Publications
- Category: Labor and employment
Startups are known for developing transformative and disruptive businesses, due to the very entrepreneurial and bold essence of their founders and employees. Their three primary and valuable assets are: (i) human capital, the people who strive to develop businesses to solve problems; (ii) inventions, products to be offered; and (iii) strategic and confidential information on the business.
The Intellectual Property Law assures protection against disclosure, exploitation, or use of confidential information or data usable in industry, commerce, or the provision of services, obtained by virtue of a contractual or employment relationship, even after expiration of the contract.
In addition, the Intellectual Property Law provides that rights relating to computer programs (software) developed and prepared by employees during the term of their employment belong exclusively to the company.
Information protected by law, therefore, is restricted to information considered confidential or, in the case of the Intellectual Property Law, only information related to the development of computer programs (software).
The result is a group of information, materials, and products that, while not expressly protected by law, may cause serious harm to companies and their businesses if disclosed or used without consent.
How then does one ensure the protection of this information? How does one prevent ideas and projects from being revealed in a highly competitive market?
Firstly, it is important to remember that startups, as employers, have the right to use all creations made by employees in the exercise of their daily duties, as these creations are part of the scope of work.
Because this is a copyright relationship, employees may negotiate these rights. Thus, the inclusion of provisions dealing with the ownership of innovations in employment agreements, especially in the case of employees working in the fields of creation and development, is an essential measure to ensure a startup’s business.
Moreover, considering that there is no legal definition of “trade secrets” in Brazil, nor of “confidential information”, a practice highly recommended for startups is the inclusion of specific provisions in contracts defining in detail which information is considered confidential within the business, in addition to additional obligations establishing, for example, the return of documents to the company at the time of termination of employment, under penalty of damages.
This type of measure has become very common in employment relationships. However, some requirements must be observed to allow the contract to be enforced quickly and efficiently in the event of breach.
Failure to observe legal requirements, however, may make it difficult to demonstrate that the information discussed in any litigation was, in fact, confidential.
Confidentiality obligations, therefore, are essential to ensure the conditions necessary for mitigating (or at least reducing) risks of leakage of confidential information by employees and, especially, former employees.
- Category: Tecnology
What can be connected will be connected. This is the most important rule of the internet of things (IoT).
There is still no consensus on the concept of what it is, but the IoT may be understood as an environment of physical objects connected to the internet that facilitates people's daily lives through functional solutions for day-to-day processes.[1]
In the current context of hyperconnectivity, the IoT represents an aspect of machine-to-machine (M2M) communication and relates to the concepts of big data and data science. This combination will significantly affect the way we live, so the IoT has been receiving strong investments from the private sector and increasing attention from society.
To regulate and encourage this situation, the federal government established the National Internet of Things Plan through Decree No. 9,854, of June 25, 2019. The purpose is to implement and develop the internet of things in Brazil, based on free competition and the free circulation of data and subject to the rules of information security and protection of personal data.
The plan conceptualizes the internet of things as "the infrastructure that integrates the provision of value-added services with physical or virtual connection capabilities of things with devices based on existing information and communication technologies and the evolution thereof, with interoperability." The document also provides that M2M communication systems are considered to be “telecommunication networks, including access devices, for transmitting data to remote applications for the purpose of monitoring, measuring, and controlling the device itself, the environment around it, or data systems connected to it through such networks."
The objectives of the plan are: i) to improve people's quality of life and promote efficiency gains in services through the IoT; ii) to promote professional training for the development of IoT solutions and job creation in the digital economy; iii) to increase productivity and foster the competitiveness of Brazilian IoT companies, through innovations in the sector; iv) to seek partnerships with the public and private sectors for the implementation of the IOT; and v) to increase Brazil's integration in the international IoT scenario.
To that end, it establishes actions and projects to facilitate implementation of the plan and defines the Management and Monitoring Chamber for the Development of Machine-to-Machine and Internet of Things (IoT) Communication Systems as the party responsible for monitoring and advising on this implementation.
Regarding potential tax debates regarding the IoT, the main element of attention may perhaps be maintenance of the definition of value-added service contained in article 61 of Law No. 9,472/1997 as being the "activity that adds to a telecommunications service that supports it and which should not be confused with new utilities related to access, storage, presentation, movement, or retrieval of information." This definition corroborates a separation between the telecommunication service intrinsic to the IoT and the resulting services.
Another important element is the exclusion of credit card machines as M2M communication systems, such that the Installation Inspection Fee set forth in article 38 of Law No. 12,715/2012 is inapplicable.
The plan is commendable and reflects another stage of Brazil's creative solutions to its information technology regulatory agenda, which has a unique character: although it is not a major innovation center in the area, it has a relevant market in the sector and a target public with capacity to adapt to new technologies.[2]
The full plan may be viewed at: http://www.in.gov.br/en/web/dou/-/decreto-n-9.854-de-25-de-junho-de-2019-173021041
[1] MAGRANI, Eduardo. A internet das coisas [“The internet of things”]. Rio de Janeiro: FGV, 2018, p. 20.
[2] MAGRANI, Eduardo. A internet das coisas [“The internet of things”]. Rio de Janeiro: FGV, 2018, p. 11.
Among the actions taken this year to combat corruption, one of the main goals of the federal government, the promulgation of Decree No. 9,764/19 certainly represents one of the most relevant milestones in improving public-private interaction and dialogue. In summary, the decree regulated how bodies and entities that are part of the structure of the direct federal Public Administration can receive donations of movable goods and services from private individuals or legal entities without costs or charges.
Historically, contributions by the private sector to the public sector have always been a point of attention for companies, which were reluctant to do so because they were concerned about the risks of potential illegalities in the relationship with the Public Administration. The main reason for this concern was the lack of legal regulations on the subject. There were only legal constructions to justify the validity and legitimacy of private collaboration with the Public Administration, based essentially on general principles of law (such as good faith) and those that guide the exercise of public functions, such as those found in article 37 of the Federal Constitution. The issuance of a decree that deals expressly with the subject, therefore, guarantees legal certainty and provides clear guidelines on the limits for actions by companies and individuals in this interaction with the Public Administration.
In force as of August 12 of this year, Decree No. 9,764/19 provided adequate clarification on the procedure and conditions for the donation of movable property and services to the federal Public Administration, especially when there is unanimous concern by companies with corporate governance and the strengthening of compliance practices.
With the publication of the Anti-Corruption Law (Law No. 12,846/13), there is a growing number of companies that adopt corporate integrity programs concerned with establishing adequate parameters for the relationship with private and, above all, public entities. In this context, Decree No. 9,764/2019 serves as a relevant legal reference to guide the drafting of corporate policies on this type of relationship.
The normative text of the decree establishes that bodies and entities of the federal Public Administration, semi-autonomous entities, and foundational bodies, provided without cost or charges, receive movable property or services from individuals or legal entities governed by private law, having as its purpose attendance to certain public interests or public needs. The regulations do not cover entities that are part of the indirect federal Public Administration, notably public companies and mixed capital companies, and do not apply to entities and bodies of the Public Administration of the states, municipalities, and the Federal District.
Bearing in mind the principles governing the Public Administration, donations should aim to promote improvements in public management, that is, they should be directed to a specific public body or entity, and not to specific public a gents. In this manner, the donor mitigates risks related to violation of the principle of administrative morality and, especially, questions of undue benefits to public agents.
A key point of the decree is the determination that donations be made free of charge or costs. This means that the Public Administration is authorized to receive donated movable property and services, provided that it does not assume the obligation to provide consideration in favor of the donor or third parties. On this point, the decree dealt specifically with the issue of advertising linked to the donation, stating that, as a rule, the use of movable property and services donated for publicity purposes is prohibited, except for, as soon as possible after delivery of the goods or provision of services, an indication of the donation on the donor's website or a mention by name of the donor on the website of the beneficiary body or entity when it is aid to a government program or project.
Another relevant aspect of the decree concerns the formal procedures for receiving donations: public calls (when the donation initiative arises from the Public Administration itself) or manifestation of interest (when a private entity announces the intent to make the donation on the website reuse.gov, created for this purpose). The conditioning of the donations on the completion of one of these procedures aims to ensure publicity and transparency of public acts and, mainly, equal treatment in relation to other interested parties, facilitating their cooperation with the Public Administration under the same rules and conditions.
With Decree No. 9,764/19, the expectation is that private players will feel more secure in cooperating with the federal Public Administration, just as occurred in other levels of government that have published similar rules. This is the case of the Municipality of São Paulo, with Decree No. 58,102/18, and the Government of the State of Minas Gerais, with State Decree No. 47,611/19.
- Category: Real estate
Federal Law No. 13,838/2019, published on June 5, sought to facilitate the geo-referencing process of rural properties. With the addition of a new paragraph 13 into article 176 of the Public Registers Law, the consent of abutting landowners in the geo-referencing process required in cases of subdivision, splitting, consolidation, and transfer of rural properties was dispensed with. Consent will be replaced by a declaration by the applicant that he respected the limits and boundaries of his property.
Geo-referencing is a modern surveying technique used to measure and describe rural properties. It uses the coordinates of the vertices, measured with the help of GPS and magnetic coordinates by satellite (UTM), in order to specify the area, shape, and location of a property.
From a legal point of view, in order for a rural property to be considered geo-referenced, it is not enough to fulfill the technical requirements for surveying points and measurements, which are: (i) a technical survey in the field conducted by a professional qualified with the aid of GPS, (ii) preparation of a deed description, and (iii) payment of the respective Technical Responsibility Note (ART). A rural property will only be considered geo-referenced after certification of the respective deed description by the National Institute for Colonization and Agrarian Reform (the Instituto Nacional de Colonização e Reforma Agrária, or INCRA in its abbreviation in Portuguese), proving that there is no overlap of area, and after its annotation in the property record with the competent Real Estate Registry Office.
At the time of recording of the deed description certified by INCRA at the Real Estate Registry Office, it was formerly required to present the consent of the abutting landowners of the property being geo-referenced. This occurred because the Real Estate Registry Offices believed that the geo-referencing of rural properties is a kind of rectification of an area, following the procedure set forth in article 213 of the Public Records Law. This requirement ended up delaying the completion of geo-referencing process, which often ended up depending on the completion of lawsuits in order to take effect.
Undoubtedly, the change in the law represents an advance in speeding up the completion of geo-referencing and adding into the Real Estate Registry Office the complete and correct description of the property. However, dispensing with the prior and express consent of abutting landowners reduces the legal certainty of the procedure, since it opens the possibility of future claims from neighbors who feel harmed.
In addition, considering that the change occurred in article 176 of the Public Records Law and that article 213, which deals with the procedure for rectification of areas, has not been altered, there are doubts as to whether this dispensing with consent will be applied in all cases or if the Real Estate Registry Offices will continue to impose this requirement in situations where geo-referencing results in inclusion or alteration of the perimeter measurement and, consequently, in alteration of the area of the property undergoing the geo-referencing process.
Considering the objective of Law No. 13,838/2019, the best interpretation of the change, in our opinion, is that the dispensing of the consent of the abutting landowners, since it is subject to a more specific rule, should be a general rule for the geo-referencing process of rural properties, even if it results in an increase or decrease in the area of the property. However, this rule will have exceptions and should be analyzed on a case-by-case basis and according to criteria of reasonableness.
It is important to emphasize that geo-referencing aims to update property descriptions based on the Brazilian geodetic system and increase legal certainty, avoiding overlapping areas, and not creating a means to legitimize the acquisition of areas in an irregular way. Whenever the Real Estate Registry Office, for any reason, believes that irregular acquisition of an area has occurred, it may be required that the deed description of the geo-referenced property contains information on the description and area of the abutting properties, as well as the observance of the procedure set forth in article 213 of the Public Records Law and, consequently, the consent of abutting landowners in order to protect themselves from future claims.
- Category: Litigation
The Special Court of the Superior Court of Justice (STJ) advanced to put an end to the controversy over the limitations period applicable to claims based on contractual civil liability. In a judgment last May 14, the Justices decided, by a majority vote (7x5), that the ten-year statute of limitations is what is appropriate in these cases.
The decision is the one with the greatest hierarchical relevance on the subject thus far handed down in Brazil and sets a binding precedent, which should be observed both by the panels and sections of the STJ itself and by the lower courts, per article 927, item V, of the Code of Civil Procedure (CPC).
The statute of limitations on the filing of lawsuits is an issue of unquestionable relevance, since the occurrence of a time-bar removes the possibility of obtaining in court the exercise of a right or liability for violation thereof. It is therefore desirable that such limitations periods be defined in a clear and stable manner without major changes over time.
This issue is especially important when any modifications may represent legal uncertainty should there be a sudden change of understanding shortening a limitations period. This would certainly frustrate the expectations of litigants in relation to the filing of lawsuits or arbitrations and would restrict the period that could be protected via these proceedings.
The issue gains even greater relevance in long-term contracts, in which the parties often choose to wait until the end of the agreement to initiate a dispute. After all, this choice does not affect the beginning of the limitations period, which coincides with the moment of the violation of the right (article 189 of the Civil Code), even if the contractual relationship continues in force.
Since the entry into force of the Civil Code of 2002, however, legal scholarship diverges regarding the limitations period applicable to claims based on contractual civil liability: some jurists claim it to be three years, due to the provisions of article 206, paragraph 3, item V of the Civil Code, while others argue that such a time limit would apply only to claims based on non-contractual civil liability. Accordingly, for contractual civil liability, the general ten-year period set forth in article 205 of the Civil Code is said to apply to those cases in which the law has not established a lesser limitations period.
The discussion is restricted exclusively to contractual civil liability, since it is settled that the non-contractual civil liability is covered by the provisions of the Civil Code cited above and, consequently, the respective limitations period is three years.
An attempt to settle the issue with regard to contractual civil liability was also made, through Restatement of Law No. 419 of the Fifth Workshop on Civil Law, of the Federal Justice Council and the Superior Court of Appeals, approved in November of 2011. The idea at the time was to establish that claims based on contractual civil liability as well as non-contractual civil liability should be governed uniformly by the three-year limitations period. However, the divergence persisted.
Contrary to the restatement in question, for example, the STJ itself has for the most part adhered to the general ten-year limitations period for contractual civil liability, although it has sometimes decided to apply a contradictory three-year limitations period for only certain modalities of contractual obligations.
In November of 2016, the divergence regarding the subject came about definitively within the STJ: in deciding Special Appeal (REsp) No. 1.281.594 - SP, the Third Panel of the STJ modified its understanding and decided that the limitations period in contractual civil liability is three years.
The decision generated an immediate reaction by the advocates of the general limitations period of ten years, where two nationally-known authorities on the civil law published an article supporting this position.[1]
Apparently influenced by the arguments presented in this publication, in June of 2018, the Second Section of the STJ, composed of the Third and Fourth Panels, decided, in Motion to Settle Divergence in Special Appeal No. 1.280.825/SP, that the applicable limitations period is ten years.
Since these two judgments occurred, litigants in contractual relations have come to live with intense legal uncertainty as to the possibility of exercising their rights.
Fortunately, however, the unsuccessful party in REsp. 1.281.594 - SP filed a motion to settle divergence against the decision (precisely to settle the case law with the courts of appeal). The appeal was then referred to the Special Court of the STJ, which decided in favor of the ten-year statutory limitations period.
Notwithstanding the divergence as to the binding effect of this decision also on arbitral tribunals, it is expected that it will also be observed in arbitration proceedings, as a means of ensuring equal protection to contract parties and ensuring legal certainty.
It is still necessary to await a final and unappealable decision so that the divergence may be definitively considered to have been overcome, but the expectation is that it will be upheld and the topic settled for a long period of time.
In addition, the decision favors legal certainty, since it removes the possibility that claims made in disputes initiated, or about to be initiated, three years after the beginning of the limitations period, and backed by the majority position, may be suddenly considered time-barred.
Also, in order to strengthen legal certainty, the decision stated that “the statute of limitations constitutes, in a certain manner, a rule restricting rights, and cannot entail an expansive interpretation of the guidelines laid down by the legislature" (page 33 of the appellate decision), which should serve as a parameter so that future decisions on the subject of the statute of limitations, even if in different contexts, favor restrictive interpretations.
[1] MARTINS-COSTA, Judith; ZANETTI, Cristiano de Sousa; Responsabilidade contratual: prazo prescricional de dez anos [“Contractual liability: ten-year limitations period”]. Revista dos Tribunais, São Paulo, v. 797, p. 215-241, May. 2017.
- Category: Environmental
Executive Order ("MP", in its abbreviation in Portuguese) No. 884, published last Friday, June 14, amended the Forest Code (Law No. 12,651/2012), so as to determine that registration in the Rural Environmental Registry (CAR) "shall be mandatory for all rural properties and holdings." The amendment redrafted the third paragraph of article 29, which sets forth the end date for registration in the CAR.
The time limit originally provided for in the Forest Code had been extended by regulatory changes, and was last defined as being December 31, 2018. The discussion was resumed following the non-conversion into law of Presidential Decree No. 867/2018, which had postponed that deadline to December 31, 2019.
The expectation is that MP No. 884/2019 and its effects will trigger debate. On the one hand, the elimination of the deadline for registration in the CAR implies the possibility of joining the Environmental Regularization Program (“PRA”, in its abbreviation in Portuguese) at any time. This is because article 59, paragraph two, of the Forest Code conditions the joining of the PRA on registration in the CAR. On the other hand, it may be thought that the amendment imposed by MP No. 884/2019 implies the immediate enforceability of registration in the CAR, subjecting all rural properties not yet registered to penalties.
Discussions may arise, for example, regarding the good standing of properties whose registrations are in progress and the respective practical effects if the presidential decree is not converted into law within the time limit determined in the Brazilian Federal Constitution. In addition, there are reports that two lawsuits have already been filed with the Federal Supreme Court (STF) challenging the constitutionality of the measure.