Created in 2004 and revised 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 sector. 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.
According to Leonardo Ribeiro, legal consultant at the Agribusiness Research Development Foundation (Fundepag), founding partner of Silva Ribeiro Advogados Associados, PhD and master’s degree holder from PUC/SP, and professor of Civil Procedure at PUC-SP/COGEAE, the law solidly and securely enables partnerships among various actors, such as public agencies, public research institutions, private companies, and third-sector organizations, so that all can seek innovative solutions.
According to the lawyer, one of the merits of the law is breaking with the still common idea that contracts with the public sector are always unbalanced and bureaucratic. ‘There is a certain fear among private institutions of partnering with the public sector. The prevailing logic, which 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, more horizontal relationship.’
Meanwhile, Rafael Carvalho de Fassio, State Attorney of São Paulo, coordinator of the Intellectual Property and Innovation Thematic Center at PGE/SP, master’s in Economic Law, PhD in Administrative Law, emphasizes that innovating is more than a competitive advantage: it is a necessity. ‘Innovation is not something we do because it’s cool. Innovating is a survival strategy. For companies, it is what allows them to stay in the market; for the State, it is a tool for growth and development.’
Fassio notes that the legislation emerged from the perception that traditional administrative law did not provide adequate mechanisms for partnerships aimed at innovation. ‘Almost nothing in the law was impossible to do before. What it did was facilitate, simplify, and provide legal security, responding to the inefficiency of traditional State channels,’ he observes. For him, the main premise of the legislation is precisely partnership. ‘No one grows alone. The private sector needs the intellectual capital of public institutions, and the State needs private investment and agility. The innovation law seeks to facilitate this meeting.’
In practice, for a company interested in innovating, the first step is to identify the problem to be solved, whether it’s a product, service, or 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 provides mechanisms for partnerships to occur securely,’ says Leonardo Ribeiro.
These collaborations can generate solutions that, in addition to meeting market demands, become shared intellectual property, contributing to revenue generation, strengthening the scientific ecosystem, and benefiting society.
Controls and legal security
Although it brings more flexibility, the Innovation Law also provides control and monitoring mechanisms. ‘It proposes off-the-shelf legal instruments to formalize partnerships. There is legal control, execution control during the partnership’s term, and, in case of public resource use, accountability,’ explains Ribeiro.
According to the prosecutor, control is a delicate issue, especially in public administration. ‘Public managers, fearing accountability, often avoid innovative paths and replicate known practices. The law helps reduce this fear by providing legal security for bolder actions.’
The challenge, according to experts, is cultural. ‘Intellectual humility is needed. Companies must recognize the value of knowledge in the public sector, and the State must understand the importance of private investment in research. The Innovation Law exists precisely to enable these exchanges fairly, efficiently, and securely,’ Fassio points out.
Artificial intelligence and innovation: an inevitable convergence
The recent popularization of artificial intelligence (AI), especially with tools like ChatGPT, has brought the innovation debate closer to audiences previously not engaged in this context. For experts, this movement could be decisive in broadening understanding of the Innovation Law’s importance.
‘Artificial intelligence has become much closer to us. When ChatGPT was socialized, everyone began discussing its impact on health, employment, law, and journalism. This debate moved from academia into daily life. It helps those not traditionally involved in innovation understand how these advances directly impact our lives,’ explains Fassio.
According to the prosecutor, as companies and institutions realize that technologies like AI are already transforming how people work and make decisions, they begin seeking legal instruments to enable innovative projects more eagerly—this is where the Innovation Law plays a fundamental role.
Leonardo Ribeiro, who also researches the topic academically, shares this view. ‘Artificial intelligence is innovation in its veins. It has come to revolutionize our relationship with the world, our jobs, and everything we do,’ he states. Although we are still dealing with what is called ‘weak AI’—specialized systems for specific tasks without autonomy or consciousness—the transformative potential is evident. ‘When we advance to strong AI, that will be a revolution. Today, tasks that would take humans days are solved in seconds. But we must use this tool wisely because it truly changes everything.’
In the experts’ view, AI is not just an ally of innovation but will increasingly be central to research, development, and public policy formulation. ‘It will be a crucial partner for those wanting to innovate, both in the public and private sectors,’ predicts Ribeiro.
Intellectual property, legal security, and balance among partners
One of the most sensitive topics in innovation is intellectual property management. According to Rafael Fassio, this is precisely where the Innovation Law promotes significant advances, offering clear rules to protect creations and ensure fair rights distribution among stakeholders.
‘When we talk about intellectual property, we are protecting a creation often resulting from collaboration between two or more parties, whether public, private, or both. The Innovation Law allows proportional criteria based on each party’s contribution—financial capital, technical knowledge, or infrastructure,’ explains the prosecutor.
Additionally, he highlights that negotiations must include confidentiality clauses from the start. ‘Parties should sign a secrecy agreement early in negotiations. This protects both public and private interests and enables franker discussions, safeguarding potential industrial or strategic secrets involved in the process.’
Leonardo Ribeiro adds that such protection is not only legitimate but necessary, even for the public sector. ‘There was an old prejudice that the State couldn’t work with confidential information because everything it did should be public. This is a mistake. When the public sector engages in innovation, it naturally needs to protect strategic data until the project matures.’
Another paradigm the law helps break is the idea that the State should always hold most or all rights over partnership results. The new logic is horizontal negotiation, where the State does not automatically prevail over private partners, and each party receives according to their effort.
According to experts, the legislation even allows full intellectual property rights to remain with the private partner when justified. ‘The law recognizes each project’s uniqueness. It permits division adjustments based on partnership realities, without generalized impositions,’ clarifies Fassio.
Transparency is also a key pillar for successful collaborations. ‘After creation is finalized and brought to market, constant information exchange between partners is essential. After all, intellectual property converts into royalties and everyone needs to know how the developed product or technology is being used. Without this, relationships can deteriorate and even lead to complex legal disputes,’ emphasizes the prosecutor.
Similarly, Ribeiro adds that the Innovation Law ensures public researchers can also benefit from their work. It clearly establishes the possibility of compensation, royalties and commercial exploitation for both public and private entities.
The cultural shift the law encourages—valuing mutual trust, legal security, and proportional effort recognition—is, for experts, a decisive step toward a more fertile innovation environment in Brazil.
Lack of awareness and bureaucracy still hinder the Innovation Law’s application
Beyond legal and institutional barriers, two central obstacles still compromise the full effectiveness of the Innovation Law in Brazil: lack of awareness among involved actors and excessive bureaucracy in the public sector.
“There is a lack of knowledge both on the public side and among universities and research institutions. Often, when we present the law in lectures, people are surprised; ‘Wow, can we really do all that?'” says Fassio. According to him, this reaction reveals a deep gap in the communication of the legislation and its practical appropriation by public agents.
Bureaucracy, in turn, also imposes itself as a recurring obstacle. The so-called ‘pen blackout,’ the decision-making paralysis caused by public managers’ fear of innovating without clear legal backing, leads many administrations to continue operating with the same old tools, even when they prove obsolete. “The manager prefers to use what they know, what they’ve been doing for 20 years, rather than risk being held accountable for something new,” explains Fassio.
To try to overcome this scenario, initiatives like the Legal Framework for Science, Technology, and Innovation Toolkit, developed by the São Paulo State Attorney’s Office, have offered practical solutions. With the goal of simplifying, the project brings together template documents and step-by-step guidance for the safe application of the legal instruments provided for in the framework, functioning as a kind of ‘legal tutorial’ for public managers.
“We started with 10 documents in 2021, today we already have 12, and we will expand to 15. It’s a project that has become a national reference and has been used by other states and institutions,” highlights the attorney. The initiative is also being internationalized with bilingual versions (Portuguese-English and Portuguese-Spanish), with support from the Inter-American Development Bank (IDB) and Brasil Lab.
Even so, there are structural barriers that hinder the standardization of procedures. As lawyer Leonardo Ribeiro points out, there is a significant disparity between the instruments used at different levels of government. While the Toolkit is widely used in São Paulo, at the federal level, different, more complex models still prevail, which do not directly align with state-level ones.
This normative divergence ends up creating 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 to the budget officer and to the entrepreneur who wants to invest,” reinforces Ribeiro.
Support foundations as a strategic link
Present in various innovation projects, support foundations like Fundepag play a strategic role by operationalizing actions, hiring personnel, and managing resources more agilely than direct administration.
“Institutions that have support foundations are precisely those that apply the law the most. This is empirical data, not an opinion,” emphasizes Fassio. The work of these foundations helps circumvent, in part, the slowness of traditional administrative processes, especially in areas like procurement and financial project management.
Despite this, both public sector representatives and private sector players need to adjust their expectations. “Entrepreneurs need to understand that when contracting with the State, it’s not possible to impose private sector rules. There is a set of specific norms that ensure fairness and control,” reflects Ribeiro. For him, finding a middle ground, with greater understanding and flexibility from both sides, is necessary to unlock partnerships.
Although progress is real, there is still a long way to go. The standardization of legal interpretations, broader dissemination of models like the Toolkit, and the strengthening of support foundations are key pieces to making Brazil a more innovation-friendly environment. “Innovation is fast. And the public sector often lacks the structure to keep up with this speed. That’s why the more ready and secure legal instruments we have, the better for all sides,” concludes Leonardo Ribeiro.
