IP law and administration

The European Parliament today debated the conflict, potential or existing, between Patents and Plant Variety Rights. The discussion was driven by a proposed motion in the Parliament, which you can read here.

The excellent IPKat website has some analysis here, although it is worth noting that it would not be limited to fruit, but apply to all plants, including ornamentals.

Some incorrect information is being bandied about by campaigners and the media. The patents that are now being granted apply to variety traits (characteristics), not to varieties themselves. This is a critical distinction between PVR (which apply to varieties) and patents.

For example: Breeder A develops the world’s first blue daffodil.

As it currently stands, Breeder A has two options:

  1. Take out Plant Variety Rights. The PVR applies to the particular blue daffodil variety that Breeder A has developed. A competitor breeder can now exploit the breeder’s exemption within PVR law and develop further blue daffodil varieties by breeding from the original variety (provided that they are sufficiently distinct as to not be considered Essentially Derived Varieties [EDV]) or by reproducing the breeding process that Breeder A followed (which circumvents the EDV rules). Within a very short period of time, Breeder A’s new variety is subject to competition, even though Breeder A invested many years and considerable resources in developing the original new blue daffodil. Conversely, Breeder A does not have a monopoly, so other breeders can improve on the original blue daffodil by developing new varieties and can aid the consumer by creating competition in the market.
  2. Take a Patent in the blue petal colour trait in daffodil, even though it is the product of a natural biological process. This would give Breeder A a monopoly position and prevent anyone else from developing a daffodil with a blue petal colour, even if they did so independently. This would provide Breeder A with a good opportunity to commercially exploit their new variety and recoup their significant investment (an incentive to innovate) but would prevent anyone else from developing a competitor or improved variety (stifles the market; stifles innovation). There is currently no obligation on a patent holder to licence their patent to any other party. Also: patents are very expensive for the independent breeder, so they can’t get this level of protection for their own new developments.

So there are arguments for and against the use of patents. As it is, the deep-pocketed breeding companies (mainly in agricultural crops) are applying for large numbers of patents. They are beyond the budget of many smaller firms and independents. Additionally, these patents may prevent other breeders from developing new varieties if they possess a trait that is owned by a third party.

We expect to see this debate run and run. We also expect growing pressure for amendments to legislation, although that will be a long and tortuous process. For now, watch out for more and more patents.

My thanks to Thomas Leidereiter for pointing this out to me. However, the commentary below and any errors or inaccuracies it contains are mine alone. Remember that PFE is not qualified to give legal advice and the following should merely be regarded as personal opinion.

The European Commission has proposed amendments to the Regulation that controls Community Trademarks (CTMs). CTMs are often used for branding plant varieties, series of plant varieties or even entire breeding programmes. For example, we look after plants covered by the CTM “Walberton’s” which is applied to plants originating from breeding activites at Walberton Nurseries. We attach brand values of quality and the assurance of many years of experience and trialling of new varieties. Other examples that you would be familiar with are the mark “Surfinia” (Suntory), applied to the well-known Petunia breeding, and “Wave” which is used for Petunia and Viola (Ball Horticulture).

CTMs are regulated by EC Regulation 207/2009 which you can read here. The European Commission has proposed amendments which are contained in document COM(2013) 0161 final, whch you can read here. Paragraph 10 of the latter document proposes the addition of a new paragraph (l) to Article 7 of the former, which is the section that covers absolute grounds for refusal for CTMs at the application stage. The new text reads as follows:

“trade marks which contain or consist of an earlier variety denomination registered in accordance with Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights with respect to the same type of product”

This is a new provision. Consider it carefully. If one applies for a CPVR using the name “Whatever”, one could then not obtain a CTM in the word “Whatever” for class 31 goods (plants), even though you would be the owner of both the CPVR and the CTM. “Pink Whatever” or “Whatever Beauty” would also be disallowed.

Moreover, if you wanted to apply for a CTM for class 31 and that contained a word that had previously been used by anyone as the variety denomination for a CPVR, then your application would be refused without any further consideration, even if the variety had been commercialized under a different (marketing) name.

The upshot of this proposal is that vast swathes of potential trademark names have been rendered unusable (there have been more than 40,000 applications for CPVR, I believe). Furthermore, applicants for CPVR will have to use a codename for the denomination if they have any intention of applying for CTM for their variety (which is probably good practice anyway). Potentially, existing CTMs which contain or are the same as CPVR variety denominations that pre-date the CTM application could be challenged and declared invalid.

Also, note that the amendment only refers to Community Plant Variety Rights and not to national PVRs in the Member States. So, potentially (and we’re being wilfully obscure here and our learned friends may well pull this to pieces!) a breeder could apply for a national PVR in a Member State in January 2015 and then apply for CTM in March 2015. In the meantime, no commercial exploitation of the variety is undertaken. Then, in January 2016 (before the first anniversary of the national PVR application), the applicant submits an application for CPVR using the rule of priority to claim the earlier filing date. Because the owner of the CPVR is the same as the owner of the CTM, the CTM does not preclude the use of that name for the CPVR denomination and yet, because the CPVR is filed after the CTM, the CTM remains valid. (Mind you, this would be very convoluted and potentially costly, just for the sake of not using a codename for the CPVR denomination).

All of which is jolly exciting and nicely illustrates why breeders pay a company like Plants For Europe Limited to worry about this sort of stuff so that they don’t have to!

We are always pleased when the cost of something is reduced. In 2013, the application fee for a Community Plant Variety Right was reduced from EUR 900 to EUR 650. On 1st January this year, the annual fee for CPVR was reduced from EUR 300 to EUR 250.

However, prices going down is a rare event. Prices going up seems more common.

The CPVO has been conducting a review of the fees it pays to the various national “competent authorities” that conduct DUS examinations of plant material subject to a PVR application. These include GEVES in France, the Bundesortenamt in Germany, the Naktuinbouw in the Netherlands and NIAB here in the UK. The fees are reviewed every three years or so and are calculated and negotiated based on the average costs incurred by the examination centres over the preceding three years. This process was completed in 2013 (relating to costs in the period 2010 to 2012) and has resulted in an average increase of 10% in fees paid by the CPVO to the examination centres.

The CPVO is now working on the second part of this fees review, which covers the fees levied by the CPVO to applicants for DUS examintion. The last review of fees was carried out six years ago, in 2008, with the new fees effective from 1 January 2009. The CPVO intends to propose a new fee structure to the European Commission, along with a simplification of the fee groups scheme (whereby different genera with similar examination requirements are grouped together with the same fee). This proposal should be completed later this year, with the new fees likely to become effective on 1 January 2015.

It seems almost certain that the DUS examination fees payable by applicants will increase. An increase of at least 10% seems probable, perhaps a little more (although the CPVO runs at a surplus and has undertaken to reduce that surplus).

Applicants should note that the DUS examination fee due for payment will be the fee applicable at the time that the DUS examination commences, not the fee applicable at the time of application. Therefore, it is almost certain that all applications made from now on (and many recently submitted) will be subject to DUS fees in the new structure, at the new higher rate.

The UK Department for Environment, Food and Rural Affairs (DEFRA) is currently conducting a consultation on increasing the fees for UK Plant Breeder’s Rights. You can find the consultation by clicking here.

Under the proposed new tariff, the application fee will increase by about one third and the DUS examination fee will increase by more than 130%. That’s a rather large price increase. DEFRA is currently losing money on (i.e. subsidising from general taxation) every PBR application that is submitted by breeders and intends that the new fee structure will result in a reduction in that loss/subsidy to nil. This is known in the jargon as “full cost recovery”.

The new fees will be so expensive that, in the case of a perennial garden ornamental, for example, the cost of the UK PBR (covering just one nation) would be equal to the cost of application, DUS examination and the first three years of annual fees for EU PVR (covering the UK and 27 other member states of the EU). We should not be surprised by this – the process of dealing with an application for Plant Variety Rights involves a similar process whether that is for UK PBR or EU PVR, with similar costs. If anything, the EU perhaps has some advantages of economy of scale, as it handles many more applications per annum than the British authorities do.

Therefore, the obvious business decision would be to not bother with UK rights, but simply apply for EU rights instead. And that is what most people do already, certainly in the world of ornamental plants – in the last twelve months, only one application for UK rights in an ornamental has been submitted (for a rose).

So, does this increase matter? Well, hopefully not. All the while the UK remains part of the European Union, breeders wishing to exploit their variety in the UK are afforded an effective, legally-enforceable protection by means of the EU PVR system. However, should the Europhobes get their way and force the UK’s exit from the EU, then breeders would find their protection costs will double – the fee for EU PVR will remain, but they would also have to pay a similar sum for UK rights (as it is reasonable to foresee that EU rights would no longer cover the UK if the UK were to leave the EU).

Let’s hope that never happens, eh? And use your vote wisely!


Aside: UK legislation refers to Plant Breeder’s Rights (PBR). European regulation refers to Plant Variety Rights (PVR) and that is the term we generally use here at Plants for Europe. PBR and PVR are essentially the same thing – an intellectual property right to protect innovations created by plant breeders. We prefer the term PVR because the right may not necessarily be owned by the breeder. Just like patent or any other intellectual property right, PVRs may be bought and sold and their ownership transferred. We look after several plants where the owner of the rights is not the original creator, for various reasons. The right relates to a plant variety, so we feel PVR is a more accurate term.

On Monday 1 July 2013, Croatia will become the 28th member of the European Union.

From this date, all granted Community Plant Variety Rights will become effective in Croatia. In addition, the provisional protection afforded by applications in progress will also extend to Croatia.

The CPVO has created a guide to the implications of enlargement of the EU by the accession of Croatia, which you can download by clicking here.

We look forward to helping breeders and growers from the new member of the club!

The Community Plant Variety Office is to reduce the annual fee for granted Community Plant Variety Rights from the current level of EUR 300 per annum to EUR 250 per annum, with effect from 1 January 2014.

This is partly the result of lobbying by our friends at CIOPORA, the organisation for breeders of ornamental and fruit plant varieties. Breeders should consider joining CIOPORA if not already members.

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