3. Why Review the Plant Variety Rights Act 1987?
22. The PVRA 87 is based on the 1978 revision of the UPOV Convention. In 1991, UPOV member states agreed on the text of a new and enhanced Convention ("UPOV 91"). The changes embodied in UPOV 91 considerably expanded the rights available to plant breeders and were intended to reflect a number of problems that had arisen with UPOV 78. These included:
- conflict between plant variety rights and patents;
- developments in plant breeding techniques;
- inadequacy of UPOV 78 in relation to essentially derived varieties.
New Zealand has signed, but has not yet ratified, UPOV 91 so that it is not yet binding on New Zealand. In light of these developments, it is timely to review the PVRA 87.
23. Although New Zealand has signed UPOV 91, the necessary amendments to the PVRA 87 to enable ratification have not been made. Many plant breeders consider that amendment of the PVRA 87 is required to ensure that their investment in the development of new varieties is protected, and to give them control of essentially derived varieties. Breeders also consider that any amendments to the PVRA 87 should enable New Zealand to ratify UPOV 91. If New Zealand does not ratify UPOV 91, they claim, there is a risk that local plant breeders may transfer their activities to other countries that have ratified UPOV 91. There is also a risk that foreign plant breeders may be reluctant to allow their new varieties to be released in New Zealand.
24. The grant of a PVR under the PVRA 87 does not prevent the commercial exploitation of new varieties that are "essentially derived"8 from the protected variety. That is, the developer of such a new variety does not have to gain the permission of the owner of the PVR for the protected variety to sell the new variety, and does not have to pay the owner a royalty. This allows the developer of the new variety to "free ride" on the development work carried out by the developer of the protected variety.
25. As the protection provided by a PVR does not extend to varieties essentially derived from a protected variety, there is the potential to damage the interests of both New Zealand plant breeders and those who make use of the plants, such as farmers and orchardists. The owner of the PVR on the protected variety has no control over how the derived variety is marketed and does not receive any royalties.
26. The Royal Commission on Genetic Modification was told of overseas research to develop a new apple variety derived from the Royal Gala variety by genetic modification.9 Under the PVRA 87, the owner of a PVR for a variety such as Royal Gala variety could not prevent the production and marketing of the genetically modified Royal Gala apples. The marketing of such apples might damage the market for Royal Gala apples as consumers might stop buying Royal Gala apples because they cannot distinguish between genetically modified and non-genetically modified apples. This prompted the Royal Commission to recommend that the PVRA 87 be amended to introduce the concept of "essential derivation" (recommendation 10.1). The government has agreed in principle to the PVRA 87 being amended in this way, subject to the outcome of this review of the PVRA 87.
27. Another perceived deficiency of the PVRA 87 is that PVR owners are not able to prevent the export of reproductive material of a protected variety. This means that it is currently possible for someone to take reproductive material of a protected variety to another country and use it to propagate the variety or develop new varieties. If the variety were not also protected in that other country, the variety could be used to grow produce that would compete with New Zealand-grown produce from the same variety. As the overseas producers would not have to pay any royalty for use of the variety, they may have a competitive advantage over New Zealand producers who do have to pay a royalty.
28. It seems likely that the unauthorised export of reproductive material of protected varieties has already taken place. For example, a few years ago, apples of the Pacific Rose variety (a variety developed in New Zealand) were found to have been grown illegally in Chile. It was suspected that they were derived from budwood smuggled out of New Zealand. In that case, Pacific Rose was also a protected variety in Chile, so it was possible to take action through the Chilean courts to have the apple trees destroyed. There was also an incident recently, where a visiting scientist was caught attempting to take cuttings of new apple varieties out of the country.
29. The expanded rights provided for under UPOV 91 include:
- the right to authorise the export of reproductive material of a protected variety;
- the extension of a PVR owner's rights to include rights over varieties essentially derived from that person's protected variety.
Farm Saved Seed
30. Under the PVRA 87, farmers are free to save harvested seed from a protected variety and use it to sow a subsequent crop. There is no requirement for farmers to pay a royalty for the use of their saved seed. Plant breeders feel that this is unfair, and significantly reduces the returns from the sale of their protected variety. This may discourage them from investing in the development of new varieties. Plant breeders consider that farmers should be required to pay a royalty for the use of saved seed of protected varieties in recognition of the breeder's investment in new varieties.
Compulsory Licenses
31. Plant breeders have also expressed concern about the compulsory license provisions of the PVRA 87. Under section 21 of the PVRA 87, if a PVR has been in force for more than three years, then any person can request the Commissioner of Plant Variety Rights to consider whether or not reasonable quantities of the reproductive material of a reasonable quality of the variety concerned are available to the public at a reasonable price.
32. The concern of plant breeders is that these provisions may discourage some organisations from investing in the development of new varieties. For example, food processors may wish to breed a new variety whose harvested produce provides some advantage to the food processor. In these circumstances the processor may wish to prevent growers from selling the produce to other food processors so as to gain a competitive advantage over them. The provisions of section 21(3) of the PVRA 87 effectively mean that the processor who owned the PVR would not be able to prevent the sale of produce of the protected variety to other processors.
Plant Varieties and Patents
33. In New Zealand, it is also possible for plant varieties to gain patent protection, although not all plant varieties would meet the criteria for the grant of a patent under the Patents Act 1953. It is also possible for a patent to be granted for plants per se. The protection provided by a patent is similar to the protection provided for in UPOV 91. The grant of a patent for a plant variety does enable the patent owner to control the commercialisation of varieties essentially derived from the patented variety. If a variety is patented, then the use of saved seed of that variety or a variety derived from it by farmers for the purposes of sowing a future crop would constitute patent infringement.
34. The question of whether plants or plant varieties should continue to be eligible for a patent will be considered in stage 3 of the review of the Patents Act 1953 that is currently in progress. A discussion document entitled "Boundaries to Patentability" dealing with the issues raised in stage 3 is being released at the same time as this document.
History of Reform
35. In 1991, after New Zealand had signed UPOV 91, the then government considered amending the PVRA 87 to enable New Zealand to ratify UPOV 91 as part of a general review of intellectual property rights statutes. Initial proposals for reform of the PVRA 87 were produced by the Commissioner of Plant Variety Rights working in association with an Ad Hoc Working party on Plant Variety Rights consisting of representatives of a number of interest groups. During the course of the review, it became clear that Māori had significant concerns about the nature of the reforms. As result, substantive reforms to the intellectual property statutes, including the PVRA 87 were postponed until further discussion with Māori could occur.
36. In 1994, as part of the consultation on a proposed Intellectual Property Law Reform Bill, the then Ministry of Commerce prepared a Māori Consultation Paper.10 The paper discussed proposed amendments to the Trade Marks, Patents and Plant Variety Rights Acts. At that time, submissions on the paper were largely confined to issues relating to trade marks and patents with little substantive comment being made on the proposals to amend the PVRA 87.
37. In August 2000, cabinet decided to re-start the process for reform of the Patents Act 1953. As mentioned earlier, stage 3 of the Patents Act review will include consideration of whether or not patent protection should continue to be available for plants or plant varieties. As many of the issues raised in relation to the patentability of plants or plant varieties are also relevant to any review of the PVRA 87, Cabinet has decided that any review of the PVRA 87 take place at the same time as stage 3 of the review of the Patents Act 1953.
Questions
- Apart from the possible problems identified above, are there any other problems with the PVRA 87? If so, what are they?
- If there are no other problems with the PVRA 87, should it be amended at this time? If so, why?
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