Plant Breeder's Rights (PBRs) are a form of intellectual property protection tailored to plant varieties and overned by the Plant Breeder's Rights Act 1994 (Cth) (the Act) in Australia. Late last year, IP Australia published six University of Queensland commissioned reports (which can be found here). The reports analyse the existing PBR regime and set out recommendations on reforms to the Act, which will be considered in informing government decision around possible PBR reforms. In this article, we provide a high-level overview of the issues canvassed in the reports - a proposed information notice scheme, PBR exhaustion, harvested material, labelling requirements, plant variety names and synonyms and essentially derived varieties. The period during which submissions can be made to the reports is drawing to a close on 31 March 2023. We will provide further updates as we learn more about the government's response on the critical issues which are the subject of the reports.
Information notice scheme (link here)
Current avenues for obtaining evidence of infringement place a high burden on PBR holders and make it difficult to establish a cause of action for infringement. One recommendation for reform to address this issue is the introduction of an information notice scheme, similar to the UK PBR regime but with adaptations. Key elements of the recommended scheme are:
- A notice period for the provision of the requested information by the notice recipient
- To limit vexatious claims, only PBR rights holders can issue a notice under the scheme where there is a reasonable belief that the notice recipient is infringing their PBR
- Reversal of the burden of proof for failure to respond within the notice period and a rebuttable legal presumption that the notice recipient has infringed the holder's PBR
- Such a scheme, if implemented, would increase the ability of PBR owners to pursue infringements by reducing the difficulties in relation to evidence collection
Exhaustion of PBR (link here)
There is significant stakeholder interest in relation to changes to the exhaustion provisions in the PBR legislation.
The Act currently provides for PBR exhaustion after the propagating material has been sold subject to some limitations for further production and reproduction and export to countries without PBRs. Many consider the scope of the term 'sold' to be both broad and unclear. For instance, does this include a sale under a contract subject to conditions and limitations, or where plant material is leased. The Act broadly defines "sell" in a non-exhaustive manner, to include letting on hire and exchanging by way of barter, which would suggest these circumstances do constitute a sale. In the decision of the Full Court of the Federal Court of Australia in Sun World International Inc v Registrar of Plant Breeder's Rights, the Court held that transactions with plant material that included restrictive covenants, such as licences on use, were still sales.
Despite this, the report recommends that IP Australia define sold for the purpose of exhaustion even more broadly as "any acts" with a PBR-protected plant variety. Such a definition would potentially result in the exhaustion provision having the broadest application of anywhere globally, so severely limiting the statutory right.
The report goes on to propose that after the PBR is exhausted, dealings with the variety be governed solely by contract. It is important to remember that a statutory right is much stronger than a contractual right, and both offer different remedies. A statutory right is enforceable against third parties, where a contract is only enforceable between the parties to the contract. In our experience, it is not uncommon for a property on which PBR material is growing to be transferred to a third party, inadvertently without the PBR holder's consent. If there is no statutory right, it is then a very difficult task for the PBR holder to take any action against the third party buyer of the property where the material is located. An alternative to the recommendations in the report, which favours a narrower interpretation of exhaustion, ensuring a greater statutory right is available, is to make exhaustion subject to the conditions and limitations in the contract, so that if a licensee breaches the conditions and limitations in the PBR licence agreement, the right is not exhausted and the PBR holder can still utilise its statutory rights. This approach has been adopted in China.
The report also recommends including a 'purchase right' among the exclusive rights of a PBR and this should only apply to taxa declared by the Plant Breeder's Rights Regulations 1991 (Cth). The addition of a purchase right would broaden the scope of the right allowing for more effective end point royalty systems. However, industry should consider the recommendation on limiting this to certain taxa. End point royalties are utilised in a broad range of crops, so the limitation would favour some industries over others.
Harvested material (link here)
The conferring of PBR onto a holder provides the exclusive rights to deal with propagating material of a plant variety and this extends to 'harvested material' and products of 'harvested material', provided certain pre-conditions are satisfied: that the PBR owner (i) has not authorised the production or reproduction of the protected variety; and (ii) has not had a 'reasonable opportunity' to exercise its rights in relation to the propagating material of the variety.
The report highlights the uncertainty around the situation where harvested material is also propagating material, and how the right should apply in such circumstances.
The report recommends that the Act be amended to provide that 'harvested material' that is also 'propagating material' be considered 'propagating material'. This would mean the direct protection provided for propagating material would be available for a broader range of plant materials and avoid having to satisfy the two conditions to extend the right to harvested material.
Labelling requirements (link here)
Labelling is an important function of the PBR system as it signals which varieties are protected by IP rights and that royalties must be paid for use of protected varieties. Suggestions in the report have been made to improve the clarity of labelling provisions under the Act, which would assist in the protection and enforcement of PBR as plant varieties are quickly reproduced and developed.
There is currently no requirement for the labelling of PBR-protected varieties under the Act. However, under section 57(1) of the Act, a court can refuse to award damages or an account of profits for a PBR infringement if at the time of infringement, the 'person was not aware of and had no reasonable grounds for suspecting the existence of that right'.
It was suggested in the report that mandated labelling would allow third parties to identify whether a variety is protected by the PBR regime and would remove the reliance on the defence under section 57(1) of the Act. However, the report notes that mandatory labelling provides its own problems such as onerous burdens on stakeholders currently working with varieties owned by others. It would also be difficult to determine a proportionate penalty for failure to comply with labelling standards. The report further notes that IP Australia already provides industry guidelines for labelling, including standardised templates for labels. The main recommendation from the University of Queensland is that IP Australia focus on using labels as part of the framework for best practice in various industries, and that IP Australia could provide PBR applicants with more information on labelling with industry education and training.
Plant variety names and synonyms (link here)
Plant variety names and synonyms are used to identify and distinguish plant varieties protected under the Act. Sections 27(5) (a) and (e) of the Act provide that a new plant variety name must not be likely to deceive or cause confusion and must not include a registered trade mark under the Trade Marks Act 1995 (Cth).
The University of Queensland has proposed that IP Australia should provide explanatory materials around a plant variety name or synonym that is likely to deceive or cause confusion, and a plant variety name or synonym that does not include a trade mark. This would include IP Australia updating their Manual of Practice and Procedure to include examples of appropriate names and synonyms. The report also recommends that IP Australia should minimise conflicts between the PBR and trade mark legal regimes by ensuring that information is provided for trade mark examiners to understand the requirements of names and synonyms under the Act.
Essentially Derived Varieties (EDVs) (link here)
PBRs extend to varieties which are essentially derived from the protected variety, known as Essentially Derived Varieties, or EDVs. EDVs in Australia are determined by IPAustralia rather than courts. To protect EDVs under section 12 of the Act, the applicant must show that the second variety:
- Is predominantly derived from the first plant variety
- Retains the essential characteristics that result from the genotype or combinations of genotypes of that other variety
- Does not exhibit any important (distinguished from cosmetic) features that differentiate it from the first variety
The utility of the EDV scheme has been called into question internationally and particularly in Australia, as there are concerns that the existing protections do not provide adequate protection for conventional breeders in the context of developments in gene technology and mutation breeding. Australia applies the narrowest concept of EDV, providing that the variety will not be an EDV if it differs from the initial variety in respect of important characteristics. This narrow concept means that the initial breeder's market is decreased and it does not receive any compensation, where its variety is used as the basis of slight targeted variation, and retains almost 100% genetic conformity to a subsequent variety.
Despite these concerns, the main recommendation of the University of Queensland report is to retain the current Australian approach to EDV stated above. The report recommends that IP Australia expand their Manual of Practice and Procedure to provide guidelines to interpret the existing EDV law.
The reports have highlighted the need for reform to ensure that plant varieties are adequately protected under the Act and PBRs are able to be enforced. The submission period is drawing to a close on 31 March 2023. We will provide further updates as we learn more about the government's response to the reports.