21 June 2018

Australian Plant Breeders’ Rights to be significantly strengthened

This article was written by Scott Bouvier, Veg Tran and Karen Litherland.

Significant changes to the regulation of Australian plant breeders’ rights ("PBR") are currently before the Federal Parliament. Those changes are anticipated to provide greater certainty and valuable commercial outcomes for rights holders as well as encourage greater investment in the agricultural sector. This AgriThinking article describes those changes and the potential benefits.

The changes to the Plant Breeder’s Rights Act 1994 (Cth) (“PBR Act”) appear in the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 (Cth) (the “Bill”). The changes broadly cover the grant of rights, scope of protection, enforcement and remedies.

Grant of rights – multiple joint ownership

The ability of multiple plant breeders to jointly own PBR will be clarified via amendments to section 45 of the PBR Act. The reference to “two breeders” lodging a joint PBR application under the current form of this provision will be removed to clearly accommodate circumstances where multiple breeders may wish to make (and be granted) a joint application. This amendment will bring the PBR Act in line with the current common practice of collaboration between multiple parties in developing new plant varieties.

Scope of protection – essentially derived variety declaration (“EDV declaration”)

The PBR Act allows protection of registered varieties to be extended to “essentially derived varieties” (“EDV”).  A plant variety will be taken to be an EDV of the registered plant variety if it is predominantly derived from the registered plant variety, retains all the essential characteristics of the registered plant variety and does not exhibit any important (non-cosmetic) features that differentiate it from the registered variety. The protection of EDV will be extended by amendments designed to close a loophole that currently limits the circumstances in which breeders may obtain an EDV declaration.

Under the current arrangements, the PBR owner of an initial registered variety can only seek an EDV declaration in respect of a second variety if it is the subject of an application, or the grant, of a PBR. Consequently, it has been possible for follow-on breeders to avoid an EDV declaration simply by not seeking any formal PBR protection for the second variety. Under the proposed amendments, PBR owners may apply for an EDV declaration for EDV that are non-PBR protected, thereby extending the opportunities for original plant breeders to exercise their exclusive rights in the initial variety.

The removal of this loophole that allows others to “free-load” on the work of original plant breeders is likely to increase investment, productivity and profitability as breeders and their commercial partners, including exclusive licensees, will have greater certainty not only in terms of the scope of protection for the variety but also the remedies against possible infringers.

Enforcement – exclusive licensees to have standing to sue

The Bill introduces amendments that will allow exclusive licensees of PBR to bring infringement proceedings against third parties, thereby bringing the PBR Act in line with similar rights already afforded to exclusive licensees of patents, copyright and trade marks in Australia.

For many parties that have entered into exclusive licensing agreements with PBR owners, these changes will provide greater scope for control over how they may wish to enforce their rights. Being able to litigate will be especially relevant for the commercial partners of government-funded research and development centres, State Governments or other statutory authorities. Although the latter are owners of extensive IP portfolios, including PBRs, they often are not well placed to pursue infringement actions for commercial and other reasons.

Notably, while the proposed amendments provide an automatic right to the exclusive licensee to bring an action for infringement, it will be open to the PBR owner to limit that right in the licence agreement.  In any event, the licence agreement will need to address issues such as identifying the party responsible for initiating infringement proceedings, the responsibility of certain parties to participate and the level of participation in the conduct of the proceeding, as well as other control and costs sharing measures.

Remedies

The Bill introduces a significant change to the quantum of damages that may be awarded for infringement of PBR by allowing the award of “additional” damages. Currently, courts are only permitted to award damages for the actual loss suffered. The proposed amendments will permit the courts to award additional damages if appropriate, having regard to the flagrancy of the infringement, the need to deter, the conduct of the infringing party, the benefit to the infringing party and other relevant matters.

Conclusion

The proposed amendments to the PBR Act bring overdue and important changes to the PBR regime that will not only strengthen the value in PBR, but will provide breeders and their commercial partners with far greater ability to protect and enforce their R&D and commercialisation investments. Stay tuned as we will report on the progress of the Bill.

How the amendments will impact the PBR process

Grant of PBR

Current

Joint ownership possible but lack of clarity where more than two owners

Proposed

Joint ownership is clarified such that joint ownership is available to multiple owners

Practical Effect

Increased clarity in the legislation which is helpful in joint development collaboration

Arrow

Scope of Protection

Current

Loophole exists in respect of EDVs and non-PBR-protected varieties

Proposed

Amendment allows EDV declaration for non-PBR protected varieties

Practical Effect

Significantly increased protection and value of PBR

Arrow

Enforcing PBR

Current

Only the PBR owner can bring an action for infringement

Proposed

The exclusive licensee can bring an action for infringment, but must join the PBR owner

Practical Effect

Greater control in enforcement rights for commercialisation partner and increased value of investment in PBR

Arrow

Remedies

Current

Court is only permitted to award damages for actual loss suffered

Proposed

Federal Court and Federal Circuit Court empowered to award additional damages

Practical Effect

Increased value and protection for PBR holders, and increased deterrence from infringement

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