Created in 2004 and reformulated in 2016, the Innovation Law (Law 13,243) has as its main function to create a safe environment for collaboration between companies, research institutions and the public power. More than just a set of rules, the legislation represents a strategy to ensure that Brazil can transform knowledge into economic development and more effective public policies.
For the legal consultant of the Agribusiness Research Development Foundation (Fundepag), founding partner of Silva Ribeiro Advogados Associados, doctor and master by PUC/SP and professor of Civil Procedure at PUC-SP/COGEAE, Leonardo Ribeiro, the law allows, in a solid and safe way, a partnership between various actors, such as public agencies, public research institutions, private companies and third sector organizations, so that everyone can seek innovative solutions.
According to the lawyer, one of the merits of the law is to break with the idea, still common, that contracts with the government are always unbalanced and bureaucratic. “There is a certain fear of private institutions in allying with the public power. The logic that has, and that is mistaken, is that these partnerships bring abusive clauses. The Innovation Law does not start from this premise, on the contrary, it creates legal instruments that enable a more balanced relationship, more horizontal”.
Already, the attorney of the State of Sao Paulo, coordinator of the Thematic Nucleus of Intellectual Property and Innovation of PGE/SP, master in Economic Law, doctor (Ph.D) in Administrative Law, Rafael Carvalho de Fassio, highlights that innovation is more than a competitive differential: it is a necessity. “Innovation is not something we do because it is cool. Innovating is a survival strategy. For the company, it is what allows it to remain in the market; for the State, it is a tool for growth and development”.
Fassio recalls that the legislation emerged from the perception that traditional administrative law did not offer adequate mechanisms for partnerships aimed at innovation. “Almost nothing in the law was impossible to do before. What it did was facilitate, simplify and offer legal certainty, being a response to the inefficiency of traditional ways of the state”, he notes. For him, the main premise of the legislation is precisely partnership. “Nobody grows alone. The private sector needs the intellectual capital of public institutions and the State needs investment and the agility of companies. The innovation law tries to facilitate this meeting”.
In practice, for a company interested in innovating, the first step is to identify what pain is desired to solve, whether a product, a service or a process. From there, the legislation allows partnerships with public or private research institutions. “The important thing is that all these actors are available and the law brings the mechanisms for partnerships to occur safely”, says Leonardo Ribeiro.
These collaborations can generate solutions that, in addition to meeting market demands, transform into shared intellectual property, contributing to generate revenue, strengthen the scientific ecosystem and benefit society.
Legal controls and certainty
Although it brings more flexibility, the Innovation Law also provides for control and monitoring mechanisms. “It proposes legal instruments on the shelf to formalize partnerships. There is legal control, enforcement control, during the term of the partnership, and, in case of use of public resources, accountability”, explains Ribeiro.
According to the prosecutor, control is a delicate issue, especially in public administration.“The public manager, for fear of accountability, often avoids innovative ways and reproduces practices already known.The law helps reduce this fear by offering legal certainty for bolder actions”.
The challenge, according to the experts, is cultural.“It is necessary to have intellectual humility. The company needs to recognize the value of knowledge that is in the public sector and the State needs to understand the importance of private investment for research. The Innovation Law serves exactly to enable these exchanges in a fair, efficient and safe manner”, Fassio points out.
Artificial intelligence and innovation: an inevitable convergence
The recent popularization of artificial intelligence (AI), especially with tools such as ChatGPT, has brought the debate on innovation closer to audiences that previously did not see themselves inserted in this context. For experts, this movement can be decisive to broaden the understanding of the importance of the Innovation Law.
“A artificial intelligence was much closer to us. When ChatGPT was socialized, everyone began to discuss what would be the impact of this technology on health, employment, law, journalism. This debate left academia and became part of everyday life. This helps bring those who are not traditionally involved with innovation to understand how these advances directly impact our lives”, explains Fassio.
According to the prosecutor, when realizing that technologies such as AI are already transforming the way people work and make decisions, companies and institutions begin to seek with more interest the legal instruments that allow to enable innovative projects, and it is at this point that the Innovation Law plays a fundamental role.
Leonardo Ribeiro, who also researches the subject at an academic level, shares the same vision. “Artificial intelligence is innovation in the vein. She came to revolutionize our relationship with the world, with our jobs and with everything we do”, she says. Although we are still, according to the lawyer, dealing with what is called weak artificial intelligence”, that is, systems specialized in specific tasks without autonomy or awareness, the transformative potential is already evident. “When we move to a strong artificial intelligence, then it will be a revolution. Today, tasks that would take days for a human being to perform are solved in seconds.
In the view of experts, artificial intelligence is not only an ally of innovation, but will be increasingly central in the processes of research, development and formulation of public policies.“It will be a very important partner for those who want to innovate, both in the public sector and in the private sector”, predicts Ribeiro.
Intellectual property, legal certainty and balance between partners
One of the most sensitive issues when it comes to innovation is the management of intellectual property. According to Rafael Fassio, it is precisely at this point that the Innovation Law promotes significant advances, offering clear rules to protect creations and ensure a fair distribution of rights among those involved.
“When we deal with intellectual property, we talk about the protection of a creation that is often the result of collaboration between two or more parties, whether public, private or both institutions.The Innovation Law allows establishing proportional criteria, based on what each party has contributed, whether financial capital, technical knowledge or infrastructure”, explains the prosecutor.
In addition, he points out that negotiations need to provide confidentiality clauses early on. “It is important that the parties sign a confidentiality agreement early in the negotiation. This protects both the public and the private and allows a more frank conversation, protecting any industrial or strategic secrets that may be involved in the” process.
Leonardo Ribeiro reinforces that this type of protection is not only legitimate, but necessary, even for the public sector. “There was an old prejudice that the State could not work with confidential information, because everything it does should be public. But this is a mistake. When the government engages in innovation, it is natural that it needs to protect strategic data until the project is mature”.
Another paradigm that the law helps to break is about the idea that the State must always hold most or all of the rights over the results of a partnership. The logic is now horizontal negotiation, in which there is no automatic prevalence of the State over the private partner, and each receives as much as their effort.
According to the experts, the legislation even allows the totality of intellectual property to stay with the private partner, when it makes sense.“The law recognizes that each project has its particularities.It authorizes the division to be adjusted to the reality of the partnership, without generalist levies”, explains Fassio.
Transparency is also an important pillar for the success of these collaborations. “After the creation is finalized and brought to the market, it is indispensable to maintain a constant exchange of information between partners royalties and everyone needs to know what is being done with the product or technology developed. Without this, relationships can erode and even result in complex legal disputes”, the prosecutor said.
Similarly, Ribeiro adds that the Innovation Law ensures that the public researcher can also receive for the fruits of their work.It clearly establishes the possibility of remuneration, division of royalties commercial exploitation, both for the public and private entities.
The change in culture that the law encourages, valuing mutual trust, legal certainty and the recognition of proportional effort, is, for experts, a decisive step towards a more fertile environment for innovation in Brazil.
Unknowledge and bureaucracy still hinder the application of the Innovation Law
In addition to the legal and institutional barriers, two central obstacles still compromise the full effectiveness of the Innovation Law in Brazil: the lack of knowledge on the part of the actors involved and the excessive bureaucracy that permeates the public sector.
“There is a lack of knowledge both from the public side, as well as from universities and research institutions. Often, when we present the law in lectures, people are surprised; ?Of us, can we do all this?’, says Fassio. According to him, this estrangement reveals a deep gap in the communication of legislation and its practical appropriation by public agents.
Bureaucracy, in turn, also imposes itself as a recurring lock. The so-called “pagain of the” pens, the decision paralysis caused by the fear of public managers to innovate without clear legal support, causes many administrations to continue operating with the same instruments as always, even when they are obsolete. “The manager prefers to use what he knows, what he has been doing for 20 years, to run the risk of responding for something new”, explains Fassio.
To try to circumvent this scenario, initiatives such as the Toolkit of the Legal Framework for Science, Technology and Innovation, developed by the State Attorney's Office of Sao Paulo, have offered practical solutions.With the proposal to simplify, the project brings together model documents and step-by-step guidelines for the safe application of legal instruments provided for in the legal framework, functioning as a kind of legal“” for public managers.
“We started with 10 documents in 2021, today we already have 12 and we will expand to 15. It is a project that has become a national reference and has been used by other states and institutions”. The initiative is also being internationalized with bilingual versions (portuguese-english and portuguese-spanish), with support from the Inter-American Development Bank (IDB) and Brazil Lab.
Still, there are structural obstacles that hinder the standardization of procedures. As the lawyer Leonardo Ribeiro recalls, there is a significant disparity between the instruments used in different spheres of government. While the Toolkit is widely used in Sao Paulo, at the federal level still prevail different models, more complex and do not dialogue directly with the state.
This normative divergence ends up generating legal uncertainty for public and private entities that wish to establish partnerships in science, technology and innovation. “The more pre-approved models we have, the better. This brings security both for the expense organizer and for the entrepreneur who wants to invest”, reinforces Ribeiro.
Supporting foundations as a strategic link
Present in several innovation projects, support foundations, such as Fundepag, fulfill a strategic function by operationalizing actions, hiring staff and managing resources more quickly than direct management.
“The institutions that have supporting foundations are precisely the ones that most apply the law. This is empirical data, not an” opinion, emphasizes Fassio. The work of foundations allows to circumvent, in part, the slowness of traditional administrative processes, especially in areas such as supplies and financial management of projects.
Despite this, both representatives of the public sector and the private sector need to adjust their expectations. “The entrepreneur needs to understand that, when contracting with the State, it is not possible to impose the rules of the private sector.There is a set of specific rules that guarantee isonomy and” control, Riberiro ponders. For him, the search for a middle ground, with greater understanding and flexibility of both parties, is necessary to unlock partnerships.
Although the advances are real, there is a long way to go. The standardization of legal understandings, the greater dissemination of models such as the Toolkit and the strengthening of support foundations are key pieces to make Brazil a more favorable environment for innovation. “Innovation is something fast. And the government often has no structure to keep up with this speed. Therefore, the more ready and safe legal instruments we have, the better for all sides”, concludes Leonardo Ribeiro.
