International Aspects of Plant Variety Protection Srividhya Ragavan University of Oklahoma

Article 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 Variety Hybrid

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 Protection extended 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 is essentially derived from the genetic 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 –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

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 United Kingdom United States India553 China852 Kenya23.5 Nigeria38 Ethiopia55 Bangladesh77

SA Watch on Trade, Economics and Environment

Farming Population Developed Nations13 million Least Dpd Nations million Developing Nations2.5 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