Spiraea Magic Carpet ready for saleOnce one or more growers have completed their observation and production trials successfully, they will move towards first sale of the new plant. Before this can begin, PFE will work with the grower to agree a Production and Marketing Licence Agreement. This will make clear the markets in which the licensee may sell the plant, the royalty to be paid for each plant that is sold and also underline the responsibility of the licensee to pay all royalties due in a timely and complete fashion.

Negotiating royalty rates is often a difficult issue. Licensees, naturally, wish to apply a downward force on royalty levels. Breeders, on the other hand, wish to see the highest possible royalty returns for their plant.

PFE will always aim to ensure that the royalty rate is set at such a level that the breeder obtains maximum overall return. This is not necessarily at an extremely high level per plant, but is at the best level to allow the licensee to be competitive in the market, sell the greatest volume of plants over the duration of the PVR and thereby create the maximum sustained return for the breeder.

Once the licence agreement has been made, test marketing can begin. This may not be to the public or even to garden centres, but to other growers. This will give a good indication of the potential future for the plant and should reinforce earlier assessments. It also starts the “clock” for PVR and Plant Patent application, as they must be made within 365 days of the first sale.

The response to test marketing from the customers of the licensees (be they plant finishers, garden centres or the gardening public) will inform the decision about whether or not to protect the plant with PVR and Patent. If the test marketing is not at all successful, it is possible to save the expense of PVR application costs. On the other hand, if it is successful, then a small royalty revenue stream will have begun which can be used to set against the protection costs.

Click here to move to the next section (Applying for PVR and other protection).