International Aspects of Plant Variety Protection

International Aspects of International Aspects of Plant Variety ProtectionPlant Variety Protection

Srividhya RagavanSrividhya RagavanUniversity of OklahomaUniversity of Oklahoma

Article 27.3 TRIPSArticle 27.3 TRIPS

“…members shall provide for the protection of

plant varieties either by patents or an effective

sui generis system or by any combination

thereof”

Article 27.3

• Should be revised to eliminate PVP due to the following reasons:

– PBR cannot achieve its objective:• Public Benefit• Reduction of trade barriers

– UPOV is an ineffective sui generis system

• UPOV lacks adequate protection for farmers rights:– Object is to protect breeders– Increasingly limits farmer’s rights– Farmers rights are merely negotiated exemptions

to that of breeder’s rights

Genetic VarietyHybrid

Legal Flaws in UPOV

• Loss of genetic diversity:

• CBD article 1 read with article 15; makes it mandatory to share genetic resources

• Protection under UPOV for new, useful stable and distinct varieties; No requirement of nonobviousness

Legal Flaws in UPOV

• Loss of genetic diversity:

• CBD article 1 read with article 15; makes it mandatory to share genetic resources

• Protection under UPOV for new, useful and stable varieties; No requirement of nonobviousness to get protection

• Commercial Novelty• The variety shall be deemed to be new if, at the

date of filing of the application for a breeder's right, propagating or harvested material of the variety has not been sold or otherwise disposed of to others, by or with the consent of the breeder, for purposes of exploitation of the variety

•Cultivation, reference collection, publication etc., will not defeat novelty

•Allows the breeder to claim protection over genetic varieties that have been cultivated for centuries but never sold.

• Breeders can extract genetic material, make nonobvious changes and monopolize it

• Deprives farmers of the genetic diversity and thus violates CBD

• UPOV does away with ‘transfer of technology’

Genetic Variety Hybrid

Nonobvious difference will not defeat protection

Loss of genetic diversity

Scope of protection for breeders• Breeder’s right covers protected variety and

“varieties not clearly distinguishable” (art. 14 (5)(a))

Genetic Variety Hybrid

Nonobvious difference will not defeat protection

Protectionextended to

clearly indistinguishable

varieties

Scope of breeder’s rights

• Art. 14 (5)(b) - Breeder can exercise rights over “essentially derived varieties”

• ‘Essentially derived varieties’ are defined as those that are:– it is predominantly derived from the variety

predominantly derived from an initial variety of – it is clearly distinguishable from the initial variety

• Breeder may be able to claim rights of other farmer’s experimented variety although it is clearly distinguishable from the protected variety

Genetic Variety

Hybrid

Nonobvious difference

Protection over‘clearly indistinguishable varieties’

Protection over clearly distingusishable but essentially derived material

It does not matter if the hybrid isessentially derived from thegenetic material

Limitations on Breeder’s Rights

• Breeder’s rights have few restrictions– Art 14(1)(b): “Breeder may make his authorization

subject to conditions and limitations”– Art 17: “No Contracting Party may restrict the free

exercise of a breeder's right for reasons other than of public interest”

• “Public interest”• Similarity with the pharmaceutical argument• Hunger v. Monopolization of food• Our ideological commitment to right to life

• Difference between breeding in developed and developing nations– Almost all breeding is funded from tax payers

money in developing nations

– Farmers form an integral part of these researches

Implications of UPOV

• Privatization of breeding– B and M report points ----------------------------– B and M report argues that in the case of rice 4 firms

dominated the number of certificates– Profs Kesan & Janis study of Soya and Corn patents

between 1970 and 2002 argue that half the issued certificates on Soy were owned by 3 companies; and by 4 companies in the case of corn.

– There has also been an increased mergers and acquisition increasing the dominance if the big companies

Post-introduction of PBR

Effect of privatization of breeding

• Aggressive use of genetic diversity without corresponding returns (B and M)

• Increases pricing discretion of the monopoly holder– B and M report suggests that seed prices increased by

176% between 1970-1980.– Correlation between monopoly and pricing evidence in

several other areas of IP

• For developing countries, such increase in seed prices can be detrimental

Effect of privatization of breeding

• Increased R & D as a possible advantage

– (Pre-1970): R & D increased proportionally with the increase in sale of seeds

– (Post-1970): Companies spent less on R & D per sales-dollar earned

Effect of privatization of breeding

• Increased R & D as a possible advantage– (Pre-1970): R & D increased proportionally

with the increase in sale of seeds – (Post-1970): Companies spent less on R & D

per sales-dollar earned

• R & D dependent on the market and sales– Supported by studies also from

pharmaceutical industry

• Concentration of R & D on commercially yielding varieties– B and M Report attributes impact of PVPA on Soy in the

US on size of the market and expectation of yield

• Sales in developing nations bound to be lower– Analogy with pharmaceutical market

Effect of privatization of breeding

• Danger of reduced allocation of R and D for developing country crops – Parallel with the pharmaceutical debate

• Direct affect on investment– Also enhanced because of type of crops that are generally

grown• Developed nations prefer more open pollinated crops while

hybrid crops are preferred in developing nations.– Eg: US: Soybeans accounted for 1,022 applications (20 % of the total)

and wheat for 472 (10%) of the applications. Only 12 % of the total applications were for corn varieties.

– CHINA: 61% percent of the total applications was for maize, followed by rice (21%), wheat (4 %), and soy (3%).

Effect of privatization of breeding

Economic effect of PBR• Current operation of PBR will also be subject to operations

under Agricultural Agreement– Art 13 of AoA precluded challenges for noncompliance

with Agricultural liberalization commitments– Exceptions to GATT, AoA and SCM permitted

developed nations to maintain subsidies of totaling upto $ 150 billion

• Dumping caused from the agricultural subsidies of several developed nations– Resale in third markets at less than the cost of production in the

exporting country; The export subsidies, direct payments and credits bridge the gap between high cost of production, high internal prices and lower world prices.

Effect of subsidies on PBR

• Assuming PBR results in higher yield, newer varieties and better crop

• Economies will flourish if farmers can sell the produce

• Farmers will not be able to sell because of the dumping of subsidized products in both local and international markets

Effect of PBR on Farming• Abundant availability of food becomes inconsequential if

majority population (farmers) suffers from lack of trade and hence is unable to afford food

• Farmer cannot stock and reuse the seed because UPOV prohibits it (art 14)

• Farmer cannot continue farming because he may not be able to afford the cost of seed for the next cultivation– Throws farmers out of business– Creates more international trade barriers – atleast does not reduce

the international trade barriers.

• Majority of population will be affected if the produce of the farmers cannot be sold

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1993-94 1994-95 1995-96 1996-97 1997-98

Agriculture

Economy

Relationship between Growth in the Agricultural Sector and the Economy (%) In Kenya

Source: Economic Surveys

Farming population in select nations in 2002 (millions)

Austria .382

Australia .865

Canada .747

Japan 4.381

United Kingdom 1.017

United States 6.062

India 553

China 852

Kenya 23.5

Nigeria 38

Ethiopia 55

Bangladesh 77

SA Watch on Trade, Economics and Environment

DIAGRAM 1: FARMING POPULATION IN SELECT INDUSTRIAL COUNTRIES

5.3

2.4

4.3

1.82.2

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Austria Canada Japan UnitedKingdom

USA

Countries

Popu

latio

n (%

)

Farming Population

Developed Nations 13 million

Least Dpd

Nations

467.4 million

Developing Nations

2.5 billion

Source: FAO

Objective based approach

• Public Benefit & Reduction of trade barriers– US: Effect of the cost of foreign trade barriers on U.S. agricultural

exports for 1997 was around $5.8 billion annually (includes barriers from agricultural subsidies in third world and due to lack of plant variety protection).

– Developing nations’ loss from agricultural subsidies of developed nations: $ 24 billion.

– Latin America and the Caribbean: US$8.3 billion in annual income from agriculture

– Asia: US$6.6 billion;– Sub-Saharan Africa: US$2 billion. – Total agricultural exports displaced by trade distorting measures of

developed nations alone from developing countries: US$40 billion per year

Source: USDA's Economic Research Service and Foreign Agricultural Service

Suggestions• Agricultural liberalization to precede PBR

• Differential monopoly term– Reduction of monopoly term– Differential pricing

• Amendments in case of emergency– Definition of public interest– Introduction of compulsory licensing– Involvement of international organization– Exceptions to least developed nations