Country Focus – Combating Piracy: Brazil Fights Back

Brazil is waging war against piracy - and on multiple fronts.  Alliances have been formed, weapons selected and battles begun.  The National Council against Piracy and Intellectual Property Crimes (CNCP), a public/private body created within the framework of the Ministry of Justice in October 2004, leads the fight.  The Council’s strategy and tactics are defined in the National Plan for Combating Piracy.  The action spans four fronts: enforcement, education, economic and institutional policies.

Strategy and tactics

The National Plan for Combating Piracy includes 99 guidelines for short, medium and long-term action.  The Council regularly assesses work in progress, to identify what is working and what is not, to amend the guidelines accordingly.

Effective communication is essential to ensure that the Council’s strategy is understood by all sectors of society and to maximize its impact.  Communication is two way, so that any interested parties can voice their opinions in workshops, meetings and through Internet and telephone channels.  Cliquedenúncia (which translates roughly as “click ’n tell”) is an open line for members of the public to file complaints, transmit information on pirated goods or new methods of counterfeiting, report new counterfeit sales outlets, etc.

Intelligence-led enforcement

Under the heading of repressive action, the National Plan defines the strategy of broadening and coordinating intelligence work within all the government departments involved in combating piracy, counterfeiting and other IP-related crime.  The government has invested significant resources in this area, and the resulting actions receive high profile media attention.

The first priority was to shut down entry points of counterfeit goods into the country by stepping up controls at strategic border points, such as the Ponte da Amizade between Brazil and Paraguay.  This alone led to the seizure of 33 million illegal CDs and DVDs in 2005, almost double the amount seized in 2004.  At the seaport of Santos in Sao Paulo more than 120 containers of illegal merchandise were impounded.  In another operation, a six months investigation led to the seizure of 204 million counterfeited surgical gloves, which contravened health and safety standards. The perpetrators keep becoming more creative in finding new ways to circumvent controls.

Media coverage of police raids reinforce the message that piracy doesn't pay.

Successful efforts to intensify repressive measures at points of sale included Operation Sagitarius carried out at popular retail outlets for cheap goods in São Paulo, Belo Horizonte, Pernambuco, Rio de Janeiro and Brasilia.

Such headline-grabbing seizures of illegal goods represented months of painstaking investigation and joint operations between the Federal and Highway Police, Federal Revenue Department and regional law enforcement agencies.  Nor did enforcement action end with the seizures.  Approximately 1,200 people were arrested in 2005 for smuggling, illegal commerce and other IP-related crime – an increase of 3,076 percent over 2004, when only 39 smugglers were arrested in the year.  This included arrests for cybercrimes, such as advertising pirated software, music and movies on the Internet.

The “Pirates Out!” campaign

While repressive action is aimed at the supply side of the counterfeit problem, the Council’s educational activities aim to tackle the demand.  The educational program is designed not only to alert people to the risks inherent in buying pirated goods but, more broadly, to promote an IP culture in Brazil, encouraging consumers to prefer genuine products.

Pirata: tô fora! Só uso original! (“Pirates out! Use originals only!”) a joint initiative with the National Union of Federal Revenue Agents (SINDIRECEITA), is a major outreach campaign.  Launched in February at the Salvador de Bahia Carnival, the slogan appeared everywhere – on posters, caps, T-shirts, pens and so on.  The Council even distributed pocket-sized schedules of the 2006 World Cup championship, a key advertising medium in football-crazy Brazil. The schedules bore the anti-piracy slogan and the national team’s trademark yellow and green colors.  The campaign is continuing in fairs and popular events around the country, and will soon be extended to primary and secondary schools, colleges and universities.

The Council’s active participation in more than 30 awareness raising events in 2005 helped to stimulate many private sector institutions to get involved. As a result, newspapers, magazines, TV channels and radio stations began spontaneously to publicize IP-related news topics.

Economic action: tackling pricing issues

An on-going campaign warns consumers not to be lured by low prices into buying shoddy goods.  The message is that buying a cheap product is only worthwhile if that product is legal and of decent quality.  But when drawing up the National Plan, the Council members recognized that the price difference is the real reason why consumers buy counterfeit products.  So in parallel with the above outreach campaigns, they set about tackling pricing issues. Their solution was to promote the creation of alternative lines of original products at more affordable prices.  The Council encouraged the public and private sector to come up with initiatives in this direction, offering producers and industry free publicity and government incentives to develop inexpensive branded products.

The response was positive:

• Some department stores and supermarket chains began selling CDs and DVDs at R$8.90 (US$4).
• A new technology, the Semi-Metallic Disc (SMD), invented by the Brazilian singer Ralf provided a low cost alternative to CDs. With a final retail price of R$4.50 (US$2), street vendors were given the opportunity to sell SMDs legally at prices comparable to pirated CDs, but on which they could still make a profit.
• NIKE, which holds the IP rights to the official team shirts of the Brazilian national football team, began manufacturing a simpler version of the shirts which retail at R$39.90 (US$18) instead of R$170 (US$78). Although still twice the price of the average fake version, the successful sales figures shows that consumers will choose quality when the price is within their budget.
• The Clube Atlético Paranense adopted a policy of incorporating street venders into their merchandizing program, and created products specially for them to sell to lower income groups.

In parallel, the government cut taxes in several sectors.  Legislation introduced in November 21, 2005, for example, granted tax benefits for computer products to be sold at popular prices.

Institutional measures

While Brazil has modern IP protection laws, legal texts relating to emerging technologies require regular updating.  Discussion is also ongoing on amending the procedural component of Brazilian laws with a view to lightening judicial formalities. This calls for a high degree of coordination among the executive, legislative and judiciary bodies involved in the process.

One bill currently being processed by the Brazilian Congress concerns the destruction of pirated products.  This is designed to address a problem caused by the current law, which requires that counterfeit goods be stored in depositories until the case is tried.  The sheer volume of pirated products seized has made this a financial burden for both the authorities and legitimate companies. Vigorous debates on various proposals for legislative change are taking place in the Council’s Legislative Issues Working Group, to ensure that proposed amendments take into account the interests of all sectors and find the best solution for Brazil.

Effective communication

On all four fronts, effective communication is the key to successful implementation of Brazil’s anti-piracy strategies.  Media coverage of enforcement action informs the public that piracy does not pay and will not go unpunished.  The Council’s education program reinforces this message, while encouraging consumers to choose quality over cheap fakes.  Publicizing the economic measures spreads awareness of low-cost legal alternatives.  And good communication among the judicial, legislative and executive bodies contribute to developing laws that address the problem.

Why fight piracy?

• Piracy means unfair competition, damagin national industry and commerce;
• It damages the national image, leading to investment and job losses;
• It erodes tax revenues;
• It feeds international organized crime, and aids money-laundering;
• It circumvents the protection of traditional knowledge and natural resources;
• It undermines respect for labor rights, creating illegal employment and exploiting child labor;
• It threatens the health and safety of consumers;
• It poses environmental concerns, undermining sustainable development