What do I do with the Brazilian patent to a popular US toy?

January 15, 2007 10:34 AM

I own the Brazilian patent to a popular US toy that has sold over 100 million dollars. What now?

I had no idea the toy I patented here in Brazil had been a major product in the US market. I came upon it surfing on the web and learned from some articles that their US sales dropped in the 90's but the company is preparing a big relaunch for next year.

It used to sell all over the world but I don't think it was ever sold in Brazil. I manufacture and sell it very small scale, only a couple hundred units per month. Should I just keep doing it?

Do I wait and see if anything comes up? Should I contact them about a possible joint venture in the Brazilian market? What's in it for me? Is it risky? A gold mine? No big deal?

posted by AnyGuelmann to work & money (17 comments total)

Get a good attorney.
posted by HotPatatta at 10:39 AM on January 15, 2007

Go straight to your attorney, do not pass Go. The issues are far too complicated for you to get a satisfactory answer based on the information you've given us. Furthermore, the amount of money potentially involved will likel preclude any sort of gentlemen's agreement between you and the US manufacturer. IAAL, but not your lawyer.
posted by Falconetti at 11:18 AM on January 15, 2007

I'm a bit confused. You only applied for and received a Brazilian patent? Never for a patent in any other country? If that is the case, unfortunately, I'd say that you are probably out of luck seeking anything for sales outside of Brazil. There are a number of very good patent lawyers in Rio and Sao Paulo that could advise you if you have any reason to hope. Call one of them for a definitive answer.
posted by toucano at 11:25 AM on January 15, 2007

You only have a Brazillian patent?
The toy is only sold in the US?
It is not made in Brazil is it?

Assuming that the manufacturer neither sells nor manufactures the toy in Brazil and you have only a Brazilian patent then you can't really stop them in the US. However, perhaps you could interest them in a license to sell it in Brazil. Your offer would be more enticing if you could ease their entry into the Brazilian market. If it has sold that much in the US, I am sure they are interested in other markets. The question is why should they bother with Brazil. You have to make it worth their while to invest in the market there. As long as they do not have to pay too much for a license the fact of having a patent to protect their market there may also be enticing. Do you have a good distribution channel? If they made it could you distribute it? Do they have any presence in Brazil or South America?
posted by caddis at 12:07 PM on January 15, 2007

Yes, the patent I have is only valid in Brazil. Int'l patents are too expensive, although I did think about getting a US patent in the future. Doing research for that is how I came upon the american version of my toy.

Now, should they ever try to enter the Brazilian market, they'll get to me eventually. My question is, knowing that they're preparing a big relaunch, should I go to them first?

My company is very small, with a limited budget. Am I going to be crushed if I come to them with any sort of proposal regarding the Brazilian market? Is owning the BR patent security enough for me? Do any of you know of a similar case anywhere in the world?
posted by AnyGuelmann at 12:10 PM on January 15, 2007

Should you go to them first? There are two schools of thought on such things. On the one hand if you go to them first you might be able to be part of the selling of the product in Brazil and perhaps all of South America. Profits from this are likely higher than a mere royalty. On the other hand, if they perceive too many obstacles in the form of your patent they may just skip the market in Brazil. However, if they make a financial committment and then learn of your patent then they will be forced to deal with you in some fashion. A lawyer who can help you negotiate with them would be most helpful to you right now. As long as you are not unreasonable and do not scare them out of Brazil it is probably best to go to them first.
posted by caddis at 12:25 PM on January 15, 2007 [1 favorite]

If you don't mind telling us, whats the product? I'm just curious.
posted by Mach5 at 12:44 PM on January 15, 2007

Is owning the BR patent security enough for me?

The only person who can fully answer that is a Brazilian patent lawyer. Have you contacted one? If not, why not?
posted by mediareport at 1:18 PM on January 15, 2007

Based on what I think you have written, you really have NO rights regarding your invention EXCEPT in Brazil. It sounds like it is far too late to apply for any other patents in other country. There are very strict time limits involved for applying for additional patents. It sounds like those are long past in your case.

You said "Doing research for that is how I came upon the american version of my toy". This is curious. Do you mean that someone else was granted a patent for YOUR invention AFTER your patent issued? I ask because the general rule in patent law is that an invention must be "novel". Your patent would have been "prior art" that would have been a bar to a patent being granted on "a substantially similar invention". BIG CAVEAT: Yes, I was an IP lawyer. My words in quotes are words of art that ONLY a current patent lawyer can apply after knowing ALL of the facts.

That said, even if the US patent you mentioned is "invalid and unenforceable" wherever they have their patent(s), that really does nothing for your situation. You seem to be stuck with a patent only in Brazil. Certainly that better than nothing. But the issue you must decide is if there a big enough market in Brazil to warrant them working with you and how you can approach them. I have NO idea. You know the market there. I do know a little about doing business in Brazil, and certainly they would be well advised that having a local with connections and knowledge is almost a prerequisite to do business there. Well, at least doing business in Brazil successfully.

I am not giving any legal advice. Not my bailiwick any more. Laws change and my knowledge is way too out-of-date. You REALLY need to talk to a patent law firm there in Brazil. As I recall, the firm we used when I was doing IP law was in Sao Paulo., Danial & CIA. They were quite big. They can certainly advise you about the patent issues. But that is a bit separate from the real issue that you have regarding a possible license with the US firm. They may or may not want to deal with that.

A boa sorte meu amigo! Minha esposa é brasileira. Amo Brasil.
posted by toucano at 3:40 PM on January 15, 2007

When did you patent your idea? Was it before or after the toy was popular in the US? If they came up with it first, they may be able to claim prior art.
posted by delmoi at 4:15 PM on January 15, 2007

What HotPatatta and Falconetti said.

IAAL, but not your lawyer.

I like that so much I'm gonna steal it, IYDM.
posted by dreamsign at 6:29 PM on January 15, 2007

It should be noted that just because you have your patent, doesn't mean a bigger company can't litigate you until you give up. If the product is popular, the US company will make a determination between:

1. Ignore you and brazil
2. Work with you for brazil only
3. Work with you for international
4. Litigate you out of their hair

Once they know you exist, it will be up to you to convince them that option 2 or 3 is the most profitable to them. There is too much of a growing consumer class in brazil to expect option 1. Ammortized over the life of the toy, option 4 is likely to be considered their cheapest option. Good luck, and hope your lawyer is even better.
posted by nomisxid at 8:25 PM on January 15, 2007

Apparently he has no patent rights except for in Brazil. So there is no potential legal motivation and/or obligation by anyone to work with him anywhere about anything BUT in Brazil if they choose to enter there with a product covered by the claims covered by his Brazilian patent.

Could the validity of his patent be challenged in Brazil. Of course. Could someone choose to enter the Brazilian market and ignore his patent, thus forcing him to litigate? Of course. Are either of those prospects likely? Who knows. Much less likely if he retains a good Brazilian IP law firm, gets his ducks in a row, and can find a way to present a 'win-win' proposition to them. Would they be interested? I have no idea. I know nothing about his product, patent, or the potential market in Brazil.

I do know enough about business and marketing in Brazil to say that while the population of Brazil is very large and it has tempted a lot of multi-national corporations, selling there is not for the faint of heart. Pizza-Hut was a disaster because they did not understand that Brazilians have a very different idea about what pizza is. Pepsi is a very, very distant 2nd to Coke. You could probably put every MAC user in Brazil in a small classroom (a slight exaggeration, but not by much).

The quality of typical napkin in a Brazilian restaurant and most commonly available in stores would never ever be accepted by Americans or Europeans. You might need to use a few more, but they do get the job done. It really doesn't bother me. There is a good reason why these cheaper napkins are made and sold: the relative available market for a cheap napkin is magnitudes greater than the market for an expensive napkin. A lesson that far too many foreigners don't quite grasp.

As I see it, his 'ace-in-the-hole' is being a Brazilian (a big advantage when you want to do business in Brazil), having the Brazilian patent, and having developed a market (albeit small I guess) in Brazil. Is that worth much/anything to the US company? Again, I have no idea. If they think they want to sell in Brazil, it is worth a lot. Probably a lot more than trying to enter alone and fight him. Another possible synergy would be the possibility that being Latin American with his database of knowledge, he might be able to help them with their product in other Latin American countries.
posted by toucano at 9:44 PM on January 15, 2007

Speaking as a non-lawyer, my understanding is the same as toucano's: your patent may be prior art that invalidates theirs. Your patent is still only good in Brazil, so this doesn't help. Nonetheless, it might mean that an attorney can get some "please go away" money from the USA manufacturers in exchange for you agreeing to keep quiet and not spoil their launch. It's a bit of a long shot, and the way to go about it is probably to offer to sell them your patent. On the other hand, do you want them to sue you? Because that's probably going to be the first raction of their lawyers.
posted by Joe in Australia at 4:34 AM on January 16, 2007

Where did all this talk about "their" patent come from? It didn't come from AnyGuelmann.
posted by caddis at 7:33 AM on January 16, 2007

AnyGuelmann, I don't know if you are still following this thread, mas se voce esta precisando, I can put you in touch with a patent attorney in Sao Paulo.
posted by msali at 3:39 PM on January 16, 2007

Thank you all for the great feedback. I have contacted an attorney (thanks anyway msali) and we are dealing with budget issues - looks like an expensive enterprise whatever path we choose, even if potentially profitable.

Mach5, sorry... I'm still not sure if I can tell you.

Thanks guys!
posted by AnyGuelmann at 6:01 AM on January 31, 2007