United States investigation into intellectual property in Brazil is a response to the initial threats of Luiz Inacio Lula da Silva’s (PT) government in the area of intellectual property, 50% rates announced by Donald Trump. Still, to some extent, research can even help Brazilian industry.
This is because, by hardening the rules against the breach of intellectual property rights, Trump administration can help curtail a counterfeit market that moved $ 83 billion in Brazil by 2024-over $ 463 billion, on Monday’s quote (28).
The data are from the 2025 forgery yearbook, made by the Brazilian Association to Combat forgery (ABCF). Between 2023 and 2024, the total loss of the market rose about 26%, as in 2023, US $ 66 billion were sold in counterfections.
Among the sectors most affected by counterfeits are alcohol, clothing and fuels, which accumulate practically one third of the losses. Sports material, perfumes and pesticides come next.
Also according to the ABCF survey, sales of online illegal products more than tripled since before the pandemic began. At that time, 10% of all illegal trade was done over the internet. Already in 2024, this commercialization route represented 36% of sales of counterfeit products.
Brazil and the United States are signatories of international treaty against counterfeits
Even though the investigation has been unilaterally moved by the US government, Brazil and the United States are signatory to the agreement on commercial aspects of intellectual property rights, or Trips (AGGRADEED (WTO) aspects of Intellectual Rights (WTO).
It is a set of rules that provides for the protection of intellectual property and trade trade rules between countries. Master and expert on intellectual property Luciano Andrade Pinheiro says piracy is a worldwide problem.
“It is not an illicit that occurs only in Brazil. We have laws that criminalize piracy, but it is a difficult combat for several factors,” he said.
By announcing the investigation, the US Commercial Representative Office (USTR) cited 25 de Março Street in São Paulo. “The region has remained, for decades, as one of the largest markets for counterfeit products, despite the operations performed to combat it,” he says.
Previously, on March 25, he had also been cited by USTR in the report “Notorious Markets for forgery and piracy”, which maps these places around the world to help protect American brands.
The measures that the US can impose with investigation against Brazil
In the field of intellectual property, American sanctions can be comprehensive. Fernando Canutto, from Godke Lawyers, list possible measures:
- Selective tariffs on Brazilian software, films and technological products;
- Exclusion of Brazil from the General Preference System (SGP);
- Imposition of strict technical tests; and
- Specific sanctions on Rua 25 de Março and Foz do Iguaçu as critical piracy zones.
Although they can curb counterfections, measures can also damage industry in Brazil. The exclusion of SGP, for example, could raise export costs to some Brazilian products. The creation of additional requirements and special audits could make it difficult to enter the US market.
In the case of regional sanctions (March 25 and Foz do Iguaçu), in addition to affecting companies that do not respect intellectual property rules, they may end up penalizing those that respect them but act in areas considered problematic.
Investigation against Brazil is a reaction to retaliation threats
To some extent, US investigation against Brazil may be the result of the rhetoric of the Brazilian government. Shortly after the announcement of 50% rates to Brazil, Lula government officials announced possible retaliation in the field of intellectual property.
Among the measures considered by petista management were the suspension of US patents, brands and copyright. In this sense, it was considered, for example, to allow the breaking of patents or the use without due payment of technologies and medicines royalties of American companies.
In addition, Brazil could still delay the long process for intellectual property records – average 7 years, and 9.5 years for pharmaceutical patents – and reduce protection to American works.
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Retaliation measures demoralize business environment and remove investors
For Tax Group Luís Garcia, the use of intellectual property rights as a form of retaliation to the US generates concerns about legal certainty. The expert points out that investors seek stability and thus abruptly affecting intellectual property tend to discourage foreign investments.
Similarly, Luciano Pinheiro states that technological development is intrinsically linked to the protection of intellectual property. “Investments in the creation of new technologies need to be in some way offset to stimulate the continuity of the innovation process,” he said.
And Brazil already feels the weight of the trade war at this point. Central Bank data released on Friday (25) show that direct investment in the country (IDP) in the first semester retreated 10.7% over the same period of 2024, reaching US $ 33.8 billion. The value is the lowest since the first half of 2021:
- 1st semester of 2021: US $ 26.8 billion;
- 1st semester of 2022: US $ 38 billion;
- 1st semester of 2023: US $ 35.3 billion;
- 1st semester of 2024: US $ 37.8 billion;
- 1st semester of 2025: US $ 33.8 billion.
Previous experience shows risks of retaliation
Tax lawyer Leonardo Roesler recalls that the suspension of obligations on intellectual property “has high symbolic and economic weight” against the US, but may be a shot in the foot of the Brazilian economy.
In 2013, unlike what happens right now, the experience in cotton litigation between Brazil and the US, when the WTO recognized the Brazilian cause, showed that the mere threat of retaliation in the intellectual property was sufficient for Americans to seek agreement.
However, the government’s decision of former President Dilma Rousseff (PT) also caused a negative reaction from national technology transfer sectors from the US.
As mentioned earlier, measures in the area of intellectual property directly affect royalties, brands and patents from foreign companies, including those that have representation and branches in Brazil and produce relevant side effects on the national economy.
According to Roesler, insecurity can cause companies and investors to review their “research and development plans in Brazil”. In addition, multinational chains can redirect their innovation centers in search of more safe countries in this regard.
Balance may be distant
Professor Roberta Portella, a specialist in FGV’s law and international trade relations, states that, according to WTO rules, measures in the area of intellectual property should have “temporary and proportional character.” According to her, the goal is not to “promote trade war”, but “restore balance” and oblige negotiation between the parties.
However, the search for balance may not be the most obvious way in the current scenario. Leonardo Roesler comments that the turbulent mood in which US investigation is filed against Brazil feeds Trump’s speech, taught it with Arsenal for additional pressures.
The mix between commercial and political measures, and the responses of the Brazilian judiciary and the government to tariff can make Brazil face not only new tariff elevations, but also the target of selective financial measures against individuals and entities, among other sanctions.
And the US government, so far, has no signs of turning back in the application of tariffs or its investigation. This weekend, during an announcement according to the European Union, Trump reiterated that tariffs for Brazil will be effective from August 1st.
Understand the investigation on intellectual property against Brazil
On July 15, with the escalation of commercial tensions between Brazil and the United States, the US Commercial Representative Office (USTR), under the parameters of section 301 of the 1974 Commerce Law – created to respond to “discriminatory” foreign practices that affect US trade – opened investigations against Brazil.
In all, six areas are being investigated: actions against social networks and Pix, unfair rates, combat corruption, intellectual property, access to the ethanol market and illegal deforestation.
Regarding intellectual property, the US says Brazil fails to effectively combat imports, distribution, sale and widespread use of counterfeit products and illicit streaming devices.
They cite 25 March Street in Sao Paulo as a large counterfeit market market. Another highlighted point was the delay in patent requests.
