PV & IP

“Plant variety” may be differently understood and defined. Botanists, for example, see  plant varieties as a taxonomic rank in the modern clasification of plants as proposed by Carl Linnaeus. Lawyers, on the other hand, consider plant varieties as an object of intellectual property rights. What distinguishes “legal” varieties from botanical varieties are three main characteristics: distinctness, uniformity, and stability. Only those varieties that are able to propagate and present their distinct features over the years are worthy of IPRs, and thus, provoke lawyers’ & breeders’ interest. For more see pp. 33-34 of a recent book.

But why should “legal” varieties be protected? In the late 19th century, breeders in the US and afterwards in Europe (20th century) started to lobby in favor of property rights on plant varieties. Protection was firstly awarded in the form of certificates in order to distinguish varieties of different breeders. Interestingly, there was a period when varieties were also protected through paintings. The works of  Prof. Kevles and Prof. Kloppenburg can better illustrate the history and reasons for protecting new varieties of plants. Different types of IPRs can be used for the protection of plant varieties: trademarks, geographical indications, patents, plant breeders’ rights, and sui generis systems. But only patents and breeders’ rights allow a better return on investments as they give the right not only to exclude the use of the variety, but also other acts such as reproduction, importation, exportation, etc. Thus, it comes at no surprise the wide use of patents and breeder’s rights.

The basis of IPRs are found on economic theory, which views exclusionary rights as necessary to spurr innovation. In simple terms, this means that in absence of IPRs, varieties will be easily reproduced  and the original breeder will be drawn out of the market. This is because the first breeder of a variety spends many years & financial resources in creating a variety with desirable features whereas other breeders don’t. Absence of IPRs facilitates the work of other breeders who can simply reproduce the variety and sell it at lower cost since they do not incurr the same breeding costs as the original breeder, and thus obtain more profit.

This issue is explained more in detail in the aforementioned book, which questions the incentive function of IPRs in light of economic studies and new institutional economic theory on IP. The incentive function of IPRs can also be challenged by economic theory itself. Economic theory, indeed, suggests that IPRs can impose costs on society (deadweight loss, in economic terms) in the long run because they block access to third parties who can use and build upon the invention. Hence the question, how to allow the first breeder to recoup his breeding costs and at the same time allow others to benefit from his varieties?  Building upon the work of economists on cumulative innovations, it appears reasonable to propose exceptions to rights in order to balance the interests of all interested parties.

Some PVP laws contain exceptions. The International Union for the Protection of New Varieties of Plants (UPOV) exempts breeder’s rights in order to allow other breeders to improve the protected variety (art. 15.1) and to permit farmers to continue some of their traditional practices (art. 15.2). Similar exceptions are found in some patent laws. France, Germany, Switzerland, and the Netherlands allow infringement of patent rights in favor of breeders that use and cross out patented material in their breeding lines. This type of exception will be mandatory in all EU countries after the Agreement on a Unified Patent Court (art. 27. c) comes into effect. Another unique exception to patent rights in the EU is the farmers’ exception to patent rights as provided for in art. 11.1 of the EC directive 98/44 on the protection of biotechnological innovations. Exceptions to patent rights in favor of breeders and farmers are also established in the 1970 US Plant Variety Protection Act (PVPA) for seed propagated plants. These exceptions are, however, of minor importance as the restriction of patent rights is quite narrow.

A question which academics have to answer is whether exceptions are desirable and feasible under current international legal obligations on IPRs.

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