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Ethics and Intellectual Property

When we study the principle of ethics in Intellectual Property, we have two classic situations to be observed: the first (and best known) is the reproduction or imitation of trademarks and / or the involvement of patents between competing companies (i.e., acts of unfair competition between companies owning intellectual property as their main assets) and the second is the one that involves competing offices that provide assistance services to holders of intellectual property rights, which, sometimes, may claim some ethical breach of the other in dealing with clients.

In this setting, the second aspect has an even broader competitive importance (of ethical consideration in its origin), since it involves from the effective onset of the knowledge and the accomplishment of the acts in relation to the practice of the law or the profession of industrial property agent, including even those who do not have such qualifications (whether due to the absence of legal prohibitions or the existence of judicial decisions that now allow free operation of the so-called “industrial property agents”), that act as authorized representatives before the responsible body INPI (Brazilian Patent and Trademark Office, a.k.a. BPTO).

Returning to the classic situation of market competition, in cases in which a competitor company that, as a transgressor, makes improper use of a trademark identical or similar to the one already registered for identical or similar products or services, the transgressor usually ceases to reproduce or to imitate when notified by the legitimate trademark owner, especially due to the lack of interest in facing a legal proceeding involving reparation for losses and damages and/or restitution for lost profits.

The same is valid when discussing the involvement of a patent, once the violation of rights over an invention or an utility model has been confirmed; or even when it is considered a violation of rights over the “design” – registered before the BPTO as an industrial design – or protected by the set-image of a certain object, also known as “trade-dress”, henceforth achievable by a legal prohibition against unfair competition.

It could be argued, at first, that such adverse situations – that is, of market competition and professional competition (in case concerning the activities of industrial property agents) are not directly correlated. But the truth is that in all these cases the wrongfulness comes from the decisions of the individual – be it the competing professional or the competing entrepreneur and, therefore, are at least correlated in their origin. In this sense, the Brazilian Gama Cerqueira reminded us:

“Free competition thus finds its limits, first, in the rights of others, then in the duties of the individual to the society in which they live, and finally, in the duties of charity. If individuals spontaneously observed the moral rule that should guide economic activity, it is clear that the laws regulating commercial and industrial competition or economic competition would not be necessary. However, this is not the case; it is quite the opposite, with free competition pending towards the abuse of this right, which requires the intervention of the State in its domains, in order to contain it within certain rules imposed by loyalty, good faith, and social interest. The principles justifying the theory of repression of unfair competition dominate all institutes of industrial property, such as the moral reverse of positive law, thus unveiling, in this respect, the unity of this branch of law.” (GAMA CERQUEIRA, João da, Industrial Property Treaty, vol. I, p. XVI, 3 ed., Lumen Juris, 2010; bolded emphasis added)

In a similar path, a diverse number of Brazilian courts remind us that the reprehensible forms of competition, in any sphere, come from violations of moral and ethical principles:

“It is clear from the foregoing that the claim of the appellant to use the domain name Airtonsenna.com.br, on the worldwide web, without the indispensable authorization from the plaintiff/appellee finds an obstacle not only in the law, but also, in the ethical and moral rules that must necessarily guide human and commercial relations.” (Court of Justice of the State of Paraná, 2nd Civil Chamber, Court Judge Sidney Mora, AC 0086382-5, DJ 29.03.2000, bolded emphasis added)

“In spite of the brilliance of such an orientation, I think it does not deserve to prosper, because in the post-positivist phase crossed by national law, the contemporary doctrine admits a rapprochement between law and morality, that is, the legal operator, in their hermeneutical task, should not deviate from ethical and axiological guidelines. That is a fact, and so much so, that among the principiologic pillars of the new Civil Code are not only sociality and operability but, above all, ethics, whose normative efficacy favors good faith in private relations.” (Court of Justice of the State of Espírito Santo, 4th Civil Chamber, Court Judge Catharina Barcellos, AC 030070038010, DJ 28.07.2009; bolded emphasis added)

Ethics is characteristic of every legal order”, as the late Miguel Reale asserts: “It could be said that attributive bilaterality is characterized by its axiologically binary structure, in such a way that the correlation between ownership and duties, between pretense and rendering, thanks to it, is expressed in an objective manner, overcoming the plan of the empirical relationship between two subjects, as it refers to something essential to the life of the spirit: the possibility and the ethical necessity of obliging the spirit, also in virtue and on account of something transsubjective.” (In: Philosophy of Law, pg. 694). Consequently, there is no action of the subject dissociated from ethics, so that the analysis of a patent application must also take into account the ethics of the applicant. “(TRF2, EDAC 2000.02.01.018537-5, Second Class of the Federal Regional Court of the 2nd Region, by consensus, Court Judge André Fontes, August 26, 2008, bolded emphasis added)

Ethics, in itself, as a branch of philosophy and, more broadly, may be understood as the set of principles, values and moral and conduct norms in a given group. In Intellectual Property, we simultaneously have the recognition of the market ethics (concerning the broad competitive law in its matter), as well as the professional ethics (concerning the competition between the offices that defend the interests of ownership: lato sensu, their attorneys).

Thus, it is imperative to establish, for the enrichment of the discussion, a definition of what would comprise the “professional ethics” to be followed by attorneys and industrial property agents, its importance, and finally, the penalties that could arise from the noncompliance by individuals or even companies that do not observe the correctness of actions in the exercise of professionalism, which should involve the mediator between companies and natural persons (clients) and the governmental body guaranteeing IP rights (such as the BPTO, the PTMO, the USPTO, etc.).

It is a fact that in Brazil, associations such as ABAPI (Brazilian Association of Industrial Property Agents) have absolute importance and legitimacy in establishing the professional ethics of those who work within their scope, and for this reason, they maintain their Code of Professional Ethics for Associates (Bound to their Articles of Association, approved by the Extraordinary General Meeting in August 2013) and which, for example, provides for the prohibition on the professional to offer a service in a specific process in which there is an acting attorney (Article 8), in addition to establishing that the associate should establish a relationship of good faith, transparency, and loyalty with others associates (Article 9). In addition to these preliminaries, ABAPI establishes in its Code of Ethics that the associate, upon assuming the process (or processes) sponsored by another associate, must notify the change of sponsorship to the previous agent (article 10). The negligence of all these duties and others, established in the Code, can result, upon initiation of due disciplinary process, in a warning, suspension or even definitive termination of the member reported.

This is, perhaps, the biggest difference between the consequences of the violation of market ethics and professional ethics, both of which are present in Intellectual Property. While the former deals with legal sanctions, both in the criminal and civil spheres, the latter is limited to administrative sanctions – and even so, only within professional associations.

Much have been said, for this very reason, of the temporary suspension of the effects of Normative Act no. 142/98 of BPTO through an ongoing disputed judicial decision, which then established the Code of Professional Conduct for Industrial Property Agent nationwide, for all those who were legitimized by the INPI to practice the profession. Although this regulation may not serve as a legal reference today, the Code of Professional Ethics for Associates of ABAPI has full effect and reaches, without exception, all those who are members of the association.

Well, then!

Such professional ethical principles, although effectively observed by most industrial property agents bound or not as associates of ABAPI and other entities, are also, in a significant number of cases (mainly in those where certain professionals dissociate themselves from known offices to start new independent offices), completely ignored. Such acts – which generally involve the disclosure of information to a clientele that such professionals have retained (sometimes unduly) – occur without the least observance of the precepts that involve ethics and competitive loyalty, which, ironically, are exactly the principles studied by Intellectual Property.

Therefore, at a time when we see a very large number of swindles multiplying (some, including the name of the BPTO itself) and Brazilians in political positions that refuse to answer for the severity of their own acts, we understand that is imperative to alert all our peers, and the ones who live by and depend on intellectual property, that ethical principles rest not only on their object of study (or even on the principological basis of the laws and rules that make them up), but also in their everyday life, reflecting in the actions of a professional with their peers and their clients.

Competitive loyalty should not be saved only for the Court.

by Márcio Ney Tavares

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