Preview: Guest blogger Rafael Lucaz Amaral, a partner at Brazilian law firm Kasznar Leonardos, discusses how his clients recover revenue lost to piracy by using the data from their anti-piracy and license compliance software to prevail in software infringement settlements.
Brazil is a huge market for intellectual property (IP) rights (including software) that are fully enforceable, and injunctions and damages are easily and commonly granted. In addition to out-of-court negotiations, litigation can be used to maximize recovery revenue. There are case law precedents concerning internet service providers (ISPs).
The Kasznar Leonardos Firm
The Kasznar Leonardos firm has very skilled compliance experts that investigate unlicensed use of our clients’ software and other IP-related content. Infringers are persuaded to discontinue the illegal use of our clients’ IP and encouraged to replace the illegal copies with properly licensed IP or pay damages. When necessary, our top-level litigation team is prepared to enforce our clients’ rights in court.
Since 2016 our anti-piracy and compliance (AP&C) practice has entered into 8,500+ negotiations and has achieved an average 52% success rate in out-of-court settlements for software purchases and/or damages. Our success is due to several key strategies. First, we are vigilant about follow-up of all negotiations with short deadlines and negotiators are encouraged to take professional negotiation courses to improve their skills. Resellers are involved when deemed necessary, resulting in assessment plus negotiation of better solutions or conditions. Litigation is recommended when the infringer is financially healthy and is using a considerable amount of illegal software in the last 30 days. In big cases we have found that a lawsuit can be more efficient than warning letters.
Litigating in Brazil
Software is fully enforceable in Brazil and foreign entities are treated the same way as domestic companies. Both civil and criminal lawsuits are available and injunctions to raid companies are very common and easily obtained; mere suspicion is enough to request raids. When infringement is confirmed, restraining orders are granted. There is no discovery phase in Brazil, consequently, litigation is a relatively low investment (around US $5,000.00) for court fees and expert fees. Final judgments can be obtained in about 18 months.
Punitive and economic damages are awarded. In the Superior Court of Justice economic damages range from 5 to 10 times the license price of each infringing seat. The infringer must reimburse the totality of the expenses incurred by the software publisher in the litigation, in other words, official fees plus court expert fees plus attorney fees.
Obtaining Infringer PPI from ISPs
Usage data obtained by our clients through anti-piracy and license compliance technology such as Cylynt’s SmartFlow Enterprise product can identify extensive illegal use, thus generating a great number of opportunities for monetary recovery. However, much of the data does not identify the actual infringers personally (per privacy laws).
The 2015 Brazilian Internet Law requires that ISPs keep use logs for 12 months. Our team has recently filed lawsuits against local ISPs and obtained injunctions that force them to disclose the personally identifiable information (PII) of customers who used our clients’ software on specific dates/times using the IP addresses connected to the ISPs. With the disclosed data we have been able to create a number of opportunities that have resulted in negotiations to recover revenue lost to illegal usage.
In order to obtain an injunction against an ISP, the software company must present the following information:
● The IP addresses that used the software
● The date and time of the use
● The time zone of the use
● IP port (or port number)
The ISPs will then be ordered to disclose the following information:
● Name of the customer
● Physical and electronic addresses
● Telephone numbers
● IRS or social security number
Usage Data from Anti-Piracy Software
The details required to meet the criteria for forcing ISPs to disclose the PII of an infringer can be provided using Cylynt’s anti-piracy software to gather precise telemetry usage data, including the IP addresses of anyone using the software without proper licensing, as well as the location where it was used, when, and how often. This data enables our firm to succeed in contacting many of the infringers directly and negotiating monetary settlements.
As an example of our success, our firm recently obtained an injunction for a software publisher that we represent in piracy matters. According to the decision, ISP CLARO has been ordered to present the contacts of the companies that used our client's software. We submitted to the court about 10,000 IP addresses and we hope to be able to identify several hundred infringers. The next step will be to send warning letters to all of them and start negotiations.
Our firm recommends that software developer clients utilize robust commercial anti-piracy and license compliance software in their products in order to protect against piracy and generate the detailed data needed to pursue infringers and recover lost revenue. Our clients are very happy with the technology and the results we can achieve using the resulting evidence in the Brazilian legal system.
Rafael Lacaz Amaral is a senior partner at Kasznar Leonardos, a Brazilian law firm specializing in international patent and trademark law. He is the coordinator of the anti-piracy and compliance (AP&C) team. The team is made up of highly-qualified practitioners who serve multinational companies from all industry segments, including oil and gas, energy, chemical, food, pharmaceutical, biotechnology, steel, aerospace, automotive, electronics, telecommunications, and information technology. His practice also includes the entertainment industry, particularly movies, music, and computer games.