Created in 2004 and revised in 2016, the Innovation Law (Law 13.243) primarily aims 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.
For Leonardo Ribeiro, legal consultant at the Foundation for Agribusiness Research Development (Fundepag), founding partner of Silva Ribeiro Advogados Associados, PhD and master’s graduate 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 they can collectively pursue innovative solutions.
According to the lawyer, one of the law’s merits is breaking the still-common notion that contracts with the public sector are always imbalanced and bureaucratic. ‘There is a certain fear among private institutions of partnering with the public sector. The flawed logic is that such partnerships involve abusive clauses. The Innovation Law does not start from this premise. On the contrary, it creates legal instruments that enable a more balanced, horizontal relationship.’
Meanwhile, Rafael Carvalho de Fassio, prosecutor for the State of São Paulo, coordinator of the Thematic Nucleus for Intellectual Property and Innovation at PGE/SP, with a master’s in Economic Law and a PhD in Administrative Law, emphasizes that innovation is more than a competitive advantage—it is a necessity. ‘Innovation isn’t something we do because it’s cool. Innovating is a survival strategy. For companies, it’s what allows them to stay in the market; for the State, it’s a tool for growth and development.’
Fassio notes that the legislation emerged from the realization that traditional administrative law lacked adequate mechanisms for innovation-focused partnerships. ‘Almost nothing in the law was impossible before. What it did was streamline, simplify, and provide legal certainty, addressing the inefficiencies of traditional state processes.’ For him, the law’s core premise is 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 aims to facilitate this meeting.’
In practice, for a company interested in innovating, the first step is identifying 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 secure partnerships,’ says Leonardo Ribeiro.
These collaborations can yield solutions that, beyond meeting market demands, become shared intellectual property, generating revenue, strengthening the scientific ecosystem, and benefiting society.
Controls and legal certainty
While offering flexibility, the Innovation Law also establishes oversight mechanisms. ‘It provides off-the-shelf legal instruments to formalize partnerships. There is legal oversight, execution monitoring during the partnership, and, if public funds are used, accountability,’ explains Ribeiro.
The prosecutor adds that oversight is a sensitive issue, especially in public administration. ‘Public managers, fearing liability, often avoid innovative approaches and stick to familiar practices. The law helps reduce this fear by providing legal certainty for bolder actions.’
The challenge, according to experts, is cultural. ‘Intellectual humility is needed. Companies must recognize the value of public-sector knowledge, 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,’ says Fassio.
Artificial intelligence and innovation: an inevitable convergence
The recent rise of artificial intelligence (AI), especially tools like ChatGPT, has brought innovation debates closer to audiences previously unfamiliar with the topic. Experts believe this movement could be pivotal in broadening understanding of the Innovation Law’s importance.
‘AI has become much more accessible. When ChatGPT went mainstream, everyone began discussing its impact on healthcare, jobs, law, and journalism. The debate moved beyond academia into daily life. This helps those traditionally uninvolved in innovation understand how these advances directly affect us,’ explains Fassio.
According to the prosecutor, as companies and institutions realize AI is already reshaping work and decision-making, they increasingly seek legal tools to enable innovative projects—and this is where the Innovation Law plays a key role.
Leonardo Ribeiro, who also researches the topic academically, shares this view. ‘AI is innovation at its core. It’s revolutionizing our relationship with the world, jobs, and everything we do.’ Though we’re still dealing with ‘weak AI’—systems specialized in specific tasks without autonomy or consciousness—the transformative potential is evident. ‘When we advance to strong AI, it will be a true revolution. Tasks that take humans days can be solved in seconds. But we must use this tool wisely, as it changes everything.’
Experts believe AI is not just an innovation ally but will become central to research, development, and public policy. ‘It will be a crucial partner for innovators in both public and private sectors,’ predicts Ribeiro.
Intellectual property, legal certainty, and balance among partners
One of the most sensitive topics in innovation is intellectual property management. According to Rafael Fassio, the Innovation Law makes significant strides here, offering clear rules to protect creations and ensure fair rights distribution.
‘When discussing intellectual property, we’re protecting creations often born from collaboration between public, private, or both sectors. The Innovation Law allows proportional criteria based on each party’s contribution—financial capital, technical knowledge, or infrastructure,’ explains the prosecutor.
He also stresses the need for confidentiality clauses early on. ‘Parties should sign a nondisclosure agreement at the start. This protects both sides and fosters open dialogue, safeguarding potential industrial or strategic secrets.’
Leonardo Ribeiro adds that such protections are not just legitimate but necessary, even for the public sector. ‘There was an outdated notion that the State couldn’t handle confidential information because everything it does should be public. That’s a misconception. When the public sector engages in innovation, it naturally needs to protect strategic data until projects mature.’
Another paradigm the law helps break is the idea that the State must always hold most or all rights over partnership outcomes. The new logic is horizontal negotiation, where the State doesn’t automatically prevail over private partners, and each party is rewarded proportionally.
Experts note the law even allows private partners to retain full intellectual property rights when justified. ‘The law acknowledges each project’s uniqueness. It permits tailored divisions without blanket impositions,’ clarifies Fassio.
Transparency is also key to successful collaborations. ‘Once a creation is finalized and marketed, partners must maintain open communication. Intellectual property translates into royalties and all parties need to know how the product or technology is being used. Without this, relationships can deteriorate, leading to complex legal disputes,’ stresses the prosecutor.
Similarly, Ribeiro adds that the Innovation Law ensures public researchers can benefit from their work. It clearly establishes remuneration, division of royalties and commercial exploitation rights for both public and private entities.
The cultural shift the law promotes—valuing mutual trust, legal certainty, and proportional recognition—is, experts say, 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 limit the Innovation Law’s full effectiveness in Brazil: lack of awareness among stakeholders and excessive public-sector bureaucracy.
‘There is ignorance on all sides—public, universities, research institutions. Often, when we present the law in talks, people are surprised: ‘Wow, we can do all this?’’ says Fassio. This reaction reveals a gap in communicating and implementing the law.
Bureaucracy also remains a recurring hurdle. The so-called ‘pen outage’—decision paralysis caused by public managers’ fear of innovating without clear legal backing—leads many administrations to stick to outdated tools. ‘Managers prefer using what they know, even if obsolete, over risking liability for something new,’ Fassio explains.
To address this, initiatives like the Toolkit for the Legal Framework for Science, Technology, and Innovation, developed by São Paulo’s Prosecutor’s Office, offer practical solutions. The project provides model documents and step-by-step guidance for applying legal instruments, serving as a ‘legal tutorial’ for public managers.
‘We started with 10 documents in 2021; now there are 12, soon 15. It’s a nationally referenced project used by other states and institutions,’ highlights the prosecutor. The initiative is also being internationalized with bilingual versions (Portuguese-English and Portuguese-Spanish), supported by the IDB and Brasil Lab.
Yet, structural barriers remain. As Leonardo Ribeiro notes, there’s significant disparity in tools used across government levels. While the Toolkit is widely adopted in São Paulo, federal models remain more complex and disconnected from state-level practices.
This regulatory misalignment creates legal uncertainty for public and private entities seeking partnerships in science, technology, and innovation. ‘The more pre-approved models we have, the better. It reassures both budget makers and investors,’ Ribeiro emphasizes.
Support foundations as a strategic link
Support foundations, like Fundepag, play a strategic role in innovation projects by operationalizing actions, hiring personnel, and managing resources more agilely than direct administration.
‘Institutions with support foundations are precisely those applying the law most. This is empirical, not just an opinion,’ stresses Fassio. These foundations partly bypass traditional administrative sluggishness, especially in procurement and project finance.
Still, both public and private sectors must adjust expectations. ‘Businesses must understand that contracting with the State doesn’t mean imposing private-sector rules. There are specific norms ensuring fairness and control,’ notes Ribeiro. Finding middle ground with mutual understanding is key to unlocking partnerships.
Despite progress, challenges remain. Harmonizing legal interpretations, expanding Toolkit-like models, and strengthening support foundations are crucial for Brazil to become more innovation-friendly. ‘Innovation is fast. The public sector often can’t keep up. The more ready and secure legal instruments we have, the better for all,’ concludes Leonardo Ribeiro.
