What Brazil's Accession to the Budapest Treaty Means for Innovative Companies and the Biotechnology Sector

Innovation, biotechnology, and the business environment

Brazil's recent accession to the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (Budapest Treaty) marks a significant step in the national and international intellectual property landscape. On October 20, 2025, the National Institute of Industrial Property (INPI) deposited, with the World Intellectual Property Organization (WIPO), Brazil's instrument of accession, making it the 92nd signatory country.

For business owners and managers, this is not a mere diplomatic formality: it opens new opportunities and demands strategic attention — especially in the biotechnology, pharmaceutical, agribusiness, healthcare, and other sectors involving the deposit of microorganisms, genetic inputs, or the development of patents with a biological basis. From now on, companies operating in these fields should revisit their protection systems, innovation structures, and industrial property compliance, particularly with regard to the deposit of biological material for patent purposes both abroad and in Brazil.

In this article, we explore the legal and practical aspects of this accession, its implications for corporate innovation management, and the precautions managers should take to incorporate this development into the corporate environment, always with an educational focus and without promising specific results.

Legal aspects of the accession and its impact on the patent system

What the treaty provides and how it works

The Budapest Treaty, in essence, regulates the international recognition of the deposit of microorganisms (or other biological materials) for patent application purposes. The rationale is that when an invention involves biological material that cannot be sufficiently described in writing — for example, strains of microorganisms, cell lines, viruses, bacteria, or fungi — such material can be deposited with a recognized International Depositary Authority ("IDA"). By doing so, the applicant satisfies the requirement of sufficient description (or "reproducibility") required for a patent application.

Under Brazilian law, the Industrial Property Law (Lei da Propriedade Industrial – LPI, Law No. 9,279/96) already provides, in the sole paragraph of Article 24, that "in the case of biological material essential to the practical execution of the subject matter of the application, which cannot be described in accordance with this article... the specification must be supplemented by the deposit of the material with an authorized institution or under an international agreement designated by INPI." Thus, the treaty accession directly connects with the national patent system and reduces an asymmetry that previously existed — namely, that a domestic applicant needed to resort to deposits abroad or faced uncertainty if the country was not a signatory to the treaty. With accession, Brazil will be able to designate national institutions to act as IDAs, allowing companies, researchers, or laboratories to deposit biological material within national territory — which can potentially reduce logistics, time, and costs, while also favoring greater strategic control over such deposits.

Implications for companies and patent protection

For managers of companies engaged in R&D (research and development), biotechnological innovation, or those seeking to internationalize their patents, the accession carries several practical impacts:

Reduction of logistical barriers and deposit costs: previously, depositing microorganisms often required shipping them abroad, along with associated costs for transportation, storage, and compliance with another country's rules. Now, with the possibility of designating a national IDA, costs may decrease and the internationalization process may become faster.

Greater legal certainty for domestic inventors: companies and laboratories now have access to an internationally recognized framework, reducing the risk of subsequent invalidation or challenge due to non-compliance with deposit requirements. In particular, the requirement of sufficient description (Article 24 of the LPI) no longer depends exclusively on deposits made abroad.

Greater international competitiveness: by joining a globally recognized regime, Brazilian companies gain market credibility and easier access to the global innovation and commercialization chain — a relevant point in biotech, agritech, healthcare, and international technology licensing.

Need for innovation governance and compliance: with the accession, companies should review internal R&D policies, technology transfer agreements, confidentiality provisions, and the management of biological material and intellectual property, to ensure that deposits are properly made, monitored, and that patent rights are protected both in Brazil and abroad.

Integration with biodiversity and genetic resource policies: Brazil, a megadiverse country, has specific obligations regarding the conservation and sustainable use of genetic resources and benefit-sharing (as seen in the Plant Variety Protection Law, or rules on access to genetic heritage). The treaty accession reflects an alignment between innovation policy and biodiversity policy — which requires companies to operate with this reality in mind, especially when biological material is linked to national genetic resources.

Transitional aspects and business challenges

Although the accession opens opportunities, there are still aspects managers should keep in mind. First, the formal international accession does not automatically mean that every domestic deposit will be accepted as an IDA deposit, nor that the national infrastructure will be immediately operational. It will be necessary to designate institutions, define procedures, train laboratories, and adapt internal regulations.

Second, companies should review their R&D contracts, technology licenses, biological material transfer agreements, and supply chains: it is essential to ensure that deposits comply with both the treaty and the LPI, in order to avoid future challenges or gaps in protection.

Third, the international dimension requires attention: a deposit made domestically does not eliminate the need, if protection is sought in other countries, to align with the local regime of those countries, or to make an additional deposit where required. The treaty facilitates but does not eliminate all international procedures. In many cases, an international patent application (via the Patent Cooperation Treaty – PCT) will still require navigating multiple jurisdictions and deadlines.

Finally, integration between the innovation, legal, and strategic areas of the company remains essential, to ensure that the treaty accession does not become merely a symbolic milestone, but an effective element of competitive advantage.

Practical implications for business managers

Intellectual property strategy in the context of biotechnology

For companies that operate or plan to operate in innovation involving biological material — whether laboratories, startups, universities, or industrial companies — it is crucial to review the innovation pipeline in light of the following practical points. First, internally map which inventions involve microorganisms or essential biological material that cannot be fully described in writing, in order to determine whether a deposit under the Budapest Treaty will be necessary or whether the domestic regime already suffices. Second, plan the timing of the deposit: the drafting of the patent application should include the deposit reference and the obligations arising from Article 24 of the LPI. Third, align research and development contracts, technology transfers, and international partnerships with clauses addressing the deposit, ownership, responsibility for costs, and the destination of biological samples.

Costs, timeline, and compliance

From a business standpoint, the treaty accession may reduce costs related to shipping materials abroad or making multiple international deposits, but several questions must be considered: who will bear the cost of the deposit? Which national laboratory will be accepted as an IDA? What is the timeline until this is fully available and reliable? Managers should budget for the transition phase and establish an internal timeline for adaptation. It is also advisable to implement documentary controls: deposit records, custody agreements, backups, deadline monitoring, confidentiality obligations, as well as sample storage policies and backup arrangements in case of IDA failure.

Risk mitigation and asset valuation

Formalizing a patent that incorporates a deposit under an internationally recognized regime strengthens the company's intangible assets — which can contribute to attracting investment, licensing, or international partnerships. On the other hand, non-compliance may result in patent invalidation, loss of exclusivity, or litigation. Therefore, the company's compliance department, together with the legal department, should monitor the Budapest Treaty accession and ensure that internal procedures are properly adapted. It is also advisable to include this variable in due diligence for M&A transactions or licensing agreements, since investors and partners value the robustness of the IP protection chain.

Sector overview and market opportunities

For sectors such as agribusiness, healthcare, cosmetics, functional foods, and industrial biotechnology, Brazil's accession to the treaty represents a competitive advantage. Domestic companies will find it easier to develop and protect biologically based inventions, use national infrastructure for deposits, and, eventually, attract international partnerships with greater credibility. On the public regulatory side, the measure aligns with policies promoting innovation, biodiversity protection, and the sustainable use of genetic resources — a fact that managers should leverage to realign the company's innovation strategy with public policy objectives, opening the door to incentives, funding, and technical-scientific cooperation.

It is important, however, that this opportunity be pursued strategically rather than merely reactively — that is, it is not enough to simply "know that Brazil has joined"; the company must actually prepare to operate effectively within this new context.

Guidance on preventive legal counsel

Brazil's accession to the Budapest Treaty is undoubtedly a significant development for the business environment surrounding innovation and intellectual property. However, for this development to generate concrete results for companies, it is essential that managers, together with their legal department or specialized advisors, undertake a systematic review of innovation, R&D, patent, and contractual processes involving biological material or microorganisms. Adopting a preventive approach means anticipating the impacts: from contractual adjustments to laboratory selection, budget planning, documentary control, and strategic alignment.

Companies are advised to seek specialized legal counsel in intellectual property — particularly to assess the patent pipeline, review technology transfer agreements, define who will be responsible for the deposit, and ensure full compliance with Article 24 of the LPI and the requirements of the international treaty. Such guidance is relevant not only to ensure compliance, but also to transform this regulatory option into a competitive advantage.

In summary: the modernization of Brazil's industrial property regime through this accession reveals a window of opportunity for companies that innovate on a biological basis. However, to truly seize it, careful planning, governance, investment, and proper legal support will be required. Putting this set of actions into motion now will certainly increase a company's chances of consolidating its position in both the domestic and international markets under the umbrella of patent protection and sustainable innovation.