer’s socialsecurity 13,043/2014 and13,202/2015established Although Law12,546/2011combinedwithLaws 1988 FederalConstitution. payroll, whichwasbasedonsection195ofthe value oflabor, therefore burdeningthecompany’s security contributionwasalwaysbasedonthe relationship. Inotherwords,theemployer’s social company, including thosewithoutanemployment the insuredandotherindividualsworkingfor the totalcompensationpaid,owedorcreditedto contribution hadalwaysbeencalculatedover In Brazil,basicemployer’s socialsecurity PAYROLL TAX CUT activities designatedasITorICTare: For thepurposesofLaw12,546/2011, –  –  andconsulting; services – ITadvisory –  –  – Dataprocessingandrelatedservices; – Programming; – Systemsanalysisanddevelopment; and updating. Web pageplanning,building,maintenance equipment; and forinformationtechnology support services software anddatabases,aswelltechnical configuration andmaintenanceofcomputer IT technicalsupport,includinginstallation, computer programs; Licensing orassignmentoftherighttouse games; Computer programdesign,includingvideo consumers toaccesstheirdatauponrequest. express consentfordatacollectionallow consumer registriesthatrequesttheconsumers’ consumers underthelaw. Databasesand email orsocialmedia–usersareconsidered of charge–suchassearchengineservices, areprovidedfree In Brazil,evenwhenservices Data aresignificantlymitigated. exercising suchcare,therisksfromusingBig related todatastorageandsecurity. By conditions, andpayingattentiontoissues from users,havingclearlydefinedtermsand precautions includerequestingauthorization be recognizedbyBraziliancourts.Such to notviolateanyrightsthatmaycome and/or treateddataneedtobeextracareful processing, orsimplyusingthecollected matter, companies interestedincollecting, Due tothelackofspecificlegislationon BIG DATA 05.

17 18 CLOUD COMPUTING 06. When thepublicadministrationisinvolvedparticular issuesarise: providers representthemaintooltoclearlydefineimportantresponsibilitiesandduties,suchas: encompassing allthenuancescloudmayentail,contractssignedwithcomputingservice address. Giventhatthelawandcourtdecisionshaveyettolookdeeperintomatterpointof must Contracts areoneofthemainissuesthatcompaniesprovidingcloudcomputingservices practices, guidelines computing services The hiredcompany The potentialreturn must abidebythe and prohibitions manual ofgood for hiringcloud of storeddata Accessibility 1 data, datamayonlybe For themostsensitive hosted onthepublic Intellectual property administration’s System failures and availability own servers 2 with certain security and with certainsecurityand confidentiality standards Storage ofconfidential proprietary information proprietary providers must comply providers mustcomply Brazil and the service Brazil andtheservice Less sensitivedata but must remain in but mustremainin in hybrid clouds in hybridclouds can be stored canbestored Confidentiality or materials 3

in ordertoencourage existing infrastructure Companies cannot acquire safesand secure rooms, the sharingof Security level Backup 4

19 20 INTERNET CIVILFRAMEWORK freedom tocompete,andconsumerdefense. openness andcollaboration,freeenterprise, via digitalmeans,onpluralityanddiversity, on rights andtheexerciseofparticipatory state thattheirregulationsarebasedonhuman acknowledge theworldwidescaleofweband the fundamentalsforInternetuseinBrazil.They The firstprovisionsintheCivilFrameworkdefine terminal connectedtotheInternet. functionalities thatcanbeaccessedthrougha forprivatenetworks.Italsoprovides or services arising fromtheInternet,exceptprivateservices thatdealwiththeflow infrastructure services Framework, asenforced,appliestoweb Framework) wasenacted.TheInternetCivil in Brazil,LawNo.12,965of2014(Civil rights anddutiesrelatedtotheInternetuse In ordertolayouttheprinciples,guarantees, 07. 8 Neutrality: Referstoequaltreatment ofusersanddoes not takeintoconsideration thelegalityoftransmitted content. Source: Pinhão&Koiffman Advogados ofthemainCivil Frameworkregulations: The listbelowpresentsasummary freedom ofspeech Content exclusionand application data Safeguarding connection data Safeguarding Neutrality private data Collecting andusing MATTER 8 to the service provider.to theservice or videos,whichmustbedeleted fromtheInternetuponsimplenoticeaggrieved person to deletecontent.Theonlyexception tothisprovisionisincaseofprivatesexualornude images onlyiftheydisobeyaspecificcourtorder could beheldliableforcontent postedontheirservices providers of speechensuredandmay beheldliableforthecontentposted.Applicationservice applicationshavetheirfreedom Third partiespostingcontent onblogs,socialmediaorservice in whichthecollectionwasauthorizedbyuser, shallnotbesafeguarded. Data relatedtoconnectionwithotherapplicationproviders orexcessiveinformationforpurpose, application datarecords,safeguardedinacontrolledand secureenvironment,forsixmonths. providersshall maintain registration datashallbeprovidedtoadministrativeauthorities. Service Access toapplicationdatashallbeprovidedthirdparties onlyuponcourtorder. User keep datarecordsonuseraccesstoInternetapplication services. in acontrolledandsecureenvironment,foroneyear. providersmustnot Connectionservice providersmustretainconnectiondatarecords,safeguarded authorities uponrequest.Service to collectregistrationinformationand,inthiscase,theymightinformittheadministrative providercanchoose not the dataisaskedandspecificinformationneeded.Theservice information requestedmusthaveamotivationandbespecific,withindicationoffromwho Access toconnectiondatashallbeprovidedthirdpartiesonlyuponcourtorder. The the neutralityprinciplearepossible,alwaysrelatedtoseriousemergencies. packets, cannotblock,monitor, filteroranalyzethecontent ofdatapackets.Afewexceptionsto providers,whetherpaidorfreeofcharge,andtransmission,switchingrouting ofdata service terminalorapplication.Likewise,Internetconnectivity content, originanddestination,service, packets haveadutytotreatInternetdatainanisonomicmanner, regardlessofthe Telecommunications providersresponsiblefortransmission, switchingorroutingofdata service agreements. collection purposesandshallbespecifiedinservice identifiers, whenevertheyarerelatedtoaperson.Useofcollecteddatamustberestrictedfor to anidentifiedoridentifiableperson,includingidentifyingnumbers,locationdataelectronic of personaldata,withexpressconsenthighlighted.Personaldataisconsideredanyrelated Clear, constantandcompleteinformationaboutcollection,use,storage,treatmentprotection REGULATION

21 22 as otherwise providedforintheagreement. to thecompany thatcommissioned it,except rights orownershipofthe softwareorITsolution such situationsresultin transferingproperty developed foraspecific company. Ingeneral, software ismadetoorder oranITsolutionis agreements usuallyemployed incaseswhere Software developmentagreements:service –  –  –  subject tothefollowingSoftwareLaw: Agreements involvingcomputerprogramsare DEVELOPMENT SOFTWARE LICENSEVS. SOFTWARE defects, orcopyrightinfringement. potential third-partylawsuitsderivingfromflaws, of thecontractingpartiesfromtheirliabilityin provisionsinforceand/orexemptany regulatory production, distributionorsale,whichviolatethe Parties cannotincludeclausesthatlimit of alicenseagreement;and The useofsoftwaremustbetheobject developing computerprograms; contracting softwarelicensesand/or Rights anddutiesofcompanies TECH TRENDS 08. are meantto limiteachparty’s liability. in therespective distributionagreement, which agreements thatmustcomply withtheconditions end-users willbegoverned byend-userlicense (who arenottheholders ofsoftwarerights)and rights. Therelationshipbetween distributors right ofreimbursementfrom theholderofsoftware held accountablebyend-usersandwillhaveno of softwarerights,otherwisedistributorsmaybe given intheagreementsignedwithholders or moreadvantagesthandistributorshavebeen allowed toofferend-usersbetterconditions When distributingsoftware,distributorsarenot license theproductinBrazil. an authorizationfromtheholderofrightsto country. Inthiscase,thedistributorwillbegranted distributed byacompanyestablishedinthe the parties.InBrazil,foreignsoftwaremustbe must besetforthinanagreementbetween For softwaresalesviadistribution,theconditions SOFTWARE DISTRIBUTION period fortechnicalassistanceservices. Such licenseagreementsmustprovidethevalid and isusedmainlyforoff-the-shelfsoftware. legitimate theuseofsoftwarebycustomer agreements, whichareusuallyelectronic, time oronapermanentbasis.End-userlicense licensed toacustomerforfixedperiodof Software licenseagreements:thesoftwareis agreement isterminated. paid infullbythecommissioningparty, orifthe developed programorcontentuntilithasbeen Developers mayalsoretainownershipofthe years tobesettled bythecourts. capable ofpreventinginaccuracies thatmaytake clause” becauseitisprecise, comprehensiveand advisable tousetheso-called “fullarbitration property. Beforearbitrationactuallybegins, itis field ofITandinrelation tointellectualandindustrial involving experttechnicalknowledge,suchasthe are viableandattractiveoptionsfordisputes Therefore, alternativemeansofconflictresolution of thecontroversyathand. choice ofarbitratorswhohavespecificknowledge arbitrator(s) thatwillsettlethedispute,enabling importantly, thepartiesareallowedtochoose months whenthepartiesraisenoobjections.Most given thatlawprovidesforadecisionwithin6 considerably shortertimethaninthecourts, a a final,bindingsolutionisobtainedwithin and thefinaldecisioncanbeassured.Additionally, which theconfidentialityofbothproceedings One advantageofarbitrationistheprocedure,in arbitration isrecognizedandwidelyusedinBrazil. ensure theprotectionofITbusiness.Inthatregard, The courtsarenotalwaysthebestalternativeto ARBITRATION ONITAGREEMENTS rights holderresidingordomiciledabroad”. addition toprovidingforpaymentthesoftware payment ofapplicabletaxesandcharges,in originating abroadmuststipulatetheliabilityfor agreements onsalesofcomputerprograms tax liabilityinBrazil,thelawstatesthat“license foreign softwareownerforthesalethereofand Regarding theremittanceofpaymentstoa

23 24 INTELLECTUALPROPERTY of theBrazilianlegislation. topic aimstobrieflyexplainthemainparticularities rights tointernationalstandards.Inthissense, adapted itsrulesregardingIntellectualProperty Rights) andtheBerneConvention,Brazilhas on Trade-Related AspectsofIntellectualProperty on thematter, especiallytheTRIPS(Agreement ofthemaininternationaltreaties As asignatory 09. companies may get temporary registration. companies maygettemporary may becomeadomainholder. Foreign requirements aremet,anyindividualorcompany simple and,providedsomeminimumidentification The proceduretoregisteradomainisquite 4 millionin2017. (NIC.br), registrationapplicationssoaredtoalmost charge ofcontrollingBrazilianInternetdomains domain names.Accordingtotheagencyin Brazil isexperiencingaveritablerushtoregister DOMAIN NAMES number oflegislativegapsandomissions. the nearfutureitisexpectedadecreasein is graduallyupdatingitsrulesonthematter, soin respect forthematerialcreatedbyothers.Brazil source originatingthepiece(whenknown),and the useofcontents,identification inforce,alongwithcarefulanalysisof abide bythegeneralrulesinauthorrights The useofanymaterialsonthewebshould law isstillapplicableinthesecases. protection ofauthorrightsontheInternet,but on thematterofmedia,socialor relatively recent,containsnospecificprovisions In Brazil,theAuthorRightsLaw, despitebeing NEW MEDIA,WEBSITESANDSOCIALMEDIA competition practices. undue commercialuseofdomainsthroughunfair find methodstodefendthemselvesagainst basis. Thus,companiesmustpayattentionand brand. Registrationisgrantedonafirst-to-file existing brandisnotseenasahighlyrenowned applicant, especiallyincaseswherethepre- not havethepowertobarrequestofany other existingdomainnames,thisagencydoes process NIC.branalyzestheequivalencywith Although duringtheregistrationapplication have mistyped). but withslightchangesthatdrawinuserswho (registration ofadomainsimilartofamousbrand or similartoafamousbrand)typosquatting cybersquatting (registrationofadomainequal related torenownednamesorbrands,suchas some financialadvantagebyregisteringdomains frequent practiceofconductaimedatgetting companies astheyareforcedtodealwiththe has beenthesourceofmanyproblemsfor On theotherhand,thissameconvenience

25 26 a givenmannerandfor specific purposes”. digital oranalogtechnique, tomakethemworkin peripheral instrumentsor equipment,basedona automatic data-processing machines,devices, kind ofphysicalmedia,tobenecessarilyused in natural orencodedlanguage,containedonany expression ofanorganizedsetinstructionsin are notsynonyms. Acomputerprogram“isthe “computer program”althoughthetwoterms Brazilian legislationreferstosoftwareas LEGAL SOFTWARE PROTECTION brands andtheirnewcampaigns. engines topreventthetransmissionofsuch and moraldamages,alsoorderingsearch ordering themtopaycompensationformaterial against companiesthatusesuchpractices, understanding, Braziliancourtshavebeenruling the actsetsupunfaircompetition.Basedonthis brand, theBraziliancourtshaveconsideredthat may havenovisiblementionofthecompetitor Although theadvertiser’s webpageortheaditself for thecompetitor. own ads,inordertoattracttheuserssearching competitor brandnamesaskeywordsintheir engine platforms.Theadvertisingcompanieslink also becomepopularinadcampaignsonsearch typosquatting, theuseofrandomtrademarkshas Similar tothepracticeofcybersquattingand ON THEINTERNET UNFAIR COMPETITIONINADVERTISEMENTS license agreement. by thesoftwaredeveloper intheend-user software technicalvalidity, whichisestablished include ensuringtechnicalsupportduringthe obligations software. Thesesupplementary they arethedeveloperorimporterofsuch obligations forsoftwaresellersinBrazil,whether The SoftwareLawprescribessupplementary conditions todoso. parties byeitherauthorizingitornot,andthe control thereproductionofsoftwarebythird that maybeaggrieving,aswelltherightto the righttoopposeunauthorizedchanges to software,Brazilianlegislationgrantsitsauthor Specifically regardingtheprotectionguaranteed the countries. software, aslongthereisreciprocitybetween The sameprotectionisguaranteedtoforeign or publicationandregardlessofanyregistration. granted for50years,countedfromitscreation by theAuthorRightsLaw. Suchprotectionis law (theSoftwareLaw),andcomplementarily Individual softwareisprotectedunderaspecific integrated intothehardware. cases, aswhenthesoftwareisintrinsically In Brazil,patentsaregrantedonlyinspecifics software, unlikewhatisseenintheUnitedStates. not usuallygrantedfortheindividualprotectionof In Brazil,likeintheEuropeanUnion,patentsare LABORRELATIONS indeterminate termemploymentcontract. of 90days,andthemostcommonmodel of experience,whichallowsmaximumextension initially beestablishedviaemploymentcontract payment of1/3thesalary. Laborrelationscan and 30daysofannualvacation,withadditional are entitledtoanadditional13thmonthsalary others). Inadditiontoamonthlysalary, employees pregnancy andHIVtests,criminalrecords,among which couldgeneratediscrimination(example: for admission,avoidingembarrassingtests registration, throughamedicalexamination Employment contractsrequireindividual 10.

27 28 of itsemployees. theprivacy security ofinformationand preserving balancing thedefenseof companyinterests, regarding useofequipment, alwaysaimingat Companies mustimplementdetailedpolicies andcontrol. supervision that suchequipmentissubjecttoemployer exclusively forprofessionalmatters,andclarifying provided bytheemployer, delimitinguse internal policiesregulatinguseofequipment sense, itisadvisabletoimplementspecific infringing onprivateemployeerights.Inthis overelectronicequipmentwithout supervision Controversy arisesoverboundariesofemployer principle ofthehumanperson’s dignity. consequently aviolationoftheconstitutional may representaformofdiscriminationand which theapplicantoremployeesubscribes Hence, accessingdataonsocialmediato fundamental rights. used asgroundsforattitudesthatviolatethose employees andoccasionaljobapplicantsmaybe subordination relationshipmaintainedwith even theemployer’s directivepowerandthe tied tothehumanperson’s , andnot must complywiththerighttodignity, whichis all actionscontrollingtheuseofsocialmedia contained intheBrazilianConstitution,anyand According totheprincipleofhumandignity TECHNOLOGY ANDSOCIALMEDIA MONITORING EMPLOYEEUSEOF its shareagainstthejointdebtor. complied withtheobligationhasrighttoclaim with noorderofpreference.Thecompanythat credits forbothdebtorsoronlyoneofthem, employee isentitledtoenforceliabilityforlabor receiver andtheoutsourcingcompany. The measure bringsjointliabilitybetweentheservice specific expertiseisrequired.However, this opportunities inindustries,especiallywhen core business.Thiswillencouragebusiness including thosedirectlyrelatedtoacompany’s 2017 andnowallowsoutsourcingallactivities, Brazilian laborlegislationhasbeenmodifiedin OUTSOURCING CIVIL LIABILITY 11.

29 30 the informationstoredby suchprovider. accountable forthesecurity, privacyandintegrity of Inbothcases,theprovideris free orpaidservices. there isnodifferenceregardingone’s liabilityfor When legislationisappliedtoemailaccounts, giving risetotheobligationcompensate. routine ofitsusers,seriouslossesmaytakeplace, of providerfailuresthataffectitsoperationandthe instrument ofworkandleisure.Hence,intheevent a largeportionofthepopulationandusedasan lifeof Email isatoolincorporatedintotheeveryday aredeemednull. any provisionstothecontrary and responsibility fortheirproductsorservices, that suppliersarenotallowedtoescapetheir Consumer DefenseCode,whichestablishes for consumerrelations,regulatedinBrazilbythe agreed uponbeforehand.Exceptionismade or releasesomeofit,choicewhichmustbe the obligationtocompensateintoperspective The lawalsoallowspartiestochooseput when freeofcharge. relationship betweenpeopleorcompanies,even –andcanbeappliedtoanytypeof services cost –suchaspurchase/saleorthesupplyof restricted onlytocommercialtransactionsata those whocausedthem.Suchliabilityisnot caused tothirdpartiesareberedressedby The BrazilianCivilCodeestablishesthatdamages COMMUNICATION TOOLS–EMAIL educated itsusers. to preventunwantedaccess andconstantly if itsuccessfullyshows that itusedsystems , theprovider’s liabilities maybereduced accounts againstthird-party access.Inapotential important forproviderstodotheirbestprotect Given alltheconfidentialityensuredtoemail,it is by theuser. suffering, indirectrelationtothelossessuffered to paydamagesandcompensationforpain disclosing emailcontentsmaysubjectoffenders extended forequalperiods.Undulyaccessing or up to15days,andsuchtimeframemaybe access inboxesormonitornewemailflowsfor confidentiality. Theauthoritiesareallowedto authorities mayaskajudgetobreachsuch Especially incriminalcases,theinvestigating court order. access informationcanonlybeprovidedupon by theCivilFrameworkLaw. Emailcontentand This ensuresitsinviolability, whichwasreinforced therefore protectedbytheBrazilianConstitution. with theconceptofregularmailaswell,andis relevantsinceelectronicmailisequated is very The “protectionofemailcontentconfidentiality” facts andallegedlossesmaybeassessed. of recentaccessactivitysothatthetruth Hence, companiesaresupposedtokeepahistory alleged factsliessolelyupontheemailprovider. – legislationstatesthattheobligationtoprove users areconsideredandprotectedasconsumers In thecaseofconsumerrelations–thatis,when information laidoutintheFederalConstitution. would notbeincludedinthelistofconfidential entitled torequestmerelyregistrationdata,which and accessdata.Administrativeauthoritiesare such asIPaddresses,registrationinformation, the authorofcontentpostedtoInternet, produce allinformationcapableofidentifying disclose thecontentofinformationand Upon courtorder, Internetprovidersmust Framework Law. Anonymity, however, isbarred. Federal ConstitutionandalsoundertheCivil Freedom ofspeechisprotectedunderthe CONFIDENTIALITY NFORMATION SECURITY–DATA economic prejudiceandviolationofimagerights. subject tomaliciousslant,whichmaycause ruled thattheimageofcompaniesmightbe payment. Braziliansuperiorcourtshavealready image violationandhenceentitledtoseverance Companies arealsosubjecttoprotectionagainst directly affectingtheperson’s honor. parodies andjokesorharassinginformation damage claimsifsuchimageislinkedtonews, mere disclosureoftheimagemaybesubjectto publication isnotforcommercialpurposes,the commercial purposes.Eveniftheunauthorized publication ofaperson’s imageforeconomicor to determineindemnificationforunauthorized that itdoesnotdependonproofofprejudice In addition,theSupremeCourthasalreadyruled civil claims. of imagerights,whichareguaranteedthrough establishment ofCivilCoderulesagainstviolation media orvirtualnetworks,neverthelessgeneral not haveaspecificprovisionforcontrollingthe control theexchangeofimages.Brazildoes virtual informationmakesitmoredifficultto However, thedynamismofexchange Image rightsaimtoprotecthumanpersonality. IMAGE RIGHTS

31 32 abusive, andthereforenull. Any conditionslimitingliabilityareconsidered losses, regardlessofthemanufacturer’s fault. compensate consumersforalldamagesand should beunlimited,andmanufacturersmust damage theysuffer. Additionally, suchliability able toinvestigatethecausesandextentof not bereasonabletoexpectconsumers difficult forthelaypersontounderstand,itwould Especially insuchatechnicalmarketthatis obligation toprovethefactstheyclaim. consumers shouldnotbeburdenedbythe the weakestpartinaconsumerrelationship, legislation, consideringthatconsumersare by theirproduct.AccordingtotheBrazilian manufacturers areliableforthedamagecaused Once itisdeemedaconsumerrelationship, commercial relationship. consumer relationshipormerelyanordinary andthepartiesinvolved:itmaybea may beregulatedaccordingtothetypeof Responsibility fortheperformanceofsoftware SOFTWARE all businessriskstothecustomer. exclude anyliabilityfortheproductandtransfer discounts ifthesoftwareisunavailable;or agreement; provideforproratedpayment the compensationattotalpriceof include clauseswhich,forinstance,cap Therefore, theyarelegallyallowedto deriving solelyfrombusinessagreements. to, insuchcase,disposeofrightsandsetrules Consumer DefenseCode,thepartiesarefree As therearenoprovisionstothateffectinthe may limittheircivilliabilityregardingthesoftware. parties areallowedtohavesomeflexibilityand In relationshipsotherthanconsumerones,the Consumer DefenseCode. or distributorsareliablefortheredress,under the manufacturercannotbelocated,sellers In casethesoftwareismanufacturedabroador NEW ITLEGISLATION and asspecifically mentionedinthe framework. family privacy, pursuanttothe FederalConstitution regarding freedom,equality, andindividual and and people’s fundamentalrights,especially afforded bytheconstitutional principleofdignity Framework Law. Suchprotectioniscurrently information forissuesassociatedwiththeCivil regulations abouttheprotectionofpersonal The legislationinforceonlyoffersspecific of personalinformation. related rulesthatmaybeappliedtotheprotection Civil FrameworkLawcontainingspecificprivacy- Consumer DefenseCode,theCivilCodeand scattered withintheFederalConstitution, by otherlawsinforce.Thereareprovisions information protectioncontinuestoberegulated are notconsideredbythelegislature,personal by theCongress.However, whilethesebills other billswithsimilarcontentwerepresented from apublicconsultation.Inthemeantime,two ofJusticepresentedabillresulting the Ministry has beengoingonforalongtime.Recently, individual rights,suchastherighttoprivacy, specific regulationstoprotectdatarelated In Brazil,thediscussionaboutneedtocreate 12. 34 OVER ADECADEOFDECISIVEWORK new technologies atlarge. internet,e-commerce,cloud computingand services, and providersoftechnology andtelecommunication software companies,hospitals, clinics,manufacturers operating intheelectronicequipment business,suchas in awiderangeoflegalissues facedbycompanies E KOIFFMANADVOGADOSteamhasgreatexpertise and civilissuesrelatedtohealthcareIT. ThePINHÃO and uncomplicatedlegalsolutionsforcontract,tax,labor, and scientificfieldswhoarecapableofprovidingclear team iscomposedofexpertstrainedinseveraltechnical the clientportfolio,PINHÃOEKOIFFMANADVOGADOS highlyrenowned Brazilianandforeigncompaniesin With of healthcare,innovationandIT. Business Law, especially in thefirm’s specialtyareas professionals dedicatedtothecomplexissuesof São Paulo,thefirmiscurrentlystaffedbyover100 Occupying threefloorsintheVilaOlímpiadistrict wide varietyofindustries. to Brazilianandforeigncompaniesoperatingina customized, andcomprehensivelegalsolutions ADVOGADOS hasbeenprovidingfast, For over16yearsPINHÃOEKOIFFMAN IN THETECHNOLOGYANDHEALTHCARE ABOUT THESPONSOR

compliance andcorporate governance rules. reach theirgoalswhilefollowing generallyaccepted contingencies. Integratedwork allowscompaniesto their strategiestodecreaseliabilitiesandprevent companies intheirmainroutineneedsbysupporting In thepastfewyears,firmhasbeenassisting partners andstaff. add valuetotheiractivitiesthroughtheexpertiseof its its clients’developmentprocessandalwaysseeks to E KOIFFMANADVOGADOShastakenactivepartin PINHÃO with bothconsultingandlitigationservices. The firmprovidesBrazilianandforeigncompanies develop innovativebusiness. legal implicationstohelpclientssetup,createand date withnew, state-of-the-arttechnologiesandtheir and healthcare,thefirmkeepspermanentlyupto specialization inlegalmattersrelatedtotechnology renowned processes andboostbusiness.With complex issuesandprovideanswersthatstreamline foster knowledge,enablingtheteamstomaster dynamically withitsclientsandusescreativityto In itsoperations,thefirminteractscloselyand 13. Pinhão &Koiffman Advogados |SãoPaulo Av. Dr. CardosodeMelo,1340, FOR MOREINFORMATION, PLEASECONTACT: 12º andar-04548-004 São Paulo,SP–Brazil +55(11)3054-1020 www.pk.adv.br

Mauro EduardoLimadeCastro–[email protected] Ivo NicolettiJunior–[email protected] Ricardo HiroshiAkamine–[email protected] Hélio FerreiraMoraes–[email protected] Mariane SilveiraPinhão–[email protected] Nelson Koiffman–[email protected] PARTNERS: 36 VISIT THE HOW TO WEBSITE: www.amcham.com.br/howto PORTO ALEGRE JOINVILLE CURITIBA SÃO PAULO SÃO CAMPINAS RIBEIRÃO PRETO CAMPO GRANDE BELO HORIZONTE BELO UBERLÂNDIA FORTALEZA GOIÂNIA BRASÍLIA SALVADOR RECIFE