Intellectual property in the commercial market place
Important facts about Essentially Derived Varieties
Intellectual Property (IP) rights exist to encourage improvements to technology and plants for the welfare and betterment of society. By granting a time-limited monopoly, IP rights provide to inventors and breeders the opportunity to realize a return on their labor and investment, thus incentivizing and encouraging these efforts. In exchange, at the end of the time-limited monopoly, the inventions and improvements are meant to go into the public domain, ensuring that society benefits from the improvements made.
In the plant world, Plant Breeders Rights (PBR) are the principal mechanism for providing IP rights, and are therefore an incentive for breeders to introduce new plant products for the betterment of both producers and consumers.
In order to ensure that the grant of Plant Breeders Rights provides not only the promised limited-time benefit to the breeder, but also the important continual improvements and advances for the benefit of society, two fundamental concepts are essential to PBR programs. The first concept is the ‘Breeders Exception’, which allows breeders access to existing protected cultivars, for the purpose of developing additional, improved varieties. The second concept, introduced at the UPOV 1991 Convention, is of the so-called ‘Essentially Derived Varieties’, or EDVs. The underlying rationale for EDV is to extend the rights of the PBR holder to new varieties created by third parties using the PBR-protected variety. The EDV concept was intended to provide additional protection for the original breeder from “me too” and “look alike” mutations that did not bring meaningful value to the table for either the industry or the consumer.
The EDV concept has been the source of much debates and discussions and, to this day, there is not a global consensus on how it should be administered. Since its introduction, the difficulty in uniformly defining the EDV concept, either by way of legislation or by the courts, became apparent. Despite efforts to clarify the intent of EDV protection through the adoption of the first version of UPOV Explanatory Notes on EDV (2009), universal acceptance of the meaning and scope of EDV protection remains elusive. From the outset, the varied interpretations of the EDV concept around the world has caused difficulty and concerns for all breeders attempting to introduce new varieties with significant enhancements to the respective industries and consumers in various counties.
The lack of a universally understood definition on EDV has had the following negative impacts:
- A misunderstanding and improper broadening of the definition of EDV, which in some cases has been expanded beyond the limits envisioned in the initial draft from UPOV;
- An inappropriate extension of the PBR rights granted to the initial variety owner;
- The prevention of introduction into the market of improved plant varieties that would significantly benefit the industry, and therefore the consumers.
The commercial implementation of the EDV concept must never be permitted to go the extreme, where the greater agricultural industries are restricted from access to new and improved selections and prevented from bringing these products to the consumers.
The extreme interpretation of not allowing new and improved selections to the market can force the implementation of ‘Compulsory Licensing’ by Governments who have granted the IP, if there are complaints of inaccessibility to the domain’s society.
With reference to compulsory licensing, the European legislation on Plant Varieties clearly affirms the : “’ a need to maintain the incentive for continued breeding of improved varieties’, in terms of cultural techniques, environment, use of genetic biodiversity facilitations, improvement of quality, yield, resistance, and adaptation to specific climatological and/or environmental factors, all of which are conditions entitling the grant of Compulsory Licenses under existing EU PBR Law1even against Initial Variety owners’ refusal to do so.”
For the same reasons, the European legislation introduced the Compulsory License also in respect to EDV. However, before applying Compulsory Licenses to EDV it should be primarily clarified which criteria should apply to state what EDV is, this would represent ultimately a loss for breeder of improved varieties: indeed, Compulsory Licenses are issued on a non-exclusive basis.
In this context, everyone may understand the importance of the 2017 UPOV Explanatory Notes on EDV, as recently adopted, which have been greatly inspired by the legislative approach of Australia. This is the only experience where they have addressed all the issues tormenting UPOV since 1991, even after the first version of the 2009 Explanatory Notes were published. Indeed, 2017 UPOV Explanatory Notes finally introduce clear-cut criteria to assess when a variety essentially conforms with the characters of the initial variety, including direct reference to the ‘market value’ and ‘phenotypical’ relevance of differing traits.
As told above, Compulsory Licensing is issued on a non-exclusive basis, with the result that the newly introduced variety would no longer have any potential for a return to its breeder. It sends that variety directly into the public domain without management, effectively destroying any commercial system that is in place. This also has the potential to destroy the commercial system of the original variety, due to unmanaged and unlimited competition.
The Intellectual Property administrative system needs to be consistent and practical in its interpretation and administration of PBR legislation to ensure that society’s access to enhanced products is always protected. The enforcement of extreme positions can lead to the total elimination of the very benefits that are the objective of IP, namely, the incentive to the breeder and the resultant improvements for the wellbeing of society.
For more information:
Proprietary Variety Management
Ph: +1 (509) 728-2518