David Gerecke (Saskatoon) with the able assistance of Aimee Schalles (Vancouver)
In our blog entry posted on March 3, 2014, we set out the broad context for the amendments to the Plant Breeders’ Rights Act (“PBRA”). In this post we will discuss the current legislation and what breeders in Canada can do today to protect their interests in proprietary seed. A more detailed discussion published by the Canadian Food Inspection Agency may be found here. The current legislation may be found here.
Plant breeders’ rights are intellectual property registrations that provide exclusive rights to carry out certain activities with plant varieties. A plant variety is any cultivar, clone, breeding line or hybrid of a plant that can be cultivated. All species of plants are eligible in Canada, other than algae, fungi and bacteria. Thus, mushrooms are not eligible for protection. However, all of Canada’s grain and oilseed species, along with fruits, vegetables, potatoes, ornamental plants and others, will be eligible.
The PBRA sets out specific criteria that must be met for a variety to receive plant breeders’ rights protection. The breeder must demonstrate that the variety is:
- new: the variety must not have been sold in Canada prior to filing the application under the PRBA, but may have been sold outside Canada for up to 4 or 6 years, depending on the plant type;
- distinct: the variety must be clearly distinguishable from all other varieties that are commonly known to exist when the application is filed;
- stable: the essential characteristics of the variety must remain stable through repeated reproduction so that subsequent generations of the variety remain true to its description; and
- uniform: variations in plants of the variety must be predictable, capable of being described by the breeder, and commercially acceptable.
A registration under the PBRA provides the registrant with the following rights:
- the exclusive right to sell propagating material (seed) of the registered variety in Canada;
- the exclusive right to produce seed of the variety in Canada for the purpose of selling;
- the exclusive right to make repeated use of seed the variety as part of commercial production of another variety (as in the production of hybrids);
- the exclusive right to use a part of the variety as propagating material in the production of ornamental plants or cut flowers; and
- the exclusive right to license others to do any of the foregoing.
Those rights endure for 18 years after the date of registration, provided that an annual fee is paid to maintain the registration.
A registration under the PBRA restricts activities within Canada only. To restrict the use of a variety in another jurisdiction, the seed company needs to register under the relevant plant breeders’ rights legislation in that jurisdiction.
There are three major limitations on the rights conferred by a registration under the PBRA.
The first limitation relates to what a farmer can do with seed protected by plant breeders’ rights. Where a farmer has grown a crop of a protected variety, the PBRA permits that farmer to save seed from that crop and plant that seed to grow another crop. No permission from the seed company is needed under the PBRA, and the farmer owes no compensation to the seed company for the saving and replanting of that seed.
Seed companies sometimes use agreements with farmers, referred to as “closed loop contracts” to prevent farmers from saving seed and growing additional crops in subsequent years. In essence, closed loop contracts require the farmer to account for all seed purchased and crop grown, and to deliver the entire crop to a specified delivery point. No saving of seed is permitted.
In our experience, closed loop contracts tend to be used more in respect of varieties where a specific end-use is contemplated (for example, Agrisoma Biosciences Inc’s Resonance carinata, the oil from which is used in biofuels) or where particular traits are incorporated into the variety (such as Monsanto’s Roundup resistance), but presumably the model could be used wherever the market demand for the variety is sufficient and it is possible to ensure that the delivery point will be able to purchase the production.
The second limitation is that the PBRA does not prevent another breeder from using a protected variety in their breeding program for the purpose of developing new plant varieties. This lack of restriction on the use of a protected variety by other breeders in their development programs, can be difficult for seed companies to address. The variety owner relies in part on the passage of time: by the time another breeder gets free use of a protected variety, the variety owner should already have improvements in its development pipeline. Thus, the variety owner hopes to stay ahead of competitors by being first to market with better varieties that are derived from the protected variety.
The third limitation is compulsory licensing. In short, a registrant holding plant breeders’ rights can be ordered by the Commissioner of Plant Breeders’ Rights to provide a license to a third party to carry out any of the activities enumerated in (a) through (d) above. The objective of the compulsory license provisions is to prevent a holder of plant breeders’ rights from unreasonably refusing to grant licenses for a registered variety.
Anyone may apply to the Commissioner for a compulsory license. The registrant is entitled to make representations opposing the application. If the Commissioner determines it to be appropriate, he or she may award a compulsory license to an applicant, with reasonable remuneration to be paid to the registrant. In so doing, the Commissioner is directed to ensure that the registered variety is made available to the public at reasonable prices, is widely distributed and is maintained in quality. One would therefore expect that the Commissioner would be unlikely to award a compulsory license if the registrant had been satisfying those conditions. It is possible for a registrant to obtain an exemption from compulsory licensing but only where it is to allow sufficient time to multiply and distribute seed of the variety.
The first and second limitations (permitting the farmer to save seed and permitting other breeders to use protected varieties in their breeding programs) are the most important, and they clearly distinguish plant breeders’ rights from patent rights. The seed company gets the ability to prevent other seed companies and local seed retailers from selling or reproducing the variety in Canada without first obtaining a license. But that clearly stops short of full control, given those limitations. We are not attempting here to express opinions on what is fair or appropriate, but rather to identify the extent of protection that a breeder obtains when registering a variety under the PBRA.
Where its plant breeders’ rights are infringed, the registrant may elect to bring enforcement proceedings in Federal Court or in the appropriate court or the province in which the infringement occurred, and may seek both damages and injunctive relief.
In our next post, we will begin to discuss the proposed amendments and how they may impact seed companies and farmers. As of the writing of this post, Bill C-18, which contains the amendments to the PBRA, has yet to proceed past Second Reading, which occurred on March 3, 2014.