A Court’s decision to strengthen IP in Brazil by securing the BPTO’s financial autonomy
The Brazilian intellectual property system has reached an important turning point. On March 3rd, 2026, the 1st IP Specialized Panel of the Federal Court of Appeals for the 2nd Circuit (TRF-2) unanimously rejected the appeals filed by the Federal Administration and the Brazilian Patent and Trademark Office (BPTO), upholding a ruling aimed at addressing the structural limitations that have long affected the BPTO.
The case originated from a Public Civil Action filed by the Brazilian Association of Intellectual Property (ABPI), which challenged the persistent financial constraints imposed on the BPTO despite its capacity to generate substantial revenue.
At the heart of the litigation was the chronic budgetary fragility of the BPTO. Although it generates significant revenue through fees, a substantial portion of these funds has historically been withheld by the Federal Administration to meet fiscal targets.
This practice has contributed to a structural deficit in personnel and infrastructure. For years, the BPTO has faced a shortage of examiners and outdated IT systems, which in turn produced significant delays in the examination of patent and trademark applications.
The First-Instance Decision
In April 2022, Judge Caroline Somesom Tauk, of the 31st Federal Court of Rio de Janeiro, partially granted ABPI’s claims. The decision established a framework aimed at addressing the institutional deficiencies affecting the BPTO. The first-instance decision ordered the following:
- The BPTO must present, within 90 days, a detailed institutional diagnosis identifying inefficiencies based on technical and comparative benchmarks and defining the resources needed to improve operations. Within the same 90 days, the BPTO must also submit a restructuring plan for the 2022–2024 period, including the progressive measures to its activities, with a detailed implementation plan and budget forecast.
- The BPTO’s plan must specify the actions, timelines, and funding sources, and will be subject to judicial approval during the enforcement phase, upon the periodic submission of reports demonstrating the implementation of the adopted measures.
- The Federal Administration must allocate the budget necessary for the implementation of the restructuring plan, in accordance with the schedule to be approved at enforcement phase.
The Court partially rejected ABPI’s requeststo order the automatic transfer of the full amount of the BPTO’s revenues. The Judge emphasized that judicial intervention should extend only as far as necessary to remedy the identified deficiencies without interfering with administrative decision-making by the Executive and Legislative branches.
What is new? The Appellate Court’s Ruling
On appeal, Reporting Appellate Judge Simone Schreiber upheld the core reasoning of the first-instance decision.
The ruling issued by the TRF-2 emphasized that, although the Judiciary should not substitute itself for the public administrator, judicial intervention becomes legitimate when governmental omissions compromise the effectiveness of fundamental rights. In this case, the court recognized the connection between the proper functioning of the BPTO and the constitutional protection of industrial property under Article 5, XXIX of the Brazilian Constitution.
The decision also clarified that the BPTO’s financial autonomy should not be viewed as an institutional privilege, but rather as a necessary condition for the BPTO to fulfill its statutory mission.
Importantly, the ruling preserved a careful balance between the parties’ positions. The court rejected the Federal Administration’s argument that it retained full discretion over the BPTO’s budget, while also denying ABPI’s cross-appeal seeking the unrestricted transfer of all revenues generated by the BPTO. Instead, the court maintained the obligation to allocate funds in accordance with the concrete needs identified in the restructuring plan.
Implications for Brazil’s Innovation Ecosystem
While the Federal Court’s ruling may still be challenged through an appeal to the Superior Court of Justice, it represents a significant institutional step toward strengthening the Brazilian innovation system.
By ensuring that the BPTO has access to the resources required to modernize its operations, the ruling creates the conditions necessary for improving examination capacity, reducing application backlogs, and enhancing legal certainty in the protection of intellectual property rights.
For innovators, investors, and businesses operating in Brazil, the outcome signals a stronger and more reliable institutional framework for the protection of industrial property.
By Thiago Ruschi
