1. Protecting Innovation in Plants Srividhya Ragavan Professor of Law University of Oklahoma College of Law

2. Relevance of Discussion IIHR – A research & training institution on agri and horticulture IIHR – A research & training institution on agri and horticulture Goals, strategies of a protection regime for a IIHR type institution Goals, strategies of a protection regime for a IIHR type institution

3. International Trade Perspective Barriers to Trade Barriers to Trade 1. Agricultural Subsidies 2. Lack of PBRs

4. Barrier 1: Agricultural Subsidies Subsidies as a trade barrier Subsidies as a trade barrier Government Support Government Support How does it affect trade? How does it affect trade? Dumping caused from the agricultural subsidies of several developed nations 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. 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.

5. Barrier 2: Plant Variety Protection Hybrids can be beneficial especially in poorer countries Hybrids can be beneficial especially in poorer countries Population, Weather etc., issues Population, Weather etc., issues Lack of plant variety protection impedes importation of hybrids and thus, blocks export markets. Lack of plant variety protection impedes importation of hybrids and thus, blocks export markets.

6. Indian Scenario - I Plant Variety Protection & Farmer’s Rights Act, 2001 Plant Variety Protection & Farmer’s Rights Act, 2001 Larger consequences - Larger consequences - Privatization Privatization Modernization Modernization Market competition Market competition Compete in the protection era – hence, be aware of protection strategies

7. Indian Scenario - II Subsidies foreclose export & local market Subsidies foreclose export & local market Larger consequences - Larger consequences - Local hybrids have to find local markets Local hybrids have to find local markets Local hybrids can find export markets if it is unique Local hybrids can find export markets if it is unique If unprotected, susceptible to copying by other breeders If unprotected, susceptible to copying by other breeders Note: Under PPVFA, no revenues from lack of right to re-sow. Note: Under PPVFA, no revenues from lack of right to re-sow.

8. Legal Roles for IIHR – I Policy changes Policy changes Agricultural negotiations Agricultural negotiations Understand protection regimes Understand protection regimes Ensure licenses are clear Ensure licenses are clear Strategize to ensure that protection is not lost Strategize to ensure that protection is not lost

9. Policy Issues Negotiations about Agricultural Subsidies Negotiations about Agricultural Subsidies Ensure that DUS Guidelines and other PPVFA requirements are clarified Ensure that DUS Guidelines and other PPVFA requirements are clarified Patent protection for plants? Patent protection for plants?

10. Structure Protection Regimes Licenses Licenses PPVFA PPVFA Protection regimes abroad Protection regimes abroad

11. Licenses Trade Secret – but susceptible to reverse engineering Trade Secret – but susceptible to reverse engineering License terms: License terms: How long is license valid? How long is license valid? Rights, restrictions and obligations of each parties Rights, restrictions and obligations of each parties Aware of PPVFA obligations Aware of PPVFA obligations

12. Models for Licensing Contract based is best for a Research Institute Contract based is best for a Research Institute Sale tied closely with license Sale tied closely with license Outright sale Outright sale Initial sale and percentage of profit later Initial sale and percentage of profit later Sale with clear restrictions Sale with clear restrictions

13. Strawberry licensing in the US US Strawberry – Protected under PPA – owner is UC- a public institution in the state of California. US Strawberry – Protected under PPA – owner is UC- a public institution in the state of California. Licensed on a nonexclusive basis directly to plant nurseries. Licensed on a nonexclusive basis directly to plant nurseries. Nurseries are licensed the right to propagate plants and to sell the propagated daughter plants to fruit growers. Nurseries are licensed the right to propagate plants and to sell the propagated daughter plants to fruit growers. Strawberry growers annually replant fruiting fields, so a royalty is collected annually. Strawberry growers annually replant fruiting fields, so a royalty is collected annually. Royalties are assessed on a per-1,000 plants (purchased) basis rather than on the basis of sales. Royalties are assessed on a per-1,000 plants (purchased) basis rather than on the basis of sales. © Bennett & Carriere, IP Handbook of Best Practices

14. Strawberry License Outside US Outside of the United States, the owner relies on business partners as an intermediary in support of the strawberry licensing program. Outside of the United States, the owner relies on business partners as an intermediary in support of the strawberry licensing program. These partners, referred to as master licensees, are provided with exclusive rights within a defined territory. These partners, referred to as master licensees, are provided with exclusive rights within a defined territory. The master licensee is granted the right to issue nonexclusive sublicense agreements to nurseries within the territory. The master licensee is granted the right to issue nonexclusive sublicense agreements to nurseries within the territory. In exchange for this exclusive right, the master licensee supports IP development and provides enforcement of IP rights including access to the local court system. In exchange for this exclusive right, the master licensee supports IP development and provides enforcement of IP rights including access to the local court system. Critical responsibilities of the master licensee are market development, technical support, and the transfer of production know-how. Critical responsibilities of the master licensee are market development, technical support, and the transfer of production know-how.

15. Strawberry Royalty A three-tier royalty structure is utilized. Growers of UC cultivars in California currently pay, in royalties, US$3.00/1000 plants. Growers of UC cultivars in California currently pay, in royalties, US$3.00/1000 plants. Growers in the United States outside of California and in Canada pay US$4.50/1000 plants. Growers in the United States outside of California and in Canada pay US$4.50/1000 plants. Outside of the United States and Canada growers pay US$10.50/1000, a percentage of which is shared with the master licensee. Outside of the United States and Canada growers pay US$10.50/1000, a percentage of which is shared with the master licensee. In addition to the royalty component described above, a research fee is collected to directly support new cultivar development. In addition to the royalty component described above, a research fee is collected to directly support new cultivar development. The research fee of US$1.00/1000 plants entitles the licensee to a lower royalty rate (rates stated above). The research fee of US$1.00/1000 plants entitles the licensee to a lower royalty rate (rates stated above). The licensee receives a US$1.50 reduction in royalties for the US$1.00 research fee contribution. The licensee receives a US$1.50 reduction in royalties for the US$1.00 research fee contribution.

16. Protecting Outside of India United States United States Plant Patent Plant Patent Plant Patent Act Plant Patent Act Plant Variety Protection Plant Variety Protection

17. Plant Patent Act, 1930 Asexually Reproduced materials (covers grafting, budding) Asexually Reproduced materials (covers grafting, budding) Plant (includes macro fungi but not bacteria) Plant (includes macro fungi but not bacteria) Excludes seeds and tuber propagated plants (sexual reprod.) Excludes seeds and tuber propagated plants (sexual reprod.) Distinct Distinct New New Can be discovered (in cultivated area) or invented Can be discovered (in cultivated area) or invented USPTO administers it USPTO administers it

18. Plant Variety Protection Act, 1970 Sexually reproducible plants Sexually reproducible plants New, Distinct, Uniform and Stable Varieties are protectable New, Distinct, Uniform and Stable Varieties are protectable Re-sowing for farmers Re-sowing for farmers Certificate Certificate Issued by the department of agriculture Issued by the department of agriculture Difference from plant patents: Difference from plant patents: Use for breeding and research does not constitute infringement Use for breeding and research does not constitute infringement Farmers get the right to plant crops of seeds of protected seeds provided the purchase is legitimate Farmers get the right to plant crops of seeds of protected seeds provided the purchase is legitimate

19. Patents on Plants J.E.M AG Supply v. Pioneer Hi-bred International, Inc J.E.M AG Supply v. Pioneer Hi-bred International, Inc Issue: Issue: Whether the PPA and PVPA are the exclusive mechanisms for protecting plants or plant varieties. Whether the PPA and PVPA are the exclusive mechanisms for protecting plants or plant varieties. Invention: Invention: Patent on a hybrid corn Patent on a hybrid corn Dispute: Dispute: Pioneer’s hybrid seeds are restricted from brown bagging or reusing. Pioneer’s hybrid seeds are restricted from brown bagging or reusing.

20. JEM bought and resold these seeds JEM bought and resold these seeds JEM is not a licensed supplier (hence cannot resell) JEM is not a licensed supplier (hence cannot resell) Pioneer sued for infringement and JEM argued that the patent was invalid (because PPA and PVPA are the exclusive mechanisms to protect plants). Pioneer sued for infringement and JEM argued that the patent was invalid (because PPA and PVPA are the exclusive mechanisms to protect plants).

21. Issue: Issue: Whether utility patents may be issued for plants under sec 101/ or is the PPA and PVPA exclusive mechanisms for protecting plants? Whether utility patents may be issued for plants under sec 101/ or is the PPA and PVPA exclusive mechanisms for protecting plants?

22. Plant Patent Especially for plants using recombinant DNA technology Especially for plants using recombinant DNA technology Monsanto has been a leader Monsanto has been a leader 4500 patents in EU currently pending 4500 patents in EU currently pending

23. Plant Patent All the requirements of the patent statute apply All the requirements of the patent statute apply Novelty Novelty Unility and Unility and Non-obvious Non-obvious Note: different strategy for plant patent than for sui generis protections Note: different strategy for plant patent than for sui generis protections

24. In Re Fisher (Sep 7, 2005) In Re Fisher (Sep 7, 2005) Invention: five purified nucleic acid sequences that encode proteins and protein fragments in maize plants - ESTs. Invention: five purified nucleic acid sequences that encode proteins and protein fragments in maize plants - ESTs. When a gene is expressed in a cell, the DNA undergoes transcription to become an mRNA When a gene is expressed in a cell, the DNA undergoes transcription to become an mRNA The mRNA released from the nucleus of the cell is used to produce proteins The mRNA released from the nucleus of the cell is used to produce proteins

25. Question is whether EST’s corresponding to genes of unknown function are incapable of satisfying the utility requirement, even though the EST’s are quite useful as research tools. Question is whether EST’s corresponding to genes of unknown function are incapable of satisfying the utility requirement, even though the EST’s are quite useful as research tools.

26. Fisher knew what genes the ESTs corresponded to but did not know how the genes were useful. Fisher knew what genes the ESTs corresponded to but did not know how the genes were useful. (Basically, any EST would perform the task of identifying the corresponding gene/DNAs. But what was needed was the utility of the gene.) (Basically, any EST would perform the task of identifying the corresponding gene/DNAs. But what was needed was the utility of the gene.) When we know that, it becomes extremely useful to understand the presence or absence of particular diseases. When we know that, it becomes extremely useful to understand the presence or absence of particular diseases.

27. India – PPVFA Obligations Follows the UPOV model for determining new varieties Follows the UPOV model for determining new varieties Creates a low level of distinctiveness Creates a low level of distinctiveness

28. India - PPVFA Obligations Farmer’s variety Farmer’s variety Benefit sharing – when do you acknowledge farmer’s contribution Benefit sharing – when do you acknowledge farmer’s contribution How much contribution is farmer’s contribution How much contribution is farmer’s contribution Seed quality must be good Seed quality must be good Record and book keeping – always good evidence

29. Novelty If, at the date of filing of the application for registration for protection, the propagating or harvested material of such variety has not been sold or otherwise disposed of by or with the consent of its breeder or his successor for the purposes of exploitation of such variety— If, at the date of filing of the application for registration for protection, the propagating or harvested material of such variety has not been sold or otherwise disposed of by or with the consent of its breeder or his successor for the purposes of exploitation of such variety— (i) in India, earlier than one year; or (ii) outside India, in the case of trees or vines earlier than six years, or in any other case, earlier than four years, before the date of filing such application: Provided that a trial of a new variety which has not been sold or otherwise disposed of shall not affect the right to protection: Provided further that the fact that on the date of filing the application for registration, the propagating or harvested material of such variety has become a matter of common knowledge other than through the aforesaid manner shall not affect the criteria of novelty for such variety;

30. Commercial Novelty 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 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 ONLY Sale or disposal of the application material defeats novelty Cultivation, reference collection, publication etc., will not defeat novelty Breeder can potentially claim protection over genetic varieties that have been cultivated for centuries but never sold or disposed. NOVELTY IN UPOV

31. Distinctiveness in PPVFA if it is clearly distinguishable by at least one essential characteristic from any other variety whose existence is a matter of common knowledge in any country at the time of filing of the application. if it is clearly distinguishable by at least one essential characteristic from any other variety whose existence is a matter of common knowledge in any country at the time of filing of the application. Explanation.-- For the removal of doubts, it is hereby declared that the filing of an application for the granting of a breeder's right to a new variety or for entering such variety in the official register of varieties in any convention country shall be deemed to render that variety a matter of common knowledge from the date of the application in case the application leads to the granting of the breeder's right or to the entry of such variety in such official register, as the case may be; Explanation.-- For the removal of doubts, it is hereby declared that the filing of an application for the granting of a breeder's right to a new variety or for entering such variety in the official register of varieties in any convention country shall be deemed to render that variety a matter of common knowledge from the date of the application in case the application leads to the granting of the breeder's right or to the entry of such variety in such official register, as the case may be;

32. Distinctiveness IN upov Distinctiveness IN upov Article 7 of UPOV: “The variety shall be deemed to be distinct if it is clearly distinguishable from any other variety whose existence is a matter of common knowledge at the time of filing the application.” “The variety shall be deemed to be distinct if it is clearly distinguishable from any other variety whose existence is a matter of common knowledge at the time of filing the application.” Application materials that are a matter of common knowledge can pass the test of distinctiveness if it can be distinguished from another material that is a matter of common knowledge. Art 14: A variety is “a matter of common knowledge” - if it has been subject “of an application for the granting of a breeder's right” or - has been entered in the official register of varieties, in any country”

33. Distinctiveness standard - ability to distinguish from another variety entered in the official register or, for which an application has been made. Distinctiveness standard - ability to distinguish from another variety entered in the official register or, for which an application has been made. Thus, varieties already cultivated, being cultivated, well known, and indistinguishable from well known varieties will pass the “novelty” threshold if it has not been sold and the “distinctiveness” threshold so long as close cousins of the variety have not been subject to an application for breeder’s rights. Thus, varieties already cultivated, being cultivated, well known, and indistinguishable from well known varieties will pass the “novelty” threshold if it has not been sold and the “distinctiveness” threshold so long as close cousins of the variety have not been subject to an application for breeder’s rights. The broad definition increases the scope for appropriation from the public domain The broad definition increases the scope for appropriation from the public domain CBD Art. 1 + Art. 15= mandatory to share genetic resources CBD Art. 1 + Art. 15= mandatory to share genetic resources Under UPOV they may become eligible for protection Under UPOV they may become eligible for protection

34. Future for IIHR To carefully strategize by taking all factors into account To carefully strategize by taking all factors into account Examine all possibilities for protection before determining course of action Examine all possibilities for protection before determining course of action