As noted by Karen Spark in the article on page 6, the Australian Productivity Commission’s overarching recommendations seek to rebalance IP policy more in favour of Australian interests. Whilst the draft report’s recommendations largely address this by seeking to further raise the bar in obtaining intellectual property rights, the Commission’s recommendations in relation to the current Plant Breeder’s Rights (PBR) scheme actually seek to enhance the protection for right owners.
Plant breeder’s rights provide exclusive rights in relation to the sale and propagation of protected plant varieties. The rights have a significant term – 25 years for trees or vines and 20 years for all other plant varieties. However, developing new plant varieties can be expensive and time- consuming. In addition, developments are often incremental, for example by the enhancement of an existing variety through the introduction of new desired characteristics. These challenges, and the potential for market failure of new varieties, has meant that historically agricultural plant breeding has been undertaken by the public sector with new plant varieties often made freely available to growers.
The Commission recognised that the PBR scheme in Australia has largely achieved its goal in stimulating greater investment and private sector plant breeding, and noted that breeders now routinely seek protection for new plant varieties in order to earn a return on their investment. This, according to the draft report, has resulted in a highly competitive business culture where breeding organisations compete with each other for market share by developing and commercialising new varieties that improve returns for growers. According to the IP Australia Australian Intellectual Property Report 2015, new PBR applications in Australia average approximately 350 per year, with a relatively even split between domestic and international breeders.
Despite the successful uptake by industry of the PBR scheme, the Commission notes a concern amongst plant breeders that the scope of protection provided by PBRs is being undermined by developments in technology which have opened the door to unauthorised copying. In particular, opportunistic follow-on breeders might use modern technologies to rapidly bring to market what are essentially copies of existing high quality varieties, but with sufficient differences in essential characteristics to avoid infringement.
At present, the PBR Act extends protection of registered varieties to ‘essentially derived varieties’ or EDVs. EDVs are varieties that share all the essential characteristics of a registered plant variety, but are distinct enough to qualify for PBR registration in their own right. The owner of a registered variety can make an application to the PBR Office for a declaration that a subsequently registered variety is essentially derived. Rights to the EDVs fall within the scope of the initial variety with neither owner able to exploit the rights without authorisation from the other.
As EDV declarations can only be made in respect of varieties granted PBR protection, the PBR Act creates a loophole allowing downstream breeders to copy or make minor or cosmetic changes to existing PBR protected varieties (sufficient to avoid infringement). They can then freely market the resulting plants, simply by not registering their copied varieties for protection under the PBR Act. In order to address this issue, the Commission has firstly recommended action to remove the loophole by recommending an amendment to the PBR Act to enable EDV declarations to be made in respect of any plant variety, not just varieties that are also nominated for PBR protection. This was a recommendation made by ACIP which was accepted by the then Government in 2010, but has yet to be implemented. The Commission believes that the recommendation has the potential to materially improve the effectiveness and efficiency of PBR and should be implemented as soon as possible.
Other mooted reforms include the adoption of a market-impact test in the EDV rules that would examine the impact of a potential or putative EDV on the commercial interests of the original breeder. The Commission notes that such a reform would help to better differentiate new from existing plant varieties, reducing the risk of fraudulent or copycat breeding and ensure that initial and follow-on breeders share appropriately in the value each has contributed. Finally, the Commission also noted that misrepresentation of varieties and refusal to pay royalties remained a concern and that this was best addressed within industry through closer cooperation and consultation.