A significant legislative development in Brazil may impact the protection and enforcement of intellectual property rights, particularly in the pharmaceutical and agriculture sectors.

In December 2023, it has been proposed in the Brazilian Senate the Draft Bill No. 2088/2023, initially introduced to deal with environmental issues. While originally aimed at conditioning market access on compliance with environmental standards equivalent to those of Brazil, the Bill has since been substantially amended by Senator Tereza Cristina in the Senate's Environment Committee.

The revised bill now establishes a framework for Brazil to adopt unilateral retaliatory trade measures in response to foreign trade policies deemed harmful to Brazilian competitiveness. Notably, the substitute text authorizes the Brazilian Foreign Trade Chamber (Camex) to suspend commitments related to:

• Intellectual property rights obligations;

• Trade concessions; and

• Foreign investments.

In particular, Articles 1 and 3 of the Bill would enable Camex to implement retaliatory measures, including the suspension of IP rights protections, under certain circumstances.

This legislative development echoes Brazil's past use of intellectual property suspension as a retaliatory tool, most notably in the WTO Cotton Dispute (DS267). In that case, Brazil was authorized to suspend IP protections, including pharmaceutical patents, in response to U.S. subsidies that violated WTO rules.

While the bill does not directly mandate IP suspension or compulsory licensing, it creates a legal basis for such measures as part of Brazil's strategic trade response arsenal. Sectors most likely to be affected include pharmaceuticals and agriculture.

If the Bill passes in its current form, these measures may be implemented unilaterally by Brazil in response to foreign policies considered discriminatory or protectionist, potentially leading to a broader systemic risk for IP holders relying on Brazilian protection.

The revised text of Draft Bill No. 2088/2023 has been approved by the Senate's Environment Committee and is currently pending final approval in the Economic Affairs Committee.