The guidelines aim at streamlining and providing more transparency to the recordal proceedingsRule #199/2017, which came into effect on its issuance date July 7, 2017, sets forth guidelines for the administrative proceedings of examination and recordal of industrial property licenses, registration of topography integrated circuits, technology transfer and franchise agreements. Such guidelines aim at streamlining the courses of action provided by INPI Rule #70/2017, effective since July 1 st , 2017, subject to our previous client alert.The Rule #199/2017 compiles a set of proceedings and “unwritten” rules adopted by INPI relating to admissibility requirements for recordal requests and formal requirements applicable to the agreements or invoices submitted to the appraisal of the Institute.In summary it addresses many issues, such as: (i) payment of INPI’s official fees and submission of payment proof; (ii) legal formalities of documents executed in foreign countries and their respective translations into Portuguese; (iii) need of signature of two witnesses in agreements executed in Brazil; (iv) obligation to initial all the pages of any agreements; (v) need to keep updated records of the Company ́s Data in the INPI’s database – valid up to 2 years; (vi) optional submission of explanatory letters in recordal requests, but its mandatory submission for official consults; (vii) need to attest the formal authorization of the IP rights’ owner prior to registering sublicense or sub franchising agreements; and (viii) need to attest the delivery/receipt of the franchise offering circular prior to registering franchise agreements; among other formal aspects.As for the contents of technology transfer agreements, INPI will analyze: (i) if the contract’s purpose fits the legal definition of technology transfer, as per Article 211, Law #9,279 of 1996 (Brazilian IP Law); (ii) the status of underlying IP rights’ applications; (iii) if the contract’s term matches the validity term of the underlying IP rights; (iv) exclusivity basis of the license or sub-license agreements; and (v) the purpose of the franchise, as per its legal definition in Article 2, Law #8,9555 of 1994 (Brazilian Franchise Law).Despite not being grounded on any Federal law, the INPI’s unique and long-standing understanding that know-how cannot be subject to licensing is reinforced in the new Rule (know-how license agreements are not listed in the hall of Article 4), being the parties limited to know-how transfer agreements (Article 8, I – sets forth for the “technology supply” or “acquisition of technical information”).It is to note that the maximum term of know-how transfer agreements will no longer be limited to 5 years, extendable for additional 5-year term, upon justification. The contracting parties, will be free to define the agreements’ validity term. The big caveat, though, is that Rule #199/2017 expressly provides that it is not admissible to submit a subsequent know-how transfer agreement or a related technical and scientific assistance agreement, with the same purpose, between the same parties (Article 12, VI, a; and Article 12, VIII, a) – which, in practical terms, forbids the renewal of such agreements.Another highlight is that license agreements involving trademarks, patents or topography integrated circuits applications can be submitted to recordal, however, the respective Registration Certificate will be issued displaying the expression “NIHIL” in the field expressing the contract value or “royalties’ fee”. Upon the granting of the relevant IP rights, the parties must request the amendment of the Certificate to the reflect the agreed amount (Article 14, IV). For more information, please contact info@lickslegal.com.