terça-feira, 5 de fevereiro de 2013

Cease and desist letters in Brazil

I have just published an article at The Brazil Business. Please check it here, or follow the link. 


The use of cease-and-desist letters is a common practice in many English speaking countries, especially those that adopt common law.

Generally speaking (and keeping in mind that I’m a Brazilian lawyer, writing under a Civil Law perspective), a cease-and-desist letter is a letter demanding that the recipient refrain from initiating or stop performing a certain behavior, under the threat of legal action, civil or criminal.

In common law jurisdiction, notably in the Unites States, sometimes a cease-and-desist letter is a fundamental condition to ascertain a party’s legal standing, and, therefore, must be issued before any claim can possibly be brought before court.
Apart from that, cease-and-desist letters also have broad applications, which are widely known by business people. Its use in patent infringement is particularly popular.
In Germany, cease-and-desist letters (called Abmahnung) are also extensively used where there is a contractual breach by the other party.
What about Brazil? Do cease-and-desist letters exist here? Do they have any legal value?
This articles aims at explaining (however briefly) how these letters work in Brazil, from a business perspective.


Cease-and-desist letters would be considered a special kind of notification, according to the Brazilian Civil code and Brazilian Civil Procedure codes.
In Brazil, notifications may be used to ascertain a claim, and also to inform the other party of a perceive breach or wrongdoing that it has performed. They may also be used to request the fulfillment of an obligation, and in many other cases, basically whenever a cease-and-desist letter would be used.
On the plus side, notifications may be used to declare the other party to an agreement as being in breach, thus making a future win in a lawsuit more probable. In addition, the date of receipt of the notification may be used as the first day for the application of interests on overdue payments (in some cases).
But the use of cease-and-desist letters in Brazil is also largely symbolic, in the sense that it is not always mandatory for a party to notify the other before filing a lawsuit. That is, a cease-and-desist letter is not always required in order to determine legal standing.
For example: a specific clause of an agreement that is governed by the Brazilian law may request one party to notify the other before terminating the agreement. In this case, the notification is very important, and it is generally expected that one party will notify the other before pursuing any legal action.
However, where this clause is absent, the party wishing to terminate the agreement may go directly to court and ask for the termination, even without issuing any prior cease-and-desist letter to the party in breach.
In some other cases, notably in the assignment of credits to third parties, the assignor’s creditors would have to be notified of the operation, in order to oppose to it if they see fit. Notifications are mandatory, too, in a limited number of situations related to corporate law, such as the summoning to shareholder’s meetings.
On the other hand, in most intellectual property cases, the party that feels damaged will go to court immediately, without issuing any prior notification.
This is because, being a civil law country, Brazil defines the ability to pursue a lawsuit in different basis than the USA, as the concept of legal standing is not the same. In Brazil, it is more theoretical and related to the infringement of a generic written rule (the Civil Code, etc.). Brazil is closer to Germany in this sense. In the USA, the actual situation and the relationship between the parties are, generally speaking, more relevant.
I’m sure the differentiation above may seem useless for many readers, but they are important under a legal stand point and might have serious implications to your business.
Finally, please note that Brazilian public agencies do not usually issue cease-and-desist letters (as they do in the US). More often than not, Brazilian agencies will send you a penalty notification (an order to pay penalties), without previous warning.

Forms of Notification

In Brazil, there are three kinds of notifications.
Extrajudicial notification
The first one would be a simple correspondence mailed or personally delivered to the other party.
The second and most usual one would be a correspondence issue by a [public notary](, upon formal request.
It works similarly to summoning administered by public notaries in the USA. The one interested in making the notification must present himself to a public notary (/article/notary-public-authenticated-photocopy) to a “Cartório”, as we say in Brazil), pay a fee (usually about one hundred reais), and supply the other party’s address and the content of the notification.
A constable or other public notary representative will personally visit the party to be notified and hand him the notification.
The notification, in this case, is not like a subpoena, because the notified party is not obliged to accept the notification, nor is it obliged to declare anything.
However, if this is the case, the public notary (constable, etc.) shall attest that the notification has been presented and read it out loud to the notified party, and that such party refused to receive it or sign a receipt. This attestation has full public faith and credit, and can be used to prove that the party has been dully notified. This kind of notification is thoroughly used in lease disputes, for instance.
Judicial notification
Finally, the third and less usual kind of notification is a judicial notification (the two above are non-judicial notification, or extrajudicial notifications). In simple words, it is a notification that is issued by a judge, upon request of one of the parties.
It shall not be confounded with a court injunction, which communicates the court’s own decisions. In this scenario, the notification is presented before the judge, who merely forwards it to the recipient. It is not more authoritative than the other ones, only more formal, considerably more expensive, for it requires the payment of lawyer and court fees, which may easily amount to USD 2.000,00.
This notification works similarly to the notary public one, with the difference that it is managed by a magistrate (who can refuse forwarding it, if the claim contained in the notification is absurd). Also, it is conveyed to the hands of the notified party by a court clerk, not by the notary public or its representatives.
The court clerk has the same public faith and credit than a notary public, to the effect of attesting the refusal of the recipient to take the notification.
Apart from the increased level of formality, the judicial notification has another advantage: it can be used to notify a party that cannot be found, or whose address is unknown. This is made by the publishing of the notification in public and private newspapers, in a procedure similar to the American “service by publication and mailing."
Those are just general considerations on the subject. Keep in mind that this article describes the use of cease-and-desist letters, not cease-and-desist orders (also called injunctions) issued by courts.
One should always ask for the help of a Brazilian lawyer whenever he wants to make a notification to a Brazilian party.

About the author:
Adler Martins is a Brazilian lawyer specialized in advising foreigners doing business in Brazil. He can speak English, Spanish, German and some Chinese. Mr. Adler has lectured to audiences in Brazil, England and India about how to invest in and export to Brazil.

Um comentário:

  1. Very nice article, Adler.

    In the U.S., formal notice to the other party, whether as a cease and desist, or something else, is often a mandatory condition precedent to having legal standing to bring an action in court. This obligation is routinely set forth in a contract, but might also be required by statute or regulation. If such an obligation exists, and is not met by the complainant, the responding party can get the lawsuit dismissed, possibly without leave to amend, making the failure of prior notice a fatal defect. Thanks for presenting the three types of notices under Brazilian law.

    Russell S. Kurtz, Esq. U.S. licensed attorney and contract manager in Campinas, Brasil.


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