Description
In the past few decades the subject of intellectual property rights (IPRs) has occupied center stage in debates about globalization, economic development and poverty elimination. This study concerns the strengthening of IPRs in the plant breeding industry and its effect on agriculture in developing countries.
Impacts of Strengthened Intellectual Property
Rights Regimes on the Plant Breeding Industry
in Developing Countries
N.P. Louwaars, R. Tripp, D. Eaton, V. Henson-Apollonio, R. Hu, M. Mendoza,
F. Muhhuku, S. Pal & J. Wekundah
A Synthesis of Five Case Studies
Report, commissioned by the World Bank
N.P. Louwaars
1
, R. Tripp
2
, D. Eaton
3
, V. Henson-Apollonio
4
, R. Hu
5
, M. Mendoza
6
,
F. Muhhuku
7
, S. Pal
8
& J. Wekundah
9
A study commissioned by the World Bank, executed in 2004
February 2005
Impacts of Strengthened Intellectual Property
Rights Regimes on the Plant Breeding Industry
in Developing Countries
A Synthesis of Five Case Studies
1
Centre for Genetic Resources, The Netherlands, Wageningen UR, P.O. Box 16,
6700 AA Wageningen, The Netherlands
2
Overseas Development Institute, London, UK
3
Agricultural Economics Research Institute LEI, Wageningen UR, The Hague, The Netherlands
4
Central Advisory Service, CGIAR, Rome, Italy
5
Centre for Chinese Agricultural Policies, Chinese Academy of Sciences, Beijing, China
6
Bogotá, Colombia
7
Agricultural Productivity Enhancement Programme, Kampala, Uganda
8
National Centre for Agricultural Economics and Policy Research, Indian Council of Agricultural Research,
New Delhi, India
9
Biotechnology Trust Africa, Nairobi, Kenya
© 2005 Wageningen, Wageningen UR
All rights reserved. Reproduction and dissemination of materilal in this volume for educational and non-commercial
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without written permission of the copyright holders.
ISBN : 90-73384-59-1
Lay-out : Vormgeving, Plant Sciences Group
Printing : Propress, Wageningen
Overseas Development Institute
111 Westminster Bridge Road
London SE1 7JD
UK
Agricultural Economics Research Institute LEI
P.O. Box 29703
2502 LS The Hague
The Netherlands
Wageningen UR
Centre for Genetic Resources, The Netherlands
Address : Droevendaalsesteeg 1, Wageningen, The Netherlands
: P.O. Box 16, 6700 AA Wageningen, The Netherlands
Tel. : +31 317 47 70 00
Fax : +31 317 41 80 94
E-mail : [email protected]
Internet : www.cgn.wur.nl
Table of contents
Page
Executive summary 1
Abbreviations 11
Acknowledgement 13
1. Introduction 15
1.1 Background 15
1.2 Objectives 16
1.3 Methodology 17
1.3.1 The case study approach 17
1.3.2 Choice of case study countries 18
1.3.3 Choice of crops within case study countries 18
1.3.4 Process 19
1.3.5 Data collection 20
1.4 Structure of this report 22
2. IPRs and the plant breeding industry 23
2.1 Introduction 23
2.1.1 Rationale for intellectual property rights 23
2.1.2 National and international aspects of IPRs 24
2.1.3 Different property rights systems: applications to plant breeding 26
2.2 The Plant Breeding Industry 28
2.2.1 Seed systems 28
2.2.2 Seed policies and regulations 29
2.3 The protection of plants and varieties 30
2.3.1 Historical perspective 30
2.3.2 Comparison of plant utility patents and PVP 32
2.4 The protection of plant biotechnology 35
2.4.1 Relevance of biotechnology in the plant breeding industry in
developing countries 35
2.4.2 Patents in biotechnology 35
2.5 Empirical research on the impact of protection of plant varieties and plants 39
2.6 Additional strategies to protect the interest of the breeder and
seed producer 41
2.6.1 Non-IPR protection mechanisms 41
2.6.2 Biological protection 41
2.6.3 Seed laws 42
Page
2.6.4 Contracts 42
2.6.5 Biosafety 44
2.6.6 Brands and trademarks 44
2.6.7 Secrecy 45
2.7 Summary 45
3. Plant breeding and seed production in the case study countries 47
3.1 Agriculture 47
3.2 Public Sector Research 51
3.3 The Seed Sector in the case study countries 53
3.4 Seed Regulation 56
3.5 Seed Use 60
3.6 Summary 63
4. IP legislation and management in the case study countries 67
4.1 PVP Legislation 67
4.2 Other IP Legislation 72
4.3 The Management of PVP in Case Study Countries 75
4.3.1 Applications for PVP 75
4.3.2 Retroactive protection 80
4.3.3 Deposit of breeding lines 80
4.3.4 Costs and budgets 81
4.3.5 Enforcement 84
4.4 Management and enforcement of patents in case study countries 84
4.5 Summary 85
5. Impact on seed companies 89
5.1 Seed Company Approaches to IPR 89
5.2 Seed Company Priorities 91
5.3 Protecting Bt Cotton 92
5.4 Managing IPRs and collecting royalties 95
5.5 Alternatives for protection 95
5.5.1 Biological protection 96
5.5.2 Seed laws 96
5.5.3 Contracts 97
5.5.4 Biosafety 97
5.5.5 Trade secrets 98
5.5.6 Business practices 98
5.6 Summary 99
Page
6. Impact on public plant breeding and seed production 101
6.1 IP policies 101
6.2 Revenue generation strategies 102
6.3 NARI Seed Production 107
6.4 Patents 108
6.5 Plant Breeding Priorities and Strategies 109
6.5.1 Research investments 109
6.5.2 Hybrids versus OPVs 112
6.5.3 Participatory breeding 113
6.6 Enforcement 113
6.7 Impact on International Agricultural Research Centers 114
6.7.1 IARC IP Policies 114
6.7.2 Interactions with Seed Companies 114
6.7.3 IARC Priorities 117
6.7.4 IARCs and Biotechnology 117
6.8 Impact on Public Seed Enterprises 119
6.9 Summary 120
7. Impact on seed users 125
7.1 Diversity of Seed Firms 125
7.2 Farmer Priorities 126
7.3 Local Seed Production and Plant Breeding 126
7.4 Seed Saving 127
7.5 The views of farmer groups 128
7.6 Flower producers 129
7.7 Summary 131
8. Lessons 133
References 141
Annex I. List of persons interviewed for the study 9 pp.
Annex II. Interview questions 10 pp.
1
Executive summary
The Study
In the past few decades the subject of intellectual property rights (IPRs) has occupied center
stage in debates about globalization, economic development and poverty elimination. This
study concerns the strengthening of IPRs in the plant breeding industry and its effect on
agriculture in developing countries. This strengthening is reflected in the growth in the number
of countries that grant such rights, an expansion of the types of inventions that can be
protected, and a broadening of the scope of protection offered by extant IPR systems. Central
to the spread of IPR systems is the Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS 1993) of the World Trade Organization (WTO) requiring all WTO members
to introduce a minimum level of protection for intellectual property in their national laws; and
subsequent bilateral or multilateral trade agreements that call for further strengthening of IPR
regimes in developing countries.
The principal objective of this study is to describe and evaluate initial experiences with
strengthened IPRs in developing country agriculture, focusing on five case studies. Such an
assessment is a prerequisite for the formulation of policy guidelines and ‘good practice’
lessons for implementing IPRs in ways that enhance their impacts on productivity and equity.
The preliminary nature of developing countries’ experience with IPRs in agriculture precludes
most possibilities for quantitative evaluation of impacts, and in many cases possible effects of
IPRs are confounded with other developments (such as domestic policy changes and the
liberalization of international trade). The study thus concentrates on qualitative evaluation of
initial experiences and analyzes the efficiency with which IPRs are implemented at the
institutional level (including interactions with other regulatory mechanisms), the effectiveness of
the new IPR regimes in providing added incentives for the breeding and seed sectors (both
public and private), and the equity of outcomes for producers (with particular attention to
smallholders).
The wide variation in plant breeding capacities and seed industries among developing countries
demands a case study approach for this research. The range of types of IPRs in force or
contemplated, as well as the great variation in local institutions and farming systems, adds to
the justification for a careful examination of a relatively few cases in terms of countries and
crops. The choice of examples is constrained, however, by the fact that many countries have
yet to establish an IPR regime for plant varieties. China, Colombia, India, Kenya and Uganda
were chosen to represent a wide range of situations. The study focused on three types of
crop: export crops, crops (for market or subsistence) with good commercial seed potential,
and crops that attract little commercial seed interest.
The study concentrated on patents, plant breeder’s rights systems and trademarks. The
protection of plant varieties with patents is fairly uncommon; the principal examples are found
in the US, where certain vegetatively propagated species have been eligible for patent
protection since 1930 and more recently utility patents have been accepted for varieties of any
type of crop. The most common system of IPRs for plant varieties is known as plant variety
2
protection (PVP), related to several conventions of the Union for the Protection of New Varieties
of Plants (UPOV). Patent protection is more common in biotechnology, where many of the genes,
tools and processes are protected by patents, although there are considerable differences
among countries regarding eligibility and coverage. The plant breeding industry also relies on
other mechanisms to protect its varieties and limit their use. Perhaps the most common is
hybridization, which encourages farmers to buy fresh seed each season and prohibits
competitors from multiplying a variety. Other mechanisms include the use of seed laws,
contract law, brands and trademarks.
The study assumes that the primary justification for the establishment of IPRs is to increase
welfare in society. By offering a type of monopoly for the commercial exploitation of an
innovation, IPRs are intended to provide an incentive for creative endeavor by inventors and
authors. The monopoly may however disadvantage particular stakeholders. The establishment
of an IPR, which is based on national law, thus requires careful consideration of the different
seed systems in the country and of the balance of economic interests of different stakeholders
in society. Such analysis at the national level also needs to be balanced against potential
benefits from international harmonization at the legal and/or implementation levels. The analysis
of IPRs also must take account of existing systems that regulate seed production, and
marketing, set biosafety standards; and enable the operation of contract law.
The case study countries
Although three of the four case study countries with PVP laws are members of UPOV under the
1978 convention, there are significant differences between them in the details of their
legislation and in the actual performance of PVP. Aside from TRIPS, a major pressure for the
initiation of PVP came from the foreign horticultural industry in Colombia and Kenya. In China
this was part of a wider policy to promote the development of the domestic seed industry and
to establish a framework for interaction with foreign agricultural technology. The establishment
of PVP in India had its major impetus from a well-developed private seed industry leading to an
extensive public debate about the nature of PVP; the result is legislation whose eligibility for
inclusion in a UPOV convention has yet to be tested. In Uganda, which has yet to establish PVP,
the debate is currently restricted to a small committee of professionals dealing with breeding
and genetic resources.
Plant varieties are not eligible for patent protection in the case study countries. Trademarks are
commonly used in all case study countries to protect seed company names and marks, but not
for official variety names. None of the case study countries have particular exemptions in their
patent laws in line with those usually available in PVP for other breeders or farmers. The
establishment of PVP in the case study countries was often marked by controversy regarding
the level and extent of protection for extant varieties.
The experience of the case study countries indicates that the ease of implementing PVP seems
to be overestimated. In all cases, the effectiveness of PVP is still being tested and refined, and
the cases illustrate that establishing a PVP law and putting it into practice are two separate
challenges.
3
There is not yet sufficient experience on levels of participation to draw conclusions about the
local resources required to manage PVP. In Colombia and Kenya, most applications for
protection concern horticultural crops, for which the testing is largely managed externally. In
China, on the other hand, there is a considerable demand for PVP, largely to protect publicly-
developed varieties. In large countries with extensive seed markets, investment in PVP will be
easy to justify; for smaller markets and niche varieties the justification will be more difficult. It is
worth noting that protection, testing and maintenance fees are currently uniform in each of the
case study countries, without regard to type of crop or seed market.
Early experience indicates that sanctions for violations are often not well defined and that the
courts are not well prepared to enforce the rights. In all cases, private and public plant breeders
are learning that the major responsibility for identifying violations and pursuing cases rests with
them, implying additional investments of staff and resources.
There is very little experience in the case study countries with the implementation of patents for
plant breeding or biotechnology, with the exception of China. There is little or no case law in
the case study countries relevant to the enforcement of such patents.
IPRs and the evolution of the private seed sector
The emergence of the private seed sector in the case study countries owes relatively little to
national IP regimes. By far the most dynamic private seed sector in the sample (India) has
grown and diversified without benefit of any IPRs but in the context of quite liberal seed laws
and in many cases through the use of hybrids as a means of appropriation. While not
necessary for initial private seed sector development, PVP may contribute to further growth
and diversification. The nature and extent of this contribution will depend on the characteristics
of the national seed system. Seed companies tend to take advantage of PVP and patents when
it helps protect them against competitors gaining access to their materials. In Colombia and
Kenya, protection is commonly not sought for hybrids. On the other hand, where hybrids are
used in a competitive seed sector, such as India and China, they attract the majority of interest
for PVP.
IPR systems can also limit farmers’ seed saving and hence provide additional incentives for
private seed provision; although there are no instances of this as yet in the case study
countries, both Kenya and Colombia are considering modifications in their laws that could limit
seed saving. Authorities admit that it would be difficult (as well as politically sensitive) to
enforce such requirements with smallholders. In the flower industry, breeding firms’ control of
export markets is a very effective deterrent to on-farm multiplication of planting materials.
The question whether IPRs will create a shake-out in the industry at the cost of the smaller
companies can not yet be answered in the case study countries. Such increasing concentration
in the industry could be a result of the costs associated with protection, particularly for smaller
companies. The situation in India, with many small seed companies in operation, deserves
particular attention. In addition, restricted access to technology might become a bottleneck for
smaller companies.
4
IPRs and the public research sector
The establishment of PVP regimes comes at a time when national agricultural research
institutes (NARIs) are being asked to take much more responsibility for revenue generation.
Research administrators see the possibility of earning income by licensing public varieties and
other inventions but the degree to which such royalties can fulfill that promise depends on
farmer demand for public varieties, and on the ability of the institutions to manage and enforce
their rights. In the case study countries there is little evidence so far of actual revenue
generation from public breeding through IPRs, with the exception of institutions in China. The
expectations of NARI management are however quite high. Potential limitations, such as
competition with the emerging private sector for human resources and lack of freedom to
operate with third-party IPR are rarely taken into account in NARIs IP strategies.
A major problem with revenue generation from PVP is that the potential opportunities are
patchy. There is a danger that this heterogeneity may be translated into inequitable and
questionable public research resource allocations, further reducing research on orphan crops
and a smallholder farmer focus in favor of breeding objectives and methodologies directed at
large-scale commercial production. Mechanisms to share income with the individual researchers
and research groups are under development in some institutions. NARI’s capacity to market
their own IP and to negotiate access to third party IP is currently very limited.
International Agricultural Research Centers (IARCs) have policies on IP that permit IP protection
of inventions and materials if this will ensure that the subject materials and technologies will be
available to its target groups. Several IARCs have some staff with legal background assigned to
IP, plus access to a central advisory service. Resources are however limited and the increasing
pressure to show impact at the local level will stretch current capabilities.
The IP issue is central in the balancing of relationships between private seed companies and
public research. As IARCs focus on poverty alleviation and smallholder farmers, and NARIs
place increased emphasis on earning royalties from their germplasm with commercial
potential, IARCs have to rethink their relationships with NARIs. When IARCs can earn royalties
on their materials from domestic seed producers, they find themselves in the same position as
NARIs with regard to possibilities that opportunities for revenue generation may affect
priorities.
The growth of the private seed industry would seem to provide a more effective link between
public plant breeding and farmers’ fields. However, many public varieties do not attract the
interest of commercial seed enterprises, and this encourages many NARIs to organize their
own seed production and marketing. In addition, many NARIs still find themselves with
obligations to public seed production efforts. The establishment of IPR systems does little to
resolve these challenges for public plant breeding.
IPRs and seed users
Farmers’ seed systems are the main source of seed and new varieties for most crops in the
case study countries. IPRs may reduce the effectiveness of these systems by limiting the
saving, exchanging and selling of farmer-produced seed of protected varieties. There are no
5
instances to date of such restrictions in case study countries, but proposals for the
strengthening of some national PVP regulations introduce these issues.
In some countries the choice of varieties is currently expanding through the opening of the
seed sector, backed by economic policies and changes in seed regulations, and these trends
may be further supported by IPRs. When the commercial seed market expansion is very rapid,
IPRs can help control rogue traders (e.g. in India and China). However, restrictions on small
seed enterprises and semi-commercial operations may jeopardize the provision of seed of
some local varieties supplied commercially. In addition, the breeding of niche varieties and their
delivery by small seed companies may be threatened.
IPRs help flower growers secure access to a wide range of varieties in the case study countries,
but only when the establishment of IPRs contributes to a trustworthy business environment.
These IPRs are not necessarily operational in the production countries, and their main point of
application is in the main wholesale markets. Non-specific IPRs like trademark protection are an
additional tool for the flower breeders.
It is likely that NARIs’ focus on revenue generation, supported by the introduction of IPRs, may
divert their attention from the needs of marginal farmers. This may also affect the conduct of
participatory methods in breeding and variety selection.
Lessons
General
Many of the principal IPR strategies have only been in place a few years (or are still in the final
stages of approval). Because the incentives provided by any IPR regime usually interact with
various other factors (such as the liberalization of domestic agricultural markets, increased
globalization, and a reduction of public expenditure for agricultural research and seed
production) it is difficult to identify unambiguous conclusions regarding the possible
contributions and concerns that IPR regimes might present for plant breeding in developing
countries. However, the difficulty in identifying clear causality at this early stage does not mean
that IPRs are unimportant. On the contrary, IPR regimes may lead to significant changes in
plant breeding and seed production, and the subject warrants careful future study and
monitoring. Despite the preliminary nature of the report’s conclusions, the analysis points to a
number of significant lessons that need to be presented and disseminated to different
stakeholder groups.
There are several priorities for monitoring. These include assessing the extent to which IPR
regimes (and other policy changes) in particular countries influence the priorities and products
of public plant breeding, affect the structure and concentration of the domestic seed industry,
and determine the options available to smallholders. On a global level, it is particularly
important to monitor how IPRs are treated in multilateral and bilateral negotiations, and how
IPRs influence the role of MNCs in technology transfer in developing countries.
6
Political realities, limitations in administrative resources, and varied economic incentives in
most developing countries indicate that it is unrealistic to expect rapid establishment and
effective enforcement of the type of IPR regimes that are found in some industrialized
countries. In any case, IPR regimes should be part of developing countries’ development
pathways and consistent with their own priorities and capacities instead of being externally
imposed. Donors and others hoping to support these processes must be prepared for a long-
term and individualized development of national agricultural institutions.
IPR regimes must be developed at the national level, and much donor effort should support
individual processes of multi-stakeholder debate, design, and implementation. Support for
specifically-tailored IPR regimes is possible because of the range of options that are available
for providing appropriate incentives. On the other hand, respecting individual country priorities
and circumstances in the design of IPR regimes does not imply that opportunities for
harmonization and cooperation should be forgone. Mechanisms such as UPOV and PCT
facilitate the implementation of IPRs and reduce transaction costs, but the object of
harmonization is to provide economic benefits rather than to promote coalitions whose
standards are dictated by their strictest partners.
There should be particular attention in these discussions to issues related to international
public goods, in particular, the conduct of international agricultural research with regard to IPRs
in plant breeding and its relation with national research systems. A further issue that requires
attention at the international level is access to some of the basic tools and processes of
biotechnology. These may be protected in the North but the possible legal implications for the
new varieties and agricultural products derived from such technology are often uncertain for
the Southern scientists who use them.
The design of IPR instruments
Policymakers need to realize that IPRs are important not because countries may be required to
accede to the conditions of an international agreement but rather because they offer possible
mechanisms for stimulating research, enabling access to technology, and promoting enterprise
growth, all for the good of society. As such, they are merely one tool in a range of policies that
may be applied in specific contexts to further agricultural development (e.g. for supporting
public agricultural research, regulating seed production and marketing, providing an enabling
environment for agribusiness development, and empowering smallholders).
In most countries, the design and implementation of an IPR regime for plant breeding should be
seen as a long-term process, subject to monitoring and adjustment. The establishment of PVP
systems or patent offices is not necessarily sufficient to initiate widespread changes within the
seed industry. It often takes considerable time for the infrastructure to be established, for plant
breeders to become conversant with the system and for the courts to be able to handle
complaints.
Not only do IPRs in plant breeding have to be seen in the context of a wider range of agri-
cultural policies, but IPR regimes themselves must be carefully tailored to specific situations. It
is important that countries recognize that they have choices in designing legislation consistent
7
with the TRIPS Agreement and that there are still opportunities for debating and interpreting the
Agreement itself. The UPOV Conventions offer some important advantages for fulfilling the
requirements for a sui generis system but they do not exhaust the possibilities. Similarly, there
are several options with respect to tailoring national patent regimes for agricultural biotech-
nology. The key elements in IPR systems that can be adapted to the specific conditions of
individual national seed sectors include the specific terms of the farmers’ privilege and the
breeder’s exemption, the relationship between different IPRs (patents, PVP, trademarks, trade
secrets), the exhaustion of these different types of IPRs, and possible differential treatment of
particular crops.
Policy makers need to consider the resources required for the establishment or strengthening
of IPR systems. Institutional capacity to deal with the processing of applications and the
granting of rights is quite variable among countries. Cooperation and harmonization at the
implementation level can lower some of these costs. Fee rates that make an office self-
supporting should be welcome, but care must be taken to avoid unfairly taxing or discouraging
applicants, and especially smaller players.
The introduction of transgenic varieties to developing countries presents special challenges,
but does not necessarily imply the adoption of overly rigid IPR regimes. Limited experience to
date has shown that in the absence of IPRs for GM plant varieties and biotechnological
inventions, multinational companies have sometimes resorted to biosafety regulations in an
attempt to protect their technology. Biosafety organizations are however not appropriate for
such purposes, and policymakers need to create a clear division of responsibilities among
various agencies for regulating the use of GM varieties. In many cases, the enforcement of
existing seed laws can offer an appreciable improvement in limiting unauthorized sale of GM
seed. Further research is needed on the extent of IP protection necessary for stimulating the
development of GM varieties (where desired).
The implementation of IPR regimes
Policymakers must consider the institutional arrangements for PVP. A PVP authority may be
included as part of an existing seed regulatory agency or established as a separate
organization; the expense of setting up a separate entity must be balanced against possible
concentration of power or conflict of interest. In addition, there must be confidence that the
PVP authority is independent from the interests of (public) plant breeding organizations.
The challenges of adequate enforcement for IPRs in plant breeding should not be under-
estimated. There is very little legal capacity in most countries to support IPR regimes for plant
breeding. Implementation of IPR regimes must include attention to strengthening the court
system’s knowledge of IPRs in plant breeding, and the ambitions and scope of any IPR system
must be consistent with the capacities of the legal system, including contract enforcement.
For the establishment of PVP, there are a number of important parameters that require careful
consideration. These include: the designation of which species are to be covered; fee structures
(and possible subsidies or differentiation by crop); the nature of the breeder’s exemption for
use of protected varieties; and the implications for farmers’ abilities to save, exchange and sell
8
seed in accordance with local custom. For patents the choices are similar: which processes
and products are patentable and the scope of protection. For trademarks, the key question is
whether a variety name can be protected.
Because the establishment of IPR regimes is a gradual process, careful monitoring is required.
Policymakers need to assess whether particular IPR regimes are actually providing incentives
for seed system development consistent with national agricultural goals. This includes analyzing
if farmers have equitable access to an increasing diversity of crop varieties and if the structure
of the commercial seed market provides confidence for participants while at the same time
encouraging new entrants.
IPRs in international negotiations
IPRs for plant breeding are not a magic bullet that automatically stimulates or redirects agri-
cultural growth, but they can be an important part of a comprehensive agricultural development
strategy by helping support competitiveness and diversity in plant breeding and seed supply.
Given the value of well designed IPRs for agricultural development, policy makers should not
treat IPRs as a negotiable bargaining chip in trade negotiations or other international
discussions.
IPRs need to be considered in international agreements that tackle related issues, in particular
biodiversity and trade. National policies towards international agreements on biodiversity,
negotiated by representatives with environment (CBD) or agriculture (IT/PGRFA) background
need to be in line with the choices made in the field of IPR, which are primarily derived from
economic and trade policies. Countries must be clear about how IPRs relate to national
sovereignty over plant genetic resources and rights of indigenous communities (CBD), and
Farmers’ Rights (IT/PGRFA) in order to avoid conflicts of interpretation. This requires a capacity
in IPR issues with a much wider group of stakeholders than commonly envisaged. Art 9 of the
IT/PGRFA encourages open and informed national debates on issues related to genetic
resources, including IPRs.
For many countries, the possibility of being required to establish particularly restrictive IPRs for
plant breeding is more likely to be a product of bilateral trade agreements than to derive from
TRIPS obligations. National policymakers need to be prepared to enter such negotiations with a
full understanding of the implications of such ‘TRIPS-plus’ agreements for their national plant
breeding and seed systems. This requires close cooperation between national policy makers
with trade, agriculture and environment backgrounds to analyze the room for maneuver in
interpreting and modifying any such requirements imposed by potential trading partners.
In the only case study country with legislation that includes Farmers’ Rights (India), there is not
enough experience to assess the degree to which this offers useful incentives for the
development or promotion of farmer varieties. Further monitoring is required.
9
Agricultural policies
This study emphasizes that IPR regimes in plant breeding should provide incentives for
diversifying and strengthening plant breeding and seed production. This implies that policy-
makers cannot consider IPR regimes in isolation from wider issues of national agricultural
policy.
The role of NARIs is a subject of considerable debate in light of generally declining national
budgets and the growth of the private sector. Many NARIs are uncertain of whether to
complement or compete with the private sector and hence are confused about how to take
advantage of IPRs. Policymakers need to set clear guidelines in this area. NARIs need to
distinguish between using IPRs in order to facilitate the use and delivery of their varieties, and
seeing IPRs as a contributor to institute budgets through royalty income. Most NARIs seem to
have little knowledge about the costs of obtaining and enforcing IPRs, and there is little realistic
assessment within the NARI’s of their capacity to compete with the private sector in producing
commercially viable products (or in rewarding and maintaining staff for this task).
Most NARIs are too poorly organized to acquire access to complementary technology on
equitable terms or to assess their ‘freedom to operate’ with protected techniques and tools.
NARIs are no match for the legal and negotiation skills and resources of major technology
firms. NARIs need assistance to formulate IP policies and strengthen their legal and negotiation
capacities.
The strategies that NARIs adopt for using IPRs will depend on answers to fundamental questions
about the role of public sector agricultural research. For instance, different approaches to
relations with the private sector must be taken into account. In addition, the way that NARIs
manage IPRs has a significant bearing on the extent to which germplasm resources are shared
more widely. Policymakers must recognize that systems of international germplasm exchange
are being threatened by an almost exclusive focus on the possible financial advantages
accruing to the control of germplasm, without appreciating the importance of facilitated
access.
Policymakers also need to ensure the development of the private domestic breeding sector.
With few exceptions, domestic firms do not have the resources to invest in high technology and
must depend on MNCs and advanced research institutions that protect their inventions. There
are a few examples of incipient consortia of local seed companies formed to negotiate access
to biotechnology, and national policy should support such efforts.
There are still serious challenges with respect to delivering useful varieties, particularly of non-
hybrids and so-called ‘orphan crops’, to smallholders. The combination of limited and isolated
markets with widespread seed saving means that even fairly strong IPR regimes are unlikely to
elicit commercial interest in the near future. Policymakers must find ways of combining (largely)
public plant breeding, appropriate formal seed delivery (most likely private or cooperative), and
support to local seed diffusion mechanisms, to serve the farmers dependent on these crops.
10
There are no indications in the case study countries to date that PVP unduly contributes to a
concentration in the seed sector. Early experiences in biotechnology patents in the case study
countries are insufficient to establish any evidence for concentration, despite the fact that most
transgenics currently have one commercial source. However, it is important to support a
critical assessment of developments in the coming years. This is an area in which industrialized
countries could provide some useful guidance given their longer experience in monitoring and
regulating anti-competitive practices.
Finally, it is worth reiterating that the purpose of IPR regimes in agriculture is to provide
appropriate incentives for science and commerce to better serve the nation’s farmers. National
policies need to ensure that farmers are conversant with, and participate in, debates regarding
possible IPR regimes; that they are well-informed consumers who understand their rights in
agricultural input markets; and that their interests and priorities are reflected in the work of
public agricultural research.
11
Abbreviations
AATF African Agricultural Technology Foundation
AICCIP All India Coordinated Crop Improvement Programme
AFLP Amplified fragment length polymorphism
ARIPO African Regional Intellectual property Organization
ARPOV Argentinean Association for the Protection of Plant Varieties
BRI Biotechnology Research Institute (China)
Bt Bacillus thuringiensis
CAAS Chinese Academy of Agricultural Sciences
CAS Chinese Academy of Sciences
CBD Convention on Biological Diversity
CGIAR Consultative Group on International Agricultural Research
CIAT International Center for Tropical Agriculture (Cali, Colombia)
CICR Central Institute for Cotton Research (India)
CORPOICA Colombian Corporation for Agricultural Research
CRI Cotton Research Institute (China)
CSIR Council for Scientific and Industrial Research (India)
DNA Desoxyribonucleic acid
DUS Distinctness, uniformity, stability
EU European Union
FAO Food and Agriculture Organization of the United Nations
FEDEARROZ National Federation of Rice producers (Colombia)
FEDEPAPA Colombian Federation of Potato Producers
FLAR Latin American Fund for Irrigated Rice
FTO Freedom to operate
GAAS Guangdong Academy of Agricultural Sciences
GDP Gross Domestic Product
GI Geographic indication
GMO Genetically modified organism
GUS Beta-glucuronidase (selection marker)
HAAS Hunan Academy of Agricultural Sciences
HHRRC Hunan Hybrid Rice Research Center
IARC International Agricultural Research Center
ICA Colombian Institute for Agriculture and Livestock
ICAR Indian Centre for Agricultural Research
ICRISAT International Crops Research Institute for the Semi-Arid Tropics
(Hyderabad, India)
IGC Inter-Governmental Committee on Intellectual Property, Genetic Resources,
Traditional Knowledge and Folklore
IIHR Indian Institute for Horticultural Research
IP Intellectual property
IPR Intellectual property rights
IT PGRFA International Treaty for Plant Genetic Resources for Food and Agriculture
12
IVF Institute for Vegetables and Flowers (Beijing, China)
KARI Kenyan Agricultural Research Institute
KEPHIS Kenyan Plant Health Inspectorate
KIPI Kenyan Intellectual property Institute
KSC Kenya Seed Company
MNC Multinational corporation
MOST Ministry of Science and Technology (China)
MTA Material transfer agreement
MV Modern variety
NARI National agricultural research institute (generic)
NARO National Agricultural Research Organization (Uganda)
NARS National Agricultural Research System
NBPGR National Bureau for Plant Genetic Resources (India)
NBRI National Botanical Research Institute (India)
NGO Non-governmental organization
NPT National Performance Trials (Kenya)
NPT2 Neomycin Phosphotransferase II (selection marker)
OAPI African Intellectual property Organization
OECD Organization for Economic Cooperation and Development
OPV Open pollinated variety (as opposed to hybrid – in this report used for
both normally out-crossing and self fertilizing crops)
PCT Patent Cooperation Treaty
PBR Plant breeder’s rights
PVP Plant variety protection
PVPA Plant Variety Protection Act (USA)
RAI Royalty Administration International (Co. Ltd)
RAPD Random amplified polymorphic DNA
RFLP Restriction fragment length polymorphism
PBR Plant breeder’s rights
PCR Polymerase chain reaction
RMB Yuan Remnimbi (currency in China)
RR Roundup Ready
RRI Rice Research Institute (China)
SIPO State Intellectual Property Office (China)
SNP Single nucleotide polymorphism
SSR Simple sequence repeats
TRIPS (agreement on) Trade Related Aspects of Intellectual Property Rights
UPOV International Union for the Protection of New Varieties of Plants
URUPOV Uruguayan Association for Plant Breeders Protection
USA United States of America
VCU Value for cultivation and use
V-GURT Genetic use restriction technology operating at variety level
WTO World Trade Organization
13
Acknowledgement
The authors are grateful to the World Bank for providing the financial support under grant
# 8001817 and the input of its specialists D. Byerlee and E. Pehu. We are very much
indebted to the large number of people that agreed to share their knowledge and views with
us in the course of the study. Without the willing contribution of these knowledgeable
informants in developing and industrialized countries it would have been impossible to
conduct this study.
Finally, our gratitude is extended to our own organizations that allowed us to work on this
study: the Indian Council of Agricultural Research (New Delhi), Chinese Academy of Sciences
(Beijing), the Biotechnology Trust Africa, the Agricultural Productivity Enhancement
Programme (Kampala), the CGIAR Advisory Service (The Hague and Rome), the Overseas
Development Institute (London) and Wageningen University & Research Centre.
14
15
1. Introduction
1.1 Background
In the past few decades the subject of intellectual property rights (IPRs) has moved from a
relatively obscure corner of legal practice to occupy center stage in debates about globalization,
economic development and the goal of poverty elimination. The growing prominence of IPRs is
related to technological advances that are responsible for an increasing rate of scientific
creativity in all fields and an expansion in the capacities and incentives for protecting such
innovation. At the same time, the movement toward globalized trading regimes has brought
pressure for the harmonization of IPR systems. These advances in technology and trade have
affected the position of IPRs for a wide range of endeavors and have particularly important
implications for developing countries. This study is concerned with one example, the
strengthening of IPRs in the plant breeding industry and its effect on agriculture in developing
countries.
The past few years have witnessed a significant worldwide strengthening of IPRs in plant
breeding. This strengthening is the product of a growth in the number of countries that grant
such rights, an expansion of the types of inventions that can be protected, and a broadening of
the scope of protection offered by extant IPR systems. Although a system of IPRs has been
internationally sanctioned for more than a century, since the Paris Convention of 1883, IPRs
have not been an issue in the plant breeding and seed sector in most developing countries until
recently. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS 1993)
of the World Trade Organization (WTO) dramatically changed the importance of IPRs in
developing countries by requiring all WTO members to introduce a minimum level of protection
for intellectual property in their national laws. Article 27.3(b) of the TRIPS Agreement requires
WTO members to provide for the protection of plant varieties through patents, an effective
sui generis system, or a combination thereof. Subsequent to the TRIPS Agreement in 1993,
the USA and the EU have negotiated bilateral or multilateral trade agreements that reduce
some of the flexibility of TRIPS, e.g. an agreement between the USA and Chile prescribes that
the latter introduce patentability of plant varieties in addition to the TRIPS-compliant breeder’s
rights system operational in that country. In addition, issues of data exclusivity that are
common in the pharmaceutical sector are beginning to appear in the agricultural field,
potentially strengthening the rights of IPR holders in the breeding and seed sectors.
The nature and scope of IPRs for genetic resources (including plant varieties) are also part of
discussions in the frameworks of the Convention on Biological Diversity and the International
Treaty on Plant Genetic Resources for Food and Agriculture, which entered into force in 1993
and 2004, respectively. There are debates about the contradictions between IPRs and Farmers’
Rights (Art. 9 of the IT/PGRFA), the concept of farmers’ privilege in the UPOV system in relation
to Farmers’ Rights, and the issue of linking protection and the sharing of benefits derived from
the use of genetic resources.
The importance of IPRs for plant breeding and the seed industry has been further enhanced by
the development of plant biotechnology, which not only engendered patents for the genes,
16
tools and processes that are an increasingly common part of modern plant breeding, but also
spurred the introduction of utility patents for plant varieties.
Most developing country members of the WTO have either enacted IPR laws or are about to do
so, as prescribed by the TRIPS Agreement and/or the so-called ‘TRIPS-plus’ requirements of
bilateral or multilateral trade agreements. The new laws include provisions governing ownership
and use of crop varieties. While IPR regimes for agricultural inventions have been widely used in
industrialized countries, most developing countries are in the early stages of implementation
and/or enforcement of IPRs related to crop varieties. The application of IPRs for plant breeding
in developing countries raises a number of important issues, including smallholder access to
technology, the role of public agricultural research, the growth of the domestic private seed
sector, the status of farmer-developed varieties, and the growing North-South technology divide
that restricts access to plant germplasm and research tools. Since access to seed and new
crop varieties is fundamental for agricultural development and rural welfare it is important to
understand the impact of these legal systems on the breeding and seed sectors in developing
countries.
The role of IPRs in agriculture is an exceptionally controversial subject. The debates involve
complex arguments from a range of interest groups. The outcomes of particular IPR regimes
will vary according to local economic, institutional, and agricultural circumstances and may
change as these determining conditions evolve. It is unrealistic to believe that there are any
simple, uniform or permanent formulas that will provide ready-made solutions. It is important to
recall that IPR regimes are rights and privileges that are granted in order to contribute to the
public good. It is therefore the responsibility of policymakers to define the particular societal
goals that IPRs in agriculture are meant to address and to develop appropriate legislation. It is
important that policymakers have access to as much experience as possible for guiding the
design and implementation of IP instruments appropriate to their goals.
The present study was initiated in the belief that an empirical analysis of the conduct and
performance of IPR regimes in plant breeding in developing countries would be particularly
useful. It is hoped that the information provided in this study, although only the product of initial
country experiences, will help serve that purpose.
1.2 Objectives
The principal objective of this study is to describe and evaluate initial experiences with
strengthened IPRs in developing country agriculture. Such an assessment is necessary in order
to provide policy guidelines and ‘good practice’ lessons for implementing IPRs in ways that
enhance their impacts on productivity and equity.
The preliminary nature of developing countries’ experience with IPRs in agriculture precludes
most possibilities for quantitative evaluation of impacts, and in many cases possible effects of
IPRs are confounded with other developments (such as domestic policy changes and the
liberalization of international trade). The study thus concentrates on qualitative evaluation of
initial experiences and analyzes the efficiency with which IPRs are implemented at the
institutional level (including interactions with other regulatory mechanisms), the effectiveness of
17
the new IPR regimes in providing added incentives for the breeding and seed sectors (both
public and private), and the equity of outcomes for producers (with particular attention to
smallholders).
The study thus involves a wide range of issues, including:
a. implementation of IPR regimes
• how changes in regulations and regulatory agencies have been implemented or are
proposed
• support for IPR institutions and their technical and financial sustainability
• the capacity of these institutions to provide competent and transparent regulation
• the enforcement capacity of IPR regimes
b. changes in public and private plant breeding
• the access of public and private breeders to germplasm
• the access of public and private plant breeders to breeding technologies
• the investments in breeding by crop, technology, type of client
• types and numbers of seed enterprises
• seed production and sales
c. changes for farmers
• the type and number of varieties available to farmers
• the affordability of the seed
• the choices and flexibility available in the seed markets
• farmers’ interactions with formal plant breeding and seed providers
1.3 Methodology
1.3.1 The case study approach
The wide variation in plant breeding capacities and seed industries among developing countries
demands a case study approach for this research. The range of types of IPRs in force or
contemplated, as well as the great variation in local institutions and farming systems, adds to
the justification for a careful examination of a relatively few cases in terms of countries and
crops. The choice of examples is constrained, however, by the fact that many countries have
yet to establish an IPR regime for plant varieties. The chances of assessing even potential
impacts are greatly enhanced in countries that have at least a minimum of experience with
IPRs, implying a careful selection of sample countries for the study. In addition, the
establishment of IPRs for plant varieties affects various institutions and organizations in
developing countries and has important implications for the way that agricultural technology is
developed, delivered and utilized. It is therefore necessary to collect data from many different
stakeholders.
The study was carried out with the realization that there are many analyses and manifestos
regarding the roles of IPRs in general and for agriculture in particular. The wide divisions of
opinion suggest that there are no easy answers to the questions at hand and that quantitative
18
comparison, necessarily involving a limited number of inputs and outputs, would not yield
convincing answers. In addition the study recognized that quantitative evidence would be hard
to find, and in many cases confounded with the effects of other developments. Therefore, a
wide range of evidence had to be sought in the small number of developing countries that have
started implementing various IPR regimes in agriculture. In addition, given the necessity of
pursuing crop-specific information amidst the diversity of issues within the study countries,
certain crops were selected for particular attention.
The diversity of issues also required input by specialists with a range of backgrounds. The
team consisted of seed systems specialists with knowledge of breeding, plant biotechnology
and enterprise development; agricultural economists and social scientists with experience in
seed and biotechnology issues; and specialists in environmental law, IPRs in biotechnology and
the management of biotechnology projects. The team included a case study researcher for
each of the five countries and a central team of four researchers based in Europe.
1.3.2 Choice of case study countries
Five case study countries were chosen to represent major segments of developing country
agriculture, geographical spread, and level of experience with IPRs:
– China is among the most important agricultural economies in the world and has
experience in implementing most relevant IPR systems over the past several years. It has a
substantial domestic capacity in plant breeding and biotechnology and is a market that
attracts investors and inventors from all over the world. China also has a significant area
planted to genetically modified crops (GMOs).
– Colombia is one of the Latin American countries with the most experience with IPRs in the
breeding and seed sectors. It has a diverse agriculture, ranging from subsistence farming
to several important agricultural exports, and an emerging use of GMOs.
– India has a very well developed agricultural research capacity in breeding and
biotechnology, and its large market attracts considerable interest from abroad. India’s
approach to agricultural IPRs has resulted in recently enacted legislation that has a number
of unique characteristics and is the product of prolonged and wide ranging political debate.
– Kenya is the sub-Saharan African country with the longest experience with IPRs in the
breeding and seed sector after South Africa. It has a very diverse agriculture ranging from
subsistence to export sectors and a relatively open policy towards biotechnology.
– Uganda does not yet have an operational IPR system in the breeding and seed sector, but
it has a diversifying commercial agricultural sector. It may be considered a representative
of the large number of developing countries that are still in the process of establishing an
IPR regime.
1.3.3 Choice of crops within case study countries
Although the study looked at the effects of agricultural IPR regimes in general, it was decided
that special attention should be given to a few focus crops in each country. These crops were
chosen to provide as much opportunity for inter-country comparison as possible and to
19
represent a wide range of commodities that would illustrate important issues in terms of
market orientation, public and private research and seed sector commitment, and biotech-
nology investment. The focus crops for the study include food staples important for
subsistence and local market (rice, maize, and beans), cash crops (cotton and vegetables) and
specialty export crops (flowers). These crops were given priority attention in discussions with
research, the seed industry, and farmers, but relevant issues in other crops were also pursued.
China Colombia India Kenya Uganda
Rice ? ? ?
Maize (?) ? (?) ? ?
Beans (?) ? ?
Cotton ? (?) ? (?)
Vegetables ? ?
Flowers ? ? ?
? = primary focus (?) = secondary focus
1.3.4 Process
A five-day organizational meeting for all nine team members was held in Wageningen in
October 2003. The meeting established a common framework for the analysis of the study
questions and, based on the framework, developed a set of comprehensive guidelines for semi-
structured interviews. The initial meeting also included the participation of two World Bank staff,
an IPR specialist from a multinational seed company, a member of an NGO working on bio-
diversity and seed access, and an economist studying agricultural patents in the US.
In the implementation phase of the study, a large number of people from the public, private and
civil sectors were interviewed by different members of the team. Most interviews in the case
study countries were conducted by the scientists in the respective countries. All countries were
visited one or more times by the Europe-based members of the team to participate in interviews
and analyze initial data. In addition, managers and IP specialists of multinational seed companies
were interviewed during an IP seminar of the International Seed Federation in Berlin, May 2004.
The analysis of the secondary and interview data collected during the study focused on identi-
fying major themes and outcomes, identifying commonalities (where they existed) and
attempting to explain the context of differences in response and outcome. The initial analysis
and conclusions were discussed at the individual country level with the relevant researchers,
and this draft report is the subject of collective writing, editing and debate engaging the entire
team.
The analysis of the secondary and interview data collected during the study focused on
identifying major themes and outcomes, identifying commonalities (where they existed) and
attempting to explain the context of differences in response and outcome. The initial analysis
and conclusions were discussed at the individual country level with the relevant researchers.
20
A draft of this report has been discussed in Washington with World Bank staff and specialists in
agricultural IPRs. This report has been the subject of collective writing, editing and debate
engaging the entire team
1.3.5 Data collection
The study team collected data related to IPR-institutions, plant breeding and seed production
organizations and farm-level outcomes.
Methodology
The country case studies are based on a combination of secondary data analysis and extensive
interviews.
Available documentation on the seed and agricultural input sector and the policy framework
concerning breeding, biotechnology and IPRs was compiled. Secondary data and previous
studies were also used to provide information about farmer seed management practices, thus
limiting the need for farmer surveys. Interviews were undertaken with relevant staff of IP
institutions; public research and seed production managers; and management of private seed
companies and biotechnology firms (see Annex I). A small number of interviews were conducted
by telephone. Given the complexity of the issues, the interviews were based on detailed guide-
lines rather than on written questionnaires (see Annex II). A concerted attempt was made to
develop uniform and comparable data sets, but the importance of pursuing specificity and
detail combined with the variable experiences and interests of the interviewees meant that it
was common to concentrate on particular aspects of the guidelines during an interview.
Interviews were conducted by the scientists in the case study countries; the European team
joined them in a number of visits: Louwaars in China, (northern) India, Kenya, Uganda; Tripp in
Colombia, (southern) India, Kenya, Uganda; and Eaton in China.
IPR institutions
The country case studies describe the background of particular IPR regimes and the nature and
scope of protection that is provided. Attention is paid to costs, technical and human capacities,
transparency and performance. An IPR regime is worth little until it can be efficiently
implemented and enforced, and institutional capacities must be assessed in their governance
environment. We sought the experiences and perceptions of the relevant staff of IPR institutions
and compared these to evidence from other stakeholders on their understanding of, and
confidence in, the IPR regime.
Plant breeding and seed supply sector
The case studies evaluate the experience to date with IPR regimes in public and private organi-
zations involved in seed provision, plant breeding and biotechnology. The study attempts to
relate changes in the IPR regime to changes in investments and output for plant breeding and
biotechnology programs. The study relates the introduction of new IPR regimes to changes in
research policies, trends in variety release, and the relative focus on hybrids or open-pollinated
varieties (OPVs). For seed enterprises, the study examines how specific aspects of IPR regimes
(such as scope of protection and enforcement options) play a role in determining investment
and protection decisions. In addition, the relation between public and private organizations,
21
including international research organizations, is examined. In the absence of relevant data
that would have allowed a before-after statistical analysis, the study assesses the relative
contribution of IPRs in light of concurrent changes such as market developments and
modifications in other legal frameworks.
Impacts at the farm level
The ultimate concern of the assessment of the experience with IPRs is to understand the
impact on the different types of crop producers, with specific emphasis on small-scale farmers
and the challenge of poverty alleviation. However, where the recent legal developments often
may not have visible and quantifiable impact on the breeding and seed provision sectors,
analysis of effects at the farm level is necessarily speculative. Large-scale farmer surveys have
thus not been undertaken, but interviews were conducted with representatives of farmer organi-
zations and NGOs. Attention was also given to any substantial examples of on-farm variety
development and local seed programs.
Challenges of the methodology
This methodology can provide valuable information, but it has some significant limitations as
well. Any study of laws, regulations or policies must bear in mind that the written and
implemented forms may differ significantly; it is necessary to describe both sides of the
picture. In addition, policies may not be well articulated or uniformly shared, and some aspects
of a legal framework may be more effectively implemented than others, leading to variation in
understanding and experiences. The necessary reliance on interviews means that much of the
interpretation is based on stakeholder perceptions, and these may be varied or mistaken (or at
times even deliberately misleading). These biases are inevitable and it was the task of the
researchers to identify and counteract them wherever possible, by understanding the context
of the interview and by ‘triangulating’ sources of information. In addition, some observations
and information were provided with the understanding that they were confidential; these
requests were respected but they further limit the scope of the analysis. Even though attempts
have been made to ensure as uniform a data collection strategy as possible, cultural
differences among countries and interviewees, and differences between researchers, inevitably
create some heterogeneity in data collection. As with many other studies, the quantitative data
are as good as their sources; we have attempted to approach the most reliable sources, but
can make no guarantees for the precision of national statistics.
Some of the data reflect a level of uncertainty among stakeholders and even contradictions in
interpretations and perceptions; such results are seen as an important indicator of the nature
of the impact of some IPR regimes. Finally, attributing impacts is particularly tricky in this field,
since the introduction of IPRs has commonly gone hand in hand with changes in other policies
that are directed to reducing public expenditures, commercialization or privatization of public
organizations, promotion of the private sector or changes in development policies.
The research and the analysis try to understand the performance and outcomes of new IPRs in
this broader policy and institutional context.
22
1.4 Structure of this report
This report starts with an overview of the basic issues in the application of IPRs to the plant
breeding industry (Section 2). The case study countries are introduced, including a description
of the breeding and seed sectors and the conventional regulatory frameworks in each country
(Section 3) and an analysis of the current status of IP regimes with regard to enactment,
management and enforcement (Section 4). The next sections analyze the impact of the recent
developments in the field of IPRs on the private (Section 5) and public (Section 6) sectors.
(The impacts of IPRs on biotechnology research, conventional plant breeding, seed production,
and marketing are closely interrelated for both private and public activities, justifying this
division by sector rather than by activity.) Section 7 discusses the impact on seed users, and
we draw our conclusions in Section 8.
23
2. IPRs and the plant breeding industry
2.1 Introduction
2.1.1 Rationale for intellectual property rights
IPRs are legal instruments that allow an inventor or author to exclude others from commercial-
izing an innovation for a specified period of time. IPRs provide a temporary monopoly, subject
to specific conditions, that governs the commercial exploitation of an invention, at the end of
which the subject matter is released into the public domain. The most common examples of
IPRs are utility patents, copyrights, and trademarks, but there are other important special
cases, such as the legal protection of industrial designs and plant varieties. This study focuses
on the IPR mechanisms designed to provide plant variety protection (PVP) and on the applica-
tions of the patent system to plant breeding and biotechnology.
The primary justification for the establishment of IPRs is economic. By offering a type of
monopoly for the commercial exploitation of an innovation, IPRs tend to provide an incentive
for creative endeavor by inventors and authors. An IPR system can also offer additional, more
widespread, economic benefits such as reducing transaction costs and clarifying ownership.
Nelson & Mazzoleni (1997) review the patent system and posit four theories to justify its
establishment. In addition to providing individual motivation for useful inventions, the patent
system also offers a systematic means of disclosing information related to inventions, fosters
the development of useful products based on inventions, and provides an orderly means for
stimulating derivative inventions.
There is also a moral dimension to IPRs; the Universal Declaration of Human Rights (Art. 27)
includes ‘the right to the protection of the moral and material interests resulting from any
scientific, literary or artistic production of which he is the author’. It is important to acknowledge
that IPRs include important qualifications; for instance, they are granted for a limited period of
time and they are subject to exceptions such as compulsory licensing and competition law
regimes (Maurer & Scotchmer, 2004) in the public interest. As the Commission on Intellectual
Property Rights (2002) pointed out, ‘an IP right is best viewed as one of the means by which
nations and societies can help to promote the fulfillment of human economic and social rights’.
IPRs may thus be seen as a means to increase a society’s welfare. Legal rights provide
incentives for inventors and authors to invest in their work and to produce useful products or
insights for the benefit of society. The patent system reflects this expectation of utility through
‘industrial application’ or ‘use’ requirements for new inventions; society does not intend to grant
patent rights on something that it won’t benefit from. For instance, these utilitarian goals are
expressed in the progress clause of the US Constitution. ‘Congress has the power to promote
the progress of science and useful arts by securing for limited times to authors and inventors
the exclusive right to their respective writings and discoveries.’ This also illustrates that in
order to increase welfare, society may need to put limitations on the rights that are granted.
In this sense, IPRs can be considered a contract between the inventor or author and society
(Hardon, 2004) in which rights are granted under particular conditions (e.g. the obligation to
24
publish the invention for the benefit of the further advancement of science) and society can
control misuse of the monopoly in the market (e.g. through compulsory licenses).
The establishment of an IPR regime requires careful consideration of the balance of economic
interests. If an IPR regime is too weak it will not provide sufficient incentives for invention or for
the orderly development of an industry. On the other hand, poorly conceived IPR systems may
assign excessive privileges, restrict access to knowledge, or limit enterprise growth and
diversification, and society at large may not benefit from the granting of the rights. Such
considerations of benefits and costs are evident in much recent debate about the patent
system. Davis (2004) suggests that the current patent system is characterized by increasing
social costs and decreasing social benefits and Andersen (2004) specifies a number of the
costs associated with the patent system, including the growing legal costs, the diversion of
investment into protectable rather than productive areas, and the inefficient monopolies
resulting from broad patents and threats of patent infringement. Patents are pursued not only
for the direct commercialization of a product but also as strategies to block or hinder compet-
itors’ endeavors or to acquire bargaining chips that may help gain access to another inventor’s
patents (Thumm, 2001; Reitzig, 2004). While such business strategies may not preclude social
benefit from a protection system, the balance can easily become skewed. Many observers are
concerned about the effects of the widespread promulgation of strong protection schemes that
have been developed in countries such as the US with the rationale that they will stimulate
strong commercial sectors elsewhere.
The economic outcomes affected by an IPR regime represent the interests of a wide variety of
stakeholders. In many cases there is no simple way of balancing these interests, and compro-
mises are required. The arena in which such compromises are sought is political, and ‘the
design of an IPR system at any one time is based on a particular constellation of political power’
(Andersen, 2004). As a result, IPR systems evolve over time and the analysis of IPR regimes
must therefore be situated within an understanding of changing national and international
political systems and priorities.
2.1.2 National and international aspects of IPRs
IPRs are territorial, i.e. they are based on national law and operate within the borders of the
country that grants the rights. National legislators thus have to consider the rights of their
citizens and the potential economic benefits in order to increase national welfare. Since
countries and their industries differ widely, the optimum contribution to increased welfare may
be achieved at different levels of protection. National policies on food security and public health
have resulted in conflicts that have led to the establishment of exemptions in several countries
(at certain points in time) for what are considered essential fields such as agriculture, food,
pharmaceuticals, and chemicals. The national interest has also been used to justify provisions
in national laws restricting or discouraging application for rights by foreign nationals.
Historically, informed governments have been able to structure IPR regimes to promote
domestic industry. The US did not recognize foreign copyrights until late in the nineteenth
century and Swiss and Dutch companies benefited when their respective governments delayed
25
the implementation of patents until the early 20
th
century. The recent development of East
Asian economies such as Taiwan took place with relatively little attention to IPRs (Wade, 1990).
Despite the wide range of historical trajectories for national IPR regimes, there have been long-
standing attempts to achieve greater standardization and harmonization. International harmoni-
zation of protection systems has been a key issue since 1883 when the Paris Convention
initiated a streamlining of the patent system in member countries. A number of mechanisms to
promote standardization have been put in place. The Paris Convention forms the basis for
international efforts to achieve mutual recognition of national IP practice in a group of member
countries. From the Paris Convention, the Patent Cooperation Treaty (PCT) was developed, a
worldwide system for simplified multiple filing of patent applications, with 124 member states
in December 2004. The PCT forms an important tool for facilitating the application process for
the filing of utility patents in member countries and facilitates the joint technical examination of
applications. Similarly, regional patent organizations in Africa (ARIPO, mainly in southern/
eastern Africa and OAPI, in West and Central Africa) take much of the burden of processing
patent applications from the offices of the member countries. Standardization at the
implementation level through PCT, the European Patent Office (EPO) or ARIPO leaves the
national integrity of IPRs intact, because the final responsibility for granting or rejecting the
application remains with the national patent offices. OAPI is the only multinational system in
which one application can be filed and result in a patent that is automatically effective in all
member states. The most important development for harmonized IPR systems was provided in
1993 by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This
agreement mandates the application of a range of minimum requirements for the protection of
intellectual property by all member states of the World Trade Organization.
Powerful arguments for harmonization include the belief that right holders are more willing to
transfer their technologies to other countries if their rights are respected in the same way as in
their own country, and the fact that transaction costs can be reduced when procedures are
harmonized. Lesser (1997b) strongly supports this view, while Correa & Musungu (2002) argue
that IPRs should remain a tool of national policy, and that further substantive harmonization of
patent law is not in the best interest of developing countries. Smith et al. (2004) cite changes
in the distribution of costs and benefits among countries and support the relaxation of some
international IPR rules. Scotchmer (2004) claims that harmonization will generally strengthen
protection. The Commission on IPRs (2002) states that developing countries should identify a
strategy for dealing with the risk that WIPO harmonization will lead to standards that do not
take their interests into account. (The controversy is particularly intense with respect to the
application of the TRIPS Agreement to developing countries. Does the application of the agree-
ment increase the welfare of these countries? Is there enough flexibility in the agreement’s
minimum requirements to allow for meaningful adaptation to the needs of developing countries?
With respect to the role of the patent system in food security in Africa, Taylor & Crayford (2003)
propose mechanisms to improve access to patented technologies and to increase flexibility in
the implementation of international agreements on IPRs. Follow-up discussions in the WTO in
Doha tabled such questions with special reference to patenting of pharmaceutical products,
triggered by limited availability of affordable HIV drugs in developing countries (McCalman,
2002).
26
Brazil and Argentina filed a formal request to the World Intellectual Property Organization
(WIPO)
1
to increase the role of the development agenda in its work.
The structuring of national law and international agreements must also recognize that the
establishment of IPRs involves a complex chain of institutional development that implies decades
of adaptation and elaboration (Chang, 2002). For instance, the exclusive rights provided by
IPRs are commonly implemented through contracts (usually called licenses in this context) that
transfer (all or part of) the rights to other parties for use in prescribed ways and markets. In
these cases the effectiveness of IPRs can then also depend on the traditions and implementation
of contract legislation in a particular country. This is only one example of the dependence of
effective IPR regimes on institutional capacities for devising, managing and enforcing appro-
priate legislation. The 2002 report of the Commission on Intellectual Property Rights places
particular emphasis on the development of these institutional capacities, as well as emphasizing
the underutilization of the flexibility that is included in TRIPS implementation at the national level.
2.1.3 Different property rights systems: applications to plant breeding
The emergence and development of effective IPR regimes are conditioned not only by specific
political, economic and institutional parameters but also by the type of innovations that are the
target of protection. This has resulted in a family of intellectual property rights systems for
different types of products. Copyright for literary, scientific and artistic works (including soft-
ware and its components) provides long-term protection of such works without formal scrutiny
(they are automatically protected once published) and usually includes a simple registration
system that assists in resolving possible claims. Industrial property rights relate to patents for
inventions, industrial designs, trademarks, geographical indications and trade secrets, all with
different regimes for registration, scope and duration of protection. Since these standard
industrial property rights were not considered sufficiently adapted to particular sectors, so
called ‘sui generis’ systems have been developed for the protection of plant varieties (plant
breeder’s rights), integrated computer circuits, and databases. In addition, technological
advance not only develops further types of innovation that are candidates for protection, but
technological change can alter the possibilities for protecting (and copying) innovations, as
illustrated by the controversies over the growth of the internet and its relations to copyright law
(Lessig, 2004), and the introduction of ‘business methods’ patents where software applications
can be protected by utility patent rights. IPR systems are not static. Society and inventors have
to review regularly whether certain IP systems are still optimal when facing such new develop-
ments and challenges that result from interpretation of IP laws by the courts.
Plant varieties present several important challenges for an IPR system. First, they are biological
products that are easily reproduced and whose very use entails multiplication. Second, the users
of the technology (and potential ‘copiers’) are millions of individual farms whose compliance
with any protection regime is difficult and expensive to monitor. Third, the agricultural sector
involves cultural values and food security and, in many countries, affects the livelihoods of the
1
WIPO is the UN organization that administers many of the international treaties and conventions that deal with IPRs, such as the
Paris Convention, the PCT, the Madrid Protocol on Trademarks, the Bern Convention dealing with copyrights, among others.
27
rural poor, making the imposition of any controls a sensitive political issue. Finally, the
development of new plant varieties has always relied to some extent on public research, partly
in response to the traditional public good nature of crop germplasm, and the application of
IPRs to the products of a publicly funded endeavor can be problematic.
The advent of modern biotechnology has brought additional challenges for the application of
IPRs in plant breeding. Not only is there the possibility to protect individual varieties and genes,
but the majority of the tools and processes of genetic transformation are patented. (The term
of protection of several early but still important biotechnology patents expires shortly.) In addi-
tion, many of the techniques of biotechnology that are becoming an increasingly important part
of conventional plant breeding are also protected, raising implications for the ownership of any
variety resulting from such research. This is also related to concerns that patents can actually
inhibit follow-on research, leading to a so-called ‘anti-commons’ in biotechnological research
(Heller & Eisenberg, 1998). Finally, because biotechnology allows a much more precise under-
standing of the genetic makeup of any crop variety, it opens the door to sophisticated screening
and reverse engineering techniques, providing new possibilities for utilizing or reproducing
protected varieties and leading to pressures for even more stringent protection.
There is no doubt that plant breeding research and seed provision are vital industries that need
to be fostered and stimulated. IPR regimes for plant breeding must play a central role in agri-
cultural development, but the challenge is to strike the right balance between incentives for
innovation and access to productive resources.
Despite the complexities of the plant breeding industry, the following is a list of possible
functions that could be expected from an IPR regime in plant breeding, recognizing that
controversy exists regarding the extent to which each of these functions is desirable:
In the interest of the rights holder:
i. to prevent farmers from saving seed of the protected variety, sharing the seed with
neighbors, or engaging in large-scale informal sale of the seed (‘brown bagging’);
ii. to prevent competing commercial seed producers from multiplying and marketing
the protected variety without a license;
iii. to prevent competing seed producers from using protected product names or logos;
iv. to prevent competing plant breeders from using a protected variety in the development
of a new variety.
In the interest of the public:
i. to put material in the public domain when rights have expired;
ii. to stimulate improvements and innovations that increase the choices available to
farmers.
Specific IPR systems are relevant to the breeding and seed industries. In this report we
concentrate on plant breeder’s rights and utility patents. The scope of protection may include
methodologies used in plant breeding, the physical products that this industry provides (seeds
and vegetative planting materials), and at times the disposition of the harvested agricultural
product. In addition, the trademark system is important to the seed industry for the establish-
ment of brands with commercial value, and trade secrets are particularly important for the seed
28
industry where breeders wish to avoid disclosure of the parents of hybrid varieties. There are
also a number of mechanisms used by the plant breeding industry, independent of any IPR
regime, that provide some level of protection, and this study examines their utilization.
2.2 The Plant Breeding Industry
2.2.1 Seed systems
IPRs in plant breeding may have effects on different components of the industry, or what may
be called the seed chain. This chain consists basically of three components: research and plant
breeding; seed multiplication; and marketing and distribution. These components have devel-
oped over time as specialized operations that are executed in various organizational patterns.
In industrialized countries, seed multiplication, marketing and distribution are almost solely
commercial operations. The situation in plant breeding is somewhat more complex. Commercial
enterprises dominate the market for high value seed crops like maize, cotton, soybean, vege-
tables and grasses, and companies that initially earned most of their revenue from seed multi-
plication and marketing now invest heavily in plant breeding in order to maintain their market
position. For lower value seed crops, such as small grains and legumes, public institutions such
as universities and government research institutes have an important position in plant breeding,
although the products are multiplied and marketed by private firms or co-operatives. Basic
research in plant breeding, such as the development of selection methods or research on the
genetic control of important characteristics, used to be the task of public institutions. However,
with the application of biotechnology to the field of plant breeding, and the associated opportu-
nities for patenting, private industry has been very active in these areas since the early 1980s.
This has been accompanied by a significant consolidation of the conventional seed companies
into a much smaller number of large multinational enterprises. For these companies, research
is not only a service unit to maintain the firm’s position in the seed market, but is a profit center
in its own right. In some cases such companies may detach themselves from the seed market,
leaving operations in seed production and marketing to specialized companies that license the
technology.
In most developing countries, the breeding industry has very different origins. Scientific plant
breeding has largely been the responsibility of the public sector, often stimulated by the results
of international research programs of the CGIAR centers. Plant breeding has been seen
primarily as a contributor to rural development and national food security and thus a public
responsibility. Similarly, seed production and distribution have been seen as vehicles for
technology transfer rather than a commercial operation. More recently, some countries have
stimulated commercial seed supply through privatization of public seed programs, encouraging
the development of domestic seed enterprises, and opening up their seed markets to foreign
investors. Developing countries currently show a wide range of public and private
responsibilities in the seed sector, although basic research and breeding for most crops
remains a public responsibility while a variety of public, parastatal and private enterprises cater
for seed production and marketing.
29
In addition to the formal seed system, there is a significant farmers’ seed system that uses
traditional methods of selection within and among varieties, on-farm seed multiplication, and
informal diffusion of seed from farmer to farmer (Almekinders & Louwaars, 1999). These
farmers’ seed systems still provide the vast majority of all crop seeds used by farmers in most
countries. Despite the fact that these farmers’ seed systems are built on traditional methods
and processes, they often involve modern varieties, some of which may have IPRs associated
with them.
2.2.2 Seed policies and regulations
IPRs are not the only type of legislation relevant to the seed industry. Both public and private
seed systems are subject to national seed legislation. Seed laws commonly include a variety
approval system and a seed certification and quality control system, managed by various
bodies and committees. A variety approval (or release) system identifies varieties that have
value for farmers and establishes a system by which the varieties are named and described.
The certification system introduces a strict generation control for seed production through
which commercial seed can only be produced from breeder’s seed (‘pre-basic seed’) through a
prescribed number of generations. The breeder is in most cases designated as the maintainer
of the variety and the sole source of this seed. Both variety release and seed certification
systems can be compulsory or voluntary. The conditions established by seed laws and policy
greatly influence opportunities for private enterprise, and seed policy change and regulatory
reform are the subjects of continuing discussion in many developing countries (Louwaars,
2002; Tripp,1997).
More recently, biosafety regulations have been developed to guide the introduction of gene-
tically modified crops (Traynor & Komen, 2002). Similar to seed laws, these regulations are an
important part of the regulatory environment of the plant breeding industry, determining what
type of transgenic varieties may be available and offering conditions for their multiplication and
sale.
International agreements on biodiversity provide the basis for additional national regulations
that affect plant breeding, especially through their positions on access to genetic resources,
Farmers’ Rights and benefit sharing. The major agreements are the Convention on Biological
Diversity (1993), covering all biodiversity and based on bilateral contracts; and the International
Treaty on Plant Genetic Resources for Food and Agriculture, entering into force in 2004 and
providing for a multilateral regime of access and benefit sharing, for a number of crops. Both
CBD and IT PGRFA have attempted to avoid conflict with national IPR systems. There are
however pressures from these bodies to directly connect to IPR systems, e.g. by including a
declaration of origin in IPR applications. In addition, MTAs that are currently in operation based
on these agreements may limit the opportunities to protect materials. Very few countries
currently have enacted and implemented national laws in support of these international treaties,
therefore, the present study did not focus specifically on the implications of these treaties.
Similarly the interplay between traditional knowledge, genetic resources and traditional cultural
expressions (folklore), on the one hand, and IPRs, on the other, is the subject of international
30
forums, especially the WIPO Intergovernmental Committee on Intellectual Property and Genetic
Resources, Traditional Knowledge and Folklore (the ‘IGC’) (seehttp://www.wipo.int/tk/en/igc/index.html). There are currently no substantial national regula-
tory frameworks that address this interaction, and it is not a subject of this report. However,
the outcomes of these debates, such as the currently debated declaration (or certificate) of
origin in IPR procedures, may have significant effects on the implementation of IPRs for the
breeding industry.
2.3 The protection of plants and varieties
2.3.1 Historical perspective
Higher organisms have been exempted from consideration by patent law until very recently,
and plant varieties have traditionally been subject to rather limited and very specific types of
IPRs. There were ethical, political, legal, biological and technical reasons for this treatment.
Ethical arguments include the notion that life is sacrosanct and that life forms should not be
subject to commercial control. In addition, there have been political arguments regarding the
concern that food security should not be the subject of commercial monopolies.
Legal and technical arguments arise from problems with the application of the patent system to
plants and varieties. First, the industrial use criterion had to be expanded to include agriculture
as well (as specifically included in the latest versions of the Paris Convention). Secondly, the
novelty criterion of the patent system was difficult to maintain where the natural diversity of a
plant variety is insufficiently known to the examiner. Third, the inherent genetic diversity within a
plant variety and the inevitable changes between generations create problems with the
description of the ‘invention’. Fourth, there have been arguments about whether standard
breeding methods constitute an inventive step. Fifth, the written description requirement that the
invention needs to be disclosed in such a way to allow someone ‘skilled in the art’ to reproduce
it is impossible in plant breeding; even if someone has access to the same parents and the
same selection strategies it is impossible to breed the same variety. This problem has been
solved for the patenting of micro organisms by the Budapest Treaty that allows a deposit of the
protected organism as a mechanism for overcoming the enablement requirement. Other
problems in the application of the patent system include the possibility that the patented
subject matter may replicate itself (even without human intervention), and customs that have
allowed the free movement of plant varieties within and among communities throughout the
world.
Nevertheless, there have been arguments for establishing some mechanism to reward the
creativity inherent in new crop varieties almost from the beginning of modern plant breeding.
The emerging plant breeding and seed industry in the USA and Europe created pressure to
develop specially designed protection systems (Van Wijk & Eaton, 2003). The first so called
‘sui generis’ system was the Plant Patent Act of 1930 in the US which applied only to vegeta-
tively propagated fruit and ornamental species, which does not preclude the use of the
protected varieties as parental material for sexual propagation (Henson-Apollonio, 2003). This
avoided the genetic diversity problem of sexually-propagated species and avoided some food
31
security issues by excluding edible tubers. In the years that followed, more generic protection
systems for plant varieties developed in Europe, beginning with methods such as protected
seals for seed from the original breeder (Germany) and monetary rewards (prizes) to breeders
issued by farmers’ organizations (Netherlands). The legal systems for the protection of plant
varieties that were enacted in Europe from the 1940s onward were harmonized through the
Convention for the Protection of New Varieties of Plants (Paris, 1961), which also established
UPOV (Union for the Protection of New Varieties of Plants) to support and expand the new
system. The UPOV system provides protocols for assessing and describing the unique
characteristics of a new variety, ensuring that it is distinct, uniform and stable (DUS).
The UPOV system was revised 3 times, in 1972, 1978 and 1991, gradually strengthening the
rights of the breeder. The rights defined under UPOV are known as plant variety protection
(PVP). Currently, 55 countries have ratified a UPOV Convention; 28 follow the 1991 Convention,
25 the 1978 Convention, and 2 still operate under older versions. An expansion of the UPOV
system took place in the early 1990s following the TRIPS agreement. PVP provides a protection
system that is rooted in the agricultural sector and has some key differences with the patent
system. Nevertheless, UPOV provides important harmonization functions. UPOV member
countries may have quite different laws, based on different Conventions and interpretations, but
almost all members use the same technical guidelines for DUS testing. This greatly facilitates
the sharing of information among countries and reduces the transaction costs. Some countries,
such as Switzerland, fully rely on foreign DUS reports, and thus don’t need to develop
specialized expertise and facilities.
The emergence of biotechnology has provided a second source of pressure for modifying the
patent system to include the protection of living organisms. In the US, court decisions caused
a gradual expansion of patentability (Landes & Posner, 2003). In the field of biotechnology this
started with the Diamond vs. Chakrabarty case of 1980 which confirmed the patentability of a
(genetically altered) micro-organism (Eisenberg, 1996). In 1985 sexually-propagated plant
varieties were ruled patentable (Hibberd case), opening the door to a flood of applications for
utility patents on plant varieties in the US. This was followed by the first patents on an animal
(an oyster, in 1987) and on a mammal (Harvard’s ‘onco-mouse’, in 1988). More recently, DNA
sequences where a utility has been described have been considered patentable matter, first in
the USA and subsequently in the majority of industrialized countries.
Since IPRs are national in scope, developments in the USA have few immediate implications for
other states operating a patent system, but they are indicative of the type of pressure facing
the plant breeding industry. There is currently a large diversity in patent legislation on plants
and varieties; only a few countries allow patent protection for plant varieties, some exclude
DNA patents, and some have special provisions in the patent system to limit the scope of
protection when patents are provided affecting living organisms. The European Directive on
the protection of biotechnological inventions includes a breeder’s exemption and a farmers’
privilege when the protection (e.g. on a gene) extends to a plant variety. However, bilateral
agreements between the U.S. or EU and countries in the South often require that the partner
country impose a level of patent protection that is comparable to that of the industrialized
trading partner (Correa , 2004; Henson-Apollonio, 2004).
32
There are serious concerns that patent practices in the USA and Europe have contributed
significantly to the oligopolization of the global seed industry, leaving four major international
seed companies controlling the majority of the market and relegating other seed companies in
industrialized countries to play only marginal roles.
2.3.2 Comparison of plant utility patents and PVP
The UPOV-based national laws for the protection of plant varieties (PVP) differ significantly from
the patent system with regard to the conditions for protection (distinctness, homogeneity,
stability, novelty and nomenclature: DUS-NN). DUS standards are adapted to the mode of
reproduction of the variety and relate to the average of the existing varieties. For example,
cross-fertilizing crops have a wide tolerance applied for uniformity, while requirements are very
strict for vegetatively propagated crops. An applicant variety is considered new under PVP
when it has not been offered for sale (anywhere in the world). There is furthermore no require-
ment for utility, such as a positive result of testing for the Value for Cultivation and Use (VCU).
Furthermore, the two systems differ with respect to two major exemptions to the protection:
the breeder’s exemption allowing breeders to freely use any protected variety for further breed-
ing; and a farmers’ privilege, providing farmers the right to reproduce seed of a protected
variety without the consent of the breeder. Table 1 summarizes the main differences.
The two exemptions are particularly crucial for understanding the differences in PVP between
the various UPOV Conventions, on the one hand, and the differences between PVP and plant
utility patents, on the other. Also the breeder’s rights laws of countries that are not members of
UPOV, such as India, Indonesia and African countries that base their laws on the model Law of
the African Union, address these basic exemptions as well. These two exemptions address the
two ‘lines of protection’ that IPRs offer the industry: protection against competing breeders
(breeder’s exemption) and protection against the customers (farmers’ privilege).
Breeder’s or research exemption
The Breeder’s Exemption is one of the cornerstones of plant breeder’s rights systems. It has
not changed in the subsequent UPOV Conventions. Even in the 1991 Convention everyone is
allowed to freely use any protected variety for further breeding, under the condition that the
results of certain breeding methods that produce so-called ‘essentially derived varieties’ (EDVs)
may fall within the rights of the breeder of the original variety. This is meant to reduce ‘cosmetic
breeding’ and reward conventional breeders even when their variety is slightly altered through
mutation breeding, repeated backcrossing or genetic transformation.
The Breeder’s Exemption is also a matter of discussion within the breeding industry itself.
Some larger companies would like to introduce the concept of ‘genetic distance’ in the EDV-
definition but other companies fear that this could lead to opportunities for strategic protection
behavior, monopolizing certain gene pools and effectively restricting the breeder’s exemption.
A discussion on the exemption itself among seed company representatives arose in a recent
seminar organized by the International Seed Federation (ISF, 2004). A call by one participant
for restricting the breeder’s exemption in a future UPOV Convention was countered by a strong
defense by another company of the need to balance access to parental materials and the level
of protection through PVP, which was later published on the company’s website.
33
There are major differences between the breeder’s exemption under PVP and the so-called
research exemption in utility patent systems. There is much debate on the research exemption
in the patent systems of several countries. Academic institutions have long been exempted
from patent claims for their research and education purposes based on the assumption that
such research had no commercial intent (Eaton & Tongeren, 2004). In several countries such
research exemptions are specifically included in the law; in others such as the USA it is an
interpretation of clauses on private and non-commercial use provisions. The situation is under
discussion as the result of a number of court rulings. Maley v. Duke in the USA seems to result
in a restriction of opportunities to use patented products or processes for research, and
indicates that scientists need a research license to use them. The research exemption would
only apply to research on the invention, and not researching with the invention (Eisenberg,
1996). Research licenses are commonly granted without the payment of royalties, but specify
the rights of the patent holder in case the research leads to something useful. Such interpreta-
tion would mean that a PVP-protected variety that is available for further breeding cannot be
used when it contains a patented gene. In the European Union, this conflict between patents
and PVP is solved by providing a specific breeder’s exemption and a farmers’ privilege in the
patent system when the scope of the patent would extend to a plant variety (Kiewiet, 2001).
In order to avoid these controversies there was an explicit ban in UPOV 1978 on ‘double
protection’. Many countries still maintain that position, but more and more countries offer
possibilities to obtain both patent and PVP protection on certain materials. This is one of the
key demands by the current trade negotiations between the USA and a number of Latin
American countries.
Farmers’ privilege or Farmers’ Rights
The right of farmers to save seed from their harvests to plant the following season is one of
the most contentious aspects of IPRs in plant breeding. Early UPOV Conventions assumed that
farmers were permitted to save and reuse seed of protected varieties. (UPOV refers to this as
‘farmers’ privilege’, although many believe it is more correctly described as a farmer’s right;
this report maintains the term privilege, to distinguish it from broader concepts of Farmers’
Rights, e.g. in the IT PGRFA.) In some countries the farmer’s privilege was interpreted rather
broadly. Perhaps the most notable case was the US, where farmers were allowed not only to
save but also to sell seed of protected varieties to their neighbors as long as the sales
accounted for less than half of total farm income. This led to extensive informal seed sale
(‘brown bagging’) and significantly reduced revenues for seed companies. The issue was not
resolved until an amendment to the US Plant Variety Protection Act (PVPA) and a Supreme
Court decision in 1995 that effectively prohibits farmers from selling seed of protected
varieties. The farmers’ privilege issue was addressed by UPOV in the 1991 Convention, which
allowed member states to specify crops for which the reuse of farm-saved seed in the same
farm would be permitted. For other crops, any transfer of seed (through sale, barter or gift)
between farmers is prohibited, and on-farm seed saving may be subject to restrictions or the
payment of royalties. Utility patents on plant varieties in the USA are even more rigid with
respect to the farmer’s privilege; a patented variety cannot be saved for subsequent use as
seed on-farm or in trade or exchange with other farmers.
34
These interpretations of the farmers’ privilege lead to major discussions in many developing
countries, many of which have chosen to use the provisions of the 1978 Convention when
introducing breeder’s rights. Making the transfer of seed from farmer to farmer illegal is widely
considered incompatible with traditions of seed handling and sharing among farmers. In addi-
tion, such a restriction is considered incompatible with ongoing discussions in the framework of
the International Undertaking (and the International Treaty on Plant Genetic Resources for Food
and Agriculture) about the concept of Farmers’ Rights which was to include provisions on the
right to save, use, exchange and sell farm-saved seed/planting material. However, Article 9.3
of the IT PGRFA made this provision ‘subject to national law and as appropriate’. Some countries,
notably India, explicitly include Farmers’ Rights in their national law.
Box 1. Saving of seed on-farm
One of the distinctions between plant breeder’s rights systems and utility patents is the right
of farmers to save (and in some cases exchange and sell on a non-commercial basis) seed
of protected varieties. Discussions about IPRs in the breeding industry consider this a key
issue in adapting IPR systems to the needs of the agricultural sector. Even within a single
country, the requirements and conditions of different agricultural systems are not uniform,
and it is possible to consider legal options that address this variability.
The Netherlands identified the need to restrict farm-saving of seed and planting materials for
some highly commercial crops, notably the production of vegetatively propagated flowers
like carnation, rose, and chrysanthemum. New varieties of these species can be propagated
by farmers very quickly to cover large parts of commercial farms, leading to inadequate
royalties for breeders and inadequate incentives for innovation in a sector that is very
important for Dutch agriculture. Dutch law that is compliant with UPOV 1978 includes
special provisions to make farm-level propagation of protected varieties of such species
without the consent of the breeder illegal. This arrangement leaves the farmers’ privilege
untouched in areas where they are considered useful and necessary (e.g. cereals).
Developing countries could use this example in designing the appropriate levels of
protection for different types of commodities which are included in various types of market
systems and have different implications for the development of domestic plant breeding
capacities.
35
2.4 The protection of plant biotechnology
2.4.1 Relevance of biotechnology in the plant breeding industry in
developing countries
Plant biotechnology emerged in the 1980s following the first transformation experiments
involving bacteria. Together with the developments in information technology, this has resulted
in a scientific revolution. The understanding of the function of various types of DNA, combined
with the ability to ‘cut and paste’ them in the genome of any living organism, has transformed
the science of plant breeding. Initially, the technology was used in a rather crude form which
led to herbicide resistant varieties, or using known functions of bacterial DNA, such as Bt. In
the case study countries that allow GMOs in the field, only Bt crops were found in commercial
production. All experiences in this report on the effects of patents in the plant breeding industry
are thus derived from one type of transgenic in one major crop (cotton).
However, a wide range of transgenics are ‘in the pipeline’ in laboratories in industrialized
countries, but also in the South. Atanassov (et al., 2004) identify 209 transformation events
2
in
developing countries, with over 50% of that total in China, South Africa, Indonesia, Argentina
and India. The pipeline includes events in many different crops and includes functions far beyond
the narrow scope of herbicide tolerance and insect resistance. Additional characteristics
include virus resistance, agronomic properties, fungal resistance and product quality.
2.4.2 Patents in biotechnology
The vast majority of the innovations in plant biotechnology are subject to patents, although the
scope of coverage varies considerably by country and technology. Patents are used to protect
biotechnology laboratory tools and reagents, genes and gene sequences, and processes for
transformation, regeneration and diagnosis. A genetically modified organism commonly
includes an inserted construct that contains a functional gene, a selection marker, a promoter
and other sequences that may all be patented (by different inventors). It is inserted using a
transformation method that is patented (possibly including improvements on an original method
that may itself be patented) and using equipment and other materials for which a research
exemption may be required. A freedom to operate analysis on the commercialization of a
product (variety) derived from such research may be required from a wide variety of patent
holders (as long as the patents are valid in the country where the variety or its products will be
used).Having a patent on a ‘new’ gene is thus no guarantee of freedom to operate when other
technologies or processes must be used to make the gene functional in a plant.
The patent regime for biotechnology affects not only the development of transgenic varieties
but also has important implications for the use of biotechnology in conventional plant breeding.
Various diagnostic tools and equipment used for such increasingly important activities as
marker- assisted selection may be protected. Even though a new crop variety may not contain
2
A transformation event is defined as the stable transformation (incorporation of foreign DNA into a living plant cell) undertaken
by a single institute, thereby providing a unique crop and trait combination.
36
any novel or protected genetic material, if its development relied on the use of protected tools
or processes it may be subject to license or restriction by a range of patent holders.
Box 2. Biotechnology processes and products
1. Biotechnology processes
Transformation methods: particle gun; Agrobacterium mediated transformation; other
bacteria mediated transformation. (Almost all transformations currently in use in
developing countries are derived from the first two.)
Marker systems: RAPDS, RFLP, AFLP, SSRs, SNPs are methods to analyze the structure
of DNA and the presence of particular characteristics in a given individual. Patented
molecular marker systems may be used under a research license.
Regeneration methods: these include medium, temperature, light etc. regimes to create
callus and plant (organs) out of cell suspensions. Many of these are published; methods
to achieve higher efficiency or to regenerate specific species are often kept secret,
since the use of such methods cannot be detected in the product.
Protected biotechnological processes are commonly provided under a research license.
Such license may include provisions that regulate ownership and revenue sharing in
case a commercial product is developed from the research. The holder of the rights on
the process does not have IP-rights on the product, but a certain level of co-ownership,
based on a contract.
2. Genes and sequences
Genes can be patented in many countries when their structure and their function can be
described by the inventor. Gene patents can be the basis of very wide claims, covering
many species and many uses.
Genes: functional genes include those for various types of Bt, herbicide tolerance, etc.
Selection markers: these include GUS and NPT2 and are used to check whether a cell is
based on a successful transformation event.
Molecular markers: these are often small sequences (DNA, RNA, protein) that can be
used to identify valuable characteristics, or to analyze the structure of a particular
genome.
Promoters: 32S (close to expiry of the patent)
Start/end sequences
GMO variety: in the USA GM varieties and groups of varieties can be patented.
3. Tools relevant to plant biotechnology e.g.
Biotechnology equipment: sequencers, microsatellite analyzers, PCR-machines and their
components. Similar to process patents, the inventor of a certain tool cannot claim IP
on a variety, but can have rights, based on a contract with the scientist using the
equipment.
Reagents: In most cases the inventor will obtain revenue through adding a mark-up on
the price of reagents that are necessary to use the equipment.
37
However, many patented technologies are not protected in most developing countries.
Binenbaum et al. (2003) indicate that since most commodities in developing countries may be
traded in regional markets but rarely reach the North and hence there may be considerable
opportunities for the use of protected technology without fear of immediate sanction.
The discussion about the possible monopoly effects of biotechnology patenting has triggered
an initiative that is similar to that for open-source software, which is attempting to counteract
the proprietary approach of large software companies. The idea in the agricultural biotechnol-
ogy sector is that new (preferably enabling) technologies such as transformation systems and
selection markers are developed in the public domain. These are then patented and licensed to
everybody under the condition that any improvements or products developed from them are
licensed out under the same conditions (see www.cambia.org). It is not clear yet whether this
process will yield enough open-source technologies to enable biotechnologists to develop
biotechnology-based plant varieties without major strings attached.
Another trend is the widening use of humanitarian licenses. A number of universities in the USA
have taken the initiative to reduce the number of exclusive licenses on their patented inventions
in order to retain control over opportunities to grant licenses on a preferential basis to users
that work for the benefit of the poor. The Generation Challenge Program of the CGIAR
(www.genesforcrops.org) has developed a format in its consortium agreement that will result in
an automatic humanitarian license to all users for the benefit of the poor of IP developed in the
course of the program’s activities (Barry, in press).
4. A transformation event
A successful transformation commonly involves a gene construct (gene, promoter,
selection marker and some additional bits of DNA) that has been inserted in a plant
through a particular process. The number of repetitions and the place(s) of the
construct in the genome determine the effectiveness of the event. Selection from large
numbers of transformants will lead to a new modified organism that can be the basis of
new varieties through conventional breeding, which may result in a range of new
varieties.
38
Table 1. Comparison of four IP systems for plant varieties.
Criteria UPOV ‘78 UPOV ‘91 Plant Patent (USA) Utility Patent (USA)
Protection Varieties of
species/genera as
listed
Varieties of all genera
and species
Asexually
reproduced plants
Sexually reproduced
plants
Exclusion Non-listed species - Uncultivated and tuber-
propagated plants
First generation
hybrids, uncultivated
plants
Requirements Novelty (in trade)
Distinctness
Uniformity
Stability
Novelty (in trade)
Distinctness
Uniformity
Stability
Novelty
Distinctness
Stability
Novelty (in invention)
Utility
Non-obviousness
Industrial application
Disclosure Description Description Description, including
photographs and
drawings
Enabling disclosure
Best mode disclosure
Deposit of novel
material
Claims Plant variety (listed
species)
Plant variety (all
species)
Plant variety
(vegetatively
reproduced, except
edible tubers)
Any invention: plant
(characteristic in any
variety), Plant variety,
genes, vectors,
enabling technologies,
equipment for
producing plants, etc.
Rights Prevent others from
producing/
commercializing
propagating materials
Prevent others from
producing/
commercializing
planting materials +
under certain
conditions: harvested
materials
Prevent others from
asexually reproducing,
selling, or using
claimed plant variety
Prevent others from
making, using, selling,
the claimed invention;
prevent others from
selling a component of
the invention
Exemptions For further breeding
For private and non-
commercial use
For further breeding,
restricted in case of
EDV
Farmers’ privilege:
permitted, taking into
account the legitimate
interests of breeder
Private and non-
commercial use
Experimental purposes
Research exemption Research exemption
Sexual reproduction of
the claimed variety
Products derived from
the variety
Duration 15 – 20 years
(depending on crop)
20 – 25 years
(depending on crop)
20 years from filing
or 17 years from
granting (prior to
8 June 1995)
20 years from filing or
17 years from granting
(prior to 8 June 1995)
Double protection No Yes No Yes
Source: adapted from Helfer (2002), Krattiger (2004) and Van Wijk et al. (2003).
39
2.5 Empirical research on the impact of protection of
plant varieties and plants
An IPR system is created to provide incentives for innovations based on the disclosure of their
methods in exchange for temporary exclusive production and marketing rights. A considerable
body of research has attempted to establish the nature and extent of the incentives created by
IPRs. A full review of this literature is beyond the scope of the current study (see Lesser, 1997a,
Srinivasan, 2001; Eaton, 2002), but it is generally acknowledged that the situation is quite
complex and that IPRs can fulfill a variety of roles in strategies to protect IP and to defend
market share (Granstrand, 1999). In the area of plant breeding, attention has concentrated on
the effects of the introduction of PVP in a number of countries, including the U.S., the U.K.,
Canada, Australia and Spain. Taken together these studies provide little conclusive evidence of
the effects of PVP in industrialized countries, and the results are thus open to various interpre-
tations.
Studies in the U.S. have examined the trends in varietal release together with questionnaire-
based surveys of breeders. Taken as a whole, these studies (Butler,1996; Butler & Marion,
1985; Perrin, Kunnings & Ihnen, 1983; Frey, 1996; Kalton, Richardson & Frey, 1989; Venner,
1997) indicate that private sector breeding in a number of non-hybrid crops has increased
following the PVP Act of 1970, but in the case of most crops, it would appear that PVP has
played only a moderate role in stimulating this activity. For example, in the case of soybeans,
considerable increases in breeding activity may be more attributable to growing demand for
the crop. In the case of wheat, Alston & Venner (2002) demonstrate that private sector invest-
ments have remained relatively static, while those of the public sector have actually increased
over 1970-1993.
Studies in other countries have also found inconclusive effects of PVP. Penna (1994) found a
statistically significant increase in the development of new varieties of some horticultural
varieties in the UK but not for others. In Canada, a survey of breeders reported some increased
breeding activity in horticultural crops, but less in grains or oilseeds, following the introduction
of PVP (Canada Food Inspection Agency, 2001). For Spain, Diez (2002) found a strong corre-
lation between the number of PVP certificates granted per crop species and the availability of
protection. It is difficult to draw firm conclusions on the effect of PVP in such studies because
of the alternative explanations for the correlations seen. For example, in the case of Canada,
impacts of PVP are difficult to separate from the effects of the U.S.-Canada Free Trade
Agreement.
One study has examined the effect of PVP in a developing country. Jaffe & Van Wijk (1995)
surveyed plant breeding companies in Argentina about their investments over the period
1986-1992. They concluded that PVP may have prevented domestic companies from reducing
or eliminating some breeding programs, and may have helped in reactivating soybean research.
Furthermore, MNCs operating in Argentina indicated that their investment decisions were
influenced primarily by other factors.
The evidence is often interpreted as an indication of the methodological difficulties of deter-
mining the impact of PVP. Even where there is longer-term data allowing a comparison of
40
before-and-after, there is no counterfactual situation. Attribution of observed changes to PVP is
still complicated by the longer-term nature of plant breeding as well as various other concurrent
or subsequent developments. Some have interpreted this evidence (Alston and Venner, 2002)
as an indication of PVP being a relatively weak form of protection, but this does not necessarily
imply that further increasing the scope of IPR protection will yield greater impact.
There are no attempts to document the effect of patenting on plant breeding but studies of the
introduction of GM crops have yielded other interesting information concerning the appropria-
bility of benefits by the breeder. GM crops are usually protected through patents (on the plant
and/or one or more genetic constructs ) which are implemented using methods such as user
agreements, supplier contracts and sales tied to agrochemical products. A growing number of
studies (e.g. Falck-Zepeda, Traxler & Nelson 2000; Pray et al., 2001 for Bt cotton in China) on
the welfare impacts of GM crops estimate the proportion of benefits accruing to three separate
groups: the breeding company, the farmers and the consumer (representing the rest of the
supply chain). Seed suppliers, such as Monsanto or Syngenta, are generally able to obtain
much higher margins from farmers for GM seeds, although the largest share of benefits is
typically enjoyed by adopting farmers. But whether making patent protection available for such
plants in developing countries has been an important factor in the decision to develop such
varieties has not been well studied. It is important to remember that private sector development
of GM crops was driven by the U.S. market situation where patent protection was introduced in
1980 but where PVP protection is relatively weak compared to PVP in e.g. Europe. This
complicates any eventual inference of the relative incentive effects of patents versus PVP.
Another growing body of literature examines the relationship between IPR regimes and some
measure of innovation, using a cross-section of national data and controlling for other factors
such as market size. One recent example is a study by Kanwar & Evenson (2003) who found a
significant correlation between an index of IPR strength and economy-wide expenditures on
research and development (R&D). A few studies have looked at the specific situation in the
plant breeding sector. Pardey, Koo & Nottenburg (2003) found a positive relationship between
IPR strength and the number of PBR applications for a sample of 42 countries over the period
1997-2001. Using a cross-section of 13 countries over various time periods in the 1990s,
Srinivasan, Shankar & Holloway (2002) found a positive correlation between IPR strength and
the number of PVP certificates granted. They also find a similar relationship for the number of
PVP certificates granted to foreigners, although the share of certificates granted to foreigners
is negatively correlated with IPR strength and market size. Pray, Courtmanche & Govindasamy
(2002) examined the issue of GM crops, revealing a positive relationship between field trials of
GM crops and both the availability of PVP protection and the frequency of biotechnology
patents for a cross-section of 58 countries over 1987-2000. A purely economic correlation is
calculated by Lesser (2002) between the strength of IPRs in developing countries and the level
of foreign direct investment.
While useful for quantifying the extent of correlation between IPRs and innovation, such studies
need to be interpreted carefully and do not provide very strong evidence that increasing the
scope of IPRs in any given country will lead to a corresponding increase in breeding activities.
The econometric methods and data used do not permit an evaluation of alternative explana-
tions for the correlation between IPRs and innovation. For example, in the studies above, IPR
41
indices could be capturing more generally the development of the legal system and the
enforceability of contracts. Furthermore, the samples in these studies are often dominated by
industrialized (OECD) countries, meaning that the relevance for developing countries of the
observed correlation is not necessarily apparent. At the same time, cross-section econometric
analysis over countries can be useful for identifying certain correlations and helping to define
the need for more research on causal relationships using case studies.
There has been less empirical research conducted on the effects of patenting in agricultural
biotechnology and little is known of the consequences. The risk that patenting of key
technologies would stifle more applied research because of the cost and inconvenience of
negotiating licenses was raised by Heller and Eisenberg (1998) in the context of biomedical
research, with the coining of the term, ‘anti-commons.’ Mazzoleni and Nelson (1998) also
indicated similar effects from broad patents in the biotechnology sector in general, referring to
the U.S. context, while Falcon & Fowler (2002) warn of the consequences in the case of
agricultural technology and genetic resources, in particular the patenting of gene sequences
and their functions. Oldham (2004) illustrates such concerns with reference to a recent patent
application concerning the regulation of flowering in rice, with additional claims potentially
covering maize, banana and wheat. Little systematic research has been undertaken in this area
with efforts concentrating on trends in the use of the U.S. patent system by the agricultural
biotechnology sector (e.g. Buccola & Xia, 2004). Concerns of an ‘anti-commons’ have clearly
been the motivation of researchers involved in establishing new clearing-house or ‘open-source’
initiatives, such as CAMBIA (mentioned in previous section) as well as efforts to establish widely
applicable humanitarian license clauses in research consortia directed at the poor, such as the
Generation Challenge Program. But the OECD (2004) points out that, aside from individual
examples, ‘there is no widespread breakdown in the licensing of biotechnology patents’.
Nonetheless, the OECD recognizes that most changes to the patent system have been
implemented without hard evidence or economic analysis, and thus continued vigilance is
necessary to ensure that access to inventions does not become excessively restricted.
2.6 Additional strategies to protect the interest of the
breeder and seed producer
2.6.1 Non-IPR protection mechanisms
The plant breeding industry does not rely solely on formal IPR systems to protect its varieties
and limit their use. The alternatives include biological processes, conventional seed law,
contract law, biosafety regulations, brands and trademarks, and secrecy.
2.6.2 Biological protection
The oldest, and still one of the most important, mechanisms for protecting a plant variety is
hybridization. Hybrids are the products of the cross between two (or more) inbred lines. The
discovery of the phenomenon of hybrid vigor opened new possibilities for producing high
yielding varieties and offered two distinct advantages for variety protection. The seed of hybrid
42
origin will lose some yield potential and other valuable characteristics (such as uniformity) in
subsequent generations, which drastically reduces farmers’ incentives for seed saving. In
addition, competing seed companies require access to the inbreds if they are to successfully
duplicate the hybrid variety (although IPRs may be needed to fully protect the parent lines from
use by competitors). The first commercial use of hybrid technology was in maize in the 1930s.
Hybrids have since been developed in most cross-fertilizing crops such as sunflower, canola,
cotton, cabbage, and high-value horticultural crops for which labor-intensive hand pollination is
economic. More recently, hybrid technologies have been developed and commercialized for
rice (China) and pearl millet (India). Hybrids overcome much of the uncertainty in the conven-
tional seed market, where factors such as the weather determine the degree of on-farm seed
saving and hence the demand for fresh seed. The use of hybrids provides a steady demand for
seed. Hybrid seed is more expensive to produce but if the varieties thus developed are superior
in homogeneity and yield potential, substantially higher seed prices can be charged.
A more recent example of biological protection mechanisms is the introduction of V-GURTs
(Genetic Use Restriction Technologies, operating at the variety level) (Louwaars et al., 2002).
Such technologies lead to sterile seed when reproduced without special treatments and would
ensure that commercial seed could not be saved by farmers for subsequent planting and make
it difficult for another breeder to use the protected germplasm. There are several such
mechanisms that are the subject of research based on genetic transformation. None of these
is yet commercially viable, but the possibility of a ‘terminator technology’ has led to widespread
debate in the popular press.
2.6.3 Seed laws
In the absence of IPRs, seed laws can be very useful for the breeding industry. For instance,
when seed certification is compulsory for all seed, the breeder can control the market to a
large extent by limiting access to breeders’ seed. Any unauthorized multiplication will not be
acceptable to the certification agency. This means, for instance, that a public research
organization can establish an exclusive contract with a seed company for the production of its
varieties, even in the absence of IPRs. Similarly, a private breeder may set a high seed price
for breeder’s seed or can develop a contract with more specific conditions concerning royalties
and market segmentation, supported by seed certification regulations. Variety release
regulations may also be used to offer some type of protection, for instance in limiting the
extent to which a company can market an essentially derived version of a released variety
(including the unauthorized use of a transgene) or prohibiting the sale of a released variety
under another name.
2.6.4 Contracts
Various types of contracts can be very effective in providing legally enforceable agreements
that restrict the use of a breeder’s variety and offer substitutes or complements to IPRs. Such
contracts are only useful if the provider of the genetic materials has exclusive access (secrecy),
rights (IPRs), or can offer other benefits for the other contracting party. Some contracts are
43
aimed primarily at preventing seed saving and multiplication while others are aimed at
protecting the germplasm from being used in competitors’ breeding programs.
One type of contract that is becoming increasingly prevalent, at least in the US seed market,
is the grower contract. This is a simple agreement (similar to that found on software) that
restricts the farmer from using or disposing of any part of the harvest as seed.
If it is possible to control the market for the harvested product, then another type of contract
can be enforced. The breeder can oblige a grower to use the plant variety in certain ways and
can impose restrictions on seed saving or multiplication. One important example is the cut
flower industry, where the output can only be sold in a limited number of wholesale markets in
Europe. If a flower variety is protected in the country where the major market is located,
growers in other countries may have to sign contracts limiting multiplication or unauthorized
sale, or risk being denied further access to the major market. The contract can be effective
even if the flower-growing country has no IPR system. A similar phenomenon is beginning to
appear in several Latin American countries growing Monsanto’s ‘Roundup-Ready’ soybeans and
Bt cotton. In the latter case, control over ginneries provides a convenient point of enforcement;
for soybeans there are indications that some grower associations appear ready to accept the
collection of a royalty at the point of sale (e.g. the grain depot) in order to ensure unimpeded
access to the technology.
Material transfer agreements (MTAs) are another form of contract that may be used in the plant
breeding industry. These may be established between genebanks or other public institutions
and private breeders, or may be used to govern transactions among private or public breeders.
The MTAs can establish exclusive access, stipulate the type of benefit sharing in the case of
commercialization, and generally prohibit legal protection by the recipient of the materials ‘in
the form received’.
A biotechnology company that owns genes or transgenic varieties (with IPRs established in one
country), may establish contracts for their access in another country, even if the latter does not
recognize the particular IPR. Thus there are examples of major biotechnology companies
entering into contracts with national agricultural research organizations for the use of particular
transgenes. The contract may specify how the genes are to be used, the rights to any technol-
ogies that are produced, and the obligations of the company (e.g. for providing training or
other assistance).
Another strategy for companies is to negotiate a contract with a particular level of government.
An example is the agreement in China between Monsanto /DPL and the Provincial Government
of Hebei that excludes others from selling Bt cotton in the territory of the province. This contract
does not rely on intellectual property rights. Similar arrangements in China have protected
national breeding/seed parastatals or companies from competition.
Finally, MNCs may find that the commercialization of transgenic varieties in developing
countries, including seed marketing, policing violations and enforcing rights, may not be as
profitable as licensing rights to a transgene to local seed companies. In developing countries
44
with well developed private seed enterprises, such as India and China, this type of contract
may be increasingly common.
2.6.5 Biosafety
Biosafety regulations are not meant to serve as IPRs, but primarily to protect the environment
and to promote the safe use of biotechnologies. However, details of the biosafety system can
create property-like rights. First, in cases where national IPR systems do not provide adequate
protection, biosafety regulations may be used to prohibit the sale of varieties that include the
unauthorized use of a privately owned transgene. In addition, biosafety data itself may be
valuable property.
3
The biosafety system generates data from extensive testing to demonstrate
environmental and food safety. Such testing is very expensive, especially when feed and food
trials are necessary and may require specialized testing facilities. Some countries require
safety data for each ‘event’, i.e. the introduction of a particular construct (gene, promoter, etc.)
at a particular place or places in the genome. When such a modified plant is used in conventional
plant breeding to produce new varieties, the construct and its place are generally not altered
and biosafety clearance for the new variety (on the basis of data from the original event) can be
quickly accomplished. In other countries, the biosafety data must be presented for every new
variety. Since such data are commonly confidential, access to the biosafety data has great
commercial value and creates the basis for contracts that create rights over the genes. For
example, in India genes cannot be patented, but Monsanto can control its Bt gene technology
through keeping its biosafety data confidential. Breeders who want to release a new cotton
variety that includes the gene construct have to enter into a contractual agreement with
Monsanto in order to satisfy the biosafety regulations in the country and such contracts are
likely to include a license fee based on the amount of seed sold.
2.6.6 Brands and trademarks
Brands and trademarks are part of intellectual property law but their utility in the seed industry
is often overlooked. Seed companies often register their brands or trademarks as a way of
distinguishing their products from those of their competitors. In the absence of other IP
instruments, the development of a strong brand image and reputation can protect a company
from some types of competition. It is much less common for crop varieties to be trademarked,
and there is usually a prohibition against the use of the same name as a trademark and under
PVP registration. The most important use of trademarks in the study was the practice of the
flower breeding industry to pursue trademark registration for its most popular varieties (using
different names than those for PVP). The trademark can be used and protected long after the
expiration of PVP on the variety.
3
A similar situation can be found in the pharmaceutical sector, where test data are needed by the producers of generic drugs to
register their products when the patent on the original product is due to run out. Extension of the confidentiality of the test data
can provide additional protection to the inventor beyond the legal term of protection (W.J. Louwaars, pers. com.).
45
2.6.7 Secrecy
In some instances secrecy is an effective way to protect markets, and the choice between
patenting and secrecy may depend on the type of technology and the size of the firm. In
industries where a long lead time is required for imitation, being first to market may be more
valuable than patent rights (Cohen et al., 2000). In plant breeding, the primary example of a
trade secret is the protection of the inbred lines used to produce a company’s hybrids. The
ability to exploit this type of secrecy depends to an important extent on the degree of physical
security that can be provided to plant breeding facilities and seed multiplication plots. In some
cases, companies can go to considerable lengths to protect their inbreds; a three-way cross
maize hybrid may be the product of a single cross (produced from two inbreds in one country)
and an inbred, with the final cross made in a second country. In the case study countries, trade
secrets are not protected by a separate body of law but come under standard trade laws. With
advances in biotechnology, secrecy becomes more difficult to maintain and less valuable. The
reverse engineering of new varieties becomes easier and the copying into new genetic
backgrounds is facilitated by the application of marker-assisted selection methods. The lead
time thus becomes shorter for breeding companies, secrecy as a means of protection is more
problematic, and IPRs assume greater value.
2.7 Summary
IPRs provide a legal mechanism meant to stimulate technological advance for the benefit of
society and the growth of enterprise. They will play an increasingly prominent part in the plant
breeding industry of developing countries by providing economic incentives for more productive
research and commercial seed provision. At the same time, it is important to recognize that
IPRs can only be justified by their contribution to the welfare of a society. IPR regimes in plant
breeding must therefore be seen as part of a wider strategy for developing an efficient and
equitable agricultural sector. IPRs are only one element of policies to stimulate the growth of
institutions that serve broader development goals. The impact of IPRs in agriculture in a
particular setting will depend on the performance of many other institutions, the status of the
public and private seed sectors, the technology available, and the type of farming and rural
communities. There are no simple rules that can be applied, and policymakers will have to learn
from their own, and others’ experience. It is particularly important to assess experience to date
in countries that have taken early steps towards establishing IPRs for plant breeding.
In the present study, we have tried to address a few basic questions regarding the current
experience with IPRs in plant breeding:
– Which IPR systems are relevant for the breeding industry; which choices have countries
made based on the international agreements and organizations to which they belong?
– What is the relative importance of IPRs in the context of the various economic,
technological and institutional factors that determine the development of the national plant
breeding and seed sectors? To what extent do IPRs support or counter these developments?
– To what extent can the incentives offered by an IPR system be achieved through alternative
legal or institutional mechanisms?
46
– What are the factors related to the implementation and enforcement of an IPR regime for
plant breeding; what are the institutional options and the costs involved?
– To what extent, and in what ways, do IPRs affect the conduct and performance of public
sector plant breeding?
– To what extent and in what ways, do IPRs affect the development of the private plant
breeding and seed industries?
– To what extent and in what ways, do IPRs regimes affect the access by different classes of
farmers to new varieties and seed?
47
3. Plant breeding and seed production in
the case study countries
3.1 Agriculture
China
The growth of agricultural production in China since the 1950s has been one of the main
accomplishments of the country’s development and national food security policies. China has
used 10% of the world’s cultivated land to feed more than 20% of the world’s population.
Except during the famine years of the late 1950s and early 1960s, the country has enjoyed
rates of production growth that have outpaced the rise in population, resulting in a significant
improvement in food availability. Since the middle of the 1980s, China has been a net food
exporter and since the mid-1990s China became a net cereal grain exporter. The rural house-
hold responsibility system, accompanied by price increases, has stimulated China’s agricultural
economy. From 1978-1984, grain production increased by 4.7% per year; the output of fruit
rose by 7.2%.
However, the one-off efficiency gains from the shift to the household responsibility system were
essentially reaped by the mid 1980s, and the growth rate of agriculture has since declined.
The declining trend is most pronounced for grain. While dropping below the rate of growth
generated in both the pre-reform and early reform periods, production of rice, other grains,
and cash crops continued to expand after 1985. In the meantime, rapid economic growth,
urbanization and food market development have boosted the demand for meats, fruits and
other non-staple foods, changes that have stimulated sharp shifts in the structure of agriculture
(Huang & Bouis, 1996; Huang & Rozelle, 1998). For example, the share of livestock output in
total agricultural production value more than doubled, from 14% to 30%, between 1970 and
2000. One of the most significant signs of structural changes in the agricultural sector is that
the share of cropping in total agricultural output fell from 82 to 56%. Within crops, grain area
has gradually declined, while cash crop area has expanded.
Colombia
Although commercial agriculture (e.g. coffee, tobacco) has been an important part of the
Colombian economy since the nineteenth century, agriculture has tended to grow more slowly
than the rest of the economy since the 1960s, in part due to the increasing importance of
manufacturing and service sectors. Nevertheless, in the late 1980s agriculture contributed
21% of GDP and 68% of export revenues. The country’s diverse topography contributes to a
wide range of commercial agriculture. Banana plantations are an important aspect of the
lowland economy, while coffee dominates the highlands, with about 20% of all cultivated land in
the country under coffee. More recently, the high central valleys have become an important
center for the production of cut flowers. Cattle ranching is also important throughout much of
the country. Commercial agriculture is characterized by the presence of strong commodity-
based producer organizations (e.g. coffee, oil palm, rice) that provide support for agricultural
48
research and lobby for agricultural policies favorable to their membership. Although public
support for agriculture has been important, there is a growing dominance of private investment
in agricultural research and services. Colombia’s agriculture is strongly dualistic, with 10% of
the farms accounting for 80% of the farmland. After an initiation of land reform in the 1930s,
there has been relatively little progress. Smallholders in the highlands grow a range of food
crops, including small grains, maize, beans and potatoes; those in coastal areas rely on maize
and root crops. More than 80% of the rural population is under the poverty line and rural
unemployment has been increasing, in part due to the fact that 800,000 ha have been taken
out of production in the past decade. The National Development Plan includes several initiatives
for revitalizing agriculture in the country, such as plans to increase investments in cotton and
maize production.
India
Indian agriculture is predominantly smallholder agriculture. The distribution of land holdings is
highly skewed and small farmers (less than 2 ha) constitute 80.3% of total farm holdings and
occupy 36% of agricultural land. The fragmentation of land holdings have reduced the average
size of holding from 2.7 ha in 1961 to 1.4 ha in 1996. Agriculture supports 72% of the
population and contributes about one-quarter to the national gross domestic products and
about 12% to the total exports in 2002.
Agricultural land area remained constant around 140 million ha during the last three decades.
The gross cropped area is 190 million ha, giving a cropping intensity of 136%. The area under
food grains is 122 million ha with a record production of 212 million tons in 2001/02. The
average productivity of rice and wheat -- two major food grain crops -- is 2.1 t/ha and 2.7 t/ha,
respectively. Much of the growth in food grain production occurred during the 1970s and
1980s with widespread adoption of the new seed-fertilizer technology in the irrigated areas.
Concurrently, the area under irrigation also expanded because of public investment in irrigation,
which further accelerated the adoption of the new technology. Presently, about 40% of agri-
cultural area is irrigated and fertilizer consumption (NPK nutrient) is 91 kg/ha. These growth
trends were also echoed in rain fed agriculture with the availability of hybrid technology and
emergence of the public and private seed industry. However, the growth momentum could not
be sustained during the 1990s because of a leveling-off in crop yields, particularly in the rice-
wheat system of northwest India, and slackening of public investment in irrigation and other
infrastructure for agriculture.
Since the 1980s, livestock, fisheries and horticulture sectors have also witnessed tremendous
growth. Non-price factors like irrigation, infrastructure development and R&D were the main
sources of growth, and the total factor productivity grew 1.5-2.0% annually since the green
revolution period, illustrating a crucial role of R&D (Evenson et al., 1999). With the increasing
commercialization of agriculture, there is greater participation in international trade and invest-
ment by the corporate sector is rising. There is now increasing pressure for rationalization of
agricultural subsidies, particularly for electricity, irrigation and fertilizers, and support to food
grain prices. Fiscal, administrative and legislative reforms are also undertaken to encourage
participation of the private sector in agricultural marketing and trade. On the inputs side, the
seed sector has received significant support from the government. These developments are
49
expected to transform Indian agriculture into a science-based sector. This coupled with
domestic product market and policy reforms will make Indian agriculture competitive
internationally.
Kenya
The Kenyan economy is agriculturally based with 85% of the population living in the rural areas.
The bulk of the farming population are small-scale farmers growing staple food crops to meet
household food requirements with little surplus for sale. A strong agricultural sector is
considered not only to be a major contributor to self-sufficiency in food, but a requirement for
the successful growth of both the secondary and tertiary production sectors of the economy.
Agriculture plays a major role in providing food, energy and incomes to a significant proportion
of the population, it also provides raw materials for the country’s manufacturing and distributing
industries. Over the last 30 years the contribution of agriculture to GDP has averaged 30%,
declining from 37% in early 70’s to 25% in 2000. Smallholders account for 75% of the total
agricultural production. Agricultural products constitute about 70% of the total export and the
sector employs about 75% of the total labor force. Formal employment in the agricultural
sector constitutes about 17% of the total waged employment.
Maize is Kenya’s main staple food although production has fallen short of demand due to
frequent droughts and low productivity. The area under maize has stabilized at around
1.5 million hectares with limited potential for further expansion given competition on land use.
On average, maize yields are 2 tons per hectare. The production of pulses has been declining
due to weather conditions, use of low quality seed and the high cost of inputs. The horticulture
industry is currently the third most important foreign exchange earner after tea and tourism.
Smallholder production constitutes 80% of all growers and produces 60% of horticultural
exports. This sector is expanding rapidly.
Over the last decade the agricultural sector (with the exception of horticulture) experienced low
and declining productivity in terms of export earnings, employment creation, food security and
household farm incomes. From a real growth rate of 4.4% in 1996, it declined to a zero average
growth in recent years. The country’s traditional exports, coffee and tea, face declining real
world prices coupled with low value addition that has led to low returns. Some of the reasons
for the decline in agricultural productivity include: poor governance in key agricultural
institutions; institutional failure due to lack of capacity by the private sector to take over
functions previously performed by the state; poor access to farm credit, high cost of farm
inputs, insecurity in certain parts of the country and taxation of farmers through local authority
cess; high prevalence of HIV/AIDS; low level of public funding and inefficient infrastructure
which has led to high cost of production. The new Kenya Rural Development Strategy proposes
to address these problems through a series of policy measures.
Uganda
Uganda’s economy has registered impressive performance since 1990 with real GDP growth
since 1995 averaging 6.7% and inflation decreasing from 33% in 1990 to a mere 3.5% between
2000 and 2004. Uganda is a predominantly agricultural economy. The agricultural sector
50
contributes over 40% to the gross domestic product, provides employment to over 80% of the
workforce in rural areas, and is the main source of export earnings (85%). Of the population of
25 million, 85% live in rural areas. Because nearly half of the population lives below the poverty
line and face food insecurity the government has put special focus on agriculture in its socio-
economic policies.
Food crop production contributes about two-thirds of agricultural GDP, while cash crops
contribute about 7%, the rest coming from livestock and fisheries. Approximately 44% of the
sector’s GDP is made up of commodities produced for home consumption, but the proportion
of agricultural production destined for the market is rising. In terms of value, cassava, sweet
potatoes, and cooking bananas are the most important, followed by coffee, maize and beans.
Production gains in agriculture have been driven by the positive policy changes, but technology
driven reforms have been limited. The majority of smallholder farmers hardly use improved
seeds, fertilizers, or agro-chemicals. Production intensification is seen as the driver of agricul-
tural transformation, if the gains made are to be sustained. In the Poverty Eradication Action
Plan, the government has formulated and operationalized the Plan for Modernization of
Agriculture (PMA) aiming at transforming subsistence farmers into market-oriented commercial
farmers. The National Agricultural Research System is a key player in the implementation of the
PMA.
Table 2. Selected Development Indicators for Case Study Countries.
China Colombia India Kenya Uganda
Population (Million) 1,280 44 1,049 31 25
% rural 62 24 72 65 85
% arable land area 15 2.4 54 8 26
Under 5 Mortality 38 23 90 122 141
GNI/capita (2002 $) 960 1,820 470 360 240
GDP growth 1990-2002 9.7 2.3 5.8 1.9 6.9
Source: World Bank (2004).
Table 3. Selected agricultural productivity indicators for Case Study Countries.
China Colombia India Kenya Uganda
Agriculture as % of GDP (2002) 15 14 23 16 40
Av. annual growth (%) in Agr. GDP (1990-2002) 3.9 -1.5 2.7 1.2 3.9
Crop production % over 1990-2002 56 6.4 24 23 39
Cereal yield increase 1980-2001 (%) 60 39 81 11 10
Agr. Productivity ( value added per worker), in $ (1995) 338 3619 401 213 346
Source: World Bank (2004).
51
3.2 Public Sector Research
China
China’s strong public agricultural research system has played an important contributing role in
growth in agricultural productivity. This has become even more apparent in the last ten years,
as growth has been based increasingly on technological change, replacing earlier input growth
(Huang, Hu & Rozelle 2004). China’s public agricultural research system includes more than
1,600 research institutes, employing more than 136,000 staff (including retirees).
Approximately 10% of this research is carried out at the national level while 90% takes place in
provincial and prefectural institutes. The total budget for agricultural research was $1,025m in
2002. About 73% is for crop-based research, of which 40% is devoted to crop breeding. China
has invested heavily in agricultural biotechnology research, estimated at $112m in 1999 and a
staff of more than 2000 (Huang & Hu, 2000).
China’s large agricultural research system needs to be assessed relative to the task at hand in
such a large country. After decades of increases between the 1960s and 1980s, financing for
public agricultural research stagnated or even declined between 1985 and 1995 (Huang & Hu,
2000). In 1996, the public agricultural research budget was equivalent to 0.4% of agricultural
GDP which is less than half of the FAO’s rule of thumb of 1% (Huang et al., 2003).
The public agricultural research system in China has also undergone a number of changes
(Huang et al., 2002). These include a shift from core funding to a competitive grant basis and
assigning responsibility to research institutes for raising their own funds. Increased commer-
cialization of the public agricultural research system is leading to overlapping roles and a drift
away from goals of food security, poverty reduction and environmental sustainability. Thus
despite impressive achievements, the system faces many challenges, particularly given the
projected growth in China’s population, income, and associated food needs.
Colombia
Public agricultural research in Colombia was formerly in the hands of ICA (Colombian Institute
for Agriculture and Livestock), but the government introduced an initiative to privatize research
in the early 1990s with the creation of an independent research corporation, CORPOICA
(Beintema et al., 2000). ICA remained as a regulatory entity, and all research functions were
transferred to CORPOICA. In theory CORPOICA is supposed to be supported by contract
research from producer organizations and private industry, but in fact the Ministry of
Agriculture and Rural Development still provides most of its budget by ‘outsourcing’ research
tasks. CORPOICA is responsible for research on most of the agricultural crops in Colombia, but
research for important cash crops is in the hands of a number of semi-public institutes
supported in part by grower associations (e.g. for coffee, sugar cane and palm oil). CORPOICA
inherited a decentralized structure, based on quite autonomous research stations throughout
the country; the corporation has only recently instituted a centralized matrix management
based on commodities and disciplines. CORPOICA’s budget for 2004 is $13.8m and it employs
about 300 researchers (compared to about 500 employed 10 years ago). CORPOICA has a
biotechnology department, although it has not done any transformations.
52
India
Responsibilities for public agricultural research in India are divided between the institutes of the
Indian Council of Agricultural Research (ICAR) and the state agricultural university system. ICAR
coordinates 89 research institutes, most of them specializing in particular commodities or
disciplines. ICAR employs about 4,100 scientists. Much of the responsibility for agriculture in
India is left to individual states, and 34 state agricultural universities (and 120 affiliated zonal
research stations) carry out research and outreach (with partial support from ICAR). The total
research expenditure in 2000 was estimated to be $625m i.e. 0.42 % of AgGDP (Pal & Byerlee,
2003), with about 55% contributed by central government and 45% from the states. It is
estimated that approximately $25m is spent on biotechnology research.
Kenya
The major responsibility for agricultural research is with the Kenya Agricultural Research
Institute (KARI), although some public agricultural research is also conducted by Kenyan univer-
sities. KARI has its headquarters in Nairobi and a number of experiment stations throughout the
country. KARI is one of the stronger NARIs in sub-Saharan Africa, but even so its operations are
severely limited by its budget. The KARI budget for 2004/5 is nearly $40m, which is a sharp
increase from the previous year ($25.5m), mostly due to a significant expansion of donor
funding, which covers slightly more than half the total budget. KARI has long experience in plant
breeding and has been particularly successful in producing maize hybrids for the highland
regions that constitute the major maize growing area of the country. KARI has invested in
biotechnology and has been involved for several years in the development of transgenic sweet
potatoes (with assistance from Monsanto). It has just inaugurated a biotechnology facility where
it will continue collaborative work with CIMMYT on transgenic insect-resistant maize and other
projects.
Uganda
Uganda’s public agricultural research is managed by the National Agricultural Research
Organization (NARO) which is also responsible for livestock, fisheries and forestry research. Its
budget for 2004-05 is $11.1m, 70% of which is provided by donors. NARO is currently in the
process of reorganization related to the PMA. The National Agricultural Research Act of 2003
outlines the development of an integrated agricultural research system that includes central
research functions, zonal research centers and the strong participation of farmers in setting
priorities through local farmer forums. NARO is expected to contribute to the PMA by making
its research demand driven and market responsive. Future funding for research will come not
only from central government and donor contributions but also from private contracts and local
governments. It is thus expected that NARO will generate a significant amount of its own
funding, although the Research Act leaves open the question of NARO control over generated
funds. The new policy envisions research funding rising from its current 0.6% of agricultural
GDP to 2%. NARO is responsible for plant breeding for most of the important food crops in
Uganda and its cotton varieties are the only ones currently used by the cotton industry.
53
International public research
The study also included consideration of IP management in the international agricultural research
centers (IARCs) of the CGIAR. This study looked in particular centers that have a physical
presence in the case study countries: ICRISAT (with headquarters near Hyderabad, India), CIAT
(with headquarters in Cali, Colombia and an outreach program in Uganda) and CIMMYT (with an
office in Nairobi, Kenya).
3.3 The Seed Sector in the case study countries
China
For many years, seed in China was supplied primarily by public seed production organizations.
Their monopoly on sales was removed with a new seed law in 2000. This law permits private
companies, research institutes or individuals to produce and market seed provided they obtain
the necessary certification from the provincial agricultural administrative department. In addition,
public seed companies and research institutes were allowed to retain some of the profits from
seed sales. The new law has strengthened a number of trends already visible in the seed sector
in the 1990s. While public institutes could already license their varieties and some private seed
companies had appeared, local markets were still monopolized by the public county-level seed
companies. This has now changed and many of the public seed companies at both county and
prefecture level have gone bankrupt or changed status to co-operative companies, selling
primarily non-hybrid or unprotected hybrid seed. In 2002, there may have been as many as
20,000 seed companies in the country, including individuals selling only small amounts at a
local level. A certain amount of consolidation has been taking place since then, underlining the
current unsettled climate for the sector.
Many research institutes are extending their traditional activities of breeding to include
production and marketing. From the other end of the supply chain, some seed companies have
begun investing in breeding activities. Although foreign companies began marketing maize
seed in the 1990s through Chinese partners, direct foreign investments in joint ventures (as
minority shareholders) in seed production and marketing have been permitted since 2002 only.
While there are currently more than 50 GMOs applying for approval, only 5 foreign applications
have been commercialized and these are all varieties of Bt cotton. However, the sown area of
these 5 varieties took more than half of the total Bt cotton area, but this market share is
declining. While the public research institutes have invested heavily in the development of GM
crops, regulatory approval appears to have been slowed down by concern over possible
effects on exports to Japan and EU markets. Nonetheless, the area sown to Bt cotton is
considerable. Bt cotton has been commercialized in China by a joint venture of Monsanto/Delta
& Pineland with two provincial level seed companies in Hebei and Anhui (Ji Dai and An Dai), and
also by the Chinese Academy of Agricultural Sciences who developed their own Bt constructs
in 1997.
The role of the government has been less pronounced in regulating the vegetable seed sector.
Private companies, including joint ventures with foreign companies, have been selling vegetable
seed in China since at least the early 1990s. Information about the extent of production and
54
seed sources is also less reliable given the small scale of production and the lack of government
attention. Nonetheless, vegetable production accounted for 15 m ha and, according to one
estimate, vegetable seed sales may be roughly one-quarter of all commercial seed sales (Koo
et al., 2003), although CCAP estimates it at not more than 10%.
Colombia
In the 1970s and 80s, the Colombian government had a heavy involvement in the seed sector,
with a state seed company of the Agrarian Bank (CRESEMILLAS) and subsidized credit that
supported the use of certified seed. The state company marketed mostly ICA varieties and a
few imported commercial hybrids of maize and sorghum. Government policy encouraged the
replacement of the state seed company by private firms, and these thrived under a regime of
support prices and government grain purchasing until 1990, when government policy changed.
At one point there were 25 domestic seed companies, but the current number is less than half
that; these are complemented by several MNCs. The domestic seed companies do most of
their business in rice seed (6 companies have their own rice breeding capacity). The largest
player in the market is FEDEARROZ, the rice growers’ association that has moved from simply
marketing inputs to breeding rice varieties and selling its own seed. There are several small
local companies that breed and sell their own maize hybrids, but the market is dominated by
hybrids from MNCs. The MNCs have the majority of the cotton seed market as well. A range of
public programs and producer organizations is responsible for seed production of many other
crops, such as wheat, barley, beans, and potatoes. For instance, the potato producers’
federation (FEDEPAPA) administers the production of certified potato seed (of public varieties).
Although beans are a very important crop in the diet of certain groups in Colombia, the majority
of bean production is based on traditional varieties and there are no commercial bean seed
producers. The majority of the cotton and maize varieties available for sale in Colombia are the
products of foreign private breeding.
India
One of the contributors to India’s Green Revolution was the development of state and national
seed corporations that provided seed of the new rice and wheat varieties, and of other public
crop varieties as well. With the exception of some vegetable seed production and import, the
presence of the private seed sector was not significant in India until the mid-1980s and was
limited to a few seed companies. Policy changes in the 1980s opened the doors to domestic
private plant breeding and seed production and also allowed the participation of foreign seed
companies, and the economy-wide reforms of 1991 further liberalized the seed sector,
particularly for the participation of MNCs. Since that time, the private seed industry in India has
expanded rapidly. Most of this expansion has been based on hybrid seed, beginning with hybrid
sorghum, pearl millet and maize. Public research had developed cotton hybrids by the early
1980s and private companies quickly adopted the technology, making India the world’s leading
producer of hybrid cotton seed. The prospect of hybrid rice drew a number of private companies
into this area, although hybrids still account for a tiny fraction of India’s rice. Vegetable seed
production is also mostly in the hands of the private sector, which largely produces proprietary
hybrids (including some imported seed) but also some public hybrids and OPVs. Most of the
public seed corporations still survive, although their performance and financial stability varies
55
widely between states. They are mostly relied upon for the production of non-hybrid seed of
major crops such as wheat, rice and pulses. Even for some of these self-fertilizing crops that
normally provide few commercial incentives, the private seed sector has made significant
inroads; for instance, private companies in Andhra Pradesh now provide more than half the
state’s rice seed (virtually all public varieties). Andhra Pradesh is one of the leading states for
seed production and its Seedsmen Association lists 440 members, 249 of whom have
processing plants. These range in size from large, diversified national firms (some with MNC
participation) to tiny local operations that may specialize in the multiplication and distribution of
seed of a single crop.
Kenya
Until recently, all seed production in Kenya was the responsibility of the parastatal Kenya Seed
Company (KSC), and no other commercial seed operations were allowed. KSC had exclusive
rights to all KARI varieties and also established its own breeding program, principally for maize
(and also wheat, pasture grass and sorghum). The policy shifted in the early 1990s, allowing
the entry of MNCs (including from South Africa and Zimbabwe) selling hybrid maize (and to a
lesser extent sorghum and sunflower). In addition, the policy change encouraged the develop-
ment of a domestic seed industry. There are currently three seed companies (besides KSC)
with their own breeding programs and several other small companies that produce and market
seed of public varieties. KARI and KSC signed an agreement providing royalties to KARI for the
use of varieties currently under KSC production, although some of the details of that agreement
are still in doubt, including the degree to which KSC has exclusive access. KARI now assigns
rights to its new varieties through a tendering process, in which KSC is expected to compete
with other firms.
Uganda
Uganda has never had a very strong seed sector, but its new policies for agriculture have
encouraged an expansion of activity. Earlier, virtually all seed (of public varieties) was produced
and marketed by the parastatal Uganda Seed Project, which had several production facilities.
This has recently been converted to Uganda Seed Ltd., which has been a candidate for
divestiture since 1998. Uganda Seed Ltd, continues to produce a small amount of seed, but it
is now challenged by five local companies that have emerged in the past few years (mostly
based on experience in grain trading and participation in seed acquisition for regional
emergency seed operations) Only one of these companies has its own plant breeding capacity
(and relies on IARC germplasm); most multiply and sell NARO varieties. Several multinational
and regional companies produce seeds in Uganda for export and some also market seed in
Uganda (mostly hybrid maize). Kenya Seed Company has a subsidiary in Uganda that sells
hybrid maize, pasture grass and vegetable seed. Most cotton seed is simply obtained from
ginneries and distributed free to farmers as part of a production inputs package, but a
company from Zimbabwe has recently proposed to take responsibility for the introduction of
new varieties and cotton seed production.
56
A note on floriculture
This project included an examination of the flower production sectors in Colombia, Kenya and
Uganda. Because virtually all of the plant breeding is done in foreign countries (with the
exception of some small, recent ventures in Colombia), the focus of this report is on the flower
producers themselves. Thus the main treatment of flower production is found in Section 7.6.
The floriculture sector is important in Colombia, Kenya and of growing importance in Uganda.
In Colombia, flower exports in 2002 accounted for over $672m in earnings and the industry is
credited with providing direct employment for 88,000 people (and indirect employment for a
further 75,000). Flower exports are diversified, with the largest proportion (28.7%) accounted
for by roses. In Kenya, cut flower exports provide $220m annually, with 70% of that in roses.
Uganda is a more recent entry in the field, under government policy to promote non-traditional
agricultural exports. Its exports of roses and flower cuttings earned $26.5m in 2003 (70%
from roses).
The planting materials are provided under contract by representatives of the breeders. The
price of rose plants consists of the cost of the plant itself plus a royalty, with these two
components of approximately equal value. Contracts stipulate that further multiplication is
either not allowed or restricted in numbers and subject to royalty payment. The contracts are
based on breeder’s rights (PVP or plant patents) in the producing country and/or the country
that imports the flowers (commonly The Netherlands or the USA). Since the PVP rights extend
to the harvested materials under UPOV 1991, breeders can claim royalties anywhere in the
chain.
3.4 Seed Regulation
Seed regulations in case study countries determine the types of varieties and seed that may be
sold. Similar to IPR regimes, such seed regulations can provide important incentives (or dis-
incentives) for the seed industry, and it is important to understand their scope. In addition, it is
frequently necessary to make conventional seed regulation compatible with new IPR regimes.
China
China’s first seed law was decreed in 1989 ( ‘Regulation for Seed Management of the People’s
Republic of China’), followed in 2000 by the ‘Seed Law of the People’s Republic of China’. The
old seed management regulation ruled that new varieties of the major crops must pass
2-3 years of trials and be approved at the state or the provincial level before being extended
and used. Currently this applies to rice, wheat, maize, cotton, soybean and one or two other
crops determined by the agricultural administration department at various levels of government.
The criteria for approval of new varieties are established by MOA or at provincial level and
usually include a yield gain of more than 5%, or a significantly higher product quality compared
to existing (check) varieties. The new seed law has not stipulated any approval mechanisms for
less important crops.
57
There are rules for seed production and management including licensing systems for seed
producers and traders. Based on ‘The Regulation of Crops Seed Production and Operation
Licenses Approval’ decreed by the Ministry of Agriculture (MOA), there are four types of
licensed seed companies of 1 million, 5 million, 1,000 million, and 3,000 million RMB Yuan
certificated capital respectively. The first type of company is permitted to produce and market
conventional crops seeds. The second can also deal with hybrids. The third type of seed
company can be involved in foreign seed trade in addition to production and marketing of any
kind of seeds locally. The fourth type of seed company can have its own breeding program.
All seed companies have the right to carry their own trademarks and have their own seed
packages according to their licenses.
Colombia
All varieties offered for sale in Colombia must be tested for agronomic performance and
officially released. The testing process involves trials in one or more of five agro-ecological
zones in the country (varieties are released for specific zones). These trials were until recently
run by ICA but a new regulation (Resolution 2046, which aimed to adjust Colombian seed
legislation to ‘the evolution in the domestic seed industry and to bring it in line with international
norms’) allows companies with their own plant breeding capacity to conduct these tests and
submit the results to ICA. All seed of agricultural crops sold in Colombia must be certified, and
ICA is the official certification agency. Some seed companies complain that ICA does not have
the capacity to fulfill this function efficiently and there is pressure from the industry for ICA to
license companies to certify their own seed. ICA certifies hybrid seed (e.g. from MNCs) without
physical deposit of the inbreds; the company supplies sufficient information about the lines and
ICA visits the seed production plots for confirmation. ICA is also responsible for monitoring
seed sale and detecting violations of regulations.
India
All public crop varieties must be officially released and notified, which includes performance
tests at either the state or national level and notification by the Central Seed Committee.
(Although varieties may be released at the state level, notification is a national level function.)
The national level performance testing is managed through the extensive All-India Coordinated
Crop Improvement Programs (AICCIP). Descriptors of notified varieties are recorded, but there
is currently no DUS testing done as part of the release process. Private varieties do not require
release or notification, but may be entered in the AICCIP trials. The fees for the private
companies are quite high, although there is a proposal to lower these. In practice only a
minority of private hybrids are officially notified (although companies acknowledge the data
from the tests is useful and the fact that a variety is notified is an aid to its promotion in the
market). Seed certification is managed by state seed certification agencies and only notified
varieties may be certified. Certification is not compulsory, even for notified varieties, although
various agricultural programs and subsidies require that farmers use certified seed. Most
private seed, and a substantial minority of public sector seed, is sold as ‘truthfully labeled’,
requiring the name of the variety and minimum germination and purity standards. Officers of
the state departments of agriculture are assigned to monitor seed sales and collect samples of
commercial seed to test for conformity with certification tags or truthful labels. The current
58
seed regulations are being reconsidered, partly in light of the PVP legislation, and a revised
Seed Act is expected by the end of 2004. This new act will make some form of variety
registration compulsory, and liberalizes seed certification, involving possibilities for self-
certification by companies. ICAR is currently working on the modalities of DUS-testing.
Kenya
Variety approval and release in Kenya was recently reorganized and placed under the auspices
of the Kenya Plant Health Inspectorate Service (KEPHIS). All varieties of field crops (public and
private) must be entered in National Performance Trials (NPTs) that are divided into agro-
ecological zones. The NPTs may take up to three years, although if the breeder presents
supporting field data the period may be less. DUS testing is also required for all varieties, and
this takes two years. After an initial year of evaluation seed companies may receive permission
for seed multiplication and test marketing of a variety. Seed of most field crops must be
certified, and KEPHIS also has responsibility for seed certification, which it manages from
several regional stations. Deposit of inbreds is not required for certifying hybrids or for
obtaining DUS, if the company provides descriptors of the inbreds and pays for KEPHIS to visit
company fields. There is some pressure from seed companies for possible accreditation to
certify their own seed, but no action has been taken. The certification requirement has been
enforced even in the case of small-scale formal seed production (e.g. by donor project-
sponsored seed producer groups) of crops such as beans and sorghum, although KEPHIS
indicates that in the future such seed of some crops (but not maize) can be sold as standard
seed, which only requires seed quality testing. KEPHIS insists that small scale farmers cannot
sell their saved seed of maize since it is not certified. They can however re-use it themselves or
share it with others (without selling). Kenya, Tanzania and Uganda have recently concluded a
harmonization of seed regulations for Eastern Africa. The new accord includes an agreement
that varieties released in one of the countries will have a ‘fast track’ in variety testing
procedures in the others and adopts common certification requirements, including a short list
of crops with mandatory certification. However, Kenya will insist that the other countries adopt
the OECD certification scheme before allowing seed to be imported. This insistence has kept
one MNC from selling its maize hybrids (produced in Malawi) in Kenya.
Uganda
Variety release in Uganda still follows the system established for public plant breeding.
Candidate varieties (public or private) must undergo a series of field trials that take at least
three seasons and include at least 7 sites; the trials are managed by NARO. If a variety
progresses to the most advanced stage, DUS testing begins, managed by the National Seed
Certification Service (NSCS). Performance and DUS data are presented to a committee that is
in charge of official variety release; NSCS maintains a national variety list. Seed of major field
crops must be certified by NSCS, although the agency is under-funded and the industry is
anxious to see a system in which companies can be accredited for certification. Uganda is part
of the recent Eastern Africa harmonization in seed policies and regulations.
59
Table 4. Variety Release, Case Study Countries.
Country Rice Maize Beans Cotton
China* 1996-1999:
237 public and 3 private
2000-2002:
189 public and 28 private
(54% of releases hybrid)
1996-1999:
170 public and 4 private
2000-2002:
105 public and
34 private
(All releases hybrid)
1996-1999:
107 public and 10 private
2000-2002:
85 public and 15 private
(8% of releases hybrid)
Colombia 1992-2003:
25 varieties (5 public)
1990-2003:
80 varieties (11 public)
1950-1989:
33 varieties
1990-2003:
20 varieties
(all public)
1990-2003:
29 varieties (6 public)
India
1995: 14
2000: 33
2001: 20
2002: 22
(all public)
1960-1999:
120 public hybrids and
OPVs + approx equal
number of unnotified
private hybrids
1995: 5
2000: 6
2001: 7
2002: 9
(mostly public) + many
unnotified private hybrids
Kenya
1960-1999:
17 hybrids+5 OPVs
(all public)
2000-2003:
43 private hybrids +
4 private OPVs.
8 public hybrids
1982-2003:
15 varieties
(7 since 1999)
(all public)
Uganda
2000-2003
12 varieties (all public)
1995-2003
12 varieties
(all public)
* For China, a ‘private variety’ is one marketed by, but not necessarily bred by, a private firm.
Source: Compiled by authors, based on data from CCAP, ICA, ICAR, KEPHIS, and NARO.
60
Table 5. Cost of Variety Release in Case Study Countries.
Country Procedures and cost
China Agronomic trials in one or more agroecological zones: $150 per season
Colombia Agronomic trials in one or more agroecological zones: $1,718 per zone for supervision
India Private sector entries in AICCIP trails: $217 per location per year
Kenya DUS test required. $600 per variety or inbred
National Performance Trials (NPT); $500 per year, per zone
Uganda Private sector entries in NARO trials pay $120 per site (5-7 sites)
Source: Compiled by authors from relevant national authorities.
3.5 Seed Use
China
The source of seed for farmers in China varies by region and by crop, including the focus
crops of this study (rice, cotton and vegetables). Marketed rice seed is divided roughly equally
between OPVs (214,000 Mt in 2002) and hybrid seed (250,000 Mt). Over 90% of the area
sown with hybrids uses seed purchased each year, while for OPVs this is estimated at 30%.
Hybrid rice seed has gained considerable market share since 1980, despite the higher costs
for farmers, and thus accounts for almost one-half of the sown area in rice. On the other hand,
approximately 35-40% of the rice area is sown with farm saved, or informally acquired seed.
Cotton seed is more heavily dominated by OPVs with hybrid seeds accounting for only about
15% of the estimated annual sale of 78,000 Mt. Purchased cotton seed from formal sources is
estimated to be 35% of the total seed requirement, highlighting the importance of saved and
exchanged seed. In 2003, approximately 56% of the cotton area was planted with Bt cotton
(James, 2003) and sales of Bt cotton seed are 58% of total sales. Since its release, Bt cotton
has been absorbed into farmer seed systems, with a considerable amount of seed saving and
crossing taking place. The situation in vegetable seed is quite different, given the extent of
development of hybrid varieties. Replacement rates are estimated to be almost 100% for most
major vegetables, such as Chinese cabbage, tomato, chili and cucumber (Hu, 1998; Koo et al.,
2003).
Colombia
Colombia’s dualistic agriculture is reflected in patterns of seed use. There are hardly any
private bean varieties marketed and most of the production is in local varieties. The vast
majority of seed is farm saved or informally acquired, even for those farmers who specialize in
commercial bean production. In rice, on the other hand, approximately half of the area is sown
with purchased seed each year. Seed purchase is quite high in this largely commercial enter-
prise, although the industry is concerned about the amount of unauthorized seed sale by
farmers. A little more than 40% of rice seed sales are by FEDEARROZ and the rest is divided
61
among 6 other companies. Maize is much more of a small-farm crop and the proportion of
purchased seed is much lower than in rice. However, the commercial maize sector, which
grows maize mostly for feed, is heavily dependent on purchased hybrid seed. Currently three
MNCs account for about 80% of the hybrid maize seed market. Cotton is also dominated by
MNCs, but official statistics indicate that the degree of seed saving varies widely from year to
year.
India
Seed use in India varies by crop and by region. Nearly 90% of rice seed is still home saved or
locally acquired, but there are important regional differences, with very little commercial seed
sold in some states, while in others, like Andhra Pradesh, more than one-quarter of rice
farmers buy commercial seed in a given season. The situation for maize is even more variable,
depending in part on the farming system. In some states a considerable portion of maize is
produced for home food and feed use and hybrids account for less than 10% of seed use. In
other states, where maize is more of a cash crop, hybrids account for more than three-quarters
of seed use. The vast majority of maize seed sale is proprietary hybrids, although state seed
corporations and some small companies sell public hybrids and OPVs. Most vegetable growers
use purchased seed from the private sector. Hybrids are important in tomato and cabbage,
which are mostly imported, but some public hybrids and OPVs are in the market. For cotton,
there are distinct regional patterns of seed use. Northern India relies to a large extent on OPV
cotton (in large part because suitable hybrids have not yet been developed for this region);
these are largely public varieties, produced by both private and public seed companies. In
central and southern India, in contrast, most of the cotton sown is hybrids (mostly private),
produced almost exclusively by private firms.
Kenya
The star performer of the Kenyan seed sector continues to be hybrid maize. Kenya was one of
the first countries in sub-Saharan Africa to produce hybrid maize and many farmers have long
experience with relying on hybrid seed. Most of these farmers are in the more productive
highland areas, where Kenya’s commercial maize production is centered. Nationwide, annual
purchase of commercial maize seed accounts for about 45% of maize area; the vast majority
of this is hybrids, with some OPVs (public and private) being sold in more marginal production
areas. Maize seed sale is still dominated by KSC, which accounts for roughly 90% of the market;
the remainder of sales is divided among six other companies. There is little seed sale for other
crops. A few companies sell a small amount of seed of KARI bean varieties and some of the
MNCs market sunflower hybrids. Virtually all vegetable seed is imported. Most seed of crops
for dryland areas (sorghum, millet, pigeon pea, etc.) is only produced through special donor or
government projects.
Uganda
Although seed production and sales are increasing in Uganda, the majority of the industry’s
business is still through special projects or NGOs rather than over-the-counter sales. The major
product is maize seed; sales in recent years were under 2,000 Mt, but jumped to nearly
62
5,000 Mt in 2003. Beans are in second place, with roughly 800 Mt sold annually. Smaller
amounts of seed of sorghum, groundnuts and several other food crops are also sold. (About
7,000 Mt of cotton seed is procured from the ginneries each year.)
Table 6. Rice Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 30,000 464 (54% hybrid) 30% (OPV)
90% (hybrid)
Colombia 470 41 (all OPV) 50-60%
India 45,000 255 (98% OPV) 11%
Table 7. Maize Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 23,000 1,068 (90% hybrid) 96%
Colombia 550 2.5-3.0 (75% hybrid) 15%
India 6,100 28 25%
Kenya 1,600 15-20 (95% hybrid) 45%
Uganda 540 1.6 (2000/02)
5 (2003) (30% hybrid)
20-35%
Source: Area planted based on official statistics; other data based on expert opinion.
Table 8. Cotton Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 3,200 78 (15% hybrid) 35%
Colombia 44 0.76 35-65%
India 8,500 27 (35% hybrid) 65%
Uganda 160 (provided to farmers as part
of production package)
n.a.
Source: Area planted based on official statistics; other data based on expert opinion.
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Table 9. Examples of Annual Vegetable Seed Sales in India and China.
India China Crop
Hybrid (mt) OPV (mt) Seed Sale (m$) All seed (mt) Seed Sale (m$)
Tomato 28 300 11.1 464 44.8
Chilli 15 403 9.2 2,287 30.0
Cabbage 40 100 1.2 7,081 102.6
Cucumber 3 1,000 14.3 2,336 56.4
Source: India data from Anand 2003; China data from Koo et al., 2003.
Table 10. Seed Prices. Case Study Countries.
China Colombia India Kenya Uganda
Seed price
($/kg)
OPV
Hybrid
0.16-0.80
0.60-2.50
0.22-0.70 0.33
2.60
Rice
Seed/grain
Ratio
OPV
Hybrid
1.2-3.0
7-17
1.1-3.5 3.0
22.6
Seed price
($/kg)
OPV
Hybrid
0.48-1.00
1.55-2.63
3.14-5.23
0.33
0.54-1.32
1.00-1.56
1.50-2.23
0.70
1.44-1.72
Maize
Seed/grain
Price Ratio
OPV
Hybrid
4-12
8-12
16-20
3.1
5-13
6.7-10
10-15
Cotton Seed price
($/kg)
OPV
Hybrid
0.48-4.80
6.2
4.54 1.08-5.40
16.70
Source: Local estimates; seed/grain price ratios based on estimates of farmgate grain price.
3.6 Summary
The context of evolving national seed systems
Until fairly recently, seed supply in all the case study countries was in the hands of the public
sector and recent private sector involvement has been a function of policy change. Any assess-
ment of the specific impact of PVP regimes and other IPRs on seed industry performance and
investment must be seen in the context of these wider changes in the commercial and policy
environment. The country with the longest experience of private seed industry participation is
Colombia. However, the development of the private seed sector in Colombia depended to a
considerable extent on government support to agriculture, and this was drastically curtailed in
the early 1990s, before PVP was introduced. Thus the introduction of PVP met a small and
contracting private seed industry. India has nearly two decades of experience with a private
seed sector that is increasingly broad and diverse, but its PVP legislation is just being put in
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place, so any assessment of the effects will necessarily be ex-ante. Kenya has PVP legislation
in place, but government policy has only cautiously opened to private seed sector participation
in the past few years, and the number of players is still limited. Uganda is also a recent convert
to private seed industry participation and has yet to enact PVP. China’s former state seed
provision system is now being converted to one in which many public institutes are able to
manage their own revenue generation and purely private seed enterprise is also encouraged.
PVP is only one factor to be considered in this sharp reversal of dependence on state-managed
seed production.
Incentives for formal seed provision
With or without PVP, national seed sectors tend to develop along certain pathways. The degree
to which PVP can alter or accelerate such processes may be limited. In all the case study
countries, hybrids are the major point of entry for the private seed industry (and in the African
cases, the major product of the previously dominant public seed sector). Where OPV seed
attracts private attention, as in rice, the clients are market-oriented farmers (relatively large-
scale in Colombia, small-scale in India) who value the qualities of commercial seed. Strong
consumer demand for a range of vegetables, whose seed is difficult to save even if it is not a
hybrid, is another important stimulus for the seed industry (as in China and India). In all cases, a
certain minimum size of market is necessary to elicit commercial response. The opportunity to
take advantage of transgenic crops depends on having a biosafety regime in place. In summary,
these biological, economic and regulatory parameters have at least as strong an effect on the
development of plant breeding and seed markets as do PVP regimes.
The status of public agricultural research
Much of the plant breeding and some seed production still depend on the public sector in all
the case study countries. In the smaller case study countries public research is either being
reconsidered (as in Colombia) or is highly dependent on donor contributions (Africa). In China
and India much larger public research systems are in place with significant government commit-
ment, but even these systems are undergoing transition, as they are forced to redefine their
roles vis-à-vis growing domestic private sectors. The national research programs also receive
support from international agricultural research, but it too is facing sharp questions about its
mandate at a time of changes in public research priorities, the strength of private agricultural
research, and the emergence of domestic seed enterprises as competing clients. It is public
agricultural research that faces the greatest challenges in adjusting to the new IPR regimes.
The role of conventional seed regulation
Plant breeding and seed production are already subject to a set of regulations on variety
release and seed quality control. These regulations have played an important part in determining
the current course of seed system development in the case study countries. In each case, the
regulations have provided incentives (or disincentives) for certain types of breeding and have
encouraged (or discouraged) certain commercial endeavors. The seed regulatory regimes
control the type of seed that is available and in some instances act to control the unauthorized
use of germplasm or sale of seed. Recently established IPR systems in the seed sector are
meant to act in concert with conventional seed regulation and in some cases they are the
65
impetus for further changes in national seed regulations. It is important to understand the
interactions between the two regimes.
IPRs in the context of wider policy and economic changes
Plant breeding and seed delivery in the case study countries are dependent on a range of
factors, including commercial sector development, seed demand, public research strategies
and seed regulation. IPRs are an additional factor in the equation. At this relatively early stage
in the development of national seed systems and the recent establishment of PVP and patent
regimes the majority of respondents claim that these IPRs will be a key factor determining seed
sector performance. Although its current role may be in the background, its future influence
may be very substantial, and it is important that its role should be played in harmony with the
rest of national seed policies and agricultural development aspirations.
66
67
4. IP legislation and management in the case
study countries
4.1 PVP Legislation
The five case study countries provide a wide range of experience with IP legislation for the
protection of plant varieties. China, Colombia and Kenya are members of the 1978 UPOV
Convention and have had a PVP system in operation for several years. India has just enacted
PVP legislation and is still in the process of establishing implementation capabilities. Uganda
has no PVP legislation in place but a draft bill is before Parliament. The rest of this section
introduces the principal features of PVP legislation and administration in these countries.
China
Despite a longer history of other IPRs, PVP was introduced relatively recently in China. The first
‘Regulations of the Peoples Republic of China on the Protection of New Varieties of Plants’ was
decreed on March 20, 1997 and is effective as of October 1, 1997. However, the first appli-
cation was submitted only in 1999 when a ruling on ‘Implementation methods of the regulations
of the People’s Republic of China on the protection of new varieties of plants’ was decreed by
the MoA. In that year, China became a member of the 1978 UPOV Convention. There are
currently 41 species eligible for protection. This list concentrates on food crops and is based
on priorities from national and provincial specialists. Cotton is not yet eligible for protection
although the Ministry of Agriculture claims to have recommended its inclusion. Responsibility
for granting PVP titles is divided between the Ministry of Agriculture, which handles most food
crops, and the Ministry of Forestry, which is responsible for any woody species, including not
only forestry species, but also woody ornamentals. The Ministry of Agriculture established an
Office of Variety Protection for Agricultural Plants in 1999, which currently has 15 substations
throughout the country for DUS testing. China’s PVP legislation includes a broad farmers’
privilege for saving and reuse of own seed, which is perceived as important in a country with
many smallholder farmers. There is also no protection for essentially-derived varieties,
consistent with the 1978 UPOV Act. According to staff interviewed at the Ministry of Agriculture,
China is not yet considering amendments to make its PVP legislation conform to the 1991 Act.
But it is acknowledged that breeders would like the stronger protection and both they and
foreign governments are lobbying for such a change. Discussions with various individuals from
private breeding companies and other Ministries indicated that the Government is likely to
consider a move to the 1991 Act in the next few years.
Colombia
Although all countries of the Andean Community (Bolivia, Colombia, Ecuador, Peru, and
Venezuela) have agreed to a common regime of PVP, the actual implementation and enforce-
ment of PVP varies by country. Colombia joined UPOV in 1996. Much of the original pressure
for UPOV membership came from the floriculture industry, and the majority of PVP certificates
issued in Colombia are for flowers. Colombian officials stress that although the country is
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member of UPOV 1978, most of its rules conform to those of UPOV 1991; the length of
protection for field crops has been extended from 15 to 20 years and no crops are exempted
from protection. In addition, a recent ruling (Resolution 2046 of July 2003) prohibits farmers
with holdings greater than 5 ha from saving seed of protected varieties. Those with smaller
farms may save such seed but they are required to report to a local ICA official and give details
of how the home-saved seed will be processed and used. Administration of PBR in Colombia is
managed by the Office of Plant Breeders Rights and Seed Production, which is part of ICA. ICA
already had an office responsible for the regulation of seed production and this was assigned
the responsibilities for PVP when the legislation was enacted.
Kenya
The legal framework for PVP in Kenya was established in the Seeds and Plant Varieties Act of
1977 which was revised in 1991. Further details were defined in a supplementary issue of the
Act in 1994. An office for administering PVP began functioning in 1998 and Kenya acceded to
the UPOV convention in 1999. As in the case of Colombia, much of the pressure for joining
UPOV came from the horticultural industry, and the vast majority of the early applications for
PVP in Kenya were from foreign breeders. A decision in 2001 provided an amnesty for extant
public varieties, allowing them to be eligible for a full term of protection. This occasioned a
great increase in PVP applications for public varieties, but the provision is controversial and has
not yet been gazetted. Such varieties have thus not been issued with protection certificates.
More recently, there is a move to make Kenya compliant with UPOV 1991; issues of particular
importance are a more restrictive definition of essentially derived varieties (especially related to
flower mutants and the possibility of the addition of a transgene to a protected variety) and
greater control over farmer saving of seed of protected varieties (particularly the widespread
practices of saving and local sale of wheat seed). The administration of PVP was initially
assigned to KARI but in 1998 it was transferred to the recently established Kenya Plant Health
Inspectorate Service (KEPHIS) which also administers plant quarantine, crop variety release,
seed quality control and certification, and pesticide residue testing.
India
The Protection of Plant Varieties and Farmers’ Rights Act was passed in 2001, after long
debate. The original impetus for the Act came from India’s commercial seed sector, and the
government produced a first draft bill in 1993. However there was opposition to this draft from
both the industry and NGOs opposed to the implementation of TRIPS, and two further drafts
were produced and debated between 1996 and 1999. A Joint Committee of Parliament traveled
through the country collecting the views of the industry, NGOs, farmer groups and others and
redrafted the bill in 2000 for introduction to Parliament (Ramanna, 2003). In addition to the
official parliamentary enquiry, the issue was widely debated in India’s press. The resulting act
has a number of unusual features. The Act is exceptionally liberal in its definition of farm-level
seed saving, allowing farmers to save, use, exchange or sell (non-branded) seed of protected
varieties in the same manner that they were entitled to previously. It thus appears that selling
seed among neighbors is permitted, as long as the transaction is conducted informally and the
seed is not sold with any commercial denomination or packaging. The Act also provides for the
protection of extant varieties; any variety that has been officially released and notified is eligible
69
for protection for the specified period starting from the original notification date. In addition,
the Act includes extensive definitions of Farmers’ Rights, including the possibility of farmers or
farming communities registering their own varieties; the expectation that farmers can claim
compensation if a variety does not perform in the manner described by the breeder; and a
method of benefit sharing through a National Gene Fund. Some provisions seem to go beyond
the UPOV 1978 clauses, but UPOV is awaiting the implementation rules in order to judge
whether the Indian system is in conformity with the 1978 Convention. India has received
dispensation to access the Union under the old Convention. An authority is currently being
established under the Ministry of Agriculture to administer the Act. Rules and protocols for DUS
testing of 40 species have been established and the testing will be done by designated ICAR
institutes and state agricultural universities. The implementation of the 2001 Act is expected to
start in 2005.
Uganda
Like most countries in sub-Saharan Africa, Uganda is still in the process of establishing PVP
legislation in order to comply with TRIPS requirements. A draft Plant Variety Protection Act was
drawn up in 2002 and was still being debated in Parliament in 2004. There have been a number
of public meetings regarding the act, but unlike India, the impending legislation has not been a
subject of widespread debate, and both the private sector and NGOs complain that they have
not been adequately consulted. The draft act includes both provisions for PBR and, drawing on
model legislation from the African Union, for community and farmer rights. The act’s conception
of PBR is largely consistent with that of UPOV 1978, although it grants protection for field
crops for a period of 20 years. Its definition of Farmers’ Rights goes beyond UPOV 1978 by
allowing farmers to not only save seed of protected varieties but also exchange and sell (on a
non-commercial basis) such seed. In addition, farmers and farm communities may act as
custodians of local plant varieties, require prior informed consent for the use of such varieties
in plant breeding, and claim royalties as developers or conservators of varieties. Discussions
are still underway regarding the nature of the authority that would administer the Uganda PVP
legislation.
70
Table 11. PVP Legislation in Case Study Countries.
China Colombia India Kenya Uganda
Legislation Regulations of the
People's Republic of
China on the
Protection of New
Varieties of Plants
(1999). Member of
UPOV (1978) since
2000
Law 243 of
1995 establishes
PBR. Resolution
2046 (2003)
defines
limitations on
seed saving
Member of UPOV
(1978) since
1996
Protection of
Plant Varieties
and Farmers’
Rights Act
(2001)
establishes PBR.
India will apply
to join UPOV
Seed and Plant
Varieties Act
(Cap 326)
amended in
1991 and 1994
to establish PBR.
Kenya joined
UPOV (1978) in
1999
A draft Plant
Variety
Protection Act is
being debated in
Parliament in
2004. It defines
PBR as well as
farmer and
community
rights
Scope of
coverage
41 crops currently
eligible. Certificates
have been issued for
15 species to date;
cotton not eligible for
protection
All crops,
eligible. In
practice
certificates
issued for
7 agricultural
crops and
15 horticultural
crops
No crops
excluded, but
exemption for
varieties whose
commercial
exploitation
would be a
danger to public
order, public
health, etc.
No crops
excluded; to
date applications
have been
accepted for
31 agricultural
crops and
23 horticultural
crops
No crops
excluded
Length of
protection
20 years for woody
species (vines, fruits,
and ornamentals);
15 years for all other
crops
25 years for
trees and
horticultural
crops; 20 years
for field crops
18 years for
trees and vines;
15 years for
other crops
18 years for
trees and vines;
15 years for
other crops
25 years for
trees and vines;
20 years for
annual crops
Farmer seed
saving and
exchange
Seed saving and
exchange is
permitted.
(Local/informal seed
sale regulated by
seed law)
Farmers with
more than 5 ha
not allowed to
save seed of
protected
varieties. No
farmers’ privilege
for horticultural
or tree crops. No
seed saving of
transgenic
varieties
permitted
Seed saving,
exchange and
sale by farmers
is permitted, but
not sale of
‘branded seed’
Seed saving
currently
permitted, but
moving towards
UPOV 1991.
(Local seed sale
restricted by
certification
requirements)
Farmers have
the right to use,
exchange and
sell farm-saved
seed of
protected
varieties, but not
‘on a commercial
scale’
71
Table 11. (continued)
China Colombia India Kenya Uganda
Breeders’
exemption
Protected varieties
may be used for
breeding
(No protection for
EDVs)
Protected
varieties may be
used for
breeding
Protected
varieties may be
used for
breeding. An
essentially
derived variety
can seek
protection, but
requires
agreement from
original breeder
Protected
varieties may be
used for
breeding, but
moving towards
UPOV 1991
Protected
varieties may be
used for
breeding
Protection of
extant varieties
Protection offered for
varieties already
available in China up to
four years earlier,
when a species/
genera first becomes
eligible for protection
(application must be
made within one year
for woody species and
within two years for
agricultural crops and
is conditional on DUS
test)
‘Amnesty’ for
1 year when
PVP was
introduced for
officially
released
varieties.
Protection
period was
based on
remaining
period, counting
from year of
release. Widely
used for flowers
(over 200),
4 cotton, 2 rice
and 1 soya. ICA
chose not to
protect
Varieties already
released and
notified will be
eligible for
protection (from
date of original
notification)
Public varieties
already released
eligible for
protection (from
date of filing),
but decision
contested
Extant varieties
not eligible for
protection
Plant variety
patents
Hybrids can fall under
the scope of a patent
for a ‘breeding or
selection
methodology’
Plant varieties
cannot be
patented, but
GMOs may be
patented
because not
found in nature
No patents of
plant varieties
No patents of
plant varieties
No patents of
plant varieties
Source: Compiled by authors from interviews and relevant national authorities.
72
4.2 Other IP Legislation
China
In China, patents are administered by the State Intellectual Property Office (SIPO), which was
the first government agency established for IP protection. SIPO is an independent organization
in China and administratively at the same level as the Ministry of Agriculture. With respect to
patenting of biological material, China studied the different approaches pursued in the U.S., the
E.U. and Japan when formulating its own policy in this area. Living organisms, such as plants
and plant varieties, are not eligible for patenting but genes are eligible, as they are considered
to be only part of a living organism. As of 2003, there were more than 100 applications for
patenting of genes related to agriculture. Biological processes, such as genetic transforma-
tions, are also patentable. Breeding and selection methodologies are also patentable, which
effectively allows patent protection to extend to hybrid varieties. A number of such patents
have been granted but the scope of allowable claims and impact of these patents is not well
known. For example, in discussions with IP specialists of large MNCs active in China, none
seemed aware of the possibility of patenting hybrid breeding and selection methodologies.
China now has 20 years experience with its patent system. One hundred thousand applications
were filed in 2003 divided among the three types of protection administered by SIPO: invention
patents (which are similar to utility patents), utility models (which are similar to petty patents)
and industrial designs. About 50% of all applications for invention patents are filed by
foreigners, of whom about 60% use the PCT, whose use is increasing quickly. SIPO currently
has about 1,400 examiners, of which 1,200 work on invention patents and the other 200 on
utility models and industrial designs. Examiners with sufficient biological expertise for
biotechnological applications are not reported as a constraint at least in comparison to other
technological areas, such as business methods. Applications do not normally require more than
30 months to process.
Trademarks have been available in China since 1979 and are administered by the Trademark
Office of the State Administration for Industry and Commerce. The Trademark law was amended
in 1994 and again in 2001, when geographical indications were included to comply with TRIPS.
The 2001 revisions have only become operationalized in 2003. The Trademark Office is an
administrative management institute under the State Administration for Industry and Commerce,
one of the Ministries under the State Council. It operates independently of SIPO, although they
both participate in a high-level IP coordination group under the auspices of the State Council.
Examinations for trademarks are normally processed within a few weeks. Trademarks are used
by seed companies in China but their effectiveness is difficult to gauge. It is easy to find
examples of logos on commercial seed packages that are extremely similar to competitors’
trademarks.
The approval of varieties is completely independent from the trademark processes. Approved
varieties are marketed by all legal seed producers under their official name, which cannot be
trademarked (lack of novelty). If a variety name is first granted a trademark, then it may not be
used in the variety registration and should be rejected. Officials of the Trademark Office have
contact with the Ministry of Agriculture on an annual basis to check for double-use of variety
names.
73
Geographical indications (GI) must be applied for by a group such as a co-operative or asso-
ciation, with the capacity to certify the origin of the products under the GI. GIs are being used
for specialty, local agricultural products with a wider reputation. There were more than
100 registered as of March 2004, including for example a type of ‘fragrant pear’ from Xinjiang
Province. Agricultural products covered under GIs include other fruits and teas. The Trademark
Office plans to carry out awareness-raising activities on GIs at various levels of the offices of
the Administration for Industry and Commerce in an effort to promote development of farmers
and ‘brand agriculture’.
Colombia
In Colombia trademarks and patents are administered by two sections of the Industrial Property
Division of the Superintendence of Industry and Commerce under the supervision of Ministry of
Commerce. The New Creation Office (i.e. patent office) employs 15 examiners, one of whom
works on biotechnology. In 2003 this Division received 1,209 applications, 83% of which came
through the PCT; 291 patents were granted in 2003. In the same year, the office also received
176 applications for utility models (petty patents) and 239 applications for industrial design.
Genes and plant varieties cannot be patented (following an Andean Community agreement) but
micro-organisms ‘not found in nature’ and GMOs are eligible for patents.
In Colombia, similar to the other case study countries, official variety names cannot be trade-
marked. However, for crops that do not require the use of the official variety name in trade,
such as flowers, the varieties are effectively protected through this form of IPR. Even old
varieties can thus be controlled by the breeder after the expiry of breeder’s rights. The
Distinctive Signs Office (i.e. trademark office) is also responsible for brands and geographical
indications. Copyright is the responsibility of the National Copyright Directorate of the Ministry
of the Interior. There is communication between the Industrial Property Division and the PVP
office regarding variety denominations and the PVP Office. The various offices responsible for
IP interact from time to time (e.g. when international trade negotiations are in progress) and
although there is considerable sympathy for the formation of a single IP authority there are no
government resources to bring about such a change at present.
India
India’s patent system does not have experience with technologies related to agriculture. The
current law excludes the protection of plants and excludes methods of agriculture. The patent
office does not have any specific expertise in plant biotechnology, but it does have experience
with other areas of molecular science. Several modifications in the patent law were implemented
in 1999 to bring the system more in line with TRIPS. Exclusive marketing rights were introduced
for pharmaceuticals that protected the inventor in the market for 5 years, but these have been
superseded by a third amendment of the patent act which took effect 1.1.2005 through the
issuance of an ordinance by the President. This latest amendment allows product patents in all
fields of innovations, including the protection of micro-organisms and genes. It is unclear to
what extent agricultural exceptions will limit the scope of gene protection for plant varieties, but
the industry expects that case law will soon open the way for agricultural biotechnology patents.
74
The trademark system in India is well established. Official variety names cannot be protected.
Trade secrets fall under unfair competition in the trade laws.
Kenya
The Kenyan patent law is administered by the Kenya Industrial Property Institute (KIPI) under the
auspices of the Ministry of Trade and Industry. It has 20 examiners out of which seven have
knowledge of biotechnology. KIPI has received 401 national applications of which 100 were
granted and an additional 243 through PCT of which 69 were granted. There are also 2033
ARIPO patent applications designating Kenya (1103 granted in Kenya); 56 national utility model
(19 registered); 556 national industrial design applications (216 registered) and 86 through
ARIPO (64 registered). KIPI has an advanced documentation system. The Kenyan law allows
protection of both process and product patents in biotechnology but excludes patents on plant
varieties. Of the national patents granted by KIPI only two are plant-related. There may however
be biotechnology patents valid in Kenya through PCT.
Trademarks and patents are administered by KIPI under two acts, the Trade Marks Act Cap
506 and Industrial Property Act 2001. Trademarks can be protected in Kenya, but not official
variety names. KIPI is also responsible for geographical indications and trade secrets, however
these two are being defined in acts of parliament. Copyright is the responsibility of the Attorney
General Chambers. The communication between KIPI (patents), KEPHIS (PVP) and Attorney
General Chambers (Copyright) concentrates mainly on awareness creation and planning for
international negotiations. PVP cannot be administered outside the Ministry of Agriculture, so
coordination will remain an issue.
Uganda
Almost all patents come in through the regional patent office in Harare (ARIPO). The national
patent office has very few staff and does not have data available on plant-related patents that
are valid in Uganda. The office has a very limited capacity to examine applications and
concentrates on examining ARIPO and PCT reports with regard to specificities of the national
patent law.
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Table 12. Participation in International Treaties and Organizations.
Treaty or
Organization
China Colombia India Kenya Uganda
UPOV 1978 convention,
since 1999
1978 convention,
since 1996
No 1978 convention,
since 1999
Observer
IT/PGRFA No Acceded 2004 Ratified 2002 Acceded 2003 Acceded 2003
CBD Ratified 1993 Ratified 1994 Ratified 1994 Ratified 1994 Ratified 1993
Cartagena Protocol Signed 2000,
not ratified
Ratified 2003 Ratified 2003 Ratified 2003 Ratified 2003
WTO Yes, 2001 Yes, 1995 Yes, 1995 Yes, 1995 Yes, 1995
WIPO Yes Yes Yes Yes Yes
PCT Yes, 1994 Yes, 2001 Yes, 1998 Yes, 1994 Yes, 1995
Source: Compiled from interviews and information on websites of international treaties and organizations.
4.3 The Management of PVP in Case Study Countries
4.3.1 Applications for PVP
The experiences of the three case study country PVP offices are quite different.
In China, there are 70 scientists assigned to DUS testing at the 15 designated stations and
another 16 examiners to test 41 species of crops. All PVP applications to date have used DUS
testing carried out in one of the stations; there is as yet no experience in the use of foreign
DUS reports. Applicants must complete a form that includes UPOV descriptors and other infor-
mation. Many applicants find this difficult to complete and the majority (80%) of applications for
PVP are prepared by an agent. The agents are licensed and they charge a fee of $350-500 for
foreign applications and approx $250 for local applications.
China received 1,150 applications for PVP between 1999 and 2003. Of these, 411 have
already been granted. Many applications made in 1999 have not yet been acted upon; for
those applications granted, the average time from application to approval is 17 months (Koo
et al., 2003). The vast majority of the applications are for field crops; maize and rice account
for 45 and 32% of the applications, respectively. More than three-quarters of the maize appli-
cations in the MoA office for PVP are for hybrids and more than three-quarters of the rice
applications involve either hybrids or inbred lines. Wheat, soybean and rape seed are the other
major examples of field crops seeking PVP. Two-thirds of the applications come from public
research institutions, mostly at the provincial and prefecture level. Applications at the Ministry
of Forestry PVP office are mainly for roses.
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The PVP and Seed Production office in Colombia has a director and 6 technicians attached to
it. None of these work full-time on PVP, and most contribute to DUS testing when necessary.
ICA developed its own capacity for DUS testing for tropical crops from the initiation of the
office, and received advice and training from UPOV. However, the vast majority of PVP
applications are for ornamentals for which testing is done externally. Most foreign applications
for PVP are handled by local law firms with the requisite expertise. If DUS data already exist for
a variety the confirmation process usually takes about one year. If the data do not exist, the
applicant pays for testing in an appropriate country. The office has good relations with testing
authorities in France, Germany and the Netherlands.
Table 13. PVP Applications and Certificates Issued by MoA in China.
Crop 1999 2000 2001 2002 2003 Total
applications
Total certificates
issued (2003)
Maize 95 58 126 120 121 520 248 (178 hybrid,
70 OPV)
Rice (non-hybrid) 2 5 12 21 43 83 15
Rice (hybrid 4 4 17 31 53 109 25
Rice (inbred lines) 9 15 31 29 89 173 42
Wheat - 3 10 30 41 84 21
Soybean - 13 4 6 7 30 19
Rape seed (OPV) - 3 5 12 18 38 11 (6 hybrid,
5 OPV)
Pepper - 6 1 3 - 10 1
Cabbage 4 1 5 - 5 15 7
Groundnut - 1 5 1 3 10 5
Potato 1 - 3 - 3 7 1
Pear - 1 6 10 1 18 8
Other - 3 2 24 24 53 8
Total 115 113 227 287 408 1150 411
Source: Compiled by authors based on information obtained from Chinese Ministry of Agriculture. Data do not
include applications made to Ministry of Forestry for woody species.
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Table 14. Source of Applications for PVP in China.
Source Number applications (and %) Number certificates issued (and %)
Public research institution
National 36 (3%) 13 (3%)
Provincial 319 (28%) 137 (33%)
Prefectural 329 (29%) 110 (27%)
University 85 (7%) 36 (9%)
Seed company 323 (28%) 107 (26%)
Individual 45 (4%) 8 (2%)
Foreign 13 (1%) -
Total 1150 100
Source: Compiled by authors based on information obtained from Chinese Ministry of Agriculture. Data do not
include applications made to Ministry of Forestry for woody species’.
Colombia has received 785 applications for PVP since 1996 and 448 had been granted by mid-
2004. The vast majority of the applications are for ornamentals; roses account for 62% of all
applications. The major examples of PVP for agricultural crops are rice (which has had
12 applications to date, with 6 granted) and cotton (25 applications and 8 granted).
Applications for other field crops include soybean, tobacco and potato, all from the private
sector. Although hybrid maize is an important crop in Colombia, sold by several local firms and
MNCs, there are no PVP applications for maize. Other important agricultural crops, including
beans and wheat, are similarly unrepresented.
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Table 15. PVP Applications in Colombia.
Crop Applications made Certificates granted
Roses 448 (62%) 279 (62%)
Other ornamentals 214 (30%) 139 (31%)
Rice 12 (2%) 6 (1%)
Cotton 25 (3%) 8 (2%)
Soybean 8 2
Potato 5 3
Tobacco 4 3
Sugar cane 5 5
Other 6 6
(All agricultural crops) 64 33
Total 727 451
Source: Compiled by authors based on information provided by ICA.
In Kenya, PVP is one of a range of services and regulatory duties performed by KEPHIS, which
is a state corporation. KEPHIS employs 4 examiners and 10 technicians (in 3 locations) to
administer PVP applications. KEPHIS carries out DUS tests on most of the agricultural crops
that apply for PVP; more than 100 public varieties of 26 agricultural crops were submitted for
testing, the majority in 2001 when the amnesty was announced. Applications for ornamental
and horticultural crops come mostly from foreign entities and the DUS testing is usually done
abroad, although KEPHIS is renovating glasshouses and other facilities in hopes of assuming
more responsibility for the testing these crops. A significant proportion of the applications for
agricultural crops come from the Kenyan public sector and researchers are expected to
provide their own descriptors as part of the application process. KEPHIS then confirms these
descriptors in two years of testing in at least two sites. (Note that DUS testing is also part of
the variety release process in Kenya.) There are a number of instances where breeders and
KEPHIS dispute the nature or quality of the data provided, and this undoubtedly slows the
registration process in some cases. The majority of foreign applications are handled by local
agents, either law firms or members of local flower growers. KEPHIS proposes to make the
use of local agents for foreign applications mandatory.
Between 1997 and 2003 Kenya received over 600 applications for PVP. More than half of
these are for ornamentals, with roses accounting for 41% of the total. Among field crops,
maize has the highest number of applications, accounting for 9% of the total; all of these
applications are for hybrids. In the first four years nearly three-quarters of the applications for
Kenyan PVP were from foreign entities, but in the three most recent years about two-thirds of
the applications are from Kenyan public research and domestic firms. The rise in domestic
applications is partly due to the amnesty granted to previously released public varieties that
were allowed to apply for a full term of protection. The fact that this amnesty is being
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contested, and has yet to be gazetted, is one of the explanations for the relatively low number
of PVP grants issued. One of the concerns was the ownership of the released varieties between
KARI and the Kenya Seed Company. By mid-2004 only 108 certificates had been granted.
Table 16. PVP Applications in Kenya.
Source of application Crop
Foreign Kenya
Public
Kenya
Private
Joint Public
& Private
Total
Applications
Granted
to date
Maize - 25 14 15 54 -
Wheat - 4 1 25 30 -
Barley - - 7 - 7 6
Sorghum - 2 - 5 7 -
Other cereals - 4 - 3 7 -
Rape seed 14 14 -
Sunflower - 5 5 - 10 -
Soybean - 7 - - 7 -
Other oilseeds - 3 - - 3 -
Beans - 6 1 6 13 -
Peas 7 - - - 7 -
Other pulses - 11 3 - 14 -
Potato - 4 - - 4 -
Cassava - 2 - - 2 -
Cotton - 1 1 - 2 -
Pasture grasses - 9 1 - 10 -
Tea - 12 21 - 33 -
Pyrethrum - 23 - - 23 23
Coffee - 4 - - 4 -
Macademia nut - 4 7 - 11 -
Sugar cane - 6 - - 6 2
Rose 248 - - - 248 61
Alstromeria 28 (?) - - - 28 9
Other ornamentals 33 - - - 33 6
French bean 13 - - - 13 1
Other vegetables 2 - 5 - 7 -
Fruit 5 - - - 5 -
Total 350 132 66 54 602 108
Source: Compiled by authors based on information provided by KEPHIS.
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4.3.2 Retroactive protection
A decision that can have an important effect on the early performance of a PVP office regards
the protection of extant varieties. In most cases in industrialized countries, extant varieties
were not eligible for protection when PVP was initiated. But there are several instances in the
case study countries where extant varieties are eligible.
In its 1999 legislation, China offered a ‘window’ when it established PVP that allowed protection
for varieties that had been released up to four years previous to the initiation of the legislation.
Its effects do not seem to have been very significant.
Colombia had a transition regime or ‘amnesty’ of one year for extant varieties when PVP was
initiated, granting protection for varieties that were already in an official public registry, offering
protection for a period based on the remaining time between the date of registration and the
15 or 20 years of protection offered under the law. ICA did not opt for PVP because it
considered their varieties to be of public access, and would have had a conflict of interest.
However, the amnesty seems to have been very significant, since 229 applications were filed
under this transitional regime. The main beneficiaries of this were ornamentals, but
4 applications were filed for cotton, 2 for rice varieties of a local company, and 1 for soybean
of another local company.
The decision in Kenya to grant an amnesty to released public varieties was responsible for a
flood of applications from KARI for the protection of its crop varieties. If the amnesty is upheld,
and KARI is willing to pay the testing and maintenance fees, it could exercise control over these
varieties for another full protection period of 15 years. Although KARI has signed a separate
agreement with KSC providing royalties for the use of its varieties currently in KSC production,
the validation of the amnesty would mean that KARI could collect royalties from any other seed
producer for a wide range of its crop varieties. The fact that KEPHIS is purchasing testing
reports on very old flower varieties in the Netherlands seems to imply that such an amnesty is
also available for varieties whose protection has expired in Europe, thus providing for a very
significant extension of the protection in a major flower-producing country.
The new PVP Act in India will allow the protection of varieties that have already been released
and notified, but the protection period will begin from the original notification date. Only a small
proportion of commercial hybrids is notified and will be able to take advantage of this. The
major impact will be for public varieties, some of whose seed is currently marketed by private
companies or used as breeding lines. Many private companies are not aware of the possible
implications of such protection of extant varieties and it is not clear what, if any, rights the
public sector institutes will try to enforce in this respect.
4.3.3 Deposit of breeding lines
An additional concern regarding participation in a PVP scheme is the requirement for deposit of
germplasm, particularly inbred lines. The issue has not arisen in Colombia, as no hybrids of
agricultural crops have applied for PVP. In Kenya, KEPHIS currently does not have the facilities
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to store inbreds and certifies domestic hybrid production by visiting seed production plots and
checking inbred descriptors against a list provided by the seed producer. In India, current law
requires that NBPGR manages all import of crop germplasm (for research or seed production
purposes) and allows them to take samples for deposit. This has been an impediment for some
firms wishing to import inbreds that cannot yet be protected in India, or germplasm under
development e.g. in shuttle breeding programs, as the owners may worry about the security of
such deposits. The new PVP law would require deposit of the inbreds of protected hybrids, and
opinion in the seed industry is divided. Some companies feel that this will cause no problems,
while others are wary about the prospect and are anxious to see how the system will be
implemented.
4.3.4 Costs and budgets
The costs of applying for and maintaining PVP in the case study countries are presented in
Table 14, along with relevant data from the EU and US for comparison. It should be noted that
the costs of application in the case study countries are substantial; in addition there are
significant transaction costs (justifying the use of agents in China and Colombia). In China
maintenance fees rise steadily over the period of protection, in Colombia they rise only through
the first 4 years, and in Kenya there is a flat annual fee for maintenance. It is important to
remember that these are only the costs of obtaining PVP and that other expenses related to
variety testing and release (VCU) must also be met.
Table 17. Costs of PVP Application.
Item China Colombia Kenya EU US *
Application $217 $233 $200 $1,060 $432
Testing $556 $1,396
($155 if done abroad)
$600 $1,300 – $2,825
(depending on type of crop)
$3,220
Granting of rights - $39 $240 - -
Annual maintenance
fee (by year)
(1-3): $181
(4-6): $236
(7-9): $306
(10-12): $398
(13-15): $517
(16-18): $672
(19-20): $ 874
(1): $78
(2): $155
(3):$ 233
(4-20): $311
(1-20): $200 (1): $350-470
(2): $470-705
(3): $590-940
(4-20): $705-1,175
(depending on type of crop)
None
* The U.S. does not charge annual maintenance fees. In addition, in the U.S. testing is undertaken by the breeder
and results supplied to the Plant Variety Protection Office; the testing fee in the table refers to an examination
fee.
Source: Compiled by authors from interviews and relevant national authorities.
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China has quite high maintenance fees for PVP, compared to those in the other case study
countries, although some subsidies are offered for public sector applications. While this may
be justifiable given the large market for which exclusive rights are obtained, it is a frequent
complaint from the private sector, but also from public sector breeders. The prefecture level
public research institutes find it particularly difficult to apply for PVP due to a lack of funds
(Huang et al, 2003). During this study, research managers at the Guangdong Academy of
Agricultural Sciences pointed out, for example, that costs of a PVP (or patent) application can
approach RMB 10,000 while a researcher’s annual budget may be about RMB 20,000. A similar
complaint was made by the Rice Research Institute of the Hunan Academy of Agricultural
Sciences, who suggested that the application and testing fees for conventional rice varieties
should be lower than for hybrid varieties, given the different market segments targeted.
In the private sector, especially the breeders of ornamentals complain since they need to
protect a large number of varieties of a particular crop to start a significant production. The
local market for flowers does not seem to sustain such investments and several foreign
breeders avoid sending their elite materials to China as a result.
All income from the PVP office goes to the Treasury in Beijing. The fees charged are not
sufficient to cover the costs of testing, especially because of the large number of testing sites
and the resulting high investment budget for constructing facilities. In Colombia, the income
from the PVP office goes directly to ICA (and hence to the Treasury), but rough calculations
indicate that the PVP office is self-supporting. (Note that the current portfolio of applications in
Colombia implies a relatively small amount of DUS testing to be done in-country.) In Kenya it
was not possible to get a breakdown of the expenses and income related specifically to PVP
within the operations of KEPHIS but there is no requirement that PVP be self-financing.
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Box 3. Protection fees
Establishing the appropriate fees for protection is an important challenge for regulatory
agencies. High fees create a barrier to widespread participation, especially for public
institutes or smaller firms. On the other hand, low fees may cause financial problems for the
registration and testing authorities, leading to reduced efficiency and/or rent seeking.
There are basically two types of consideration in calculating appropriate fees: i) the extent
to which the agency establishes different fees for different types of crop variety and/or
applicants, and ii) the extent to which government subsidizes the protection agency as a
stimulus to national plant breeding activity.
With respect to fee rates, one option assumes that the cost of the authority’s activities will
be shared equally among all applicants and crops. This will probably involve a certain
amount of cross-subsidizing between crops (e.g. few applications and high costs in testing
sorghum can be compensated by many applications and relatively low-cost registration work
in rice).
Alternatively, countries may establish different fee levels for separate crop groups (based
on the actual costs of evaluation). This may lead to acceptable fees for crops with large
numbers of applications each year (e.g. major cereals). But it can also lead to prohibitive
fees if special facilities need to be maintained, and charged accordingly, for crops with few
applications per year (e.g. minor vegetables).
A third option is based on the value of the protection for the applicant. Fees for applicant
varieties with a potential large market can be higher than for varieties with a smaller market.
Fee levels for highly commercial crops like maize may not be useful for minor crops like
pigeon peas. This argument also underscores why it is difficult to make comparisons
between countries. Fee levels that are acceptable in a large country like China may not
stimulate applications in a smaller country like Uganda.
Countries could also establish different fee levels for different types of applicants. For
example, patent application and maintenance fees for independent inventors, small
businesses or non-profit organizations in the U.S. are now only 50% of the regular fees.
Countries may also subsidize certain operations of the testing authority, and they may
choose to reduce costs through international cooperation. In the European Union, for
example, national authorities share the responsibilities of testing particular species; Kenya
and Colombia purchase test reports for flower varieties from abroad. A limitation to this
option may be that some UPOV member countries share their test reports only with other
UPOV-member countries.
The need to cover the costs of variety protection has to be balanced by the need to
establish effective incentives for stimulating widespread invention and achieving equitable
results for all sectors of the farming community.
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4.3.5 Enforcement
To be effective, a PVP system must include adequate mechanisms for enforcement. The PVP
systems in Colombia, Kenya and China have only been in place for a short time, so there is a
limited amount of evidence available on enforcement capabilities.
PVP offices themselves are not actively engaged in enforcement. In Colombia, it is expected
that the breeder or seed producer will pursue any cases of infringement. In a recent example a
seed company asked the PVP office to examine particular fields and confirm that the cotton
variety being grown was the company’s. The company could show that the seed was not legally
acquired and used the PVP office testimony to obtain an out-of-court settlement. Another case
is being pursued where one company is marketing Brachiaria seed using the name of a popular
(protected) variety. The seed company licensed to sell the variety is trying to mount a legal
case. In general, the companies that sell rice seed are more concerned about the practice of
large-scale informal seed sale and hope that Resolution 2046, which limits seed saving of
protected varieties to small farms, will provide some relief. But the companies recognize that
they will have to detect the violators and bring cases. It does not help that the Colombian PVP
law currently has no description of penalties for violations.
In Kenya there have as yet been no major cases involving violations of PVP law. Probably the
major example is a dispute between a small seed company and KEPHIS regarding the
company’s rights to market seed of an old KARI maize hybrid.
In India, there is a provision in the 2002 Act for the establishment of an Appellate Board to
handle IP issues, so that knowledge can be drawn from different departments and experience
can be concentrated in this body.
Chinese institutes market their own products (which is not necessarily an efficient practice) for
fear of losing control of them if they attempt to contract out. Seed management stations under
county agricultural administration departments can check licenses and some are apparently
supporting breeders in claiming their rights and imposing fines. Several respondents however
complain that the level of knowledge of the courts is often insufficient to effectively enforce the
rights. One company manager explained that he pursues rather minor infringements mainly ‘to
educate the courts’.
4.4 Management and enforcement of patents in case
study countries
Experience with enforcing patents in the breeding industry has been very limited in the case
study countries. Only in China and Colombia are there a few varieties that contain patented
biotechnological inventions actually in the field, and enforcement is even more difficult than with
PVP, especially when it comes to pursuing illegal reproduction by farmers. One MNC is confident
that the recently concluded case in favor of the patent holder against a farmer in Canada will
facilitate enforcement in other countries as well, but large numbers of cases against farmers in
developing countries are not considered likely in the coming years.
85
However, unlike PVP, patents in agriculture can draw upon experiences of enforcement of the
patent system in industrial applications. Law firms that have experience with patent infringement
cases are available in all case study countries, even though the number is very limited in
Uganda. The presence of vast international experience, concerns for respecting property rights
and the threat of future claims can affect behavior. An example is provided in India, where the
National Botanical Research Institute (NBRI) decided not to release its own Bt gene because it
is not sure whether it will have enough freedom to operate regarding other components of the
construct when the new patent law becomes operational.
4.5 Summary
Establishment of legislation
PVP has been (or is being) instituted in the case study countries in distinct ways. Although three
of the four countries with PVP laws are members of the UPOV under the 1978 convention,
there are significant differences between them in the details of their legislation and in the actual
performance of PVP. Much of the explanation for these differences is in the distinct characters
of the national seed sectors. In addition, the historical development of support for PVP varies
among countries. The major pressure for the initiation of PVP came from the foreign horticultural
industry in Colombia and Kenya. In China, the initiation of PVP was part of a wider policy to
promote the development of the domestic seed industry and to establish a framework for
interaction with foreign agricultural technology. The establishment of PVP in India had its major
impetus from a well-developed private seed industry; the industry is large enough, and there is
a similarly well developed civil society representing a range of rural interests, so that the public
debate about the nature of PVP was open and extensive. In Uganda, on the other hand, neither
the seed industry nor rural civil society organizations are well established. The debate about
the nature of PVP has been restricted to a small committee of professionals dealing with both
breeding and genetic resources. Many developing countries that currently face the establish-
ment of TRIPS-compliant PVP will find themselves in situations similar to that of Uganda.
Once PVP legislation is in place, further developments are possible. The moves in Colombia
and Kenya towards restrictions on seed saving of protected varieties are a case in point. It
remains to be seen how such modifications are interpreted and applied. Right holders may say
that they would not pursue seed saving by smallholder farmers, but farmers in any country
require assurances that seed saving restrictions are not be applied in an arbitrary or politically
motivated manner.
Plant varieties are not covered by patent law in the case study countries, although China offers
patents for some special types of varieties (particularly hybrids) through provisions for the
patenting of breeding methods. Trademarks are commonly used in all case study countries to
protect seed company names and marks, but not for official variety names. None of the case
study countries have particular exemptions in their patent laws that bring the patent system in
line with the PVP system when the scope of the patent includes a plant variety or a group of
plant varieties. It is still unclear how the Farmers’ Rights clauses in the Indian law will relate to
the patent system when the latter will allow the patenting of products, such as genes.
86
The protection of extant varieties
One of the factors affecting the initial size of demand for PVP will be the decision on protection
for extant varieties. In many countries such a decision will be largely relevant to public varieties,
although private varieties may be affected in some instances (such as certain popular, notified
hybrids in India). If the public institutes are able to meet the fees for initial DUS testing, this
could result in a significant initial backlog of requests with little clear commercial purpose. It
should be possible to separate situations in which DUS testing is pursued as part of a plan for
seeking royalties and licenses from those instances where the public sector is simply trying to
ensure that private individuals do not usurp the products of their research. It is not clear if the
potentially high investment in maintenance fees for public varieties that remain off the shelf is a
good investment. In addition, such redefinitions of the status of public germplasm that is
already in use may upset relationships between the public and private sector, as the disputes
over the amnesty in Kenya illustrate.
Implementation of PVP
The ease of implementing PVP seems to be overestimated in several countries. It is incorrect
to believe that once PVP legislation is in place the rules and consequences will be clear for all
stakeholders, or that countries with similar legislation will have similar outcomes. In all cases,
the conduct of PVP is still being tested and refined. Establishing a PVP law and putting it into
practice are two separate challenges, and differences in the management of similar PVP
regimes help explain differences in outcomes and impact. Countries require considerable time
to experiment with the implementation of PVP and to understand the consequences.
The transparency of PVP management
An institution must be identified to manage PVP and for testing varieties. The duties may be
assigned to an existing agency, perhaps the one responsible for seed regulation, or a new
institution may be created. There are advantages of integrating PVP with an existing seed
regulatory agency, but also possible conflicts of interest. The agency must be seen to have
sufficient independence; for instance, there are some concerns in India about the fact that ICAR
will be assigned duties for DUS testing for its own varieties. Some parts of the private sector
also have concerns about deposits of inbreds. In addition, the agency must be transparent in
its interpretation of the rules.
Administrative and technical resources required to manage PVP
There is not yet sufficient experience to draw conclusions from the levels of participation in the
PVP system about the local resources required to manage PVP. In Colombia, a relatively small
number of private OPVs of commercial crops (rice, cotton, and soybean) have sought protection
and many of these are in production. In addition, a large number of horticultural crops have
been granted PVP, but the DUS testing has been managed externally. In Kenya, very few private
varieties of agricultural crops have yet applied for protection, but there has been a deluge of
applications for a range of public varieties (in response to an amnesty for extant varieties). This
has required an extensive amount of DUS testing, but what proportion of these public varieties
will attract maintenance fees remains to be seen. Kenya is also considering developing its own
87
testing capacity for things such as ornamental crops, although it is not clear if this is an
efficient use of resources. In China as well, there is a large, and continuing, demand for PVP,
largely for public varieties.
Fees for PVP
Another factor affecting the demand for PVP is the level of fees. The high number of applica-
tions in Kenya and China in the early years of PVP is not necessarily an indication of the levels
of demand that will eventually emerge. Whether private companies or government institutes will
be willing to pay application fees and yearly maintenance will depend on their experience in the
market. In large countries with extensive seed markets, investment in PVP will be easy to
justify; for smaller markets and niche varieties the justification will be more difficult. The fees
are uniform, without regard to type of crop or seed market (so that the costs of protecting a
rice OPV, a rice hybrid, and a common bean variety are all the same, despite significant
differences in their potential earning power in the seed market.) There is not much difference in
the costs of PVP between the 3 countries in the sample, despite significant differences in
potential market size. (For the 3 countries it costs between $1,200 and $2,400 to register and
protect a variety for five years.) In addition, the countries take quite different approaches to the
adjustment in fees during the period of protection; in some cases fees are lower in the earlier
years (presumably to encourage testing the market). As experience with PVP systems develops,
it will be important to see how the fee schedules affect the willingness to seek protection for
different crop types (e.g. high-value horticultural exports versus local grain crops).
Financial sustainability of PVP authorities
Discussions about the level of fees charged for PVP are related to the question of whether a
PVP authority can be expected to be self-supporting. If it cannot, then justifications for public
investment are required. On the other hand, if it is self-supporting, care must be taken to
ensure that revenues are not being generated by the enforcement of a protection system that
encourages high-value applicants and locks out lower-value candidates. Questions of financial
independence (and of the appropriate level of fees) also depend on the relative participation of
public plant varieties (and the extent to which revenue is earned simply by moving money from
one government agency to another). It was not possible to assess the degree of financial
sustainability of the 3 case study PVP authorities in their early years of experience. The rapidly
expanding Chinese PVP system is certainly not self-financing at this early stage in its career,
while the Colombian system (which does its own testing on a very limited number of crops and
earns substantial revenues from the protection of foreign-origin IP) would appear to be viable.
Enforcement capacity
The PVP agency itself is rarely the body responsible for enforcement, and if PVP is to function
efficiently concomitant enforcement capabilities and resources must be developed. The few
cases described in Colombia indicate that sanctions for violations are not defined and that the
courts are not well prepared. Experience from China shows that it takes some time for the
courts to develop requisite expertise in this area. In all cases, private and public plant breeders
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must recognize that the major responsibility for identifying violations and pursuing cases rests
with them, implying additional investments of staff and resources.
Implementation of patents and trademarks
Patents in the breeding industry do not require specific implementation needs apart from a
capacity in the patent office to examine molecular biotechnology tools, methods and products.
Countries can benefit from regional (e.g. ARIPO) or global (PCT) harmonization of application
and substantive examination of applications. There is no or very little case law in the countries
studied about the width of the claims, the scope of protection, etc. Enforcement of patents in
the breeding industry can draw on the infrastructure in the case study countries for enforcing
patents in other industries even though experiences differ among the countries.
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5. Impact on seed companies
5.1 Seed Company Approaches to IPR
There has been significant private seed sector activity in many developing countries even
before the establishment of national IP regimes for plant varieties. In these cases companies
have tried to protect their products through other means (particularly through reliance on
hybrids and being ‘first-to-market’) and have rarely devoted many resources to the consideration
of IP issues. The MNCs that see a market for their (patent-protected) GMOs form an exception
to the above. They have protected their inventions in the main markets outside the OECD-
countries where possible. With the advent of PVP laws, companies must now reconsider their
strategies and investments in IP.
In India, seed companies are anxious to apply for PVP for their hybrids. Many private seed
companies compete, and seed production usually takes place with contract farmers in specific
areas of the country that have appropriate agronomic conditions and grower experience for
efficient seed production. The juxtaposition of many small seed producers for competing firms
and the impossibility of providing strict monitoring means that inbreds and other germplasm
may be stolen or traded. (The industry politely describes this as ‘cross-purchasing’.) Some
observers estimate that one popular cotton hybrid has leaked from the company that developed
it and is now produced and sold under different names by as many as a dozen competitors.
Another company spoke of its surprise at finding its sunflower hybrid entered by a competitor
in an AICCIP trial. The hope is that the new PVP law will allow companies more control over
their inbreds.
Many Indian companies decry the lack of contact with the public system and hope that the
establishment of PVP will usher in a new policy that provides greater access to public
germplasm. Most Indian companies express an interest in this possibility and a willingness to
pay for access to such material.
The private sector is now preparing for the implications of the new PVP law and of the seed and
patent laws which are due in 2005. Until recently, private companies in India could sell their
own varieties without having them released and notified, a requirement for public varieties.
Non-notified varieties could not be certified, but many companies prefer to sell their seed,
particularly hybrids, as truthfully labeled seed in combination with a well established brand
name. Private companies are well aware of the new PVP law, and most hope to register their
varieties despite what they generally consider weak protection. But there is considerable
uncertainty about what such registration will entail, and to what extent it will be regulated by
seed law or plant variety protection law. Most seed companies are adopting a ‘wait and see’
attitude. The companies understand that DUS testing will be required for PVP, and some
believe that DNA fingerprinting may be used (which is not likely to happen in the short term),
but opinions vary regarding the degree to which other tests will be required (as the new Seed
Law has yet to be finalized). Some observers are concerned about costs and efficiency of
managing large scale DUS testing that will be required. Although many companies welcome
the possibility of protecting their hybrids (especially for controlling the theft of inbreds), some
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express reservations about the requirement for depositing protected inbreds with NBPGR. In
some of the larger firms, new posts have been developed for monitoring and advising on IP
issues. The largest firms are developing considerable legal capacity. Some smaller companies
have tried to deal with particular violations of their IP (such as the imitation of brand names or
theft of inbreds) by hiring lawyers and occasionally pursuing court cases, but this has not
resulted in any strengthening of company IP skills. Companies that are part of larger commer-
cial holdings can draw upon the legal capacities of the parent company.
The situation is different for foreign seed companies operating in India that use biotechnology
in their breeding programs. They expect that the new patent law will provide effective protection
after an initial ‘maturation’ period, and many have filed applications, using a ‘mail box’ procedure;
such applications will be considered when the new patent law becomes effective in
January 2005. The use of this procedure addresses restrictions on late registration. At the
same time, companies are increasingly wary of working with technologies that may contain
components that could eventually fall under an Indian patent.
In China, private sector participation in the seed sector is developing rapidly, as a result of the
new seed sector regulation which eliminated the monopoly of the public seed companies. Many
smaller, start-up companies, have appeared and several larger ones are seeking partnerships
with foreign companies. Companies are concentrating attention on hybrid varieties for all major
crops, but not exclusively. Attitudes towards IPRs differ depending on the size and nature of the
companies. The larger companies, such as China National Seed Group, already make use of
trademarks and are applying for PVP titles. These tend to be well-resourced companies that
have their origins as public corporations that are in the process of some sort of privatization.
Such companies are devoting professional staff to IPR management, primarily PVP and trade-
marks. However, it is not clear how some of these companies that are engaging in breeding,
possibly with the use of transformation techniques or marker-assisted selection, are dealing
with FTO issues. Also a wide range of vegetable seed companies have been using trademark
protection for quite some time.
Many smaller Chinese companies, on the other hand, have established themselves in order to
produce and sell seed of competitors’ varieties ‘illegally’, reportedly without knowledge of
restrictions imposed by IPRs. Some of the larger companies describe the current situation as a
learning phase for a market which does not have a long history of IPRs. The CEO of one major
domestic seed company, active in maize and also in cotton, explained that they pursue as
many PVP infringement cases as possible because they feel it is necessary to ‘educate’ their
competitors, as well as the legal system, about the new rules of the game. Foreign seed
companies have been rather cautious about using the new PVP system. They are worried about
leakage of their material during the DUS testing and many are adopting a wait-and-see attitude
concerning the effectiveness of enforcement. In many cases, they cite perceived weak enforce-
ment possibilities as a reason for refraining from introducing elite material in the Chinese
market or in investing in major breeding programs (with partners). The situation with vegetables
is illustrative. Many domestic companies are applying for PVP protection but still seem to be
concentrating on hybrids. Foreign companies, some of whom even use China as a production
base for other markets, have generally limited themselves on the local market to introducing
older varieties whose protection has almost expired.
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In the other case study countries the domestic seed companies are relatively small and do not
have the resources to establish legal expertise. In Colombia, there are agents that help
companies apply for PVP. In Kenya, the new private seed companies have not yet applied for
PVP for their varieties, even for maize OPVs, partly because they view the process as involving
high transaction costs.
5.2 Seed Company Priorities
Although one of the objectives of PVP is to provide incentives for a wider range of breeding
strategies and objectives, the evidence from the private seed sector in the case study countries
provides few examples to date. However, the length of time that companies in these countries
have had to gain experience with PVP legislation is admittedly limited, so the evidence must be
interpreted with caution.
The majority of private seed company activity continues to focus on hybrids, and asked about
whether investments might be directed to OP varieties or crops because of IPRs, all responded
that they would concentrate on hybrids where these are feasible. Colombian rice breeding by
the private sector seems to be an exception, but this was already ongoing long before PVP
was established. Companies now seek protection for their rice varieties, but there is not
sufficient evidence to demonstrate increased private rice breeding activity due to the IP regime.
Most of the farmers who purchase rice seed manage commercial operations (average holding
about 32 ha) and many purchase seed rather than saving it, so the rice seed industry has a
reasonable market. Nevertheless, the considerable amount of informal seed sale, and the fact
that there are no criminal penalties described for PVP violations, means that incentives for the
seed companies are still limited. The advent of PVP in Colombia has not seen the emergence of
private plant breeding for crops such as OPV maize or beans.
In Kenya, the major hopes of the private seed industry rest with hybrid maize despite the
introduction of PVP. However, two companies are producing and marketing their own OPVs,
and KSC also markets public OPVs. It is interesting to note that the private companies have so
far not applied for PVP for these varieties. Private companies are not investing in breeding for
other non-hybrid seed crops, although the brewery funds some of the public barley breeding.
The flower sector claims that PVP is vital for the development of this sector. It is worth noting
that part of the rationale for Kenya’s proposed move towards UPOV 1991 comes from KSC
complaints about the widespread sale of farm-saved seed among wheat farmers; KSC is
currently the only firm supplying wheat seed.
In China, the PVP system has existed only four years but there is not yet much indication of
private sector interest in breeding OPVs. One of the largest, diversified seed companies, China
National Seed Group, indicated that PVP has not affected its hybrid/OPV mixture of products
and breeding strategies. Breeding with OPVs seems to be minimal and concentrates, as does
marketing of imported OPVs, on small market niches where there is demand from very profes-
sional, commercially-oriented growers who would not be interested in purchasing ‘counterfeit’
seed. Again both domestic and foreign companies do not yet have sufficient trust in enforce-
ment possibilities to consider OPVs seriously. According to some, PVP can help improve the
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protection of their hybrids through the protection of the inbreds, but those who can choose to
continue to use (modified) three-way crosses that provide a reasonable protection from
‘stealing’ inbreds by competitors. Foreign companies may market some OPVs but are not yet
bringing in elite material. Optimists claim that time is necessary for Chinese business culture,
as well as the legal system, to adjust.
Monsanto and Delta & Pineland’s experience with Bt cotton may indicate that confidence in the
patent system is not much greater. Aside from complaints by their Chinese partners of the
difficulties in enforcing the patent, Monsanto has clearly withheld from introducing its Bollgard II
technology in China awaiting new strategies that can effectively deal with the business
environment.
The Indian private seed industry is large and diverse and there is no single attitude that charac-
terizes the attitude towards breeding strategies. However, there is relatively little evidence at
this early stage that the new PVP law will elicit much additional breeding activity outside of
hybrids. There are a few private companies that already have their own OPVs (e.g. rice, cotton,
and certain vegetables); they expect the new legislation will help protect them from competitors,
but at this point they have no plans to expand their breeding in this direction. A few companies
say that if the PVP legislation is effective they may expand into non-hybrid seed, but many
others reject the possibility, at least in part because of the very liberal scope for farmer seed
saving and exchange. Some seed companies express interest in non-hybrids as a way into the
hybrid market. For instance, several companies began conventional rice breeding programs as
a way to gain a foothold on what they hope could be a lucrative hybrid rice market. One com-
pany in the sample hopes to begin mustard and wheat breeding, but again in the expectation
that hybrid technology will eventually become feasible. One large company has temporarily
abandoned its work on a transgenic mustard hybrid, but continues to market an OPV based on
its brand recognition for seed quality. The strategy of offering a wide range of products to
farmers in order to generate brand loyalty explains the fact that at least one large company
expresses interest in crops like soybean, not as an important generator of revenue, but as an
additional service to its clients of hybrid cotton and sorghum.
The existence of PVP legislation is reported to make foreign companies more willing to provide
their more advanced breeding lines and varieties to a country, but this depends on the level of
enforcement. In India, some local representatives of MNCs say that they still have only restricted
access to the parent company’s germplasm while others say that the situation is improving. In
China, companies seem to be playing a wait-and-see game, watching the experiences of mostly
domestic competitors in pushing through enforcement cases.
5.3 Protecting Bt Cotton
The most relevant example of the challenge of protecting a transgenic variety is the case of
Bt cotton, already grown in China, Colombia and India (and a future possibility for Kenya and
Uganda).
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China has the longest history with Bt cotton, both through a joint venture between Monsanto,
Delta and Pineland and the Hebei provincial seed company, and separate constructs and
varieties developed by the public research organizations of CAAS, including BRI. Bt varieties of
cotton have been quite successful in north China, in particular the provinces of Hebei, Shandong,
and Henan. It was estimated that almost one-third of all of China’s cotton area was planted with
Bt varieties in 1999, and 58% in 2003 (Pray et al., 2002; James, 2003). Difficulties in making
precise estimates illustrate the special challenges of protecting Bt cotton in China. Monsanto
and Delta and Pineland first introduced their 33B variety in 1999 in Hebei and two years later
introduced their 99B variety. Biosafety approval, although nationally coordinated, is granted on
a province-by-province basis and marketing of Monsanto’s varieties has extended gradually to
other provinces during the last six years, but not without reported delays (Pray et al., 2002).
Monsanto has some patent protection in China, including on their transformation methods and
the 35S promoter gene. But they do not have protection on the Cry1Ac gene construct. Given
that cotton is not yet eligible for PVP, this leaves trademarks and biosafety as possible modes
of protection.
It is commonly acknowledged by many involved in the sector that there is widespread illicit
production and marketing of Monsanto and Delta and Pinelands’ Bt varieties (see Pray et al.,
2004). During a random visit to seed shops in Henan Province, packages marked as 99B seed,
either illicit or counterfeit, were readily available. There are also no legal restrictions on farm-
saving of seed and Monsanto’s construct has reportedly been crossed into other varieties by
farmers (and breeders). A similar situation faces the public-sector developers of Bt cotton in
China even though BRI does have patent protection for its two Bt constructs. BRI acknowledges
the problems that their joint venture company, Biocentury, has had in enforcing the patents.
The Cotton Research Institute (CRI), based in Anyang City, Henan, also has Bt varieties
containing constructs licensed from BRI. CRI management explained that biosafety regulations
currently provided the most effective means to limiting illicit sales of their varieties, particularly
given the ineligibility of cotton for PVP, But a visit to another seed shop in Anyang also revealed
illicit or counterfeit CRI varieties (particularly CRI221) easily available. Thus neither BRI nor
Monsanto and Delta Pine Land’s Chinese joint venture (Ji Dai) is able to effectively control
unauthorized sales of their varieties. Many, though not all, claim that the situation is improving,
although the situation would be improved if PVP were available for cotton. Monsanto has yet to
introduce its Bollgard II technology in China. This may be due to IP considerations, or the
changing rules concerning foreign participation in the biotechnology and seed sectors.
India’s first Bt cotton was released through a joint venture between Monsanto and India’s
largest seed company, Mahyco, which it partly owns. Mahyco cotton hybrids that were already
marketed in southern India were transformed and submitted for biosafety approval. They were
made available to farmers in 2002. The release of the varieties and their subsequent perfor-
mance are the subjects of considerable controversy, as there are many anti-GM movements in
India. Mahyco claims to be satisfied with the sale of the transgenic hybrids (which are priced at
close to four times the cost of conventional cotton hybrid seed), but it faces a number of
uncertainties related to IP strategies. It is not possible to patent genes in India, and the PVP
system in not yet in force. It would appear that at present the only effective way of controlling
the unauthorized sale of Bt varieties is through the biosafety regulations. The year before the
Mahyco hybrids entered the market, a small seed company in Gujarat marketed an ‘insect-
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resistant’ cotton variety that turned out to contain the same Bt gene. Although the company
protested its innocence, claiming it must have been introduced through natural cross-fertiliza-
tion, the most widely accepted explanation is that company breeders crossed commercial
Bt cotton (from the US) with their own lines and produced a cotton variety that quickly became
very popular with Gujarat farmers. The company was prohibited from continuing by the
enforcement of biosafety legislation (i.e. their variety had not achieved clearance). Mahyco’s
own Bt varieties are only approved for certain states, but there is already a thriving underground
market for the seed in north India. There are many rumors of other ‘Bt’ cotton varieties for sale,
and although the majority are surely spurious, everyone admits that it is fairly straightforward
to use commercial Bt varieties to develop new varieties. Despite the losses in control and
royalty income by Monsanto/Mahyco, the widespread illegal introductions in Gujarat and other
areas may have opened up future markets for the company, thus falling under ‘optimum levels
of piracy’ strategies (G. Tansey, pers. comm.)
Monsanto’s strategy with respect to Bt cotton in India has now shifted towards technology
provision rather than direct marketing. A joint venture (Mahyco Monsanto Biotechnology Ltd.) is
providing the Bt gene for cotton to other Indian seed companies. A number of companies have
entered into agreements for access to Monsanto’s Bt cotton lines to use in their own breeding
programs. As the company does not ‘own’ the gene, the contract is based on access to the
biosafety data that will be necessary for approving any transgenic variety. At the same time, a
consortium of seven seed companies entered into agreement with the National Botanical
Research Institute for access to another Bt construct. That arrangement is currently on hold
because of uncertainties about NBRI’s freedom to operate, and some have turned to Monsanto
for quicker access to Bt technology. In addition, another company has entered into agreement
with Biocentury for access to the Chinese Bt gene for cotton.
Cotton is a less important crop in Colombia than previously, but it is now the subject of
considerable government effort at expansion. Monsanto introduced a Bt cotton variety there in
2004. Both Monsanto and the Colombian government are anxious that the experiment works
well, and considerable care has been taken to ensure that there is no unauthorized production.
The production and sale of the Bt variety is licensed to a local seed company. Farmers who
want to grow Bt cotton must register with a cooperative, through which they sell their harvest.
ICA and the seed company will monitor cotton fields to enforce access to the technology and
to ensure that growers comply with the requirements for planting a non-Bt refuge. The Bt
variety has been officially released, but does not yet have PVP. The Bt gene is not patented in
Colombia, but it is felt that the strict enforcement planned for the introduction of Bt cotton will
be sufficient to prevent any unauthorized activity. In addition, the recent Resolution 2046
makes it illegal for any farmer to save seed of any transgenic crop. Whether this type of
intensive investment in regulatory enforcement would be feasible for the more widespread use
of transgenic crops is uncertain.
The introduction of Bt cotton in Uganda is awaiting the establishment of a biosafety regulatory
system and although Kenya is further along in defining biosafety regimes it is only beginning to
consider the possibility of Bt cotton.
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5.4 Managing IPRs and collecting royalties
Having rights is only the start of operating IPR from a company point of view. When a company
itself cannot reach the entire market for its variety it commonly contracts with other seed
producers. In addition, contracts may be signed with the end-users, particularly in the cases of
flowers in several case study countries, and of genetically modified varieties and hybrids in
industrialized countries. These are either signed contracts or so-called ‘seed wrap’ or ‘bag tag’
licenses that automatically enter into force when the bag is opened.
Companies may need to put considerable effort in enforcing such contracts. They need to know
whether their licensees and customers live up to their obligations, i.e. whether they indeed
produce and market only the amounts that they pay royalties for. It is even more difficult to
control seed flows outside the contracts. In addition, the rights holders often have to establish
the thin line between permitted farmer exchange and commercial sales of illegal farmer-
produced seed.
Information and presence are the key elements in following up IPRs. Information is relatively
easy to get in countries with a strict seed law, i.e. where all seed in the market is certified by
an authority that can make its data available to the rights holder. Such authorities know exactly
which amounts of seed are produced of each variety, and they have a role in policing non-
certified seed in the market, providing valuable information for rights holders. In the absence of
such regulated systems (such as for horticultural crops in most of the world) or where such
systems are far from operational, the breeder has to follow-up on his rights himself. Licensees
may have a role in pursuing cases of illegal seed in their own markets. Alternatively, the market
intelligence staff of the seed companies actively follow up on the rights. In some cases
breeder’s/seed associations can play a role, or specialized agencies can offer assistance.
In the case study countries, seed associations are not primarily involved in pursuing royalties
for their members. This may be contrasted with some Latin American countries such as
Argentina and Uruguay where seed associations (ARPOV and URUPOV, respectively) are very
active in taking illicit seed traders to court on behalf of their membership, which includes the
majority of seed companies in these countries. Specialized agencies are active, especially in
the flower business, in some of the case study countries. For example, the international
company Royalty Administration International is active in many flower producing and importing
countries, including Colombia and Kenya.
5.5 Alternatives for protection
Conventional IPRs on plant varieties are not the only way that seed companies can protect their
products from being used by other companies or restricting farmers from saving seed. It is
worth reviewing case study country experience with other alternatives that may be employed
on their own, or in combination with IP instruments.
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5.5.1 Biological protection
An exceptional investment in plant breeding research has attempted to extend the range of
crops for which hybrid seed production is feasible; the incentives are both agronomic (the
higher potential yields) and commercial. In many countries, including those in this study, the
seed industry has been able to take advantage of this biological protection long before the
advent of IPR regimes in agriculture. It is thus interesting to examine the behavior of firms
regarding the protection of hybrids under new PVP laws. On the one hand, given that hybrids
bring their own built-in protection, it may be argued that companies would not bother with the
additional expense of seeking PVP for hybrids. This seems to be the case in Colombia, where
neither MNC nor domestic maize hybrids have sought PVP. The situation in Kenya is more
complex. The public (and parastatal) maize hybrids are seeking protection, but the maize
hybrids of the small domestic companies have yet to apply for PVP.
The possibility of industry applications of V-GURTs has a significant impact in the IPR discussions
in some case study countries. Even though the technology is not commercialized anywhere,
several respondents in the group of farmer representatives consider ‘terminator technology’
and IPRs as equivalents. Even though both may increase chances of concentration in the seed
industry, education seems to be required in this field. ‘Terminator’ is prohibited in India through
a special clause in the Act on Plant Breeders Rights and Farmers Rights.
5.5.2 Seed laws
Conventional seed law also can provide some aspects of protection against competitors. If
varieties must be officially released and registered, and if seed can only be sold if certified, this
may limit illegitimate use of company germplasm. For instance, certification rules would require
a company to demonstrate access to a legitimate source of breeder seed or inbreds.
This method is being used by NARO in Uganda. License contracts with seed producers are not
based on IPR, but on a gentlemen’s agreement about the NARO-ownership of the varieties and
backed by the seed law. Seed producers cannot produce commercial seed when they cannot
prove access to NARO-supplied breeder’s seed. Although this may not stop them from commer-
cializing such varieties abroad, such behavior may exclude them from future releases.
In China, companies are also able to protect against some illegal sales of seed through the
seed regulation which requires seed companies to be certified. Thus, smaller, ‘fly-by-night’
propagators or vendors can be shut down, or bags of seed removed from shops, by bringing
these to the attention of the local (county or city) office of the Administration of Industry and
Commerce. PVP seems to be more useful as a form of protection against established seed
companies, especially operating at a county-level, some of whom reproduce established and
registered varieties of other companies.
Kenya seems to use its seed law to protect local seed producers from competition by inter-
national companies. A recent interpretation of the seed law excludes imports from countries
like Uganda and Malawi, countries used for seed production by emerging regional and multi-
national companies.
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5.5.3 Contracts
Contracts are very commonly used in the seed sector. MTAs have been introduced as a
standard practice between genebanks and breeders and are commonly part of technology
transfer agreements between (public or private) breeders in case study countries and biotech-
nology firms or institutes. The study encountered several applications of contracts as a means
to obtain and enforce rights.
Some foreign companies in case study countries appear to concentrate on contracts to
manage their IPR on biotechnologies instead of commercializing them directly in the seed
market. This is the case in India for Bt cotton technology. However, contracts may be difficult
to monitor. In China, for example, there are contracts between Biocentury Transgene
Technology and some breeders of Bt cotton varieties, but the technology fee obtained by
Biocentury is significantly less than that expected from the estimated area of cotton containing
its Bt gene. A recent change in the management of Biocentury has resulted in the company’s
direct involvement in seed production and seems to have provided an increase in revenues.
Since the coming into force of the Cartagena Protocol, liability issues are becoming more
prominent in contracts involving genetically modified varieties. This development is expected to
reduce the transfer of such technologies (Sullivan, in press).
In Kenya, KARI entered into a contract with a major biotechnology company for access to Bt
technology. The contract stipulates how the genes can be used, who has rights on inventions
made on the basis of the technology, etc. It also prescribes that KARI will have to use new
versions of the technology (by the same supplier) as soon as they come onto the market. This
means that KARI will have to use any new Bt gene that is likely to be patent protected in the
future, and may also limit its opportunities to use other sources of Bt technology, such as
those that go out of patent. The institute is now bound to these conditions, even though it
knows that the patents on the genes and technologies are not valid in most of Africa, including
Kenya. The reasons for entering into the contract were twofold: get additional support for the
use of the technology (training), and the development of a good relation for future scientific
collaboration. The long term value of the rights are important for the company, even though it
does not see Africa as a profit center for years to come. On the other hand, it is questionable
how the potential long-term ‘losses’ for KARI balance the short term value of training and
access to the technology.
Uganda has entered into a contractual arrangement (MTA) with a German enterprise to supply
coffee germplasm on an exclusive basis, stipulating among other things benefit sharing when
the material is commercialized.
Contracts are particularly important in the floriculture sector, and are discussed in Section 7.6.
5.5.4 Biosafety
Biosafety regulations are not meant to create property, but primarily to protect the environment
and to promote the safe use of biotechnologies. Nevertheless, we have seen in the case of Bt
cotton in India that access to biosafety data is the principal protection mechanism currently
available to the owners of the technology.
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5.5.5 Trade secrets
Hybrid technology is a good example of a trade secret. But the protection offered by hybrids is
only as good as the physical security provided to the inbreds. In Uganda, where a local seed
company produces maize hybrids on contract for Monsanto, the lack of PVP for the hybrids
means that the operation must be very closely supervised at the seeding phase (all inbred
parent seeds provided by the company have to be planted) and by destroying the males
immediately after pollination, which adds to the cost of the seed.
There is evidence that in some cases in the Indian biotechnology industry, companies currently
prefer to maintain there innovations as trade secrets rather than seek (foreign) patents.
5.5.6 Business practices
Business practices can help to combat the illegitimate use of company varieties. The seed
industry in India has had to contend with high competition and very little legal protection for its
germplasm for nearly two decades. Many companies place great emphasis on the importance
of developing a brand image as a way of developing farmer loyalty and protecting themselves
from imitators. There are certainly limits to what can be accomplished through brand loyalty,
but the investment doubtless has payoffs. Although not all farmers can easily recognize or
depend on brand names, seed companies’ efforts to build up a loyal following with seed dealers,
on whom many farmers depend for advice, probably makes at least as important a contribution
to defending market share. But following up on the misuse of a brand requires time and
resources. One company has faced repeated instances of people selling ‘seed’ in falsified
bags, but it has only been able to catch the perpetrator twice, and the only case that made it
to court resulted in just a small fine. In those cases where Indian companies market their own
OPVs, management often responds confidently to questions about illicit competition by
referring to farmer loyalty. Nevertheless, these same companies are usually resigned to a
certain degree of leakage.
Practices of brand development are also common in China, but the case of Bt cotton shows
that there are clear limitations.
MNCs are particularly experienced in the use of other business practices to help protect their
varieties. The most important of these is selection of local partners, in the initial stages for
marketing and possibly also production. Companies repeatedly stress this issue in interviews.
While they will reinforce these agreements with contracts, they want to minimize the risk that
they will end up in a dispute with their business partner. MNCs have generally low expectations
of enforcing contracts in the study countries, and in any case once material has leaked out it is
too late. Thus MNC activity tends to build up at a gradual pace and pays attention to many
factors beyond IPR regimes. Many foreign seed companies have been active in some form or
other in China for over 20 years, often in only a modest form.
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5.6 Summary
IP and the evolution of the private seed sector
The emergence of the private seed sector in the case study countries owes relatively little to
national IP regimes. By far the most dynamic private seed sector in the sample (India) has
grown and diversified without benefit of any PVP regime but in the context of quite liberal seed
laws and in many cases through the use of hybrids as a way of appropriation (e.g. Pray &
Ramaswami, 1990) . Colombia’s private seed sector is more than two decades old, but private
seed enterprises in the other three countries are the outcome of fairly recent policy changes
that move away from public monopolies on seed production. Thus PVP is not a necessary
condition for initial private seed sector development, but it may contribute to its growth and
diversification. The nature and extent of this contribution will depend on the characteristics of
the national seed system. The only major example of private domestic plant breeding in
Colombia is for rice, and the establishment of PVP almost certainly encouraged the further
development of the industry, which is based on OPVs. Foreign companies also market protected
OPVs of soybean and cotton, but it is difficult to point to examples of the diversification of the
private seed industry in Colombia due to PVP. It is even more difficult to identify any effects of
PVP on the nascent private seed industry in Kenya, where the few products of private domestic
breeding have yet to seek protection and the hybrid maize offered by MNCs may not have PVP.
In Uganda, exclusive rights over public varieties given to local private companies have
contributed to the emergence of local seed enterprises, and it is worth noting that this was
done without any formal IP-legislation. Although the (foreign) horticultural industry pressed for
the establishment of PVP in Colombia and Kenya, and the national regimes certainly provide
added confidence and contribute to the perception of a better business environment for
expansion, neighboring countries with similar ecologies but less developed PVP (e.g. Ecuador
and Uganda) can still participate strongly in the industry (see Section 7.6). The course of
private seed sector evolution in China will depend on a wide range of factors, and the role of IP
is uncertain.
IPRs’ role in protection from competitors
Seed companies tend to take advantage of PVP and patents when it helps protect them against
competitors gaining access to their materials. Thus OPV rice varieties are regularly protected
in Colombia (as are cotton and soybean). Hybrid maize is not protected in Colombia because
the hybrids are relatively secure. Similarly, OPV barley has sought protection in Kenya, but
private hybrid maize varieties have yet to apply for PVP. In addition, those OPV crops that seek
protection are ones that are grown in commercial systems, where variety and seed quality are
important and where seed cost is a relatively small proportion of costs of production.
Where hybrids are used in diversified seed industries, such as India and China, hybrids attract
the majority of interest for PVP.
PVP and protection against seed saving
PVP systems can also limit farmers’ seed saving and hence provide additional incentives for
private seed provision, but there are no instances of this as yet in the case study countries
except for the flower industry where on-farm production of planting materials is fairly adequately
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regulated by the breeders. The two cases where there is movement in this direction in field
crops are Colombia and Kenya, and in each case specific complaints contribute to the argument
for change. In Colombia there is a considerable amount of seed saving and informal commercial
sale of farm-produced rice seed and the industry would like to control this; a new resolution
limits seed saving to farms below a certain size. In Kenya, there are complaints that wheat
farmers save and trade the majority of their seed, rather than buying commercial stocks, and
Kenya proposes making its regulations compliant with UPOV 1991. In these two cases, the
specific instances are related to relatively large-scale commercial agriculture where the extra
costs to farmers of obligatory seed purchase will probably be acceptable, but the changes in
law and regulation open the door to much wider control of seed use without any obvious
mechanism for discretion. In both cases authorities admit that it would be difficult to enforce
such requirements with smallholders (as well as being politically sensitive), and at this admit-
tedly early stage the evidence points to these limitations on seed saving as merely strength-
ening already existing seed production rather than providing incentives for diversification. Any
control on seed saving is explicitly ruled out in the Indian law, and this is one of the reasons
why the majority in the private seed industry does not predict any PVP-derived expansion in
investment in OPV seeds.
Implications of IPRs for structure of industry
The question whether IPRs will create a shake-out in the industry at the cost of the smaller
companies can not yet be answered in the case study countries. Such increasing concentration
in the industry could be due to the costs associated with protection (which is one of the reasons
why smaller companies in Kenya don’t yet pay attention to PVP). The situation in India, with
many small seed companies in operation, deserves particular attention. In addition, restricted
access to technology might become a bottleneck for smaller companies. One way to deal with
this is the formation of company consortia for access to (public) technology. There is at least
one example in India, and the idea has also been discussed in Latin America. Alternatively,
technology providers may change their business approach to license their technology to a wide
number of local companies instead of marketing the seeds themselves.
While it is assumed that the powerful multinational companies will be able to protect their
interests both with and without IPRs, medium-sized local companies have much to gain from a
secured market provided by license contracts or their own PVP-protected varieties. The
introduction of PVP could be helpful in stimulating these companies’ contribution to a diversified
seed supply (Srinivasan, 2004).
Relations with NARIs
Most local seed companies start with the multiplication and marketing of public varieties. In
most of the case study countries, a second step towards developing in-house breeding
capacity is also visible. This evolution may lead towards accessing public breeding lines rather
than public varieties, as is observed in India. The response of the public system is discussed in
the following chapter.
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6. Impact on public plant breeding and seed
production
6.1 IP policies
IP policies in NARIs may address three types of goal: revenue collection, recognition of
achievement, and technology transfer. These goals may not always be compatible, and the
development of adequate policies for the NARIs is a difficult task.
NARIs in China tend not to have written policies on IP management, in particular with respect to
patents and PVP. There are however policies in operation in the sense of guidelines and rules
understood by employees and management. The situation varies and is certainly different for
institutes working on transformation techniques, in contrast to crop research institutes. At BRI,
where patents are one of the principal means of assessing achievement, individual researchers
generally decide whether an invention has sufficient market potential to be patented, but they
do receive some general support. CAS has an office to assist researchers in conducting patent
searches and also in engaging the services of a patent agent for filling out applications at a
relatively inexpensive fee of approximately $250 (RMB 2,000). The costs of application must
generally be borne out of their research budgets although they may apply to a CAS fund for a
subsidy. Assigning the responsibility to the individual researcher is justified, according to BRI, in
order to allow the researcher to gain from a patent, both professionally and financially. The
provincial and national crop research institutes are less oriented towards patents, but increas-
ingly towards PVP. The Hunan Hybrid Rice Research Center (HHRRC) and the Rice Research
Institute (RRI) of the Hunan Academy of Agricultural Sciences both apply for PVP for their new
rice varieties that show market potential. In both cases, the director takes the decisions about
whether to apply for PVP on a case-by-case basis. The Rice Research Institute of the Guangdong
Academy of Agricultural Sciences (GAAS) seems to have somewhat less experience although
they have been granted PVP for at least three varieties. But research management indicated
that capacity to manage and enforce their rights is still being developed. They also do not see
as much use for PVP, given that their government financing is partly based on adoption figures.
At the broader level of GAAS, some of whose other institutes have been regularly granted
patents for more than 10 years now, there is a written IP policy. Decisions concerning applica-
tion for patents and PVP are taken by researchers and management in the institutes concerned.
But ownership of the resulting rights rests with the Academy. In general, the approach seems
to be different in each organization. As far as the crop research institutes are concerned, this
may be an indication of a period of adjustment after the introduction of PVP. Over all, PVP
varieties and hybrids fetch a slightly higher seed price than unprotected varieties.
In India, ICAR does not yet have a written IP policy, and its constituent institutes look to the
center for guidance and direction on these issues. ICAR has guidelines on its website for
seeking patents and instructions are being issued for DUS testing of extant varieties and
registration of germplasm. IP is managed there at the highest level, but with very limited
resources. There is only a small unit assigned to IP at ICAR headquarters. Similarly, most
Indian agricultural universities do not have an IP policy; in some cases a knowledgeable staff
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member may perform the role of IP advisor for the university, but without title or terms of
reference.
In the other case study countries CORPOICA, KARI and NARO are still developing their own
policies in this area. Attention to IP issues in KARI is divided between its lawyer and the head of
its biotechnology center. NARO recognizes that it needs staff with some IP expertise but is not
considering employing its own lawyer. Some institutions in Eastern Africa do have a written
(often draft) IP policy developed under the guidance of the Eastern Africa Regional Network on
Biotechnology (BIOEARN). These policies tend to concentrate on maximizing revenue.
NARI IP policies will have to strike a delicate balance among several factors, including the
division of attention between commercial and public service activities, an equitable division of
royalties within the institute, and the choice and enforcement of IP instruments.
In most cases NARIs will stand a better chance of earning royalties if they offer exclusive
access to their varieties or breeding lines, but that may clash with the expectations of public
service. Even if it can be demonstrated that an exclusive license provides the most effective
delivery route for a particular variety the NARI may still be accused of ignoring its public
mandate. Partly for this reason, KARI administration favors non-exclusive arrangements for its
varieties, and lost the chance to license one of its maize hybrids to a company because of the
exclusivity issue. In Uganda, NARO has licensed three maize hybrids on an exclusive basis but
has yet to define its policy on the issue. In India, a strong public service tradition makes it
unlikely that very many public varieties or breeding lines will be assigned on an exclusive basis.
One aspect of the IP-related policies is that the public sector sees one of its duties as counter-
acting concentration and monopoly in the seed sector by creating a strong position for the
public sector in the commercial seed industry.
6.2 Revenue generation strategies
The establishment of PVP allows NARIs to protect their germplasm and thus earn revenue from
seed companies through royalties on finished varieties and fees for access to breeding lines.
This potential for raising revenue is a welcome possibility for research administrators who have
to contend with inadequate public budgets, but there is considerable uncertainty regarding both
the level of revenues that can be expected and the effects that this revenue might have on
research programs. The possibility of NARIs raising some of their own revenue is of course not
solely dependent on the emergence of IP regimes.
India
The sale of source seed of public varieties to seed producers is an example of revenue gener-
ation that takes place in the absence of IPRs. In India, when private companies sell seed of
public varieties they are expected to buy the source seed from the public institution. For
instance, Andhra Pradesh Agricultural University sells more than 70 Mt of breeder seed of its
rice varieties every year. The system does not work for all crops, however. Private companies
rarely purchase fresh stocks of breeder seed of public vegetable varieties, preferring to
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maintain their own supply. The companies complain about the relatively high price of breeder
seed of vegetable varieties and point out that sometimes their requests for breeder seed are
not met. In addition, because vegetable seed is not certified there is no requirement for using
original breeder seed.
Many private seed companies complain that their access to public breeding lines has decreased
in recent years. On the other hand, public institutions often express resentment of the fact that
the private sector earns large profits from the products of public research and complain that
private companies are unwilling to share some of their own lines or knowledge with public
research. The degree of interaction varies by crop. There are a few examples where seed
companies feel they have acceptable access to public lines (through field days and other
contacts). In some cases (such as maize) this openness is a function of the influence of CGIAR
policies on open access combined with willingness of the crop program itself to share materials.
In the case of maize, the program’s coordination unit has a policy to develop lines and to share
these with all partners, including the private sector. For many crops, however, private
companies frequently say that it is much easier to get access to CGIAR germplasm than to
local public lines. There are also a few recent examples in which public institutes or universities
have entered into non-exclusive agreements with seed companies for access to breeding lines,
following guidelines set down by ICAR for such contracts. The Indian Institute of Horticultural
Research (IIHR) made a one-time sale of the parental lines of a tomato hybrid to several private
companies; some sell the hybrid under the original name while others modified the name.
Indian universities tend to be driven by strong public service mandates and many have no
experience of interaction with the private sector, while a few others establish occasional links.
The University of Agricultural Sciences in Karnataka sold access to three virus-resistant tomato
OPVs to ten seed companies. The assumption was that the companies would market these
varieties directly, although in many cases the companies’ objective was to use the germplasm
in their own breeding programs. A private company that has recently begun work on hybrid rice
has agreements with two agricultural universities for non-exclusive access to inbreds and a
large seed company occasionally buys germplasm for its vegetable breeding program from
universities.
China
Revenue generation strategies among crop research institutes in China vary by crop and
province. Many provincial crop research institutes in China have been selling rights to hybrid
varieties of rice and maize well before the introduction of PVP. Both the Rice Research Institute
of the Guangdong Academy of Agricultural Sciences and the Hunan Hybrid Rice Research
Center of the Hunan Academy of Agricultural Sciences (HHRRC) have licensed exclusive rights
to private companies for production and marketing. Before the new seed sector legislation
introduced in 2000, purchasers tended to be the public seed companies at national, provincial
and county levels. The Cotton Research Institute (CRI) of the Chinese Academy of Sciences
(CAS) has on the other hand traditionally generated revenue through the sale of marketing
rights to its seed, primarily OPVs. The Institute for Vegetables and Flowers (IVF) has also
concentrated on generating revenue from sales of seed, also relying on companies for the
marketing stage.
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A number of officials indicated that this process of selling new varieties has been enhanced by
the introduction of PVP. If an institute has acquired PVP for a variety, then it is in a position to
request a higher price. In many cases, auctions have been organized to obtain the highest
price. Agreements may be based on lump sum arrangements, such as the HAAS Rice Research
Institute which auctioned non-exclusive production rights to its new protected variety
‘Nongxiang103’ for more than $45,000 (RMB 380,000) in 2003. The Rice Research Institute of
the Guangdong Academy of Agricultural Sciences sold exclusive rights to a protected variety in
2002 for about $240,000 (2 mRMB). Such lump sum payments seem to be preferred by large
companies, according to Doneed Seeds Company, one of the countries’ largest diversified
seed companies. But royalty arrangements based on seed sales are also common, particularly
where the rights negotiated involve marketing but not production.
Uganda
In Uganda, NARO has recently licensed three maize hybrids to three different companies. The
companies were willing to enter into contracts and agree to pay royalties even though there is
no PVP in Uganda. NARO’s legal advisors believe that the institute can demonstrate ownership
of these hybrids, and in any case the country’s mandatory seed certification law would make it
difficult for another company to offer one of these hybrids for sale. NARO also hoped to contract
with the local brewing company for exclusive access to a sorghum OPV, but this agreement fell
through and the brewery simply pays NARO for source seed which it uses to produce commer-
cial seed for its outgrowers.
Colombia
In Colombia there are several important examples of the private funding of commodity research.
The cotton growers association has provided some funding to CORPOICA for cotton breeding
(the association originally asked to share in any royalties earned, but then agreed that royalties
would go to a fund for cotton research). There are several commodity research institutes in
Colombia (separate from CORPOICA) where growers associations fund plant breeding (e.g. for
coffee). Given the fact that PVP is well established in Colombia there are surprisingly few
examples of contracts between CORPOICA and the private sector. One of the problems is that
many public varieties are OPVs (beans, maize, wheat, oats) in which the private seed sector
has little interest even if they can be protected. The few recent examples of contracts with the
private sector have not turned out well; CORPOICA offered exclusive licenses on two maize
hybrids to two seed companies in return for a 3% royalty, but the seed companies and
CORPOICA blame each other for poor quality seed and CORPOICA has reverted to trying to
produce and market these varieties itself. They also had a similar experience with a cotton
variety.
Kenya
Kenya also has a well-established PVP law, but there are few examples of revenue generation
by the public sector to date. An important factor is the continuing uncertainty about the owner-
ship and protection of many of KARI’s older varieties that have been the exclusive province of
the Kenya Seed Company (KSC). The prior arrangement with KSC and the relatively recent
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liberalization of the seed sector that allowed competition with KSC also explain the relative lack
of progress in licensing KARI varieties. In addition, there are very few KARI crop varieties besides
maize hybrids that are of interest to the private sector. KARI has a non-exclusive agreement
with Kenya Breweries, who pay a royalty of 2.5% on the value of the seed of KARI barley
varieties that the company produces for its outgrowers. The brewery’s support for barley
breeding has also led to several new barley varieties seeking PVP with the brewery and KARI as
joint owners. In early 2004 KARI tendered 16 old and new maize hybrids, with the expectation
that various seed companies would bid for production rights. The outcome was disappointing,
however, and only three of the hybrids were contracted, in each case to very small seed
companies. In one case, the KARI Seed Unit will take charge of seed production and the
company will market the seed. KARI is now considering whether it should try to produce and
market some of the new maize hybrids itself.
Future prospects
The potential for revenue generation through royalties on public varieties and sale of breeding
lines varies by crop and by country. In India and China, the large and technically proficient
public breeding programs will certainly have things to offer for their diverse and well-developed
commercial agricultural sectors. In both countries there are many cases where private
companies, particularly smaller ones, produce seed of public varieties (mostly OPVs) and it is
likely that this will continue. Although most seed companies in India would prefer exclusive
licenses for public varieties, there are smaller companies that are satisfied with sharing a
market. But many of the seed companies either have, or aspire to develop, their own breeding
programs and naturally tend to promote their own varieties.
In China, several larger seed production companies, such as China National and Doneed, are
beginning to establish their own breeding programs, partly to ensure future sources of improved
varieties, given the uncertainty of competing for access to varieties at public institutes.
However, even though there will be many opportunities for NARIs in China and India to generate
revenue from protected germplasm, the NARI’s are not likely to rely on this income for the
operation of their different breeding programs.
In the other case study countries the situation is even less clear. Where NARIs are relatively
small and under-funded, there are relatively few opportunities for them to offer products that
the private sector is willing to pay for. The dilemma is that in order for NARIs to generate a
significant amount of revenue from private contracts they need sufficient public investment in
the first place in order to establish their capacities. In addition, national seed markets need to
be large and diverse. In Kenya, KARI’s disappointing experience in its recent tender of maize
hybrids is an indication of the problem. In Uganda, while NARO was completing the first
contracts with seed companies for production of its maize hybrids, the institute’s only maize
breeder resigned in hopes of joining the private sector.
An additional possibility for revenue generation by NARIs is through interaction with MNCs. In
such cases the NARI provides germplasm in return for a share of royalties on any varieties
eventually marketed (nationally or internationally). Several international seed companies are
active in India and there are a few cases where they have simply purchased non-exclusive
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access to public breeding lines. Once the PBR legislation is in place it can be expected that
these interactions may be strengthened and formalized. Additional understandings would have
to be developed to cover royalties or compensation when the MNC uses the germplasm
outside of India, and similar considerations are warranted for the larger domestic seed
companies with international marketing and research aspirations.
In Kenya, KARI has an agreement with Monsanto that provides Kenyan maize and cotton
breeding lines for possible genetic transformation in return for a share (as yet unspecified) of
royalties on any transgenic varieties. Interactions with MNCs may also be mediated through
IARC programs.
Incentives for individual scientists
A particularly important administrative issue for NARIs is the degree to which royalties earned
are shared with individual scientists. The emergence of private seed companies carry the risk
that innovative and active breeders are absorbed by the private sector, leaving few capable
staff in the public research institutes (Morris & Ekasingh, 2002). In general, staff promotion in
NARIs is determined by a fairly complex set of criteria, usually including research productivity,
publications, and service to the institute. For breeders, the number of released varieties is
often an important criterion for promotion. As NARIs begin to earn royalties from protected
varieties, there is the possibility that the breeders may also share directly in the financial
benefit. The NARIs in our sample are approaching this issue in various ways. Chinese NARIs
have the broadest experience in earning royalties through commercial seed sale, and breeders
generally are given a ‘bonus’ related to the level of royalties received. This was a common
practice even before the introduction of PVP. The provincial academies of agricultural sciences
and their institutes have developed their own approaches. Interviews revealed a range of
revenue-sharing schemes although a general feature was to ensure that not only breeders, but
other staff also benefited. It was not possible to gauge to what extent this is affecting
incentives and motivation at an individual level.
In India, ICAR does have a formula for sharing consultancy income with its scientists, but not
for sharing revenues from IP. CSIR however is working on a formula that would grant equal
shares to the inventor(s), the institute and a special fund at the Council.
In Kenya, KARI has yet to establish a policy, but is under pressure from the Kenya Plant
Breeders Association for the acceptance of a formula for division of royalties (based on type of
crop) with the breeder; the association is even lobbying to have this formula included in the
revised Seed Law (for both public and private sector breeders). The director of KARI admits
that deciding how to divide royalties within the institute, between and among programs, is a
significant management challenge. Despite Colombia’s experience with PVP, CORPOICA has yet
to establish a policy for the disposition of royalties, and NARIs in India and Uganda are only
beginning to consider the issue.
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6.3 NARI Seed Production
An alternative to contracting with private seed companies is the possibility of NARIs producing
and marketing seed themselves. Despite several decades of generally unhappy experience
worldwide with public seed production schemes, the problems of attracting private company
interest combined with pressures for demonstrating revenue generation capacity have
encouraged several NARIs to consider their own seed production strategies.
The situation in China is particularly complex, as there is a clear incentive and expectation for
many research institutes to generate a significant proportion of their own budgets, but this
clearly varies by province and by crop. The Institute for Vegetables and Flowers (IVF) has
always undertaken its own seed production and then sold to retailers, in order to maintain
control over parent lines. This situation, partly manageable because of the intensive nature of
vegetable seed production in terms of land use, has changed little with the introduction of PVP.
In the case of cotton and rice, incentives for generating income have led to some research
institutes establishing their own subsidiary companies for production and marketing. For
example, the Cotton Research Institute (CRI) markets essentially all of its varieties through joint
ventures with seed companies. In other cases, contracts granting exclusive access to new
varieties are negotiated with companies that have a special relationship with the institute. The
case of HHRRC in China is perhaps most illustrative. The director of the Center established the
Longping High-Tech Corporation which then established an exclusive rights agreement with
HHRRC. NARI diversification into seed production and marketing, whether by the institutes
themselves or a wholly-owned subsidiary company, has also been made possible by the
changes in the seed sector regulation, allowing private companies or others to produce and
market seed. The choice to diversify may reflect an expectation that revenues can be
maximized by maintaining direct control over production, as opposed to licensing.
In India, on the other hand, there is much less possibility that research institutes or universities
would attempt to produce and market seed on any appreciable scale. There are well established
public seed corporations and other government programs (such as parastatal agencies for
commodity development) that have the mandate for this type of activity. Although the role of
public seed production institutions is being challenged and reformulated with the rise of the
private seed sector in India, there is every likelihood that many of these public seed production
activities will continue in the foreseeable future. The up-scaling of facilities to provide source
seed under the National Seed Project illustrates this.
The smaller NARIs are in a difficult position when they fail to attract commercial interest in their
varieties but face mounting pressure for generating revenue and demonstrating that public
varieties are reaching farmers. KARI has a Seed Unit which was established to ensure that
source seed of KARI varieties was readily available to seed producers. An important rationale
for the creation of the Seed Unit was the fact that seed of many ‘orphan crops’ was not avail-
able to farmers because the few commercial seed enterprises took little interest in multiplying
the (limited) output of orphan crop breeding programs. It was thought that a more transparent
and efficient source seed facility would contribute to generating commercial interest and
fostering smaller seed enterprises. The Seed Unit has been an important player in donor
projects that support local groups in seed production. It is not clear if any of these producer
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groups can survive commercially, and the Seed Unit continues to see government and donor
programs as the major conduit for seed of orphan crops. In some cases the Seed Unit
coordinates the production and sale of commercial seed (e.g. potatoes) at KARI stations. The
unit is helping a small commercial firm produce seed of a KARI maize hybrid (the packaging
includes the company’s and the Seed Unit’s logos) and with the failure to attract more interest
in its latest offering of hybrids there is the temptation to expand into more commercial seed
production and marketing. This would be done under KARI’s newly established commercial arm.
A similar situation obtains in Colombia; CORPOICA has recently established a Seed Production
Unit whose principal aim is to provide source seed of crops with little commercial seed demand.
An inheritance from CORPOICA’s origins as a public entity is the expectation that it should
support various government programs that produce such seed, although the corporation is not
always reimbursed for the source seed that is requested. The Seed Production Unit also has a
mandate for producing and marketing commercial seed in certain cases. When CORPOICA was
disappointed in the performance of private companies contracted to produce seed of maize
and cotton varieties it began exploring the possibility of producing the seed itself.
In Uganda, the public seed enterprise has lost an important share of the market to newly
established private companies. It competes with these companies for the licenses for new
NARO varieties. There is no indication that NARO itself would like to venture into commercial
seed production.
6.4 Patents
An additional mechanism for revenue generation open to NARIs is the patenting of inventions
NARIs in China have the most experience among the case study countries. The Biotechnology
Research Institute (BRI) of CAAS owns approximately 10 patents and has another
40 applications pending, of which 2 have been submitted for overseas protection under the
PCT. BRI has patented two Bt genes and commercialized these in cotton varieties through a
joint venture with Biocentury Transgene Technology. Biocentury has licensed these genes to
the Cotton Research Institute (CRI). BRI receives one-third of the net revenues of Biocentury
with half of this amount going to the research group that developed the Bt cotton genes and
10% to the individual scientist. Revenue generation has however been much less than expected
due to difficulties in enforcing the patent. Most of CRI’s Bt cotton varieties are OPVs, IP
enforcement of which is very difficult with the local seed producers. Nonetheless BRI currently
generates about 15% of its income from patents, primarily other than Bt, and is expecting to
increase this significantly in coming years. BRI staff are assessed on both publications and
patents obtained, and advisory and financial support is available from CAAS for submitting
patent applications.
NARIs in India have limited experience in patenting and policies and modalities are being
established. However, there is a growing experience in patenting plant-based products and
processes for pharmaceutical uses (locally and abroad). The National Botanical Research
Institute (NBRI) used this experience for the international patent applications for its Bt genes
that have however not yet been commercialized. One commercially successful case involves a
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method for detecting the Bt gene in a plant. A scientist at the Central Institute of Cotton
Research (CICR) developed the technology and ICAR did the paperwork to acquire an Indian
patent and (through PCT) to pursue patents in several other countries. The detection kit is
being marketed by an Indian firm and royalties go to CICR. Although this is a success story,
the public system has no institutional mechanism to pursuing patents, or sharing costs and
royalties. The process involved a great deal of time from CICR and ICAR staff, as well as the
use of consultants. The present guidelines for contract research and consultancy are
inadequate to address the entire IP-related issue.
A contrasting case from an agricultural university involves a scientist obtaining a patent on a
method for gene insertion. Although the Department of Biotechnology (under the Ministry of
Science and Technology) is supposed to help with such applications, it was slow to respond
and the university scientist hired a patent lawyer using his own funds. The patent was eventually
granted (in the university’s name) but it is unclear if the university will even pay maintenance
fees and little likelihood that it will offer any help in pursuing commercial partners. State
Agricultural Universities look upon ICAR for policy guidance.
There is of course another side to NARI’s pursuit of patents for their inventions, involving the
rights to use patented genes or tools in NARI research. In all the case study countries
researchers are using technologies that are patented (at least in industrialized countries), for
activities such as genetic transformation or even marker assisted selection. Varieties or other
products have yet to emerge from this work, but only a minority of bench researchers are
aware of the implications of their use of protected technology, and NARIs in the case study
countries rarely commission an FTO or other reviews to address possible consequences. In
India, the National Botanical Research Institute (NBRI) which initially entered into negotiations
with a consortium of local seed companies for access to NBRI’s Bt construct for cotton is now
reconsidering its position.
The study found two very distinct attitudes in laboratories towards third-party IP: ignorance and
over-apprehension. As an example of the latter attitude, some institutes in ICAR, like IAR,I now
insist on prior permission for the use of IP in research. On the other hand, researchers that do
know about the possible consequences of patents may not realize that many patents are not
valid in their countries and that they can freely use the technologies in their territory. But lack
of awareness or lack of interest are also widespread.
6.5 Plant Breeding Priorities and Strategies
6.5.1 Research investments
The effects of pursuing compensation for the use of public varieties and breeding lines may
have important effects on the nature of public plant breeding. Certain crops are much more
likely to attract commercial interest than others, and one of the concerns is that the possibility
of earning royalties may shift resources to the more commercially attractive crops, even though
such a shift might not be in line with the NARI’s mandate for poverty reduction. Similarly,
research priorities within a particular crop may shift from solving production constraints in
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smallholder agriculture to increasing output in commercial agriculture. The study examined
evidence for shifts in NARI priorities regarding crop portfolios, breeding objectives and breeding
methods. There are some noteworthy trends, although not all can be attributed to the advent of
an IP regime.
The case of NARO presents an interesting example. Uganda’s new agricultural policy empha-
sizes that agricultural research is to be client oriented and market driven. NARO sees its
principal role as contributing to the development of commercial agriculture in Uganda and is
prepared to allocate its resources accordingly. Although this means that priority will be given to
crops such as hybrid maize (whose seed can earn royalties), the policy also assigns priority to
any crop for which market demand is evident, even if there is little immediate opportunity for
commercial seed sale. Thus NARO would invest significantly in cowpea research if there was
evidence of growing commercialization of cowpea production. The hope is that demand from a
particular industry or from ‘the market’ would be translated into specific funding for NARO
research. But if cowpea remained a crop that featured mostly in subsistence production, it
seems likely that NARO would assign it a lower priority. The possibility of earning royalties on
certain seed products contributes to this shift toward research for commercial agriculture. The
emergence of PVP in Uganda thus merely enforces a trend rather than being the instigator of
change in research policy.
Agricultural development policy is less well defined in Kenya, but KARI currently assigns high
priority to those crops from which it can earn some revenue. The major example is hybrid
maize, and the fact that past KARI research produced most of the maize hybrids that account
for more than half the country’s maize gives the institute confidence that hybrid maize will be a
major revenue earner, once KARI begins to offer a new generation of hybrids to the growing
number of seed companies operating in the country. The implications for other crops are less
clear, although KARI leadership acknowledges its public service mandate and admits that
Kenyan farmers grow a range of crops that do not figure in current seed company portfolios.
Colombia finds itself in a position somewhat similar to that of Kenya. CORPOICA is expected to
earn an increasing proportion of its own revenue and hopes that royalties from its varieties
make an important contribution. The greater diversity of Colombia’s commercial agriculture
offers several possibilities (maize, rice, cotton), but the choices are relatively few and the
implications for research investment on other crops are unclear.
It is difficult to predict the effect of the PVP legislation in India on the relative distribution of
research investment across crops. There is no indication at the present time that research
administrators have any plans to adjust their portfolios because of potential royalties. Institute
administrators believe that royalties, like other income of the institutes, will be remitted to ICAR
headquarters (and to the Treasury), thus providing limited incentives for shifting priorities in
favor of royalty-earning crops. Administrators of the agricultural universities that were inter-
viewed also emphasized their mandate towards serving the needs of their state’s farmers. For
instance, the director of research at Andhra Pradesh Agricultural University expects that rice
breeding will remain a high priority and that once PVP is in place the university will continue
selling breeder seed of its varieties (perhaps at a slightly higher price) to any interested seed
company, rather than attempt to negotiate licenses or royalties. ICAR leadership identifies a
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role for the public sector in complementing as well as competing with the private seed sector
as IPRs threaten to concentrate the market.
Given the many academies and institutes involved in agricultural research in China, it is also
difficult to identify changes in public research investments and priorities that are a direct result
of IPRs. Most institutes have crop mandates but the issue is the extent to which priorities within
these crops may be affected. Many of the crop research institutes already became more
oriented towards revenue generation through selling varieties or seed long before the intro-
duction of PVP. Most of the rice and cotton research institutes interviewed indicated that
developing varieties for all farmers, including poor farmers, remains a priority. In Hunan, the
Rice Research Institute concentrates primarily on conventional (OPV) varieties, and emphasizes
poor farmers as a target group even though its cheap seeds are also available to richer
producers. Although it earns almost half its income from seed-related revenue generation, it is
perhaps not likely to compete in more commercially-oriented hybrids given that another
institute, the Hybrid Rice Research Institute, has that mandate.
Some institutes in China have a mandate to focus on adoption targets, including in a few cases
a corresponding incentive in the amount of government funding. For example, the Rice Research
Institute of the Guangdong Academy of Agricultural Sciences receives extra financing according
to the area sown with their varieties, although the institute is also concentrating more on hybrid
varieties due to income generation possibilities. There may be a fair amount of overlap in the
variety characteristics sought by different types of rice farmers in those provinces.
Management of the Cotton Research Institute (CRI) of CAAS pointed out that one of their
mandates is to develop cotton varieties for poorer farmers, who show a preference for OPVs,
including for those in other agro-ecological zones such as Xinjiang in the north-west. The vege-
table seed market, which has been commercially-oriented for much longer, is quite different.
The national-level Institute of Vegetables and Flowers of CAAS has concentrated on hybrid
varieties and revenue generation. This would appear to have changed little since the introduction
of PVP.
The Biotechnology Research Institute (BRI) of CAAS is influenced more by patents than by PVP.
It has traditionally focused on the 5 major crops (rice, wheat, maize, soybean and cotton) and
expects less success were it to apply for research funds on other crops. The situation with
BRI’s Bt cotton, commercialized by Biocentury and CRI, illustrates the potential shifts that might
be expected to take place. CRI’s Bt cotton varieties have been quite popular and widely
disseminated, including among poor farmers. This is partly attributable to the difficulties in
enforcing the patents and royalty collection. Thus BRI has not realized nearly as much revenue
as was forecast. If this situation influences the institute and its partners to undertake research
that can be better protected, then this will probably entail a shift in breeding priorities more
oriented towards better resourced farmers. At this point, there is no indication yet as to how
BRI is dealing with this issue. Thus in China, there are examples of measures that can mitigate
against unwanted shifts in priorities due to IPRs, but this is only one aspect of a stronger and
longer-term trend towards increased commercialization of the NARIs.
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Even if a NARI’s crop portfolio remains unchanged, it is possible that breeding priorities may
shift within crops. Interviews with case study NARIs revealed some recent shifts in breeding
priorities, although it is difficult to attribute many of these directly to the advent of PVP. The
most consistently mentioned factor is market demand. In Colombia, public rice breeding now
places much more emphasis on grain quality than on yield per se. A recently released
CORPOICA potato variety failed to gain acceptance and researchers acknowledge this is
because of a lack of involvement of end-users in the research. NARO bean breeders point to
the importance of consumer qualities such as cooking time in determining the uptake of new
varieties. These experiences all indicate a growing realization of the necessity for public
research to take more cognizance of consumer and market demand, but as yet there are few
examples of changes in breeding priorities that can be directly related to demand as
interpreted through commercial seed enterprises.
But if NARIs become more dependent on income from private seed companies, it is fair to ask
whether breeding priorities may be affected. NARO has released a number of bean varieties
and several are produced, on a modest scale, by private seed companies. However, no seed
company is yet willing to invest in seed production of climbing bean varieties. It remains to be
seen if this will result in a diminished investment in climbing bean varieties within NARO.
6.5.2 Hybrids versus OPVs
There are other examples where the establishment of a PVP regime may directly influence
breeding strategies. This is particularly true for the use of hybrid technology There is an
expectation that IPRs offer incentives for the commercial exploitation of OPVs, diversifying
away from exclusive reliance on hybrids and their built-in ‘biological’ protection. But since the
commercial seed industry places value on hybrids despite legal protection, NARIs that respond
to demand from seed producers will continue to focus on hybrids. As we have seen, both
Kenya and Uganda place high expectations on hybrid maize as a source of revenue and
although both NARIs continue to develop maize OPVs they show no inclination to increase their
OPV maize research budget.
In China, where more than 50% of commercially marketed rice is hybrid, even some of those
NARIs that previously concentrated on rice OPVs are tending to shift towards hybrids because
they are seen as a much better source of revenue. The situation for hybrid cotton is somewhat
different and the effects of IPRs are probably limited relative to other factors. Only a small
minority of China’s cotton is hybrid, partly because there are not many suitable hybrids for the
North where most of the cotton is grown. A survey by CCAP indicated that yield differences
between conventional and hybrid varieties in the north of China are insufficient to cover the
higher price of hybrid cotton seed. Another reason is that cotton hybrid breeding is still not
popular, partly because the parents are controlled by a few institutes such as CRI. On the other
hand, the possibility of patent protection does appear to be a factor that motivated decisions
to invest in OPV Bt cotton at BRI, Biocentury and later at CRI. With respect to vegetables, the
Institute of Vegetables and Flowers has always concentrated on hybrids, and interviews did not
indicate any new shift towards OPVs as a result of PVP. Indeed, staff interviewed indicated that
the PVP system was too weak to ensure enforcement of the rights.
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In India, although public research pioneered the development of hybrid cotton, the majority of
CICR’s efforts are in OPVs. This means that public cotton OPVs still occupy the majority of the
market in northern India, where suitable cotton hybrids have yet to be developed, but that
public sector participation is much lower in southern India, where the majority of cotton is
commercial hybrids. In the latter case the rationale is that the public sector is expected to give
particular attention to poorer farmers in more marginal conditions. The public sector also took
the lead in developing India’s first rice hybrids, but the private sector is now heavily involved
and the majority of the (still small) hybrid rice area is grown with commercial varieties. There is
still considerable public investment in hybrid rice breeding in India, although the university in
Andhra Pradesh currently shows little interest in developing hybrid rice for the state’s farmers.
Similarly, the agricultural university in Karnataka serves the state’s tomato growers with OPV
breeding, leaving hybrid development to the private sector.
6.5.3 Participatory breeding
The orientation of public research towards the needs of smallholder farmers which gained
special attention in the 1980s has led to a wide range of participatory research processes.
Participation of the end-user should on the one hand provide better focused information for the
conventional breeding programs, and on the other hand empower farmers in the development
of their own improved materials with specific adaptation to their own environments and needs.
Where the former approach may feed into commercial seed production, the latter commonly
feeds into the farmers’ seed system that produces and disseminates seeds as part of crop
production.
NARIs interviewed did not have policies on sharing ownership over varieties that would be
developed through participatory approaches. Whether NARIs would continue to invest in
approaches that would only feed into local seed systems when revenue collection becomes a
guiding principle in research management is uncertain. NARIs may consider continuing these
programs as an important part of their public task in supporting less-endowed farmers and
reserve core funding from the government or redirect some revenues; or they may consider
such programs only if they attract donor funding.
6.6 Enforcement
Another administrative challenge for NARIs wishing to take advantage of PVP is the investment
required for the enforcement of agreements. If NARIs sell or license a protected variety to a
seed company, then enforcement is not their problem (although enforcement possibilities do
affect the value of a protected variety).
In China, rice institutes that are oriented towards revenue generation either sell or license the
variety to a company, in which they may even have an ownership share. This is generally the
case with the high-value rice varieties, particularly hybrids, developed by the institutes of the
Hunan Academy of Agricultural Sciences. Other institutes such as the Rice Research Institute,
Guangdong Academy of Agricultural Sciences have recently acquired their first PVP titles and
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do not yet have much experience with trying to enforce the right, or even commercializing the
varieties in question. The IVF has much more experience with their hybrid vegetable crops but
acknowledge that the difficulties of enforcing PVPs is a major factor in their decision to continue
exclusively with hybrids. BRI and BioCentury claim to have generated little revenue from their
Bt cotton because of problems with enforcement of patent protection. Staff from the Cotton
Research Institute are deployed to check local shops for illegal seed of their varieties in the
seed sale season. This is only partly effective as illegal copies of one of their Bt varieties were
readily available at a local shop in Anyang, where the institute is located. Without PVP protection,
they must rely on trademarks and, in the case of Bt cotton, patent protection and biosafety
regulations. CRI expects however that PVP would ease enforcement difficulties. The other case
study countries have little experience, but acknowledge that extra administrative effort will have
to be devoted to establishing agreements with seed companies, collecting royalties, ensuring
that adequate seed certification and/or sales data are available to verify seed quantities,
checking for unauthorized sales, and pursuing violations. Some research administrators,
particularly in India (where there is a large and complex commercial seed market) admit that it
may be difficult to pursue these issues thoroughly and a few say they would prefer more easily
managed commercial agreements, such as the one-time sale of varieties or lines rather than
the annual collection of royalties.
6.7 Impact on International Agricultural Research
Centers
6.7.1 IARC IP Policies
All of the IARCs with a crop breeding mandate have written IP policies, although some are only
in draft form. The actual implementation of these policies is still evolving. Several centers now
have their own in-house lawyer while others have assigned staff for responsibilities in IP
management. The CGIAR system has also established the Central Advisory Service on IP to
assist the centers and to facilitate the sharing of experiences in IP management practice.
Most IARCs have seen their principal role as supporting NARI breeding programs. In many
cases IARCs do not release their own varieties; NARIs either test and release IARC varieties or
use IARC germplasm in the development of their own varieties. Germplasm, both improved
varieties and genebank materials, is moved within and outside the system under material
transfer agreements (MTAs). The MTAs that accompany genebank materials is standard for all
of the centers under their agreement with the FAO and stipulates that no IPRs can be taken out
over the material in the form received. MTAs used with improved materials can vary, although
all versions of these MTAs would only allow that rights could be taken out if such protection
could be shown to stimulate wider distribution and use of the materials.
6.7.2 Interactions with Seed Companies
Most IARCs also provide their breeding lines to private seed companies, usually under MTAs
that prohibit the protection of the lines as provided. As domestic seed companies in the South
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develop increased breeding capacity, and as they compete with increasing effectiveness
against public seed enterprises, they will become an ever more important conduit for IARC
research.
In the case of maize, CIMMYT provides germplasm to seed companies that use this for devel-
oping and releasing their own commercial varieties. For instance, this germplasm has made a
valuable contribution to the rise of several small seed companies in Kenya. In Colombia,
CIMMYT has provided several maize hybrids to CORPOICA, which is expected to license them
to local seed companies (and collect royalties). In southern Africa CIMMYT licenses its own
hybrids and OPVs to private companies; the hybrids may be licensed on an exclusive basis for
a single country, but the OPVs are always offered on a non-exclusive basis. CIMMYT takes
responsibility for obtaining national variety release in these cases but has not pursued PVP and
does not collect royalties on these varieties. However, its recent work on Striga-resistant
hybrids in Kenya involves attention to PVP (See Box 4). The domestic breeding capacity in
China means that Chinese companies generally prefer materials from domestic institutes, or
Box 4. CIMMYT’s Collaboration with BASF for Striga-
Resistant Maize
The parasitic weed Striga is one of the most serious yield-limiting factors for many African
maize farmers. Hand weeding or conventional herbicide use are inadequate to control the
weed, which does most of its damage before emergence by attaching itself to the maize
roots. Research by the Weizmann Institute and CIMMYT indicated that an herbicide seed
coating could effectively control Striga by killing the weed as it germinated in the soil. The
innovation would require herbicide resistant maize varieties, and collaboration was initiated
with BASF, the owner of a mutant gene that conferred resistance to an imidazolinone
herbicide that BASF produced. The technology was already licensed for commercial use in
the US (for conventional post-emergence weed control in maize), and because it does not
involve a transgene the technology does not require biosafety clearance or regulation. BASF
facilitated access to maize germplasm (through Pioneer) and CIMMYT began to develop a
series of IR (imidazolinone resistant) maize OPVs and hybrids suitable to conditions of
Western Kenya, where Striga is a particular problem. BASF granted access to the IR gene
initially for research purposes only. CIMMYT has used its germplasm to develop three IR
maize hybrids that have passed Kenya’s variety approval tests. IR maize is one of the first
projects for the newly formed African Agricultural Technology Foundation (AATF), which
hopes to complete final regulatory and commercial arrangements. AATF has already drafted
agreements with three seed companies in Kenya to produce the IR varieties. It is expected
that royalty payments would be managed by AATF. However, further negotiation with BASF
is still required to obtain permission for commercial use of the gene in Kenya and to define
conditions for wider application of the technology (e.g. in neighboring countries). Although
the IR varieties could be the subject of PVP in Kenya, it is not clear how the IR gene itself
would be protected, if this were seen to be desirable.
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increasingly of foreign companies, to those of CIMMYT, but most Chinese wheat varieties have
CIMMYT materials in their pedigrees (according to data collected by CCAP).
In India, ICRISAT’s support of the domestic commercial pearl millet and sorghum seed sector
has been so valuable that companies are willing to subscribe to consortia that provide access
to breeding lines and inbreds (see Box 5); the subscriptions currently cover the cost of
ICRISAT’s hybrid pearl millet and sorghum breeding for India. It should be noted that NARIs in
India still maintain full access to ICRISAT’s breeding material, but the subscribers to the
consortia do not see this as a threat.
There is little commercial production of bean seed in developing countries (because of the high
rate of seed saving and the relative expense of commercial seed) so CIAT’s bean breeding
program has little experience with private seed companies. Most of the materials go through
NARS and particularly through participatory breeding and seed production programs. However,
there is a very high dependence on purchased seed for snap bean production and CIAT has
approached a foreign seed firm about possible collaborative research in Colombia, where CIAT
Box 5. ICRISAT and Seed Company Consortia
The growth of the hybrid pearl millet and sorghum seed business is one of the great success
stories of India’s seed market liberalization. A number of domestic seed companies began
producing and selling pearl millet and sorghum hybrids and then expanded into other seed
products. Hybrid pearl millet and sorghum seed remain profitable enterprises and a signif-
icant proportion of the germplasm is still sourced from the public sector, mostly from
ICRISAT. Until recently, ICRISAT has provided germplasm to any legitimate private company
or NARI. In 1999, ICRISAT approached Indian seed companies to discuss ways in which they
could support ICRISAT’s research, leading to the creation of two consortia (for pearl millet
and sorghum). Each member paid a modest annual fee for access to breeding lines and
NARIs continued to get free access to all material. Non-participating companies can have
access to some ICRISAT germplasm as well. In 2003 the relationships were re-examined
and a third consortium (based on ICRISAT’s recent success with developing hybrid pigeon
pea) was established. The three consortia have both full and provisional members (the
former pay an annual $10,000 subscription and gain access to a wider range of breeding
lines; the latter pay $5,000 and are limited to two years in that status). The pearl millet and
sorghum consortia each have 11 full members and 6 provisional members and the pigeon
pea consortium has 4 full and 2 provisional members. The consortia include a range of
Indian seed companies, although some of the very largest and smallest players in the hybrid
pearl millet and sorghum business are not members. A few companies from other Asian
countries are also included in the current membership. It is expected that the Indian
companies will apply for PBR for the hybrids they produce, once India’s PVP law is
operational. Members are asked to provide sales figures to ICRISAT in order to assess
uptake and impact, but no further royalties or payments are expected.
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offers disease-resistant germplasm and the company brings its own breeding capacities and
commercial experience.
When CIAT developed a new variety of Brachiaria (a pasture grass), called Mulato, it found that
the most effective way of promoting its diffusion was to license seed production and marketing
to a company in Mexico for a limited time (because of its commercial and technical capabili-
ties). The Mexican company in turn licenses local seed companies for distribution in Colombia
and several other Latin American countries. The Mexican company has to protect Mulato in the
name of CIAT in every country where it intends to commercialize it and it has agreed to pay a
royalty to CIAT on seed sales for the first ten years. A separate agreement provides additional
royalty payments to CORPOICA, (which participated in the research to develop the variety). The
royalties paid to CIAT go into a special royalty fund.
6.7.3 IARC Priorities
The past decade has seen a wide range of pressures from donors and other stakeholders on
IARCs regarding their roles and comparative advantage. There is a strong desire to make sure
that their products reach the smallholder farmer and thus an emerging attitude that product
development and distribution plans need to be a part of the research planning process. The
establishment of national PVP regimes and the strengthening of the private seed sector in
developing countries are two important factors in the environment of IARC priority setting, but
there is no uniform response. CIAT relinquished most of its interest in breeding for commercial
rice systems in Latin America in favor of concentration on subsistence growers and marginal
environments. ICRISAT, on the other hand, invests the majority of its pearl millet and sorghum
breeding resources for India in support of the commercial seed sector, and the research is
almost completely funded by the industry. In Africa, CIMMYT provides maize germplasm to both
NARIs and private companies but has yet to examine the implications or to see if the two
sectors complement each other or compete.
There is a strong fear in several centers that the regional nurseries in which the best varieties
(released or under development) are shared among members of a consortium of NARS for
testing under different environments, may collapse due to unwillingness of members to provide
their materials when their protection in all these countries cannot be guaranteed. This is a
response to the increased commercial attitude of several NARS that is supported by the rise of
IPRs.
6.7.4 IARCs and Biotechnology
Most of the commodity-focused IARCs have extensive biotechnology research programs. Many
of the tools and genes used by the IARCs are patented in the North (and some are specifically
licensed for research purposes) and there is little experience on how to proceed with products
based on licensed technology. CIAT believes that a transgenic virus-resistant rice variety it has
developed is nearly ready for deployment and commissioned an FTO search, which identified
the principal IP holders with whom CIAT needs to negotiate. CIAT admits, however, that it is
poorly prepared for such negotiations. Similarly, CIMMYT commissioned an FTO for its Bt maize
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varieties for Africa, but the next steps are yet unclear. Even CIMMYT’s negotiations for the non-
transgenic Striga-resistant maize have proven to be complex (see Box 4). ICRISAT has
developed a number of transformed crop lines but has yet to do an FTO on any of them.
The IARCs also have little experience in patenting their germplasm-related inventions. CIAT has
filed a patent jointly with EMBRAPA for a technique for Brachiaria transformation, and one on a
tissue culture technique (on guanabana, with potential impact on other fruits), but these have
yet to be granted. ICRISAT has yet to patent any technologies, although there are several
candidates. Most IARCs are developing their staff to identify which research streams might
result in patentable products and hence require different management.
Recently initiated CGIAR Global Challenge Programs are expected to yield a wide range of
patentable technologies through collaboration between IARCs and institutes in developing and
industrialized countries. The programs aim at making all protected technologies and materials
available in order to provide technology and products to the resource-poor on a non-exclusive
basis. However, terms such as ‘resource-poor’ are not yet well defined and require attention.
Box 6. Latin American Fund for Irrigated Rice (FLAR)
FLAR was created in 1995 to fill the gap left by CIAT’s decision to shift its rice breeding
priorities towards virtually exclusive concentration on marginal production zones. The
Colombian government (and others) expressed concern that commercial rice production
would suffer and subsequent discussions led to the creation of FLAR, which currently has a
membership of eight countries (plus CIAT). Each country has a single representative, which
may be a NARI, a rice producers association, or a group of seed companies. FLAR’s budget
is largely provided through members’ contributions. FLAR manages an extensive regional
program of rice breeding, directed by its members. FLAR does not produce finished
varieties but rather provides members access to breeding lines at roughly the F
5
or F
6
stage.
(CIAT’s rice breeding program provides germplasm to FLAR, covered by MTAs.) Each
representative or constituent member of FLAR is responsible for the registration and
protection of varieties it produces from FLAR germplasm. FLAR requires that any varieties
based on its germplasm be protected under national PVP, but FLAR does not receive any
royalties or additional payments from released varieties. Members can produce seed
themselves or license varieties to someone else and collect royalties. If a member produces
and markets a variety based on FLAR germplasm in another member country there is a
formula for determining the proportion of royalties that go to the second country represen-
tative. Companies outside the FLAR network may approach FLAR members for access to
germplasm, but any such exchange must be approved by the FLAR board. The first FLAR
varieties were released at the national level in 2003 (in Venezuela and Bolivia). The direction
of FLAR research is determined by its members, through the FLAR board. Recent interest in
pursuing an agreement with a US company for joint development of hybrid rice was recently
halted by the board, largely because the representative from Brazil (FLAR’s major
contributor) is developing its own hybrid rice research program.
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A newsworthy application of IP policy is found in the recent intervention by CIAT in a US patent
application for yellow (‘Enola’) beans, which might interfere with CIAT’s bean program in Latin
America where yellow beans are fairly common. In a wider context, this challenge serves as a
proof that the CGIAR, with its open access to genetic resources, is willing to defend this access
policy in a wider context. The effort and costs involved in challenging this patent may serve as
an example of how difficult it is for IARCs to deal with the protection of rights relevant for their
work.
6.8 Impact on Public Seed Enterprises
The establishment of IPRs is only one of the factors that have affected public seed production
activities in the past decade, leading to a general decline of the public sector in seed provision
in developing countries.
In India, the state seed corporations concentrate almost exclusively on the production of public
OPVs, although some of seed of hybrid maize is still produced by the public sector. The
Maharashtra State Seed Corporation now has its own breeding programs to complement the
ICAR varieties. As long as state universities and ICAR institutes continue to sell breeder seed of
their varieties, most state seed corporations may not see much change due to PVP, although
they are increasingly challenged by private sector activity, e.g. more than half of the seed of
public rice varieties in Andhra Pradesh is supplied by private companies. In other states as well
(e.g. Haryana) the private sector is getting involved in the paddy seed sector.
In China, it is difficult to define what should be understood by public sector seed production
since most of the seed production units that were operated by the national, provincial or lower
levels have been commercialized to such an extent that their decisions are almost exclusively
based on business considerations. Several have entered into joint ventures with foreign
companies.
The fate of the Kenya Seed Company, which has operated as a successful commercial enter-
prise with majority shares held by the Kenya government for many years, has yet to be decided.
Although it continues to dominate the market, management problems and irregularities during
the years of the former government have left doubts about its role, and even about the degree
of public ownership. It has lost its previous monopoly status, but many express the belief that
the government will still look to KSC as a guarantor of maize seed sufficiency and as such it
would expect certain concessions. But emerging policy also seems to expect that KSC will
have to compete on the basis of seed and varietal quality; the rights on the established hybrids
could provide KSC with some valuable assets to maintain its strong position in the market.
The former Uganda Seed Project has now been converted into Uganda Seeds Ltd. and has
been a candidate for divestiture for several years. It produces seed of public varieties only and
its future without significant government backing is uncertain, especially as local private seed
sector capacity continues to grow. Uganda Seeds can obtain licenses on public varieties like
any other seed company in Uganda.
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Although there is no longer any public seed company in Colombia, there is considerable seed
production that takes place with some public support. The government expects CORPOICA to
supply source seed of many public OPVs for crops such as beans and wheat to publicly-
supported programs for seed multiplication and distribution. A more difficult case is that of
FEDEARROZ, which is a producer association but also operates as a private seed company
(with its own breeding program and protected varieties). It receives some tax revenues in its
position as a producer cooperative and there are questions whether as a recipient of public
funds it should be allowed to maintain its monopoly access to FLAR rice germplasm for
Colombia.
6.9 Summary
IPRs and revenue generation in NARIs
The establishment of PVP regimes comes at a time when public agricultural research in
developing countries is being asked to take much more responsibility for revenue generation.
Among the case study countries, India is an exception, where revenue generation is encouraged
but not compulsory (and ICAR revenue flows back to the treasury). These demands for revenue
generation are not entirely explained by the emergence of PVP, but administrators certainly see
the possibility of earning income by licensing their varieties and other inventions as an
important response to the challenge of achieving greater financial self-sufficiency. The public
sector appears to be a major supporter in the push towards PVP in most countries. The degree
to which such royalties can fulfill that promise depends on farmer demand for public varieties,
the efficiency of the domestic seed delivery system, and the ability of public breeders to
compete with their private sector counterparts.
In Colombia there is little evidence so far of potential revenue generation from public breeding.
In Kenya, the fact that most of the maize hybrids grown by farmers are products of public
breeding would indicate the possibility of substantial revenues, but the domestic and foreign
private plant breeding sector is expanding rapidly. In Uganda, public plant breeding has not yet
resulted in a widespread use of public varieties by farmers, and because it concentrated on
OPVs until recently it has not contributed to the nascent seed industry. The private sector is
still insignificant in terms of breeding. In India, although the vast majority of hybrid seed is now
the product of private plant breeding, huge areas of wheat and rice are planted to public
varieties, and even though only a fraction of that area is planted to purchased seed, the royal-
ties could be significant. But it would appear that there are no plans at present to shift away
from the practice of selling breeder seed to any legitimate seed producer. In China, the system
is in a state of flux, as public breeding institutions for major crops are making the transition to
take partial responsibility for revenue generation. As there are substantial quantities of public
varieties of many important field crops grown with purchased seed (especially hybrid rice and
maize), the revenue generating possibilities are substantial. But public funding and broader
mandates are also important.
In summary, the expectations of NARI management for the amounts of revenue that can be
generated are quite high. For comparison, the income of universities in the USA from
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intellectual property rights is approximately 2-3% of their annual turnover (J. Barton, pers.
comm.). Income from PVP on plant varieties is likely to be more predictable than patent-based
revenues (Fischer & Byerlee, 2001).
Can NARI plant breeding keep pace with the private sector with regard to human resources?
The degree to which a PVP system can help generate income for NARIs depends to a large
extent on whether NARIs can keep control of plant breeding skills and resources for commer-
cially important crops. The experience of India in the past two decades is instructive; as policy
changes encouraged the emergence of private plant breeding, the expertise for commercial
(largely hybrid) seed crops began to shift from the public to the private sector, even for sup-
posedly ‘marginal’ crops like sorghum and pearl millet. As the private seed sector developed in
India, NARI staff were hired away, and the private sector now offers an attractive alternative for
recent graduates. Even where public sector research leads the way, as in hybrid rice, the
commercial potential soon attracts resources (and results) to the private side.
The current situation in China is more difficult to characterize. Large companies are investing in
breeding activities, particularly for hybrid maize and rice, and breeders from public institutes
are getting involved. By helping to generate revenues, PVP is providing the institutes with
resources that can be shared with breeders as an incentive for them to stay. The large invest-
ments in the application of biotechnology by CAAS may also be providing a scientific and
prestige-related counterbalance to the lure of the private sector, where many companies do not
yet have such resources. Thus there are uncertainties about the extent to which the private
sector will be able to offer alternative employment to the best plant breeders.
In the smaller countries in the sample, the ability of the NARI to retain plant breeding personnel
and resources in the face of an expanding private seed sector is much more in doubt. In Uganda
NARO is struggling to maintain its maize breeding program. In Kenya KARI’s traditional partner,
KSC, is now a rival, with a separate breeding program, and other domestic companies are
assembling their own breeding resources. The emergence of PVP thus comes at a time when
there are many uncertainties about the role of NARIs vis-à-vis the private sector in terms of
mandate crops and the division of labor between upstream and downstream research.
NARI administration of IPRs
The advent of PVP and the increased use of patented technology in agricultural research place
an additional burden on NARI administrations to establish IP policies and procedures. Most
NARIs in the study are moving very slowly in this direction, hampered by a lack of experience
and resources. In most cases IP policies are still being drafted. Skills required for activities
such as the pursuit and enforcement of PVP, organizing patent applications, and understanding
freedom to operate, are in short supply and in any case would not be fully employed in most
NARIs under current circumstances, but they are all required at certain key junctures in NARI
technology development. In this regard, there is a difference between the national and provin-
cial level institutes of the academies of agricultural science in China. The former generally have
much more resources to assist scientists with IPR matters, in particular patent applications.
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Another administrative challenge is the management of royalties received by the NARI.
Decisions must be made about sharing such income more widely within the institute (to support
less commercial research but at the risk of diluting the incentives offered by the royalty system).
There is also understandable pressure that some part of the royalty earnings from a protected
variety or a patented technology go to the scientists responsible for the innovation. In any
public research system this can create potential inequalities, but in some developing country
NARIs these could be quite problematic. In Kenya, for instance, a small share of the royalties
(in line with proposals from the plant breeders association) from a widely-used maize hybrid
could dwarf the breeder’s normal salary and significantly jeopardize the institute’s incentives for
research in other crops. There are also more mundane administrative challenges. For instance,
if NARIs hope to earn income from the sale of source seed, they need an efficient and
transparent service in place. Such a system exists in some Indian NARIs, but is less well
established in some of the other case study countries.
Implications of PVP for NARI priorities
A major problem with revenue generation from PVP is that the potential opportunities are
patchy. There is a danger that this heterogeneity may be translated into inequitable and
questionable public research resource allocations. Why, for instance, should hybrid rice
research earn much more than wheat research just because of differences in seed systems?
Although it makes sense to assign research resources to crops and problems for which there
is high farmer demand, commercial seed systems often provide imperfect signals of that
demand. There are already indications that these signals from the seed system and associated
PVP are making their marks on NARI priority setting. This can be seen with the case of hybrid
rice in Hunan and Guangdong provinces, as well as with the longer running approach to
vegetable breeding in China. NARO in Uganda is encouraged to concentrate on research where
commercial contracts or PVP will provide revenue, and KARI’s calculations for income are
based on hybrid maize.
NARIs need to manage their IP to maximize the benefits of public investments to society and to
ensure equity in the distribution of these benefits in line with national policies (Fischer & Byerlee,
2001, 2002).
IARC IP policies and resources
IARCs have policies on IP that stipulate that the Centers can protect inventions and materials
under the condition that this protection will ensure that the subject material will be available to
stakeholders; in such situations provisions will be negotiated in the licenses with the intent that
such material will be given out royalty-free for use for the poor. Centers are committed to
having their products reach the smallholder farmer at little or no cost. Several centers have
some staff assigned to IP with legal background, plus access to CAS-IP, in order to improve
IP Management practice and to also focus on product development and distribution issues.
Resources are however limited and the increasing pressure to show impact at the local level
will stretch current capabilities.
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The IP issue is central in the balancing of relationships between seed companies and NARIs.
As IARCs develop wider relations with domestic commercial seed sectors, and NARIs place
increased emphasis on earning royalties from their germplasm, IARCs have to balance between
giving materials directly to seed companies or going through NARIs that the can earn royalties.
In many countries, companies seem to prefer direct relation with the IARCs. When IARCs can
earn royalties on their materials, they find themselves in the same position as NARS with regard
to possibilities that opportunities for revenue generation may affect priorities. Contrasting
examples are provided with CIAT’s rice and ICRISAT’s sorghum.
The dilemma of public seed production
The growth of the private seed industry (and the demise of many parastatal seed companies)
would seem to provide a more effective link between public plant breeding and farmers’ fields,
with the added incentive of royalty earnings. However, many public varieties do not attract the
interest of commercial seed enterprises, and this encourages NARIs to organize their own seed
production and marketing. Such temptations are clearly evident in some of the smaller NARIs in
the study. In addition, many NARIs still find themselves with obligations to public seed production
efforts. The problem is that in most countries the conventional private seed sector does not
have the incentives to produce and market the full range of public sector varieties for which
there may be farmer demand, such as beans, but the public sector has shown itself incapable
of organizing an efficient alternative. In China, the old system of seed production and
distribution by public companies is shifting quickly to dominance by private companies. Few
public breeding institutes are expanding into seed production, with the exception of the IVF
which has long produced and marketed its own seed.
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7. Impact on seed users
7.1 Diversity of Seed Firms
One of the principal arguments in favor of PVP legislation is that it will provide incentives for a
wider array of seeds from which farmers can choose. The impact of PVP legislation on the
seed industry in the case study countries was discussed in a previous section and although it is
still too early to say anything definitive about how changes in domestic seed industries will
affect farmers, some preliminary observations are possible.
When India’s new PVP law is functional, and if the new seed law requires that all varieties be
registered, there could be at least two major effects at the farm level. On the positive side, it
will be easier to control the illegitimate seed producers whose products cause confusion and
uncertainty. If companies can control the illegal use of their germplasm (e.g. theft of inbreds)
by others, some of the fly-by-night operations that sell seed of uncertain origin will be curtailed.
Although the net effect will be to reduce the number of players, it may bring positive benefits.
For example, cotton farmers, particularly in southern India, currently confront an exceptionally
complex market. It is generally acknowledged that in some cases a popular hybrid is being
marketed under several names (because of illegal access to inbreds or commercial seed); in
other instances, small companies go in and out of business, marketing hybrids of uncertain
provenance. Eliminating the smaller, illegitimate players in the cotton seed business could bring
added transparency to the market. On the other hand, if the new PVP and seed laws raise the
costs of bringing a new variety to market, small companies that specialize in niche markets will
have fewer incentives to operate. However, there may be few current examples of private seed
companies investing breeding resources in small, specialized markets that can access
proprietary materials through licenses from colleagues.
Perhaps a more relevant concern is the potential impact on public plant breeding for marginal
environments. When such breeding can be linked to delivery by small private seed companies it
is possible to imagine that the additional regulatory costs would discourage this type of activity.
Evidence from Andhra Pradesh shows that even small private firms are fairly conservative in
promoting new public rice varieties until there is evidence of sufficient demand. The initial
activity in promoting the new rice varieties (and in meeting the needs of niche environments)
depends in large part on the activities of certain larger farmers who test new public varieties
and serve as seed sources for their neighbors (Pal et al., 2000). Whether such a system will
continue depends on public plant breeding policies.
Although some commercial seed activities emerged in China in the early 1990s, the truly
private seed companies started selling seed only after the implementation of the new seed law
in 2000. There has been a recent proliferation of seed companies, and many of these are
selling Bt cotton seed. Some of this is legitimate and properly regulated, but much is legitimate
seed sold in unapproved areas, pirated seed, or simply spurious imitations. This exceptional
competition has driven the price of all Bt cotton seed down, but farmers pay the price of
risking the use of fraudulent or poor quality seed and the legitimate seed producers do not get
adequate compensation. Recent analyses have argued that better enforcement of IPRs in Bt
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cotton would drive some of the smaller, illegitimate players out of the market and improve
overall productivity (Pray et al., 2004).
In both Kenya and Uganda farmers would certainly benefit from a wider range of seed sources,
but the opening of these markets has been related to changes in national policies rather than
PVP per se. In recent years farmers have increasingly complained about the quality of KSC
seed; some of the complaints are related to grain sold in imitation seed bags by fraudsters but
some may be the product of lax quality control by the company itself. In any case, farmers
have been eager to try hybrid maize seed from other companies, even when it is significantly
more expensive. The increased competition has been responsible for other innovations, such
as the availability of smaller pack sizes, but has yet to elicit a wider range of crop seed into the
market.
In Colombia, PVP was instituted at a time when government support to agriculture had declined
and the seed industry was contracting. Farmers have a modest range of choice of companies
for rice and maize seed, but there is little indication that the industry is diversifying further.
7.2 Farmer Priorities
There are also concerns about the extent to which PVP may shift plant breeding priorities,
particularly for the public sector. We have seen several examples of how such priorities may be
changing, although it is difficult to attribute such changes to PVP alone. In Uganda, NARO
administrators and scientists consistently talk about using public plant breeding to serve the
development of commercial agriculture. They express considerable faith in finding the commer-
cial potential of most crops, and have less time for examples concerned solely with subsistence
agriculture. This may likely to affect the distribution of funds between crops e.g. at the cost of
attention to locally consumed crops like beans and cassava, and put more emphasis on the
selection of high-yield potential maize at the cost of yield stability under low-input conditions.
The private seed companies that have beans and other locally important crops in their portfolio
confirm that this is mainly to cater for the demand of aid agencies and that they don’t see a
future for these products when that demand disappears. In India, ICRISAT’s clients for hybrid
pearl millet and sorghum breeding are now the members of the company consortia, and those
companies naturally target commercial opportunities. For instance, they see particular impor-
tance in breeding for dual purpose sorghum that can be used for both food and fodder. The
requirements of those farmers that depend on sorghum as a subsistence crop will be less in
evidence.
7.3 Local Seed Production and Plant Breeding
The majority of farmers in the case study countries rely on farm-saved or other non formal
sources of seed for many crops. Farmer-to-farmer seed exchange has been a key mechanism
to transfer the green revolution technologies to farmers that could not be reached by the
formal seed systems. This ‘lateral spread’ system is the basis of the inclusion of modern
varieties in the farmers’ seed systems.
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A more recent mechanism to reach smallholder farmers in ecologically diverse countries are
the different farmer participatory approaches to plant breeding and variety selection (Sperling
et al., 2001). Farmers become partners in breeding and in testing a wide range of (nearly)
finished varieties on farm with the intention to either develop small-scale seed enterprises or to
feed new varieties into the local seed systems.
Varieties selected in such participatory initiatives often bypass the regulatory system. Such
initiatives could be affected by IPRs in two ways. First, NARIs that seek revenues from their
research are likely to give very little priority to such participatory approaches because they will
not likely lead to commercial varieties. Those varieties that are the products of participatory
plant breeding may not meet uniformity standards, or participating farmers may reject the idea
of ownership (Salazar et al., 2004). Second, given the ecological and sociological diversity in
which participatory plant breeding programs operate, there is a requirement for access to a
wide range of genetic materials for breeding and testing. When more materials are protected
by PVP or patents, there are fewer opportunities for participatory approaches.
7.4 Seed Saving
One of the major concerns about the establishment of PVP legislation is that it may restrict
farmers’ ability to save seed. The new Indian legislation specifically guards against this
possibility and many seed companies feel that the law provides too much flexibility, not only for
seed saving but also for extensive sale of saved seed under the rubric of ‘seed exchange’. This
is formally limited to genuine farmers, but may be misused by local operators for profit. In any
case, Indian farmers who are used to saving commercial seed or obtaining seed of new
varieties from their neighbors will notice no difference when the new law is in place. Similarly,
the proposed PVP law in Uganda permits seed saving of protected varieties.
In Kenya and Colombia, both of whom have several years of experience with PVP, changes are
being proposed that will affect farmers’ ability to save seed. In some respects these changes
are in response to the practices of commercial farmers that reduce seed sales. In Colombia,
the seed industry complains that it suffers from widespread informal seed sale, where certain
farmers produce and sell seed to their neighbors. Resolution 2046, which prohibits seed
saving on properties of greater than 5 ha (and requires permission from ICA for seed saving on
smaller farms) is meant to address this problem. If this is enforced it would raise the cost of
production for certain rice farmers who are used to buying informal seed or saving their own
seed, but in the context of the current seed market it may not have any other notable effects,
as very few OPVs of other crops currently grown are protected (soybean may be the major
exception). It could theoretically make a significant difference, for instance, in the case of
protected potato varieties, whose yearly replacement with certified seed would add greatly to
the costs of production. There are also uncertainties about the interpretation of the farm size
limitation. If a farmer with 6 ha of land grew 3 ha of beans, the obligation to buy certified seed
(of a hypothetical protected variety) would imply a significant investment. The actual effects of
the resolution will be determined by its interpretation and management.
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In Kenya, there are plans to revise the legislation so that it is compliant with UPOV 1991, which
allows breeders to restrict seed saving of protected varieties. Probably the principal case of
contention is wheat farmers, who use a large proportion of saved or locally-purchased seed.
Many of these are fairly large farmers who at one time were more frequent customers of the
Kenya Seed Company. The farmers contend that they would still be willing to buy KSC seed if it
were of good quality and appropriate varieties. KSC, on the other hand, claims that the farmers
are simply trying to save money, and that they are often abetted by the KARI station at Njoro
that provides some seed (of its own released or experimental varieties) to local farmers, who
then multiply and save it. No matter who is right, if a restriction on seed saving were introduced
in Kenya, it might be possible to enforce with wheat farmers, who are relatively large, few in
number and operate in a delimited environment. However, Kenyan wheat farmers’ current
range of choice for seed is much more restricted than the options available to Colombian rice
farmers. In addition, a very large number of (mostly public) food crop varieties are in line for
PVP in Kenya. Although there is no threat that a wholesale application of a restriction on seed
saving would be enforced for subsistence farmers (it would be administratively impossible and
politically unwise), there are legitimate questions about how farmers could be protected from
the arbitrary application of such a law.
7.5 The views of farmer groups
The emergence of IPR regimes has caused a certain amount of concern among farmers and
farmer groups, although relatively few farmers are conversant with the issues. Among the most
prominent concerns are the dangers of excessive commercial control of the seed market,
possible restrictions on seed saving, and the possible fate of local varieties. Several spokesmen
of farmers’ organizations who were interviewed indicated that they do not see many advantages
of IPRs for their members. They claim that IPRs will lead to monopolies that will increase seed
price and that will reduce the focus on the needs of farmers who will not benefit from foreign-
bred materials. They fear that such monopolistic tendencies will not easily be curtailed in
developing countries by anti-trust measures. Representatives from India and East Africa
indicated that they do not expect such negative effects to take place immediately, but are
concerned about the growing concentration of the seed market in certain areas. They fear that
large commercial interests will gradually exclude alternatives (including the public sector). Local
commercial seed companies will either be marginalized or purchased by the larger firms.
In general, these farmers did not distinguish between PVP and patents. The introduction of PVP
(even the weak form in India) is seen by some farmer organizations as a first step in a process
that will lead to strong patents. The capacity of the governments to balance the interests of the
industry and smallholder farmers in this process is considered very limited given considerable
international pressures. The TRIPS-plus negotiations in several countries are presented as an
illustration of this pressure.
In India, the new law allows farmer groups (or NGOs representing farmers) to pursue the
protection of farmers’ varieties. There is little activity yet in this area, but one NGO expressed
interest in documenting farmers’ varieties, even if direct benefit-sharing turns out to be difficult.
Another NGO pointed out that a considerable amount of capacity-building is required before
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there is the possibility of protecting farmers’ varieties. In addition, some NGOs already have
experience in public interest litigation in support of issues related to Farmers’ Rights and the
new legislation will almost certainly provide further opportunities.
7.6 Flower producers
The flower producers of Colombia, Kenya and Uganda can be considered ‘seed users’ as well,
and most of their production depends on the use of protected germplasm. Like seed users for
agricultural crops, they are for the most part unacquainted with local PVP regulations. Most
flower producers in Colombia and Kenya are only vaguely aware of the PVP offices in their own
countries. They are well acquainted with the royalties that they pay on planting material, but
these payments are negotiated with the flower breeding companies in Europe or elsewhere.
There is no standard format for paying royalties to the IP owners, and the nature of the contract
depends in part on the length of the relationship and the trust between the two parties.
Royalties may be charged on the planting material or on the marketed product, depending on
species. In the former case, initial contracts may stipulate that the royalties for the lifetime of
the planting material (e.g. usually four years for roses) be paid in advance, but once business
relations are established the royalty payments may be spread out over the production period.
In certain cases, a producer may negotiate for exclusive rights to produce a particular variety.
There is surprisingly little difference in the level of royalties between rose varieties, which
appear to account for about 3-6% of the cost of production for flower growers. For roses, the
royalty cost is roughly equivalent to the cost of the planting material itself. The major cost of
production is labor.
The monitoring of growers’ conformity to royalty agreements is managed by occasional visits
to their farms by breeding company representatives. The growers put much value on a good
relation with the agent of the breeder since only through him can they access varieties that
fetch a good price in the market. Some of breeder representatives are appointed agents
resident in the country and others come from abroad. In Colombia, a Dutch company, Royalty
Administration International (RAI), has an office that looks after the interests of a number of
flower breeding firms. Those who monitor the flower growers are aware of the quantity of
breeding stock contracted by the grower and check for evidence of excess production.
A second method of monitoring production is by reviewing export statistics. In Uganda, for
instance, all flower exports go through one handling agent.
At present the major means of controlling illegal flower production is through close monitoring
of the wholesale markets. Most flowers destined for Europe pass through a single market in
the Netherlands and statistics from this market are closely monitored. Flower-producing firms
depend on a limited number of wholesale outlets and this means that it is fairly easy to spot a
company’s extra-contractual production. The control over product markets is the principal
instrument for enforcing royalty agreements. For instance, there was a landmark seizure of
20,000 roses in Miami exported from Colombia and Ecuador for Valentine’s Day 2004.
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The varieties are also grown by legitimate producers in Colombia, although it appears that the
varieties are not protected by PVP in Colombia. The roses were the property of a US breeding
company and the seizure was made on the basis of violations of trademark rather than PVP.
RAI, Colombian security officials and US Customs collaborated in the operation.
Given the possibility of controlling illegal production through the withdrawal of contracts and the
relative ease of monitoring wholesale markets, it is fair to question the role of PVP regimes in
producer countries for the flower industry. Many producers in Colombia and Kenya say they
saw no particular change in their conditions or markets when their countries joined UPOV. On
the other hand, these producers may not be aware of the degree to which their choice of
varieties (presented in catalogues to the growers) may be influenced by the breeding
company’s confidence in the business climate of those countries with PVP legislation.
The case of Uganda illustrates that a country can attract a buoyant flower production industry
without a PVP regime. If the flower varieties are protected through PVP in the country of desti-
nation (or if they are trademarked), then PVP in the country of origin may be irrelevant. The
Dutch flower industry is however lobbying for strong IPRs in the main production countries to
create additional ways to tackle infringements. This is particularly important where additional
wholesale markets develop, such as direct exports from Kenya to the Middle East and other
parts of Africa (or as the domestic market for flowers expands). Some producers in Colombia
believe their industry is better positioned than that of neighboring Ecuador (which does not
have a functioning PVP system and suffers more illegal flower production). With respect to
attracting new contracts, a local PVP regime also gives a breeding company the option of
bringing (or threatening) a local court case.
The discussion has focused on large commercial flower growers, but it is worth asking what
the possibilities are for small-scale production (and how PVP might apply). Unfortunately, most
commercial flower production requires considerable infrastructure (greenhouses, irrigation) and
hence it is not feasible on a small scale. Even where outgrower production is possible (for
those species that can be grown in open fields), current regulations in the North regarding
environmental and social conditions make monitoring smallholder production very unattractive.
There was a case several years ago in Kenya where large firms organized the production of an
Alstroemeria variety through outgrowers. The breeding company did not charge royalties on
the variety initially, but when expanded sales encouraged it to begin charging royalties, the
economics of outgrower production collapsed. Although the exercise of PVP was the initial
cause for the failure of the outgrower scheme, the other economic and regulatory factors that
have since appeared now make smallholder flower production uneconomic.
The situation with flower production may be quite similar to a number of other high-value
commodities, such as export vegetables, tropical fruits, and possibly estate crops, where the
rights can be controlled through export markets rather than by enforcing protection of the
planting materials themselves.
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7.7 Summary
Limitations on seed saving
Farmers’ seed systems are the main source of seed for most crops in the case study countries.
IPRs may restrict this practice. This could affect access to new varieties by farmers who
cannot afford frequent purchase of seed from formal sources. In this respect the potential of
plant patents is of most concern, but the changes in some national PVP regulations already
introduce these issues, especially if legislation designed for the commercial farming sector is
extended to subsistence crops.
Expanding choice
Farmers need choice; in some countries this choice is currently expanding through the opening
of the seed sector through economic policies and changes in seed regulations. When the
commercial seed market expansion is very rapid and uncontrolled, IPRs can help control rogue
traders (e.g. in India, China). However, restrictions on small seed enterprises and semi-
commercial operations may jeopardize seed supply of some local varieties supplied commer-
cially, as in India. In addition, the breeding of niche varieties and their delivery by small seed
companies may be threatened.
IPRs seem to secure access to a wide range of varieties by flower growers in the case study
countries, but only when the implementation of the IPRs contributes to a trustworthy business
environment. These IPRs are not necessarily operational in the production countries, as long as
they can be exercised in the main wholesale markets. Where the introduction of PVP is strongly
pursued and the lobby for strengthening the system comes primarily from this sector, non-
specific IPRs like trademark protection appears a very strong tool for the flower breeders.
Addressing marginal farmers
It is likely that NARS’ focus on revenue generation, supported by the introduction of IPRs, and
may divert their attention from the needs of marginal farmers. Choices of crops, variety
characteristics, and breeding strategies are less likely to take account of the needs of more
marginal farming populations. This is particularly relevant to participatory methods in breeding
and variety selection, although the impact of such approaches is quite variable at the moment.
On the other hand, there are some indications in India that a strong and diverse seed industry
may want to diversify into more marginal markets.
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8. Lessons
This study has attempted to survey and analyze the design, management and impacts of
various IPR instruments applied to plant breeding in five developing countries. Because many of
the principal IPR strategies have only been in place a few years (or are still in the final stages of
approval), and because the incentives provided by any IPR regime usually interact with various
other factors, it is difficult to identify unambiguous conclusions regarding the possible contribu-
tions and concerns that IPR regimes might present for plant breeding in developing countries.
We have attempted to make the precision of the conclusions provided in the ‘Summary’
sections of Chapters 4-7 consistent with the level of evidence that is currently available.
Despite the preliminary nature of the report’s conclusions, we believe that the analysis points to
a number of significant lessons that need to be presented and disseminated. This final chapter
outlines the most important of these. Some of these lessons merely indicate the importance of
vigilance and monitoring, while others imply the need for immediate action. The following
presentation directs the lessons in a somewhat arbitrary fashion (given overlaps in interests
and mandates) among: those with a general interest in the subject, particularly donors; national
policymakers concerned with the design of IPR instruments; policymakers and officials engaged
in the implementation of IPRs; national representatives and others engaged in trade negotia-
tions; and those concerned with broader issues of national agricultural development policy.
General
It is too early to attempt a statistical or even a quantitative analysis of the impact of strength-
ened intellectual property rights on plant breeding and seed production in developing countries.
In most developing countries the introduction of IPRs for plant breeding is a recent event which
coincides with a series of other processes that have been set in motion, including the liberaliza-
tion of domestic agricultural markets, increased globalization, and a reduction of public expen-
diture for agricultural research and seed production. All of these trends have a marked effect
on the seed and plant breeding sectors. Although these concomitant trends may be compatible
with a move towards strengthened IPRs in plant breeding, it is very difficult to attribute
particular outcomes to changes in IPR regimes alone. But the difficulty in identifying clear
causality at this early stage does not mean that IPRs are unimportant. On the contrary, IPR
regimes may lead to significant changes in plant breeding and seed production, and the subject
warrants careful future study and monitoring.
There are several priorities for careful monitoring. These include assessing the extent to which
IPR regimes (and other policy changes) in particular countries influence the priorities and
products of public plant breeding, affect the structure and concentration of the domestic seed
industry, and determine the options available to smallholders. On a global level, it is particularly
important to monitor how IPRs are treated in multilateral and bilateral negotiations, and how
IPRs determine the role of MNCs in technology provision in developing countries in order to
ensure that the significant concentration witnessed in the industry can be counterbalanced by
measures that allow more widespread access to the tools and processes of biotechnology.
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Although it is possible to conclude that this study only examines the very partial implementation
of relatively weak IPR regimes, it is important to bear in mind that the case study countries
capture a good deal of the wide range of experiences among developing countries with large
populations of resource-poor farmers who have established IPRs for plant breeding. Political
realities, limitations in administrative resources, and varied economic incentives in most
developing countries indicate that it is unrealistic to expect rapid establishment and effective
enforcement of the type of IPR regimes that are found in some industrialized countries. In any
case, IPR regimes should be part of developing countries’ development pathways and consistent
with their own priorities and capacities instead of being externally imposed. Donors and others
hoping to support these processes must be prepared for a long-term and individualized
development of national agricultural institutions.
Support for specifically-tailored IPR regimes is possible because of the range of options that
are available for providing the types of incentives that many believe (incorrectly) to be
associated only with uniform and rigid IPR regimes. The following sections on design and
implementation provide further details on the flexibility that is available for pursuing a more
responsive approach to IPRs.
It is important to clarify that respecting individual country priorities and circumstances in the
design of IPR regimes does not imply that opportunities for harmonization and cooperation
should be forgone. Mechanisms such as UPOV and PCT facilitate the implementation of IPRs
and reduce transaction costs. But the object of harmonization is to provide economic benefits
(such as the development of regional markets) rather than to promote coalitions whose
standards are dictated by their strictest partners.
Donor support for the development of appropriate national IPR regimes should not be limited
to providing information and resources for the technical options related to design and imple-
mentation. Such support should be accompanied (or indeed, preceded) by encouragement for
open and informed national debates among all stakeholders regarding options for IPRs as well
as wider issues related to agricultural development. Such stakeholder involvement is also
encouraged by Art 9. of the International Treaty on Plant Genetic Resources for Food and
Agriculture.
Although IPR regimes must be developed at the national level, and much donor effort should
support individual processes of debate, design, and implementation, there are also issues
related to international public goods that require attention. In particular, the conduct of inter-
national agricultural research will be affected by decisions regarding IPRs in plant breeding.
International agricultural research should support the development of local farmer capacities,
strengthen national public research, and encourage the growth of domestic private seed
sectors. This is a delicate balance, with much scope for contradiction and compromise, and
more study is required to identify appropriate IPR instruments for supporting these multiple
goals.
A further issue that requires attention at the international level is access to some of the basic
tools and processes of biotechnology. In many cases, plant breeders in developing countries
are using tools and processes that are protected in the North through patents, and they are
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uncertain of the possible legal implications for the new varieties that they might develop aided
by such technology, as well as the status of the agricultural products grown from these
varieties. In addition, there is lack of clarity about access to certain technologies (and
supporting information) that have, or will soon, go out of patent protection and are presumed
to enter the public domain. Concerted attention at the international level is required.
The design of IPR instruments
Policymakers need to understand that IPRs are important not because countries may be
required to accede to the conditions of an international agreement but rather because they
offer possible mechanisms for stimulating research, enabling access to technology, and
promoting enterprise growth, all for the good of society. As such, they are merely one tool in a
range of policies that may be applied in specific contexts to further agricultural development.
Carefully designed IPRs for plant breeding can make an important contribution, but they are
unlikely to be effective unless combined with other policies (e.g. for supporting public agri-
cultural research, providing an enabling environment for agribusiness development, and
empowering smallholders). Policymakers should understand that IPRs for plant breeding are
not a magic bullet that automatically stimulates or redirects agricultural growth, but they can
be an important part of a comprehensive agricultural development strategy. Under the right
conditions, IPRs can help support, but do not themselves create competitiveness and diversity
in plant breeding and seed supply.
Given the value of well designed IPRs for agricultural development, policy makers should not
treat IPRs as a negotiable bargaining chip in trade negotiations or other international
discussions.
In most countries, the implementation of an IPR regime for plant breeding should be seen as a
long-term process, subject to monitoring and adjustment. The nature of patent rights in the
field of biotechnology is a subject of debate in most industrialized countries, and developing
countries should approach the revision of their own patent systems armed with adequate
information. Similarly, the establishment of a PVP office is not necessarily sufficient to initiate
widespread changes within the seed industry. It often takes considerable time for the testing
infrastructure to be established and for plant breeders to become conversant with the system.
In some cases companies may be hesitant to invest in protection that they either feel is
unnecessary or unenforceable. In other cases, even fairly weak IPR regimes are welcomed by
the seed industry, especially when they help protect companies against infringement by
competitors.
Not only do IPRs in plant breeding have to be seen in the context of a wider range of agricul-
tural policies, but IPR regimes themselves must be carefully tailored to specific situations. It is
important that countries recognize that they have choices in designing legislation consistent
with the TRIPS Agreement and that there are still opportunities for debating and interpreting the
Agreement itself. There is a range of instruments that may be established to fulfill the require-
ments for a sui generis system of IPRs for plant varieties. The UPOV Conventions offer some
important advantages, but do not exhaust the possibilities. Even within the UPOV Conventions
there is room for national policymakers to define specific aspects of coverage, such as what
species, if any, are subject to limitations on seed saving. Similarly, there are several options
136
with respect to tailoring national patent regimes for agricultural biotechnology. For instance,
when EU patent law was broadened to effectively include plant varieties within the scope of
biotechnology patents, and EU Directive introduced a farmers’ privilege with reference to the
PVP laws that a standard interpretation of patent law would not have included. This illustrates
the flexibility available within IPR systems. The key elements in IPR systems that can tailor them
to the specific conditions of individual national seed sectors include the specific terms of the
farmers’ privilege and the breeder’s exemption, the relationship between different IPRs (patents,
PVP, trademarks, trade secrets), the exhaustion of these different types of IPRs, and possible
differential treatment of particular crops.
Policy makers need to consider the resources required for the establishment or strengthening
of IPR systems. Institutional capacity to deal with the processing of applications and the granting
of rights is quite variable among countries. Many countries will find it difficult to identify staff
with sufficient legal and/or scientific skills to establish PVP offices and testing facilities, and the
opportunity cost of this personnel may be considerable (e.g. the release of experienced plant
breeders for variety testing). Cooperation and harmonization can lower some of these costs
(e.g. the utilization of external DUS tests or reliance on regional or international organizations
such as PCT). Because IPR regimes should further national agricultural development goals
rather than merely signal compliance with treaty obligations, the choices related to the degree
of cost recovery for IPR offices are not straightforward. On the one hand, fee rates that make
an office self-supporting should be welcome, but on the other hand care must be taken to avoid
unfairly taxing or discouraging applicants, and especially smaller players.
PVP and patents are not the only (or even necessarily the most effective) instruments available
to policymakers to help provide incentives for plant breeding and seed production. Particularly
in countries where neither public nor private plant breeding has yet to have a substantial impact
on the majority of farmers, the establishment and enforcement of effective seed laws and
support for contract law and responsible business practices are likely to offer more immediate
incentives. Trademark protection may be an underrated IPR in the debate, but is highly valued
by the private seed sector. In addition, it is important to remember that most regulatory
systems, including IPRs and conventional seed laws, present dangers of gate-keeping and rent-
seeking, and policy makers must be vigilant in establishing transparent administrations.
The introduction of transgenic varieties to developing countries presents special challenges,
but does not necessarily imply the adoption of extraordinarily strong IPR regimes. Limited
experience to date has shown that in the absence of IPRs for GM plant varieties and biotech-
nological inventions, MNCs have resorted to biosafety regulations in an attempt to protect their
technology (e.g. India). Biosafety organizations are however not appropriate for such purposes,
and policymakers can offer an appreciable contribution by limiting an expansion of the role of
biosafety regulations and by creating a clear division of responsibilities among various agencies
for regulating the use of GM varieties. In many cases, the enforcement of extant seed laws can
offer an appreciable improvement in limiting unauthorized sale of GM seed. In some cases,
controls over output markets for GM crops may provide a significant level of protection. None
of this implies that PVP or relevant patent law should not also be pursued for GM varieties but
indicates that GM varieties, on their own, are not a sufficient rationale for establishing overly
rigid IPRs; other types of regulation may be effective (or indeed a prerequisite), particularly in
137
the early stages of development of GM seed markets. Nonetheless, further research should
concentrate on the extent of IP protection necessary for stimulating the development of GM
varieties where desired.
The implementation of IPR regimes
Policymakers must consider the institutional arrangements for PVP. A PVP authority may be
included as part of an existing seed regulatory agency or may be established as a separate
organization; the expense of setting up a separate entity must be balanced against possible
concentration of power or conflict of interest. In addition, there must be confidence that the
PVP authority is independent from the interests of public plant breeding organizations.
The challenges of adequate enforcement for IPRs in plant breeding should not be under-
estimated. There is very little legal capacity in most countries to support IPR regimes for plant
breeding. Although the application procedure for PVP may be quite straightforward, for instance,
neither IPR-holders nor courts appear to be prepared for addressing cases of infringement.
The experience of the case study countries is that the enforcement of PVP is often difficult,
undermining confidence in the system. Implementation of IPR regimes must include attention to
strengthening the court system’s knowledge of IPRs in plant breeding, and the ambitions and
scope of any IPR system must be consistent with the capacities of the legal system, including
contract enforcement. Developing such legal capacities is not only a technical issue but also a
process of institutional development that requires political commitment.
There is a danger that the implementation of IPR regimes for plant breeding will proceed using
standard models rather than taking account of the specific circumstances of individual
countries. For the establishment of PVP, there are a number of important parameters that
require careful consideration. These include: the designation of which species are to be
covered; fee structures (and possible subsidies or differentiation by crop); the nature of the
breeder’s exemption for use of protected varieties; and the implications for farmers’ abilities to
save, exchange and sell seed in accordance with local custom. For patents the choices are
similar: which processes and products are patentable (e.g. sequence information or only
functional genes) and the scope of protection, including the restrictions on the free use by
breeders and by farmers. For trademarks, the key question is whether a variety name can be
protected.
Despite the necessity of defining the parameters of IPR instruments as carefully as possible to
fit national goals and circumstances, there are limits to the levels of specificity and targeting
that are feasible. Because of these limitations, policymakers must be vigilant to analyze the
implications of arguments made for further strengthening IPRs. For instance, although a
legitimate case may be made for providing legal boundaries on the degree to which large
farmers can multiply and sell seed of protected commercial varieties of a particular crop, a
general limitation on seed saving may have very adverse affects on many smaller farmers
growing other crops. Similarly, although rigorous restrictions may need to be applied in the
case of plant breeding involving transgenes, strict general interpretations of breeder’s or
researcher’s exemptions may be inimical to national plant breeding.
138
Because the establishment of IPR regimes is a gradual process (and the regimes should
respond to changing conditions in national plant breeding capacities, seed markets, and farmer
priorities), careful monitoring is required. Policymakers need to assess whether particular IPR
regimes are actually providing incentives for seed system development consistent with national
agricultural goals. This includes analyzing if farmers have equitable access to an increasing
diversity of crop varieties and if the structure of the commercial seed market provides
confidence for participants while at the same time encouraging new entrants.
In the only case study country with legislation that includes Farmers’ Rights (India), there is not
enough experience to assess the degree to which this offers useful incentives for the develop-
ment or promotion of farmer varieties. Further monitoring is required.
IPRs in international negotiations
IPRs need to be considered in international agreements that tackle related issues, in particular
biodiversity and trade. National policies towards international agreements on biodiversity,
negotiated by representatives with environment (CBD) or agriculture (IT/PGRFA) background
need to be in line with the choices made in the field of IPR, which are primarily derived from
economic and trade policies. It must be clear how IPRs relate to national sovereignty over plant
genetic resources and rights of indigenous communities (CBD), and Farmers’ Rights (IT/PGRFA)
in order to avoid conflicts of interpretation. This requires a capacity in IPR issues with a much
wider group of policy makers than commonly envisaged.
For many countries, the possibility of being required to establish particularly restrictive IPRs for
plant breeding is more likely to be a product of bilateral trade agreements (most often with the
US but also with Europe) than to derive from TRIPS obligations. National policymakers need to
be prepared to enter such negotiations with a full understanding of the implications of such
‘TRIPS-plus’ agreements for their national plant breeding and seed systems. They also need to
research their room for maneuver in interpreting and modifying any such requirements imposed
by potential trading partners.
Implications for agricultural policies
This study has emphasized that IPR regimes in plant breeding should provide incentives for
diversifying and strengthening plant breeding and seed production. This implies that policy-
makers cannot consider IPR regimes in isolation from wider issues of national agricultural
policy. Three relevant concerns here are the future of public agricultural research, the develop-
ment of a robust domestic seed sector, and the empowerment of farmers.
Research policies
The role of NARIs is a subject of considerable debate in light of generally declining national
budgets and the growth of the private sector. Many NARIs are uncertain of whether to
complement or compete with the private sector and hence are confused about how to take
advantage of IPRs. Policymakers need to set clear guidelines in this area. NARIs need to
distinguish between using IPRs in order to control the use and delivery of their varieties, on
139
the one hand, and seeing IPRs as a contributor to institute budgets through royalty collection,
on the other. In the former instance, there may be cases where the assignment of some type
of IPR is necessary to provide a seed company with sufficient incentives to deliver a public
variety to farmers. In the latter instance, many NARIs look upon IPRs as a way to counterbalance
reduced public funding for research and show a keen interest in the opportunity to earn revenue
on existing and new varieties. In some cases this interest is translated into a shift in priorities
towards research that is most likely to earn royalties. However, most NARIs seem to have little
knowledge about the costs of obtaining and enforcing IPRs, and there is little realistic assess-
ment within the NARI’s of their capacity to compete with the private sector in producing commer-
cially viable products (or in rewarding and maintaining staff for this task).
There are also a number of unresolved issues for NARIs in terms of basic research goals and
their relation to IPRs. NARIs have many valuable assets to contribute to plant breeding, including
their own varieties, breeding lines, and basic research. But they are not equipped to establish
or assign their rights in order that public research makes the strongest possible contribution to
agricultural growth. Neither are most NARIs organized to acquire access to complementary
technology on equitable terms or to assess their ‘freedom to operate’ with protected techniques
and tools.
The use of IPRs depends on negotiations between right holders and users of technologies.
There is no sign of equality in negotiations anywhere in the world for access to technologies for
R&D or for use of protected products. Individual parties, especially NARIs are no match for the
legal and negotiation skills and resources of major technology firms. NARIs need assistance to
formulate IP policies and strengthen their legal and negotiation capacities. National and
international platforms for institutional IP-managers may provide opportunities to exchange
experiences and promote institutional learning.
The strategies that NARIs adopt for utilizing IPRs will depend on answers to fundamental
questions about the role of public sector agricultural research. These questions are beyond
the scope of this study, but experience in the case study countries highlights that the issues
deserve more attention from policymakers. For instance, they must recognize that the mainte-
nance and development of public scientific capacity requires attention to an appropriate mix of
incentives (professional, public service, and monetary) and that the way NARIs choose to
interpret IPR regimes determines how these incentives are presented. Different approaches to
shaping relations with the private sector as a technology provider or distributor may be taken
into account in this debate, from license contracts to joint ventures or full privatization of
(parts of) the public research system. IPRs play an important role in these relationships. In
addition, the way that NARIs manage IPRs has a significant bearing on the extent to which
germplasm resources are shared more widely. Policymakers must recognize that systems of
international germplasm exchange are being threatened by an almost exclusive focus on the
possible financial advantages accruing to the control of germplasm, without appreciating the
importance of equitable access.
140
Breeding and seed sector policies
Policymakers also need to ensure the development of the domestic breeding sector. With
respect to biotechnology, local companies are generally at a disadvantage to MNCs. With few
exceptions, domestic firms do not have the resources to invest in high technology and must
depend on MNCs and advanced research institutions that protect their inventions. There are a
few examples of incipient consortia of local seed companies formed to negotiate access to
biotechnology, and national policy should support such efforts.
IPR regimes will only be effective when there is an enabling environment for the growth of
commercial agriculture. Policies need to be in place that support the type of information
provision, contract enforcement, business practices and credit availability that stimulate
agribusiness development and that encourage private seed production and plant breeding.
Although many national seed and plant breeding sectors have experienced significant recent
development, and judicious use of appropriate IPR instruments can facilitate further growth,
there are still serious challenges with respect to delivering useful varieties, particularly of non-
hybrids and so-called ‘orphan crops’ to smallholders. The combination of limited and isolated
markets with widespread seed saving means that even fairly strong IPR regimes are unlikely to
elicit commercial interest in the near future. On the other hand, there is sufficient evidence that
public seed provision schemes are generally ineffective. Therefore policymakers must find
ways of combining (largely) public plant breeding, appropriate formal seed delivery (most likely
private or cooperative), and support to local seed diffusion mechanisms, to serve the farmers
dependent on these crops.
There are no indications in the case study countries that PVP unduly contributes to a concen-
tration in the seed sector that leads to monopolistic behavior. Early experiences in biotech-
nology patents in the case study countries are insufficient to establish any evidence for
concentration. The vast number of transgenics in the pipeline in both the (inter-)national private
and public sectors calls for a critical assessment of the developments in the coming years.
Monitoring could be done on the number of seed suppliers for any crop; the number of
competing proprietary key technologies (e.g. insect resistance) in crops; the development of
the levels of ‘technology fees’ relative to seed costs, etc. This is an area in which industrialized
countries could provide some useful guidance given their longer experience in monitoring and
regulating anti-competitive practices, including in agricultural input markets, in particular.
Rural development policies and empowerment of farmers
Finally, it is worth reiterating that the purpose of IPR regimes in agriculture is to provide
appropriate incentives for science and commerce to better serve the nation’s farmers. National
policies need to ensure that farmers are conversant with, and participate in, debates regarding
possible IPR regimes; that they are well-informed consumers who understand their rights in
agricultural input markets; and that their interests and priorities are reflected in the work of
public agricultural research. From a good governance perspective, this is now (under the IT-
PGRFA) an issue of Farmers’ Rights.
141
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148
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Annex I.
List of persons interviewed for the study
General
– Peter Button - UPOV Secretariat Geneva
– Stuart Coupe - ITDG, [email protected]
– Jean Donnenwirth - International IP Manager Pioneer, EU-office
– Krieno Fikkert - Office for Plant Breeder’s Rights, MoA, The Netherlands
– Jean-Christophe Guache - Managing Director, Limagrain
– Rolf Jördens - UPOV Secretariat Geneva
– Gisbert Kley - Board member DSV-Lippstadt
– Peter Lange - Director KWS-Einbeck
– Manfred Pohl - Patent attorney (Patline) representing KWS
– Michael Roth - Monsanto St. Louis
– Gary Thoenissen - Rockefeller Foundation
Participants of workshops in Wageningen and Washington
– J. Barton, Stanford Law School, Standord CA, USA
– D. Byerlee, World Bank, Washington DC, USA
– I. Ekanayake, World Bank
– H. Ghijsen, BayerCropScience, Gent, Belgium
– J. Hardon, Foundation Agromisa, Wageningen, The Netherlands
– P. Heisey, USDA, Washington DC, USA
– King, International Food Policy Research Institute, Washington DC, USA
– B.-W. Koo, International Food Policy Research Institute, Washington DC, USA
– S. Kumar, Michigan State University, East Lansing MI, USA
– M. Maredia, Michigan State University, East Lansing MI, USA
– A. Michiels, International Food Policy Research Institute, Washington DC, USA
– E. Pehu, World Bank, Washington DC, USA
– Pray, Rutgers University New Brunswick NJ, USA
– R. Rajalathi, WorldBank, Washington DC
– G. Tansey, Hebden Bridge, UK
China
IP Organizations + other Government offices, China
– HE Yuefeng, State Intellectual Property Office (SIPO) = patent office
– LI Yianmei, State Intellectual Property Office (SIPO) = patent office
– LUI Bo, PVP Office, MoA
– SUN Junli, PVP Office, MoA
– SUN Xue Mei, MoA GMO Biosafety Office
I - 2
– LIU Hai Peng, MoA GMO Biosafety Office
– REN Gang, Trademark Office
– HUA Jie, Trademark Office
– HU Li, Trademark Office
– SUN Yongjian, Ministry of Science and Technology (MOST)
– CHEN Linghao, Ministry of Science and Technology (MOST)
– WANG Jie, State Environmental Protection Agency (SEPA)
– CAI Li, State Environmental Protection Agency (SEPA)
– XUE Dayuan, State Environmental Protection Agency (SEPA)
Public Sector Research Organizations, China
– LI Ruiyun, Institute for Vegetables and Flowers, CAAS
– WANG Qinfang, Biotechnology Research Institute, CAAS
– WANG Kunbo, Cotton Research Institute, CAAS; Anyang, Henan Province
– GUO Xianmuo, Cotton Research Institute, CAAS; Anyang, Henan Province
– XING Chaozhu, Cotton Research Institute, CAAS; Anyang, Henan Province
– ZHAO Xinhua, Cotton Research Institute, CAAS; Anyang, Henan Province
– LIU Jinhai, Cotton Research Institute, CAAS; Anyang, Henan Province
– YUAN Longping, Hunan Hybrid Rice Research Center (HHRRC)
– WAN Yizhen, Hunan Hybrid Rice Research Center (HHRRC)
– ZHANG Yuzhuo, Hunan Rice Research Institute
– ZHAO Zhenghong, Hunan Rice Research Institute
– LI Xiaofang, Guangdong Rice Research Institute
– WANG Feng, Guangdong Rice Research Institute
– HUANG Qing, Guangdong Rice Research Institute
– HUANG Nongrong, Guangdong Rice Research Institute
– BAI Song, Guangdong Rice Research Institute
– LIANG Jingcai, Guangdong Academy of Agricultural Science (rice)
– CHEN Qinling, Guangdong Academy of Agricultural Science (rice)
– LUO Shaojia, Zhejiang Academy of Agricultural Science (rice)
– LU Hongxing, Zhejiang Academy of Agricultural Science (rice)
– CHENG Shihua, China National Rice Research Institute
– HU Huiying, China National Rice Research Institute
– FU Qiang, China National Rice Research Institute
– NI Jianping, China National Rice Research Institute
– YAO Haigen, Jiaxing Agricultural scientific institution (Zheijiang) (rice)
Private Companies, China
– ZHOU Weihua, China National Seed Group Company (rice, maize, cotton, vegetables)
– ZHANG Mengyu, China National Seed Group Company (rice, maize, cotton, vegetables)
– CUI Yingji, China National Seed Group Company (rice, maize, cotton, vegetables)
– HAN Yaomin, China National Seed Group Company (rice, maize, cotton, vegetables)
– HAN Gengchen, Beijing Origin Seed Technology Inc (maize)
– ZHAO Yuping, Beijing Origin Seed Technology Inc (maize)
I - 3
– WANG Weizhong, Doneed Seed Company (D'long) (rice, maize, cotton, vegetables)
– WANG Li, Doneed Seed Company (D'long) (rice, maize, cotton, vegetables)
– Monsanto, China office
– YANG Yuanzhu, Yahua Seed Academy (rice)
– FAN Xiaobing, LongPing High-Tech Seed Corporation (rice)
– TANG Buocheng, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– LIU Fenghua, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– ZHENG Aizhong, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– WANG Zhongyu, Gold Sun Agricultural China Co. Ltd (Maize, Rice)
– LIU Shukun, Gold Sun Agricultural China Co. Ltd (Maize, Rice)
– LI Degnhai, Shandong Denghai Seeds Co., Ltd (maize)
– LIU Jingguo, Shandong Denghai Seeds Co., Ltd (maize)
– WANG Tianxiang, China Trademark & Patent Law Office Co. Ltd (Patent Agent)
Others, China
– P. Gooren, Royal Netherlands Embassy, Agricultural Counsellor and attaché
– R. Konijn, Royal Netherlands Embassy, Agricultural Counsellor and attaché
– Seed shops, Anyang, Henan Province
Colombia
IP institutions & other Government offices, Colombia
– Ana Luisa Diaz, National Coordinator, Plant Breeders Rights and Seed Production
– Giancarlo Marcenaro, Deputy Superintendent for Industrial Property
– Alix Céspedes de Vergel, Patent Office Director
– María del Socorro Pimiento, Trademark Office Director
– Luis Angel Madrid, Head of the Colombian Delegation for the Free Trade Area of the
Americas (FTAA) on IP issues
– Juan Lucas Restrepo, Former Viceminister of Agriculture
– Ricardo Torres, General Coordinator of Research Project on ‘Policy Design on Access and
utilization of genetic resources’
– Santiango Perry, Head of Corporación para el Desarrollo Participativo y Sostenible de los
Pequeños Agricultores Colombianos, CDPSPA
Public sector research organizations, Colombia
Corporación Colombiana de Investigación Agropecuria, CORPOICA
– Luis Arango, Executive Director
– Tito Díaz, Deputy Director for Strategic Research
– Andrés Leignelet, General Coordinator, Management and Technology Innovation Program
– Jorge Suárez, Seed Coordinator
– Víctor Núñez, Director Biotechnology Unit
– Alba Marina Cotes, Researcher, Integrated Pest Management Unit
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Centro Internacional de Agricultura Tropical, CIAT
– Aart van Schoonhoven, Director, Science Park (AgroNatura)
– Zaida Lentini, Plant Biologist/Geneticist, Biotechnology Unit & Rice Project
– Cesar Marinez, Rice breeder
– Stephen Beebe, Head, Bean Project
– Edith Hess, Head Information and Communications Unit
– Joe Tohme, Head Agrobiodiversity and Biotechnology Unit
– German Arias, Head Legal Office
– Rafael Posada, Head Impact Project
– Daniel Debouck, Head of Genetic Resources Unit
Private Sector, Colombia
– Luis Sanin, Executive Director Fondo Latinoamerica de Arroz de Riego, FLAR
– Andres Toro, Colibri Flowers S.A.
– Eduardo Villota, Director General, Semillano Ltda & Head of Asociación Colombiana de
Semillas, ACOSEMILLAS & Head of Latin American Federation of Seed Associations (FELAS)
– Luis Enrique Acevedo, Royalty Administration International, Latin America
– Sabina Cajio, Auditor Royalty Administration International, RAI
– Rafael Aramendis, Regulation Manager for Andean Region, Central America and the
Caribbean
– Jose I. Bolaños, Andean Research & Development Coordinator & Andean Biotechnology
Research Coordinator
– Gustavo Mejia & others, Unique Latin Roses LTDA (Esmeralda Farms Holding)
– Pablo Robledo, Attorney PBR
– Rafael Aramendis, Monsanto
– Jose I. Bolanos, Dupont
Farmers’ association, Colombia
– Augusto del Valle, Head of Federación Nacional de Papa FEDEPAPA
India
IP institutions & other Government offices, India
– H.C. Bakshi, Joint Controller of Patents and Designs, Patent Office, New Delhi
– Ms Premlata, Assistant Registrar, Trademark Office, New Delhi
– Dr K.K. Tripathi, Advisor (IPR), Department of Biotechnology, Ministry of Science and
Technology, Government of India, New Delhi
– Prem Narain, Joint Secretary (Seeds), Ministry of Agriculture, Government of India,
New Delhi
– S.V. Singh, Director (Seeds), Ministry of Agriculture, Government of India, New Delhi
– Babu Rao S., Managing Director, Andhra Pradesh Seeds and Development Corporation,
Hyderabad, Andhra Pradesh
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Public research organizations, India
Indian Council of Agricultural Research
– Dr Mangala Rai, Director General, Indian Council of Agricultural Research, New Delhi
– Dr G. Kalloo, Deputy Director General (Crops and Horticulture), Indian Council of Agricultural
Research, New Delhi
– Dr S. Nagarajan, Director, Indian Agricultural Research Institute, New Delhi
– Dr J.P. Mishra, Assistant Director General (Intellectual Property Rights), Indian Council of
Agricultural Research, New Delhi
– Dr G.S. Dhillon, Director, National Bureau of Plant Genetic Resources, New Delhi
– Dr K.R.M. Swamy, Director-in-charge and Head, Division of Vegetable Crops, and other
Heads of the Division and senior scientists, Indian Institute of Horticultural Research,
Bangalore, Karnataka
– Dr P. Singh, Director, and senior scientists, Central Institute of Cotton Research, Nagpur,
Maharashtra
– Dr M. Ilyas Ahmed, Scientist-in-charge of hybrid rice program, and Scientist-in-charge,
biotech programs, Directorate of Rice Research, Hyderabad, Andhra Pradesh
State Agricultural Universities
– Dr Kulkarni, Nodal scientist for IPR, and Dr P. H. Ramanjini Gowda, scientist with seeking
patent for his innovation, University of Agricultural Sciences, Bangalore, Karnataka
– Dr A. Padmaraju, Director Research, Andhra Pradesh Agricultural University, Hyderabad,
Andhra Pradesh
Other public research organizations
– Dr Rakesh Tuli, Scientist Bt transgenic program, National Botanical Research Institute
(Council of Scientific and Industrial Research), Lucknow, Uttar Pradesh
International Centre for Research in the Semi-Arid Tropics, ICRISAT
– Dr Dyno Keatinge, Deputy Director General,
– B. Hanumanth Rao, IPR Officer, scientists of crop improvement programs
– C.L.L. Gowda, S. Nigam, C.T. Hash, K.N. Rai, Scientists of crop improvement programs
– J.H. Crouch, F. Waliyar, Scientists of biotechnology program
Private seed sector, India
Seed companies
– Uday Singh, President, Seed Association of India, and Managing Director, Namdhari Seeds,
Dr N. Anand, Director Research, Namdhari Seeds, Bangalore, Karnataka
– Raju Barwale, President, Association of Seed Industry, and Managing Director, Maharashtra
Hybrid Seed Company Ltd (Mahyco), Mumbai, Maharashtra
– R.V. Kaundinya, Managing Director, and A.R. Sadananda, Director Research, Emergent
Genetics India, Hyderabad, Andhra Pradesh
– Dr M.J. Vasudeva Rao, Senior Vice President, Advanta India, Bangalore, Karnataka
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– Dr M. Vinod Kumar, Manager (Regulatory issues), Proagro Seeds/Bayer Crop Science,
Gurgaon, Haryana
– Raman Modi, General Manager, and rice breeders, Hybrid Rice International (Proagro
group), Hyderabad, Andhra Pradesh
– L.P. Aurangabadkar, Director Research, Ankur Seeds, Aurangabad, Maharashtra
– R.S. Arora, Managing Director, Century Seeds, New Delhi
– Dr Y. Yogeswara Rao, President, Andhra Pradesh Seedmen Association and Managing
Director, Vikky’s Seeds, Hyderabad, Andhra Pradesh
– M. Prabhakar Rao, Managing Director, Nuziveedu Seeds, Hyderabad, Andhra Pradesh
– P.S. Dravid, President, JK Seeds, Hyderabad, Andhra Pradesh
– Dr N.K. Singh, Head Product Development and Dr A. Gopinath, Manager, Syngenta India,
Pune, Maharashtra
– Vinod G. Broker, Managing Directors, Pocha Seeds, Suyash Seeds, and Prakash Navalakha,
Navalakha Seeds (small seed companies in Pune)
– Dr A.S. Kataria, Director, Seed Association of India, New Delhi
Private agricultural biotech companies
– R.D. Kappor, National Regulatory Manager, and P.P. Reddy and H.H. Basappa,
plant breeders, Monsanto India, Bangalore, Karnataka
– Dr Koen Wentink, Chief Logistics, and Dr K.R. Rajyashri, Director Research, Avesthagen,
Bangalore, Karnataka
– Dr K.K. Narayanan, Managing Director, Metahelix, Bangalore, Karnataka
NGOs/FO, India
– Dr Anil Gupta, Professor, Indian Institute of Management, Ahmedabad, Gujarat, and
Executive vice chairperson, National Innovation Foundation and Sristi
– Dr M.D. Gupta, Senior researcher, Suri Sehgal Foundation, ICRISAT, Patancheru, Hyderabad
– Dr A. Nambi, IP expert, MS Swaminathan Foundation, Chennai, Tamil Nadu
– Mr Akkineni Bhavani Prasad – Farmers’ Association of Andhra Pradesh, Hyderabad
Kenya
IP-institutions and other government offices, Kenya
– Spencer Mathioka, Actg Director, KIPI
– Reuben Lang’at, Patent Examiner, KIPI
– Stanley Atsali, Patent Examiner, KIPI
– Eunice Njuguna, Lawyer, Kenya Industrial Property Institute
– C.J. Kidera, Managing Director, KEPHIS
– M.O. Gunga, Examiner of PVP, KEPHIS
– J.J. Gichuki, Deputy Director PBR, Ministry of Agriculture
– Prof. Kingoriah, Executive Secretary, National Council for Science and Technology
– Solomon Kuria, Trade officer, Ministry of Trade Kenya Government
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Public research institutes, Kenya
Kenyan Agricultural Research Institute
– Romano Kiome, Director
– Betty Kiplagat, Legal Officer
– J.A. Ochieng, Assistant Director Crops (Maize breeder)
– Jane Ininda, Maize breeder
– Dr Kahiu Ngugi, Senior Bean Breeder
– J.B. Kamau, Cassava breeder
– Kiarie Njoroge, Maize Research Coordinator
– Dr Kabiro, Centre director, KARI-Tigoni
– G. Ombakho, Mazie breeder, KARI-Kitale
– L.F. Ragwa, Assistant Director Seed Unit
– Ben Odhiambo, Biotechnology Coordinator
Universities
– Levi Akundabweni, Chairman, Dept of crop science, University of Nairobi
– Prof Ogada, Moi University Holding, Moi University
International organizations
– Stephen Mugo, IRMA Coordinator, CIMMYT
– Dr Majiwa, Programme Manager, African Agricultural Trust Fund
– Richard Boadi, Legal counsel, African Agricultural Trust Fund
– Nancy Muchiri, Public Relations Officer, African Agricultural Trust Fund
Private sector, Kenya
– Obongo Nyachae, Executive Secretary, Seed Traders Association Kenya (STAK)
– Saleem Esmail, Chief Executive Officer/Maize breeder, Western Seed
– Graig Nelson, Marketing Manager, Pannar Seed Co.
– Valentine Miheso, Seed Sales Manager, Monsanto Kenya
– Johnson Thaiya, Seed Operations Manager, Monsanto Kenya
– Mosses Onim, Proprietor, Lagrotech Seed Company
– S. Omamo, Production manager, Lagrotech Seed Company
– Peter Rukwaro, Production manager, Valentine Flowers
– Samwel Gathara Kiarie, Representative, Pioneer Seed Company in Kenya
– Charles Nga,nga, General Manager, Faida Seed
– Francis Ndambuki, Research Manager Maize, Kenya Seed Co.
– Peter Veal, Regional Representative, Syngenta Company
– Wilfred Munyao, Farm/propagation Manager, Sian Roses
– Sunders, Production Manager, Magana flowers
– J. Kamau, Production Manager, Magana flowers
– John Njenga, Lead Auditor & Activity CEO, Kenya Flower Council
– Francis L. Oyatsi, Deputy Managing Director, Kenya Seed Company
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– Rose Kauri, Company Secretary, Kenya Seed Company
– Hosea Sitienei, Sales Manager, Kenya Seed Company
– James Boit, R&D Manager, National Cereals and Produce Board
– Bruce Mc Arthur, Country Manager, Seed Co
NGOs/FOs Kenya
– Caleb Wangia, Winrock International: Seed Production & distribution
– Mercy Karanja, Chief Executive, Kenya National Federation of Agricultural Producers
– Leonard Nduati Kariuki - KENFAP Nairobi, Kenya
– Philip Kiriro - East African Farmers Union - Nairobi, Kenya
Uganda
IP-institutions and other Government offices
– Ltd. Bayiga, Fiona: Senior State Attorney/ Assistant Registrar, Ministry of Justice
– Mugoya, Charles: Uganda National Council for Science & Technology
– Bazaale, Joseph: Head, National Seed Certification Services, Ministry of Agriculture [MAAIF]
– Kyazze Lubega, Jean: Law Reform Commission, Ministry of Justice
Public research organizations
National Agricultural Research Organization NARO
– Otim Nape, George: Ag. Director General, NARO
– Aluma, John W.: Deputy Director General, Research, NARO
– Bigirwa, George: Head of Maize Research Program, NAARI/NARO
– Imanywoha, Justus: Maize Breeder, NAARI/NARO
– Kyetere, Denis: Maize Breeder & Director of Research, CORI/NARO
– Ogen, Michael: Bean Breeder, NAARI/NARO
– Opio, Fina: Director of Research, NAARI/NARO
– Sserunjogi, Lustus: Cotton Breeder & Director of Research, SAARI/NARO
– Wasswa, Mulumba: In-charge National Genetic Resources, NARO
University
– Rubaihayo, Patrick: Professor, Makerere University
International organizations
– Abebe, Demessie: Association for Strengthening Agricultural Research in Eastern &
Central Africa [ASARECA]
– Kirkby, Roger: Head, CIAT Uganda
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Private sector
– Gareeba Gaso, Emmanuel: General Manager, Uganda Seeds Ltd
– HiteshPanchmatia: MD, Bon Holdings Ltd - Cotton
– Kaijuka, Chris: Managing Director, FICA Seeds Ltd
– Kashaija, Steven: Cottco Uganda Ltd - Cotton
– Lutaaya, Yassin: Local Seed Merchant, Rakai District, Uganda
– Mugisa, Boniface: Seed Manager, Monsanto International, Uganda
– Ndemo, Job: Country Manager, Kenya Seed Company, Uganda
– Mulumba, Stanley: Uga Rose Ltd - Flower Firm
– Okot, Josephine: Chair, Uganda Seed Trade Association & GM Victoria Seeds Ltd
– Paku & Ravi: Dunavant Cotton, Uganda
– Pandya, Kashap: Xpressions Ltd - Flower Firm
– Rodneys, Nicolai: General Manager, NASECO Seeds Ltd
– Rutten, John: FIDUGA Flower Firm & Chair, Uganda Flower Exporters Association [UFEA]
– Peter Benders, Mairye Estates - Magic Flowers
– Yan Krul: Mairye Estates - Magic Flowers
NGOs/FOs
– Chemisto, Wilson: Kapchorwa Commercial Farmers Association, Uganda
– Kagweri, Florence: Bakusekamajja Women Farmers Group, Iganga District, Uganda
– Kambale, Daniel: Kasese Farmers Group, Uganda
– Mayiga, Rosemary,: Community Enterprise & Development Organization [CEDO]
– Gonza, Peter, Community Enterprise & Development Organization [CEDO]
– Mpeirwe, Arthur: Program Manager, IPR & Biotechnology Policy, ACODE
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II - 1
Annex II.
Interview questions
1. Guidelines for interviews: IP-institutions
Preparation before visiting office
1) If relevant - review the IP-offices webpage
2) To which international conventions, treaties, IP organization the country is a member of
(including WTO, WIPO (which versions of which agreements, protocols, etc.), UPOV, CBD,
IT/PGRFA (check with lead team if necessary)
3) National legislation on trademarks, trade secrets, geographical indications
4) Review state of laws, regulations, judicial review, case law
5) Reviewed state of laws, regulations, judicial review, case law, etc. as much as can be
found
6) Note the names of high profile IP law firms, names of developed country law firms that
have regional branches in the country, professional associations, etc.
1. General
1.1 What is the organization of IP Offices in the country - Patent protection, Plant Variety
Protection? Trademark, Copyright, others (e.g. database and geographical indications)?
1.2 What is the cross-office relationship between/among the various IP Offices?
1.3 What is the procedure for the appointment of Directors for these offices?
1.4 When was (were) the institution(s) established? (Perhaps ask for a brief history of each
office.)
1.5 In case of a regional system: what is the relationship between the national and regional
office?
1.6 How are IPRs enforced in your country?
1.7 Do you have any special protection for infringement or ‘stealing’ of Trade Secrets?
1.8 Do you consider the courts to be effective in terms of helping owner enforce their IPRs?
1.9 Is the judicial system in your country active in interpretation of IP laws? If so, would you
describe a case that has gone through your courts system and what affect that case has
had on the way IPRs are awarded by your office.
2. Patent office
– legal issues
2.1 Does the country have a patent law, what revisions to the law have been made?
2.2 What interpretation of the law is given towards protection with regards to patents for
plant varieties, plants, genes, biological processes such as transformation
-compositions, processes?
2.3 Who is in charge of the interpretation? How are decisions appealed?
II - 2
2.4 Is there a system that includes the possibility of seeking petty patents/innovation
patents, or one that only allows for utility patents? What is your experience?
2.5 Are there special provisions in the patent law for biological inventions - such as
exemptions for non-commercial use (would this include seed saving and exchange?) or
a research exemption allowing further breeding?
2.6 How is the regional harmonization of patent regulation and practice /or: How would
envision that a regional, harmonized system would work in your region? - and what are
the effects on biological patents?
2.7 Does the country have special provisions ref TRIPS 27(3) b: plant variety protection or do
plant varieties fall under the patent system? How did the legislation come about? How do
you regard this outcome?
2.8 (If the country have laws on trademarks, trade secrets, geographical indications), how
are these implemented in the agricultural field (specifically seed related) and how are
these enforced (general impression of officer)?
– Institutional/general implementation issues
2.9 How many applications do you get in the national office:
• patents – national or PCT filings
• try to estimate proportion related plant biological inventions? (This could be difficult to
determine. It might be better to ask for an example of a biotech patent that has been
issued and then go from there to try to get a feel for how many biotech inventions
involving plants.)
• Breeder’s rights? – probably ask at the PVP-office again
2.10 How many examiners do you have in your office?
• For patents with knowledge of biotech, natural products, microbiological
• For breeder’s rights (if handled by patent office)
2.11 How long does it normally take for an application to go through examination?
2.12 Does your office publish patent applications? If so, what is the process?
2.13 Is it possible to obtain copies of the examination records of a particular patent?
2.14 What is the appeal process? –How often does a rejection get overturned upon appeal?
2.15 What is the opposition practice?
2.16 What is the procedure for reexamination? –for invalidation of issued patents?
2.17 What are the requirements to be an examiner? how do you maintain/upgrade their
knowledge and skills?
2.18 Does the same person carry out both search and examination?
2.19 What searching resources do your staff have?: computers, access to databases
2.20 How do you do your search for plant/biotech patents? (contract out, CD-Roms, On-line,
scientific community in the country)
2.21 How are patent agents/attorneys certified?
2.22 How is the office funded - % Government / % fees / . . . .
2.23 What is your fee schedule? Is there a one-time charge at application or is there also a
maintenance fee. What are the amounts?
2.24 Do you consider the amount of the fee prohibitive for certain applicants? - Do you have
different fee amounts based on the size/status of the applicant?
II - 3
2.25 What sort of political pressures do you perceive influencing/pressuring in your
agency/office, Could you give examples?
2.26 Do you carry out educational or awareness-raising activities?
3. Plant Variety Protection
3.1 Does the country have special provisions ref TRIPS 27(3) b: plant variety protection or do
plant varieties fall under the patent system? How did the legislation come about? How do
you regard this outcome?
3.2 Does it conform to UPOV – which Convention? – is the country a member of UPOV
(under which convention?) - expl.: a country may comply with a UPOV convention without
being a member!!
3.3 What aspects may be different from UPOV? – if different: any plans for change??
3.4 For which crops is protection currently available? Is there a list of crops (under UPOV ’78)
or all crop plants protectable? In the latter case – for which crops has the law been
implemented so far?
3.5 Who is responsible for the testing of applications? (breeder, office, any institution as
certified by the office)
3.6 What training do the examiners have?
3.7 What is their link with the national research institutes / breeding stations?
3.8 In case they have a dual task – how do you avid conflicts of interest?
3.9 In case they have an official task only: do they have enough work? (there may be only
1 or 2 applications per year)
3.10 Do you get applications for protection from public research institutes or only from private
breeders/seed importers
3.11 Number of applications for PVP (total, by crop specifically for target crops); trends
(over years) in terms of numbers and source of applications,
3.12 Number of applications vs. number of certificates granted – trends.
3.13 Is there any regional cooperation in DUS-testing?
3.14 Do you accept (or promote) the use of foreign DUS-reports?
3.15 Does the DUS-testing follow the UPOV-guidelines?
3.16 What resources are available: access to databases, trial fields?
3.17 How do you do you establish novelty, and how do you identify the most similar varieties
of common knowledge for each application?
3.18 How are examiners certified? (if you use outside examiners in line with the Australian
system)
3.19 How is the office funded - % Government / % fees / . . . .
3.20 Is there a one-time charge at application or is there also a maintenance fee. What are
the amounts?
3.21 Is there evidence that this fee is prohibitive for certain applicants?
3.22 Are there provisions for compulsory licensing?
3.23 Do you receive influences/pressures in your agency, What kind, by whom?
3.24 Do you carry out educational activities?
3.25 Do you consider the courts capable enough in terms of enforcing IPRs?
II - 4
4. Scenario
Discuss what actions your office, a company, or the legal system would be expected to take if:
• A farmer sold seed of a company’s protected (conventional) variety to a neighbour
• A farmer sold seed of a company’s (GM) variety to a neighbour
• There is evidence that a competitor is using one of a company’s inbred lines in a new
hybrid
• There is evidence that a competitor is producing and selling one of a company’s varieties
II - 5
2. Guidelines for interviews: Private Companies in the seed sector
N.B. It is important to note when there is an explicit or implicit reluctance to share potentially
sensitive information for particular questions. – Do mark such matters in your report!!!
1. Nature of Company
(may need to BRIEFLY clarify these issues at time of interview if not known beforehand)
1.1 What is the ownership structure? (eg. private limited, joint venture, etc.)
1.2 Is the company national or international?
1.3 How long has the company been in business?
1.4 How was it established?
2. Company Varieties
2.1 How many varieties (for target crops) does your company market?
2.2 Obtain a list of current and past varieties of target crops with release dates, relative
market share, distinguishing characteristics
2.3 What specific traits and markets do you concentrate on?
2.4 What are the major trends in type of variety or market that your company targets?
Explain any changes, including the relative importance of IPR legislation.
2.5 Discuss trends in seed price and reasons for these trends, including any influence/cost
of IPRs.
3. Marketing of Non-company Varieties
(i.e. varieties not developed by another company or a public institute)
3.1 Does the company produce seed of any public-sourced varieties? (Identify them)
3.2 How does it acquire the rights for these varieties? (Exclusive license?)
3.3 What payments are made to the public institute (for source seed, royalties, licenses,
etc.)? Estimate proportion of seed price.
3.4 Are there plans to continue marketing public varieties? If there are any changes, what are
the reasons; what role do IPRs play?
3.5 Does the company produce seed of other companies' varieties? (Identify them)
3.6 How does it acquire rights for these varieties? (Exclusive license?)
3.7 What payments are made to the other company (for source seed, royalties, licenses,
etc.)? Estimate proportion of seed price.
3.8 Are there plans to continue marketing other companies' varieties? If there are any
changes, what are the reasons; what role do IPRs play?
4. Company Breeding Programme
4.1 Does the company have a research/plant breeding programme for the target crop(s)?
4.2 How many breeders work on the target crop? (If possible, budget proportion devoted to
plant breeding research; try to separate proportion for biotechnology)
II - 6
4.3 Germplasm sources. What proportion of germplasm from public sources? Specify these
sources. Arrangements for acquiring access to this germplasm.
4.4 Any changes recently or envisioned in access to public germplasm. Reasons for any
changes, including relative role of IPRs.
4.5 How have IPRs affected your relationship with national and international public sector
research organizations (access to material, capacity building, information, collaborative
research agreements, marketing)? Describe specific experiences.
4.6 Germplasm sources. What proportion of germplasm used in breeding programme from
other companies? Specify these sources. Arrangements for acquiring access to this
germplasm.
4.7 Any changes recently or envisioned in access to other companies' germplasm. Reasons
for any changes, including relative role of IPRs.
4.8 Effect of IPRs (patents, PVP, trade secrets, trademarks) on dealings with national or
international companies (access to material, technologies, marketing, licensing
agreements, exchange, etc.)
4.9 How have IPRs affected the company research programme in terms of investment, types
of crops or traits, research focus or methods (biotech, hybrids, etc.)?
4.10 Do IPR regimes encourage the company to invest more in non-hybrid varieties?
5. Use of Biotechnology
5.1 Outline the company's current and projected use of biotechnology, including any GM
varieties.
5.2 For the following technologies, check if the company uses each of them. If so,
(a) do you know if the technology is protected in your country? (b) under what terms was
it acquired? (c) will this affect the commercialization of products?
• AFLPs, microsatellites, microarrays
• Gene gun, agrobactor mediated, selectable markers
• Genes, gene constructs, vectors, promoters
5.3 Are there instances in which your institute has tried to acquire protected technology
(including databases) and was unable to do so? What were the reasons? Did your IP
policy play a role?
6. Protection of Company Products
6.1 How does the company protect its research products (particularly for the target crop)?
6.2 Discuss the use of PVP, patents, trademarks, trade secrets (e.g., inbred lines).
6.3 What other business management techniques are used to protect company products
(physical security measures, personnel practices, types of contracts, types of business
partner)?
6.4 Are there differences between protection practices for domestic business and foreign
business?
6.5 Discuss trends in the use of these various protection methods and practices. To what
extent does recent national IPR legislation have an effect on these trends?
II - 7
6.6 What aspects of IPRs influence the company's use of these instruments (costs,
timeliness, granting procedures, associated variety registration/certification
requirements, culture, reliability, enforcement potential, international/regional
collaboration or harmonization)?
6.7 Are IPRs affecting your market shares or those of your competitors?
6.8 How does the company enforce its IPRs? Are there specific cases of (suspected)
infringement (if so, describe)? What are the costs to the company of monitoring and
enforcement?
6.9 If you could make use of geographical indications, are there specific varieties you would
like to protect?
Scenarios
Discuss what actions the company or the legal system would be expected to take if:
• A farmer sold seed of the company's protected (conventional) variety to a neighbour.
• A farmer sold seed of the company's protected (GM) variety to a neighbour.
• There is evidence that a competitor is using one of the company's inbred lines.
• There is evidence that a competitor is producing one of the company's varieties.
• A competitor adopts a similar product name, brandname or logo.
7. Company IPR resources
7.1 Does the company have an IPR policy? (If so, describe or obtain a copy.)
7.2 If the company has no IPR policy, why not?
7.3 Any recent evolution in company policy.
7.4 Advantages and disadvantages to the way IP issues are handled in the company.
7.5 How many personnel handle IPR matters for the company (full-time, part-time)? Does the
company outsource professional services (e.g., attorneys) for IPR issues?
7.6 Try to estimate what IPR management costs the company (as proportion of final seed
cost).
7.7 How does the company manage DUS testing? (depending on national application
procedure; DUS = distinctness, uniformity, stability)
8. Access to Technology
8.1 How have IPR regimes affected the company's relationship with national and international
public sector research organizations, including CGIAR centers (access to material,
capacity building, marketing, collaborative research agreements)? Describe specific
experiences.
8.2 How have IPRs affected the company's participation in South-North linkages related to
germplasm and technology?
8.3 What have been the effects of IPRs (patents, PVP, trade secrets, trademarks) on dealings
with national or international companies (access to material, technologies, marketing,
licensing agreements, exchange, etc.)?
II - 8
3. Guidelines for interviews: Public Sector Plant Breeding Institutes
1. General IP policy and management
1.1 Does the institute have an IP policy? When was it established?
1.2 Provide details of the policy and if it is written, obtain a copy.
1.3 What is the policy used for? Does it apply to all crops?
1.4 Is there a mechanism for review/revision?
1.5 What personnel are assigned to IP in the institute? (Provide details on numbers,
part/full time, training, special training).
1.6 Is there an expectation that the institute should generate some of its own revenues?
If so, what place do IPRs play in this strategy?
1.7 Has there been any discussion about how the institute's IP policy relates to national rural
development policy? (For instance, is it expected that research products should be
available to the poor?)
1.8 How does the ability to protect the institute's technology, and the dependence on
protected technology, affect the institute's research policy?
• Increased (or changed) revenue
• Concentration of research on protectable technologies/crops
• Leaving certain types of research to the private sector
2. The IP policy related to the institute’s own innovations
2.1 Who has authority to sign MTAs, licenses in the institute?
2.2 Try to obtain an example of an MTA and/or license agreement
2.3 Who is in charge of filing for PVP?
2.4 Who is in charge of filing for patents? (Provide examples, where relevant.)
2.5 Are there examples of filing for trademarks? What are they and who has done the work?
2.6 If royalties are received, what proportion goes to: the institute, the specific crop
programme, the scientist?
2.7 Is the employee asked to assign his/her rights to innovations to the institute?
2.8 Is the employee asked to assign his/her copyright on data, manuscripts, etc. to the
institute?
2.9 What aspects of these assignments of rights are specified in the employee’s contract?
2.10 Are there examples where employees have left the institute, taking things with them?
2.11 Are there private spin-offs that have been established from public innovations from the
institute?
3. IPRs in practice in the institute
3.1 How many of the institute's varieties are currently protected? (Try to get specific lists,
by crop)
3.2 Identify the varieties that currently receive royalties.
3.3 How many of the institute's varieties are currently seeking protection?
3.4 Estimate the amount or proportion of current budget of institute derived from royalties
on crop varieties; what is the projection for 5 years? (Try to break down by crop.)
II - 9
3.5 Are there factors that limit the feasibility or attractiveness of seeking protection for plant
varieties (e.g., length of testing and approval process)?
3.6 How many of the institute's biotechnology innovations are protected? (Obtain a list, or
major examples.)
3.7 How many of the institute's biotechnology innovations are seeking protection?
3.8 Identify the biotechnology innovations that currently receive royalties.
3.9 Estimate the amount or proportion of current budget of institute from royalties on
biotechnology; what is the projection in 5 years? (Try to break down by crop.)
3.10 Are there factors that limit the feasibility or attractiveness of seeking protection for
biotechnology innovations?
4. Institute's policy related to protected innovations from elsewhere
4.1 Does the institute's policy cover the use of others’ protected innovations (protected
varieties, biotech tools, genes)?
4.2 Does the policy cover IPRs on jointly developed products?
4.3 Are there patented varieties that cannot be used in crossing programmes? If so,
who owns the patents?
4.4 For the following technologies, check if the institute uses each of them. If so,
(a) do you know if the technology is protected in your country? (b) under what terms
was it acquired? (c) will this affect the commercialization of products?
• AFLPs, microsatellites, microarrays
• Gene gun, agrobactor mediated, selectable markers
• Genes, gene constructs, vectors, promoters
4.5 Does the access to any of the above technologies rest on understandings about
segmentation in commercial application (e.g., only for the poor; only for domestic use)?
4.6 Are there instances in which your institute has tried to acquire protected technology
(including databases) and was unable to do so? What were the reasons? Did your IP
policy play a role?
5. Relations between the public breeding institute and seed companies
(public or private)
5.1 Inventory of institute varieties currently in commercial seed production. Inventory should
include: variety name; seed producer(s); type of protection (if any); type and amount of
compensation (including royalties and fees).
5.2 Describe major examples of relations with seed companies; terms of license (e.g. ever
give exclusive license?). Is there a standard procedure/license for seed companies, or is
it ad hoc?
5.3 What resources/strategies does the institute devote to enforcement of agreements with
seed companies?
5.4 How are relations between the institute and seed companies likely to change in the next
five years? Why?
II - 10
5.5 Are there mechanisms that allow the institute to supply germplasm (source seed) of crop
varieties (protected and unprotected) that are not in commercial seed production to
farmer groups or to individual farmers for multiplication and informal seed sharing?
Are there factors that make this difficult?
6. Research priorities (at the institute or programme director level)
6.1 Have there been changes in investment by crop in the institute over the past decade?
(Get statistics where possible, e.g., number of breeders.) What are the major reasons
(and do IPRs play a role)?
6.2 What is the current (and projected) strategy for ‘orphan crops’ that are unlikely to attract
commercial seed production?
6.3 What is the policy for staff promotion, and to what extent is it related to factors such as
varieties released, farmer uptake of varieties, royalties generated, number of
publications, etc.? (Do ranking)
6.4 For focus crop(s), have there been changes in breeding priorities (e.g., drought versus
insect tolerance) or type of farmer targeted in past decade? If so, why?
6.5 For focus crop(s) have there been changes in sources of germplasm used in breeding
programme in past decade? If so, why?
6.6 For focus crop(s) have there been changes in breeding strategies (hybrid v. OPV, MAS,
transformations) in past decade? If so, why?
6.7 For focus crop(s) have there been any efforts at participatory plant breeding or other
close interaction with farmers? Will changes in IPR regime have any effect on these
efforts?
7. Research priorities (at the scientist level)
(For programmes with many breeders, it may be useful to interview a small sample to
understand the degree to which institute policies and priorities are understood.)
7.1 Describe the institute's IP policy.
7.2 Who in the institute has the authority to sign an MTA?
7.3 For focus crop(s), have there been changes in breeding priorities (e.g., drought versus
insect tolerance) or type of farmer targeted in past decade? If so, why?
7.4 What is the policy for staff promotion, and to what extent is it related to factors such as
varieties released, farmer uptake of varieties, royalties generated, number of publica-
tions, etc.? (Do ranking)
8. Access to technology
8.1 Access to germplasm (South-South): Has access changed in the past decade? If so,
how and why? To what extent are IP issues contributing?
8.2 Does participation in regional/international collaboration improve access to protected
technology for research purposes?
doc_917804115.pdf
In the past few decades the subject of intellectual property rights (IPRs) has occupied center stage in debates about globalization, economic development and poverty elimination. This study concerns the strengthening of IPRs in the plant breeding industry and its effect on agriculture in developing countries.
Impacts of Strengthened Intellectual Property
Rights Regimes on the Plant Breeding Industry
in Developing Countries
N.P. Louwaars, R. Tripp, D. Eaton, V. Henson-Apollonio, R. Hu, M. Mendoza,
F. Muhhuku, S. Pal & J. Wekundah
A Synthesis of Five Case Studies
Report, commissioned by the World Bank
N.P. Louwaars
1
, R. Tripp
2
, D. Eaton
3
, V. Henson-Apollonio
4
, R. Hu
5
, M. Mendoza
6
,
F. Muhhuku
7
, S. Pal
8
& J. Wekundah
9
A study commissioned by the World Bank, executed in 2004
February 2005
Impacts of Strengthened Intellectual Property
Rights Regimes on the Plant Breeding Industry
in Developing Countries
A Synthesis of Five Case Studies
1
Centre for Genetic Resources, The Netherlands, Wageningen UR, P.O. Box 16,
6700 AA Wageningen, The Netherlands
2
Overseas Development Institute, London, UK
3
Agricultural Economics Research Institute LEI, Wageningen UR, The Hague, The Netherlands
4
Central Advisory Service, CGIAR, Rome, Italy
5
Centre for Chinese Agricultural Policies, Chinese Academy of Sciences, Beijing, China
6
Bogotá, Colombia
7
Agricultural Productivity Enhancement Programme, Kampala, Uganda
8
National Centre for Agricultural Economics and Policy Research, Indian Council of Agricultural Research,
New Delhi, India
9
Biotechnology Trust Africa, Nairobi, Kenya
© 2005 Wageningen, Wageningen UR
All rights reserved. Reproduction and dissemination of materilal in this volume for educational and non-commercial
purposes are authorized without any prior written permission from the copyright holders provided that the source is
fully acknowledged. Reproduction of material in this volume for resale or other copmmercial purposes is prohibited
without written permission of the copyright holders.
ISBN : 90-73384-59-1
Lay-out : Vormgeving, Plant Sciences Group
Printing : Propress, Wageningen
Overseas Development Institute
111 Westminster Bridge Road
London SE1 7JD
UK
Agricultural Economics Research Institute LEI
P.O. Box 29703
2502 LS The Hague
The Netherlands
Wageningen UR
Centre for Genetic Resources, The Netherlands
Address : Droevendaalsesteeg 1, Wageningen, The Netherlands
: P.O. Box 16, 6700 AA Wageningen, The Netherlands
Tel. : +31 317 47 70 00
Fax : +31 317 41 80 94
E-mail : [email protected]
Internet : www.cgn.wur.nl
Table of contents
Page
Executive summary 1
Abbreviations 11
Acknowledgement 13
1. Introduction 15
1.1 Background 15
1.2 Objectives 16
1.3 Methodology 17
1.3.1 The case study approach 17
1.3.2 Choice of case study countries 18
1.3.3 Choice of crops within case study countries 18
1.3.4 Process 19
1.3.5 Data collection 20
1.4 Structure of this report 22
2. IPRs and the plant breeding industry 23
2.1 Introduction 23
2.1.1 Rationale for intellectual property rights 23
2.1.2 National and international aspects of IPRs 24
2.1.3 Different property rights systems: applications to plant breeding 26
2.2 The Plant Breeding Industry 28
2.2.1 Seed systems 28
2.2.2 Seed policies and regulations 29
2.3 The protection of plants and varieties 30
2.3.1 Historical perspective 30
2.3.2 Comparison of plant utility patents and PVP 32
2.4 The protection of plant biotechnology 35
2.4.1 Relevance of biotechnology in the plant breeding industry in
developing countries 35
2.4.2 Patents in biotechnology 35
2.5 Empirical research on the impact of protection of plant varieties and plants 39
2.6 Additional strategies to protect the interest of the breeder and
seed producer 41
2.6.1 Non-IPR protection mechanisms 41
2.6.2 Biological protection 41
2.6.3 Seed laws 42
Page
2.6.4 Contracts 42
2.6.5 Biosafety 44
2.6.6 Brands and trademarks 44
2.6.7 Secrecy 45
2.7 Summary 45
3. Plant breeding and seed production in the case study countries 47
3.1 Agriculture 47
3.2 Public Sector Research 51
3.3 The Seed Sector in the case study countries 53
3.4 Seed Regulation 56
3.5 Seed Use 60
3.6 Summary 63
4. IP legislation and management in the case study countries 67
4.1 PVP Legislation 67
4.2 Other IP Legislation 72
4.3 The Management of PVP in Case Study Countries 75
4.3.1 Applications for PVP 75
4.3.2 Retroactive protection 80
4.3.3 Deposit of breeding lines 80
4.3.4 Costs and budgets 81
4.3.5 Enforcement 84
4.4 Management and enforcement of patents in case study countries 84
4.5 Summary 85
5. Impact on seed companies 89
5.1 Seed Company Approaches to IPR 89
5.2 Seed Company Priorities 91
5.3 Protecting Bt Cotton 92
5.4 Managing IPRs and collecting royalties 95
5.5 Alternatives for protection 95
5.5.1 Biological protection 96
5.5.2 Seed laws 96
5.5.3 Contracts 97
5.5.4 Biosafety 97
5.5.5 Trade secrets 98
5.5.6 Business practices 98
5.6 Summary 99
Page
6. Impact on public plant breeding and seed production 101
6.1 IP policies 101
6.2 Revenue generation strategies 102
6.3 NARI Seed Production 107
6.4 Patents 108
6.5 Plant Breeding Priorities and Strategies 109
6.5.1 Research investments 109
6.5.2 Hybrids versus OPVs 112
6.5.3 Participatory breeding 113
6.6 Enforcement 113
6.7 Impact on International Agricultural Research Centers 114
6.7.1 IARC IP Policies 114
6.7.2 Interactions with Seed Companies 114
6.7.3 IARC Priorities 117
6.7.4 IARCs and Biotechnology 117
6.8 Impact on Public Seed Enterprises 119
6.9 Summary 120
7. Impact on seed users 125
7.1 Diversity of Seed Firms 125
7.2 Farmer Priorities 126
7.3 Local Seed Production and Plant Breeding 126
7.4 Seed Saving 127
7.5 The views of farmer groups 128
7.6 Flower producers 129
7.7 Summary 131
8. Lessons 133
References 141
Annex I. List of persons interviewed for the study 9 pp.
Annex II. Interview questions 10 pp.
1
Executive summary
The Study
In the past few decades the subject of intellectual property rights (IPRs) has occupied center
stage in debates about globalization, economic development and poverty elimination. This
study concerns the strengthening of IPRs in the plant breeding industry and its effect on
agriculture in developing countries. This strengthening is reflected in the growth in the number
of countries that grant such rights, an expansion of the types of inventions that can be
protected, and a broadening of the scope of protection offered by extant IPR systems. Central
to the spread of IPR systems is the Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS 1993) of the World Trade Organization (WTO) requiring all WTO members
to introduce a minimum level of protection for intellectual property in their national laws; and
subsequent bilateral or multilateral trade agreements that call for further strengthening of IPR
regimes in developing countries.
The principal objective of this study is to describe and evaluate initial experiences with
strengthened IPRs in developing country agriculture, focusing on five case studies. Such an
assessment is a prerequisite for the formulation of policy guidelines and ‘good practice’
lessons for implementing IPRs in ways that enhance their impacts on productivity and equity.
The preliminary nature of developing countries’ experience with IPRs in agriculture precludes
most possibilities for quantitative evaluation of impacts, and in many cases possible effects of
IPRs are confounded with other developments (such as domestic policy changes and the
liberalization of international trade). The study thus concentrates on qualitative evaluation of
initial experiences and analyzes the efficiency with which IPRs are implemented at the
institutional level (including interactions with other regulatory mechanisms), the effectiveness of
the new IPR regimes in providing added incentives for the breeding and seed sectors (both
public and private), and the equity of outcomes for producers (with particular attention to
smallholders).
The wide variation in plant breeding capacities and seed industries among developing countries
demands a case study approach for this research. The range of types of IPRs in force or
contemplated, as well as the great variation in local institutions and farming systems, adds to
the justification for a careful examination of a relatively few cases in terms of countries and
crops. The choice of examples is constrained, however, by the fact that many countries have
yet to establish an IPR regime for plant varieties. China, Colombia, India, Kenya and Uganda
were chosen to represent a wide range of situations. The study focused on three types of
crop: export crops, crops (for market or subsistence) with good commercial seed potential,
and crops that attract little commercial seed interest.
The study concentrated on patents, plant breeder’s rights systems and trademarks. The
protection of plant varieties with patents is fairly uncommon; the principal examples are found
in the US, where certain vegetatively propagated species have been eligible for patent
protection since 1930 and more recently utility patents have been accepted for varieties of any
type of crop. The most common system of IPRs for plant varieties is known as plant variety
2
protection (PVP), related to several conventions of the Union for the Protection of New Varieties
of Plants (UPOV). Patent protection is more common in biotechnology, where many of the genes,
tools and processes are protected by patents, although there are considerable differences
among countries regarding eligibility and coverage. The plant breeding industry also relies on
other mechanisms to protect its varieties and limit their use. Perhaps the most common is
hybridization, which encourages farmers to buy fresh seed each season and prohibits
competitors from multiplying a variety. Other mechanisms include the use of seed laws,
contract law, brands and trademarks.
The study assumes that the primary justification for the establishment of IPRs is to increase
welfare in society. By offering a type of monopoly for the commercial exploitation of an
innovation, IPRs are intended to provide an incentive for creative endeavor by inventors and
authors. The monopoly may however disadvantage particular stakeholders. The establishment
of an IPR, which is based on national law, thus requires careful consideration of the different
seed systems in the country and of the balance of economic interests of different stakeholders
in society. Such analysis at the national level also needs to be balanced against potential
benefits from international harmonization at the legal and/or implementation levels. The analysis
of IPRs also must take account of existing systems that regulate seed production, and
marketing, set biosafety standards; and enable the operation of contract law.
The case study countries
Although three of the four case study countries with PVP laws are members of UPOV under the
1978 convention, there are significant differences between them in the details of their
legislation and in the actual performance of PVP. Aside from TRIPS, a major pressure for the
initiation of PVP came from the foreign horticultural industry in Colombia and Kenya. In China
this was part of a wider policy to promote the development of the domestic seed industry and
to establish a framework for interaction with foreign agricultural technology. The establishment
of PVP in India had its major impetus from a well-developed private seed industry leading to an
extensive public debate about the nature of PVP; the result is legislation whose eligibility for
inclusion in a UPOV convention has yet to be tested. In Uganda, which has yet to establish PVP,
the debate is currently restricted to a small committee of professionals dealing with breeding
and genetic resources.
Plant varieties are not eligible for patent protection in the case study countries. Trademarks are
commonly used in all case study countries to protect seed company names and marks, but not
for official variety names. None of the case study countries have particular exemptions in their
patent laws in line with those usually available in PVP for other breeders or farmers. The
establishment of PVP in the case study countries was often marked by controversy regarding
the level and extent of protection for extant varieties.
The experience of the case study countries indicates that the ease of implementing PVP seems
to be overestimated. In all cases, the effectiveness of PVP is still being tested and refined, and
the cases illustrate that establishing a PVP law and putting it into practice are two separate
challenges.
3
There is not yet sufficient experience on levels of participation to draw conclusions about the
local resources required to manage PVP. In Colombia and Kenya, most applications for
protection concern horticultural crops, for which the testing is largely managed externally. In
China, on the other hand, there is a considerable demand for PVP, largely to protect publicly-
developed varieties. In large countries with extensive seed markets, investment in PVP will be
easy to justify; for smaller markets and niche varieties the justification will be more difficult. It is
worth noting that protection, testing and maintenance fees are currently uniform in each of the
case study countries, without regard to type of crop or seed market.
Early experience indicates that sanctions for violations are often not well defined and that the
courts are not well prepared to enforce the rights. In all cases, private and public plant breeders
are learning that the major responsibility for identifying violations and pursuing cases rests with
them, implying additional investments of staff and resources.
There is very little experience in the case study countries with the implementation of patents for
plant breeding or biotechnology, with the exception of China. There is little or no case law in
the case study countries relevant to the enforcement of such patents.
IPRs and the evolution of the private seed sector
The emergence of the private seed sector in the case study countries owes relatively little to
national IP regimes. By far the most dynamic private seed sector in the sample (India) has
grown and diversified without benefit of any IPRs but in the context of quite liberal seed laws
and in many cases through the use of hybrids as a means of appropriation. While not
necessary for initial private seed sector development, PVP may contribute to further growth
and diversification. The nature and extent of this contribution will depend on the characteristics
of the national seed system. Seed companies tend to take advantage of PVP and patents when
it helps protect them against competitors gaining access to their materials. In Colombia and
Kenya, protection is commonly not sought for hybrids. On the other hand, where hybrids are
used in a competitive seed sector, such as India and China, they attract the majority of interest
for PVP.
IPR systems can also limit farmers’ seed saving and hence provide additional incentives for
private seed provision; although there are no instances of this as yet in the case study
countries, both Kenya and Colombia are considering modifications in their laws that could limit
seed saving. Authorities admit that it would be difficult (as well as politically sensitive) to
enforce such requirements with smallholders. In the flower industry, breeding firms’ control of
export markets is a very effective deterrent to on-farm multiplication of planting materials.
The question whether IPRs will create a shake-out in the industry at the cost of the smaller
companies can not yet be answered in the case study countries. Such increasing concentration
in the industry could be a result of the costs associated with protection, particularly for smaller
companies. The situation in India, with many small seed companies in operation, deserves
particular attention. In addition, restricted access to technology might become a bottleneck for
smaller companies.
4
IPRs and the public research sector
The establishment of PVP regimes comes at a time when national agricultural research
institutes (NARIs) are being asked to take much more responsibility for revenue generation.
Research administrators see the possibility of earning income by licensing public varieties and
other inventions but the degree to which such royalties can fulfill that promise depends on
farmer demand for public varieties, and on the ability of the institutions to manage and enforce
their rights. In the case study countries there is little evidence so far of actual revenue
generation from public breeding through IPRs, with the exception of institutions in China. The
expectations of NARI management are however quite high. Potential limitations, such as
competition with the emerging private sector for human resources and lack of freedom to
operate with third-party IPR are rarely taken into account in NARIs IP strategies.
A major problem with revenue generation from PVP is that the potential opportunities are
patchy. There is a danger that this heterogeneity may be translated into inequitable and
questionable public research resource allocations, further reducing research on orphan crops
and a smallholder farmer focus in favor of breeding objectives and methodologies directed at
large-scale commercial production. Mechanisms to share income with the individual researchers
and research groups are under development in some institutions. NARI’s capacity to market
their own IP and to negotiate access to third party IP is currently very limited.
International Agricultural Research Centers (IARCs) have policies on IP that permit IP protection
of inventions and materials if this will ensure that the subject materials and technologies will be
available to its target groups. Several IARCs have some staff with legal background assigned to
IP, plus access to a central advisory service. Resources are however limited and the increasing
pressure to show impact at the local level will stretch current capabilities.
The IP issue is central in the balancing of relationships between private seed companies and
public research. As IARCs focus on poverty alleviation and smallholder farmers, and NARIs
place increased emphasis on earning royalties from their germplasm with commercial
potential, IARCs have to rethink their relationships with NARIs. When IARCs can earn royalties
on their materials from domestic seed producers, they find themselves in the same position as
NARIs with regard to possibilities that opportunities for revenue generation may affect
priorities.
The growth of the private seed industry would seem to provide a more effective link between
public plant breeding and farmers’ fields. However, many public varieties do not attract the
interest of commercial seed enterprises, and this encourages many NARIs to organize their
own seed production and marketing. In addition, many NARIs still find themselves with
obligations to public seed production efforts. The establishment of IPR systems does little to
resolve these challenges for public plant breeding.
IPRs and seed users
Farmers’ seed systems are the main source of seed and new varieties for most crops in the
case study countries. IPRs may reduce the effectiveness of these systems by limiting the
saving, exchanging and selling of farmer-produced seed of protected varieties. There are no
5
instances to date of such restrictions in case study countries, but proposals for the
strengthening of some national PVP regulations introduce these issues.
In some countries the choice of varieties is currently expanding through the opening of the
seed sector, backed by economic policies and changes in seed regulations, and these trends
may be further supported by IPRs. When the commercial seed market expansion is very rapid,
IPRs can help control rogue traders (e.g. in India and China). However, restrictions on small
seed enterprises and semi-commercial operations may jeopardize the provision of seed of
some local varieties supplied commercially. In addition, the breeding of niche varieties and their
delivery by small seed companies may be threatened.
IPRs help flower growers secure access to a wide range of varieties in the case study countries,
but only when the establishment of IPRs contributes to a trustworthy business environment.
These IPRs are not necessarily operational in the production countries, and their main point of
application is in the main wholesale markets. Non-specific IPRs like trademark protection are an
additional tool for the flower breeders.
It is likely that NARIs’ focus on revenue generation, supported by the introduction of IPRs, may
divert their attention from the needs of marginal farmers. This may also affect the conduct of
participatory methods in breeding and variety selection.
Lessons
General
Many of the principal IPR strategies have only been in place a few years (or are still in the final
stages of approval). Because the incentives provided by any IPR regime usually interact with
various other factors (such as the liberalization of domestic agricultural markets, increased
globalization, and a reduction of public expenditure for agricultural research and seed
production) it is difficult to identify unambiguous conclusions regarding the possible
contributions and concerns that IPR regimes might present for plant breeding in developing
countries. However, the difficulty in identifying clear causality at this early stage does not mean
that IPRs are unimportant. On the contrary, IPR regimes may lead to significant changes in
plant breeding and seed production, and the subject warrants careful future study and
monitoring. Despite the preliminary nature of the report’s conclusions, the analysis points to a
number of significant lessons that need to be presented and disseminated to different
stakeholder groups.
There are several priorities for monitoring. These include assessing the extent to which IPR
regimes (and other policy changes) in particular countries influence the priorities and products
of public plant breeding, affect the structure and concentration of the domestic seed industry,
and determine the options available to smallholders. On a global level, it is particularly
important to monitor how IPRs are treated in multilateral and bilateral negotiations, and how
IPRs influence the role of MNCs in technology transfer in developing countries.
6
Political realities, limitations in administrative resources, and varied economic incentives in
most developing countries indicate that it is unrealistic to expect rapid establishment and
effective enforcement of the type of IPR regimes that are found in some industrialized
countries. In any case, IPR regimes should be part of developing countries’ development
pathways and consistent with their own priorities and capacities instead of being externally
imposed. Donors and others hoping to support these processes must be prepared for a long-
term and individualized development of national agricultural institutions.
IPR regimes must be developed at the national level, and much donor effort should support
individual processes of multi-stakeholder debate, design, and implementation. Support for
specifically-tailored IPR regimes is possible because of the range of options that are available
for providing appropriate incentives. On the other hand, respecting individual country priorities
and circumstances in the design of IPR regimes does not imply that opportunities for
harmonization and cooperation should be forgone. Mechanisms such as UPOV and PCT
facilitate the implementation of IPRs and reduce transaction costs, but the object of
harmonization is to provide economic benefits rather than to promote coalitions whose
standards are dictated by their strictest partners.
There should be particular attention in these discussions to issues related to international
public goods, in particular, the conduct of international agricultural research with regard to IPRs
in plant breeding and its relation with national research systems. A further issue that requires
attention at the international level is access to some of the basic tools and processes of
biotechnology. These may be protected in the North but the possible legal implications for the
new varieties and agricultural products derived from such technology are often uncertain for
the Southern scientists who use them.
The design of IPR instruments
Policymakers need to realize that IPRs are important not because countries may be required to
accede to the conditions of an international agreement but rather because they offer possible
mechanisms for stimulating research, enabling access to technology, and promoting enterprise
growth, all for the good of society. As such, they are merely one tool in a range of policies that
may be applied in specific contexts to further agricultural development (e.g. for supporting
public agricultural research, regulating seed production and marketing, providing an enabling
environment for agribusiness development, and empowering smallholders).
In most countries, the design and implementation of an IPR regime for plant breeding should be
seen as a long-term process, subject to monitoring and adjustment. The establishment of PVP
systems or patent offices is not necessarily sufficient to initiate widespread changes within the
seed industry. It often takes considerable time for the infrastructure to be established, for plant
breeders to become conversant with the system and for the courts to be able to handle
complaints.
Not only do IPRs in plant breeding have to be seen in the context of a wider range of agri-
cultural policies, but IPR regimes themselves must be carefully tailored to specific situations. It
is important that countries recognize that they have choices in designing legislation consistent
7
with the TRIPS Agreement and that there are still opportunities for debating and interpreting the
Agreement itself. The UPOV Conventions offer some important advantages for fulfilling the
requirements for a sui generis system but they do not exhaust the possibilities. Similarly, there
are several options with respect to tailoring national patent regimes for agricultural biotech-
nology. The key elements in IPR systems that can be adapted to the specific conditions of
individual national seed sectors include the specific terms of the farmers’ privilege and the
breeder’s exemption, the relationship between different IPRs (patents, PVP, trademarks, trade
secrets), the exhaustion of these different types of IPRs, and possible differential treatment of
particular crops.
Policy makers need to consider the resources required for the establishment or strengthening
of IPR systems. Institutional capacity to deal with the processing of applications and the
granting of rights is quite variable among countries. Cooperation and harmonization at the
implementation level can lower some of these costs. Fee rates that make an office self-
supporting should be welcome, but care must be taken to avoid unfairly taxing or discouraging
applicants, and especially smaller players.
The introduction of transgenic varieties to developing countries presents special challenges,
but does not necessarily imply the adoption of overly rigid IPR regimes. Limited experience to
date has shown that in the absence of IPRs for GM plant varieties and biotechnological
inventions, multinational companies have sometimes resorted to biosafety regulations in an
attempt to protect their technology. Biosafety organizations are however not appropriate for
such purposes, and policymakers need to create a clear division of responsibilities among
various agencies for regulating the use of GM varieties. In many cases, the enforcement of
existing seed laws can offer an appreciable improvement in limiting unauthorized sale of GM
seed. Further research is needed on the extent of IP protection necessary for stimulating the
development of GM varieties (where desired).
The implementation of IPR regimes
Policymakers must consider the institutional arrangements for PVP. A PVP authority may be
included as part of an existing seed regulatory agency or established as a separate
organization; the expense of setting up a separate entity must be balanced against possible
concentration of power or conflict of interest. In addition, there must be confidence that the
PVP authority is independent from the interests of (public) plant breeding organizations.
The challenges of adequate enforcement for IPRs in plant breeding should not be under-
estimated. There is very little legal capacity in most countries to support IPR regimes for plant
breeding. Implementation of IPR regimes must include attention to strengthening the court
system’s knowledge of IPRs in plant breeding, and the ambitions and scope of any IPR system
must be consistent with the capacities of the legal system, including contract enforcement.
For the establishment of PVP, there are a number of important parameters that require careful
consideration. These include: the designation of which species are to be covered; fee structures
(and possible subsidies or differentiation by crop); the nature of the breeder’s exemption for
use of protected varieties; and the implications for farmers’ abilities to save, exchange and sell
8
seed in accordance with local custom. For patents the choices are similar: which processes
and products are patentable and the scope of protection. For trademarks, the key question is
whether a variety name can be protected.
Because the establishment of IPR regimes is a gradual process, careful monitoring is required.
Policymakers need to assess whether particular IPR regimes are actually providing incentives
for seed system development consistent with national agricultural goals. This includes analyzing
if farmers have equitable access to an increasing diversity of crop varieties and if the structure
of the commercial seed market provides confidence for participants while at the same time
encouraging new entrants.
IPRs in international negotiations
IPRs for plant breeding are not a magic bullet that automatically stimulates or redirects agri-
cultural growth, but they can be an important part of a comprehensive agricultural development
strategy by helping support competitiveness and diversity in plant breeding and seed supply.
Given the value of well designed IPRs for agricultural development, policy makers should not
treat IPRs as a negotiable bargaining chip in trade negotiations or other international
discussions.
IPRs need to be considered in international agreements that tackle related issues, in particular
biodiversity and trade. National policies towards international agreements on biodiversity,
negotiated by representatives with environment (CBD) or agriculture (IT/PGRFA) background
need to be in line with the choices made in the field of IPR, which are primarily derived from
economic and trade policies. Countries must be clear about how IPRs relate to national
sovereignty over plant genetic resources and rights of indigenous communities (CBD), and
Farmers’ Rights (IT/PGRFA) in order to avoid conflicts of interpretation. This requires a capacity
in IPR issues with a much wider group of stakeholders than commonly envisaged. Art 9 of the
IT/PGRFA encourages open and informed national debates on issues related to genetic
resources, including IPRs.
For many countries, the possibility of being required to establish particularly restrictive IPRs for
plant breeding is more likely to be a product of bilateral trade agreements than to derive from
TRIPS obligations. National policymakers need to be prepared to enter such negotiations with a
full understanding of the implications of such ‘TRIPS-plus’ agreements for their national plant
breeding and seed systems. This requires close cooperation between national policy makers
with trade, agriculture and environment backgrounds to analyze the room for maneuver in
interpreting and modifying any such requirements imposed by potential trading partners.
In the only case study country with legislation that includes Farmers’ Rights (India), there is not
enough experience to assess the degree to which this offers useful incentives for the
development or promotion of farmer varieties. Further monitoring is required.
9
Agricultural policies
This study emphasizes that IPR regimes in plant breeding should provide incentives for
diversifying and strengthening plant breeding and seed production. This implies that policy-
makers cannot consider IPR regimes in isolation from wider issues of national agricultural
policy.
The role of NARIs is a subject of considerable debate in light of generally declining national
budgets and the growth of the private sector. Many NARIs are uncertain of whether to
complement or compete with the private sector and hence are confused about how to take
advantage of IPRs. Policymakers need to set clear guidelines in this area. NARIs need to
distinguish between using IPRs in order to facilitate the use and delivery of their varieties, and
seeing IPRs as a contributor to institute budgets through royalty income. Most NARIs seem to
have little knowledge about the costs of obtaining and enforcing IPRs, and there is little realistic
assessment within the NARI’s of their capacity to compete with the private sector in producing
commercially viable products (or in rewarding and maintaining staff for this task).
Most NARIs are too poorly organized to acquire access to complementary technology on
equitable terms or to assess their ‘freedom to operate’ with protected techniques and tools.
NARIs are no match for the legal and negotiation skills and resources of major technology
firms. NARIs need assistance to formulate IP policies and strengthen their legal and negotiation
capacities.
The strategies that NARIs adopt for using IPRs will depend on answers to fundamental questions
about the role of public sector agricultural research. For instance, different approaches to
relations with the private sector must be taken into account. In addition, the way that NARIs
manage IPRs has a significant bearing on the extent to which germplasm resources are shared
more widely. Policymakers must recognize that systems of international germplasm exchange
are being threatened by an almost exclusive focus on the possible financial advantages
accruing to the control of germplasm, without appreciating the importance of facilitated
access.
Policymakers also need to ensure the development of the private domestic breeding sector.
With few exceptions, domestic firms do not have the resources to invest in high technology and
must depend on MNCs and advanced research institutions that protect their inventions. There
are a few examples of incipient consortia of local seed companies formed to negotiate access
to biotechnology, and national policy should support such efforts.
There are still serious challenges with respect to delivering useful varieties, particularly of non-
hybrids and so-called ‘orphan crops’, to smallholders. The combination of limited and isolated
markets with widespread seed saving means that even fairly strong IPR regimes are unlikely to
elicit commercial interest in the near future. Policymakers must find ways of combining (largely)
public plant breeding, appropriate formal seed delivery (most likely private or cooperative), and
support to local seed diffusion mechanisms, to serve the farmers dependent on these crops.
10
There are no indications in the case study countries to date that PVP unduly contributes to a
concentration in the seed sector. Early experiences in biotechnology patents in the case study
countries are insufficient to establish any evidence for concentration, despite the fact that most
transgenics currently have one commercial source. However, it is important to support a
critical assessment of developments in the coming years. This is an area in which industrialized
countries could provide some useful guidance given their longer experience in monitoring and
regulating anti-competitive practices.
Finally, it is worth reiterating that the purpose of IPR regimes in agriculture is to provide
appropriate incentives for science and commerce to better serve the nation’s farmers. National
policies need to ensure that farmers are conversant with, and participate in, debates regarding
possible IPR regimes; that they are well-informed consumers who understand their rights in
agricultural input markets; and that their interests and priorities are reflected in the work of
public agricultural research.
11
Abbreviations
AATF African Agricultural Technology Foundation
AICCIP All India Coordinated Crop Improvement Programme
AFLP Amplified fragment length polymorphism
ARIPO African Regional Intellectual property Organization
ARPOV Argentinean Association for the Protection of Plant Varieties
BRI Biotechnology Research Institute (China)
Bt Bacillus thuringiensis
CAAS Chinese Academy of Agricultural Sciences
CAS Chinese Academy of Sciences
CBD Convention on Biological Diversity
CGIAR Consultative Group on International Agricultural Research
CIAT International Center for Tropical Agriculture (Cali, Colombia)
CICR Central Institute for Cotton Research (India)
CORPOICA Colombian Corporation for Agricultural Research
CRI Cotton Research Institute (China)
CSIR Council for Scientific and Industrial Research (India)
DNA Desoxyribonucleic acid
DUS Distinctness, uniformity, stability
EU European Union
FAO Food and Agriculture Organization of the United Nations
FEDEARROZ National Federation of Rice producers (Colombia)
FEDEPAPA Colombian Federation of Potato Producers
FLAR Latin American Fund for Irrigated Rice
FTO Freedom to operate
GAAS Guangdong Academy of Agricultural Sciences
GDP Gross Domestic Product
GI Geographic indication
GMO Genetically modified organism
GUS Beta-glucuronidase (selection marker)
HAAS Hunan Academy of Agricultural Sciences
HHRRC Hunan Hybrid Rice Research Center
IARC International Agricultural Research Center
ICA Colombian Institute for Agriculture and Livestock
ICAR Indian Centre for Agricultural Research
ICRISAT International Crops Research Institute for the Semi-Arid Tropics
(Hyderabad, India)
IGC Inter-Governmental Committee on Intellectual Property, Genetic Resources,
Traditional Knowledge and Folklore
IIHR Indian Institute for Horticultural Research
IP Intellectual property
IPR Intellectual property rights
IT PGRFA International Treaty for Plant Genetic Resources for Food and Agriculture
12
IVF Institute for Vegetables and Flowers (Beijing, China)
KARI Kenyan Agricultural Research Institute
KEPHIS Kenyan Plant Health Inspectorate
KIPI Kenyan Intellectual property Institute
KSC Kenya Seed Company
MNC Multinational corporation
MOST Ministry of Science and Technology (China)
MTA Material transfer agreement
MV Modern variety
NARI National agricultural research institute (generic)
NARO National Agricultural Research Organization (Uganda)
NARS National Agricultural Research System
NBPGR National Bureau for Plant Genetic Resources (India)
NBRI National Botanical Research Institute (India)
NGO Non-governmental organization
NPT National Performance Trials (Kenya)
NPT2 Neomycin Phosphotransferase II (selection marker)
OAPI African Intellectual property Organization
OECD Organization for Economic Cooperation and Development
OPV Open pollinated variety (as opposed to hybrid – in this report used for
both normally out-crossing and self fertilizing crops)
PCT Patent Cooperation Treaty
PBR Plant breeder’s rights
PVP Plant variety protection
PVPA Plant Variety Protection Act (USA)
RAI Royalty Administration International (Co. Ltd)
RAPD Random amplified polymorphic DNA
RFLP Restriction fragment length polymorphism
PBR Plant breeder’s rights
PCR Polymerase chain reaction
RMB Yuan Remnimbi (currency in China)
RR Roundup Ready
RRI Rice Research Institute (China)
SIPO State Intellectual Property Office (China)
SNP Single nucleotide polymorphism
SSR Simple sequence repeats
TRIPS (agreement on) Trade Related Aspects of Intellectual Property Rights
UPOV International Union for the Protection of New Varieties of Plants
URUPOV Uruguayan Association for Plant Breeders Protection
USA United States of America
VCU Value for cultivation and use
V-GURT Genetic use restriction technology operating at variety level
WTO World Trade Organization
13
Acknowledgement
The authors are grateful to the World Bank for providing the financial support under grant
# 8001817 and the input of its specialists D. Byerlee and E. Pehu. We are very much
indebted to the large number of people that agreed to share their knowledge and views with
us in the course of the study. Without the willing contribution of these knowledgeable
informants in developing and industrialized countries it would have been impossible to
conduct this study.
Finally, our gratitude is extended to our own organizations that allowed us to work on this
study: the Indian Council of Agricultural Research (New Delhi), Chinese Academy of Sciences
(Beijing), the Biotechnology Trust Africa, the Agricultural Productivity Enhancement
Programme (Kampala), the CGIAR Advisory Service (The Hague and Rome), the Overseas
Development Institute (London) and Wageningen University & Research Centre.
14
15
1. Introduction
1.1 Background
In the past few decades the subject of intellectual property rights (IPRs) has moved from a
relatively obscure corner of legal practice to occupy center stage in debates about globalization,
economic development and the goal of poverty elimination. The growing prominence of IPRs is
related to technological advances that are responsible for an increasing rate of scientific
creativity in all fields and an expansion in the capacities and incentives for protecting such
innovation. At the same time, the movement toward globalized trading regimes has brought
pressure for the harmonization of IPR systems. These advances in technology and trade have
affected the position of IPRs for a wide range of endeavors and have particularly important
implications for developing countries. This study is concerned with one example, the
strengthening of IPRs in the plant breeding industry and its effect on agriculture in developing
countries.
The past few years have witnessed a significant worldwide strengthening of IPRs in plant
breeding. This strengthening is the product of a growth in the number of countries that grant
such rights, an expansion of the types of inventions that can be protected, and a broadening of
the scope of protection offered by extant IPR systems. Although a system of IPRs has been
internationally sanctioned for more than a century, since the Paris Convention of 1883, IPRs
have not been an issue in the plant breeding and seed sector in most developing countries until
recently. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS 1993)
of the World Trade Organization (WTO) dramatically changed the importance of IPRs in
developing countries by requiring all WTO members to introduce a minimum level of protection
for intellectual property in their national laws. Article 27.3(b) of the TRIPS Agreement requires
WTO members to provide for the protection of plant varieties through patents, an effective
sui generis system, or a combination thereof. Subsequent to the TRIPS Agreement in 1993,
the USA and the EU have negotiated bilateral or multilateral trade agreements that reduce
some of the flexibility of TRIPS, e.g. an agreement between the USA and Chile prescribes that
the latter introduce patentability of plant varieties in addition to the TRIPS-compliant breeder’s
rights system operational in that country. In addition, issues of data exclusivity that are
common in the pharmaceutical sector are beginning to appear in the agricultural field,
potentially strengthening the rights of IPR holders in the breeding and seed sectors.
The nature and scope of IPRs for genetic resources (including plant varieties) are also part of
discussions in the frameworks of the Convention on Biological Diversity and the International
Treaty on Plant Genetic Resources for Food and Agriculture, which entered into force in 1993
and 2004, respectively. There are debates about the contradictions between IPRs and Farmers’
Rights (Art. 9 of the IT/PGRFA), the concept of farmers’ privilege in the UPOV system in relation
to Farmers’ Rights, and the issue of linking protection and the sharing of benefits derived from
the use of genetic resources.
The importance of IPRs for plant breeding and the seed industry has been further enhanced by
the development of plant biotechnology, which not only engendered patents for the genes,
16
tools and processes that are an increasingly common part of modern plant breeding, but also
spurred the introduction of utility patents for plant varieties.
Most developing country members of the WTO have either enacted IPR laws or are about to do
so, as prescribed by the TRIPS Agreement and/or the so-called ‘TRIPS-plus’ requirements of
bilateral or multilateral trade agreements. The new laws include provisions governing ownership
and use of crop varieties. While IPR regimes for agricultural inventions have been widely used in
industrialized countries, most developing countries are in the early stages of implementation
and/or enforcement of IPRs related to crop varieties. The application of IPRs for plant breeding
in developing countries raises a number of important issues, including smallholder access to
technology, the role of public agricultural research, the growth of the domestic private seed
sector, the status of farmer-developed varieties, and the growing North-South technology divide
that restricts access to plant germplasm and research tools. Since access to seed and new
crop varieties is fundamental for agricultural development and rural welfare it is important to
understand the impact of these legal systems on the breeding and seed sectors in developing
countries.
The role of IPRs in agriculture is an exceptionally controversial subject. The debates involve
complex arguments from a range of interest groups. The outcomes of particular IPR regimes
will vary according to local economic, institutional, and agricultural circumstances and may
change as these determining conditions evolve. It is unrealistic to believe that there are any
simple, uniform or permanent formulas that will provide ready-made solutions. It is important to
recall that IPR regimes are rights and privileges that are granted in order to contribute to the
public good. It is therefore the responsibility of policymakers to define the particular societal
goals that IPRs in agriculture are meant to address and to develop appropriate legislation. It is
important that policymakers have access to as much experience as possible for guiding the
design and implementation of IP instruments appropriate to their goals.
The present study was initiated in the belief that an empirical analysis of the conduct and
performance of IPR regimes in plant breeding in developing countries would be particularly
useful. It is hoped that the information provided in this study, although only the product of initial
country experiences, will help serve that purpose.
1.2 Objectives
The principal objective of this study is to describe and evaluate initial experiences with
strengthened IPRs in developing country agriculture. Such an assessment is necessary in order
to provide policy guidelines and ‘good practice’ lessons for implementing IPRs in ways that
enhance their impacts on productivity and equity.
The preliminary nature of developing countries’ experience with IPRs in agriculture precludes
most possibilities for quantitative evaluation of impacts, and in many cases possible effects of
IPRs are confounded with other developments (such as domestic policy changes and the
liberalization of international trade). The study thus concentrates on qualitative evaluation of
initial experiences and analyzes the efficiency with which IPRs are implemented at the
institutional level (including interactions with other regulatory mechanisms), the effectiveness of
17
the new IPR regimes in providing added incentives for the breeding and seed sectors (both
public and private), and the equity of outcomes for producers (with particular attention to
smallholders).
The study thus involves a wide range of issues, including:
a. implementation of IPR regimes
• how changes in regulations and regulatory agencies have been implemented or are
proposed
• support for IPR institutions and their technical and financial sustainability
• the capacity of these institutions to provide competent and transparent regulation
• the enforcement capacity of IPR regimes
b. changes in public and private plant breeding
• the access of public and private breeders to germplasm
• the access of public and private plant breeders to breeding technologies
• the investments in breeding by crop, technology, type of client
• types and numbers of seed enterprises
• seed production and sales
c. changes for farmers
• the type and number of varieties available to farmers
• the affordability of the seed
• the choices and flexibility available in the seed markets
• farmers’ interactions with formal plant breeding and seed providers
1.3 Methodology
1.3.1 The case study approach
The wide variation in plant breeding capacities and seed industries among developing countries
demands a case study approach for this research. The range of types of IPRs in force or
contemplated, as well as the great variation in local institutions and farming systems, adds to
the justification for a careful examination of a relatively few cases in terms of countries and
crops. The choice of examples is constrained, however, by the fact that many countries have
yet to establish an IPR regime for plant varieties. The chances of assessing even potential
impacts are greatly enhanced in countries that have at least a minimum of experience with
IPRs, implying a careful selection of sample countries for the study. In addition, the
establishment of IPRs for plant varieties affects various institutions and organizations in
developing countries and has important implications for the way that agricultural technology is
developed, delivered and utilized. It is therefore necessary to collect data from many different
stakeholders.
The study was carried out with the realization that there are many analyses and manifestos
regarding the roles of IPRs in general and for agriculture in particular. The wide divisions of
opinion suggest that there are no easy answers to the questions at hand and that quantitative
18
comparison, necessarily involving a limited number of inputs and outputs, would not yield
convincing answers. In addition the study recognized that quantitative evidence would be hard
to find, and in many cases confounded with the effects of other developments. Therefore, a
wide range of evidence had to be sought in the small number of developing countries that have
started implementing various IPR regimes in agriculture. In addition, given the necessity of
pursuing crop-specific information amidst the diversity of issues within the study countries,
certain crops were selected for particular attention.
The diversity of issues also required input by specialists with a range of backgrounds. The
team consisted of seed systems specialists with knowledge of breeding, plant biotechnology
and enterprise development; agricultural economists and social scientists with experience in
seed and biotechnology issues; and specialists in environmental law, IPRs in biotechnology and
the management of biotechnology projects. The team included a case study researcher for
each of the five countries and a central team of four researchers based in Europe.
1.3.2 Choice of case study countries
Five case study countries were chosen to represent major segments of developing country
agriculture, geographical spread, and level of experience with IPRs:
– China is among the most important agricultural economies in the world and has
experience in implementing most relevant IPR systems over the past several years. It has a
substantial domestic capacity in plant breeding and biotechnology and is a market that
attracts investors and inventors from all over the world. China also has a significant area
planted to genetically modified crops (GMOs).
– Colombia is one of the Latin American countries with the most experience with IPRs in the
breeding and seed sectors. It has a diverse agriculture, ranging from subsistence farming
to several important agricultural exports, and an emerging use of GMOs.
– India has a very well developed agricultural research capacity in breeding and
biotechnology, and its large market attracts considerable interest from abroad. India’s
approach to agricultural IPRs has resulted in recently enacted legislation that has a number
of unique characteristics and is the product of prolonged and wide ranging political debate.
– Kenya is the sub-Saharan African country with the longest experience with IPRs in the
breeding and seed sector after South Africa. It has a very diverse agriculture ranging from
subsistence to export sectors and a relatively open policy towards biotechnology.
– Uganda does not yet have an operational IPR system in the breeding and seed sector, but
it has a diversifying commercial agricultural sector. It may be considered a representative
of the large number of developing countries that are still in the process of establishing an
IPR regime.
1.3.3 Choice of crops within case study countries
Although the study looked at the effects of agricultural IPR regimes in general, it was decided
that special attention should be given to a few focus crops in each country. These crops were
chosen to provide as much opportunity for inter-country comparison as possible and to
19
represent a wide range of commodities that would illustrate important issues in terms of
market orientation, public and private research and seed sector commitment, and biotech-
nology investment. The focus crops for the study include food staples important for
subsistence and local market (rice, maize, and beans), cash crops (cotton and vegetables) and
specialty export crops (flowers). These crops were given priority attention in discussions with
research, the seed industry, and farmers, but relevant issues in other crops were also pursued.
China Colombia India Kenya Uganda
Rice ? ? ?
Maize (?) ? (?) ? ?
Beans (?) ? ?
Cotton ? (?) ? (?)
Vegetables ? ?
Flowers ? ? ?
? = primary focus (?) = secondary focus
1.3.4 Process
A five-day organizational meeting for all nine team members was held in Wageningen in
October 2003. The meeting established a common framework for the analysis of the study
questions and, based on the framework, developed a set of comprehensive guidelines for semi-
structured interviews. The initial meeting also included the participation of two World Bank staff,
an IPR specialist from a multinational seed company, a member of an NGO working on bio-
diversity and seed access, and an economist studying agricultural patents in the US.
In the implementation phase of the study, a large number of people from the public, private and
civil sectors were interviewed by different members of the team. Most interviews in the case
study countries were conducted by the scientists in the respective countries. All countries were
visited one or more times by the Europe-based members of the team to participate in interviews
and analyze initial data. In addition, managers and IP specialists of multinational seed companies
were interviewed during an IP seminar of the International Seed Federation in Berlin, May 2004.
The analysis of the secondary and interview data collected during the study focused on identi-
fying major themes and outcomes, identifying commonalities (where they existed) and
attempting to explain the context of differences in response and outcome. The initial analysis
and conclusions were discussed at the individual country level with the relevant researchers,
and this draft report is the subject of collective writing, editing and debate engaging the entire
team.
The analysis of the secondary and interview data collected during the study focused on
identifying major themes and outcomes, identifying commonalities (where they existed) and
attempting to explain the context of differences in response and outcome. The initial analysis
and conclusions were discussed at the individual country level with the relevant researchers.
20
A draft of this report has been discussed in Washington with World Bank staff and specialists in
agricultural IPRs. This report has been the subject of collective writing, editing and debate
engaging the entire team
1.3.5 Data collection
The study team collected data related to IPR-institutions, plant breeding and seed production
organizations and farm-level outcomes.
Methodology
The country case studies are based on a combination of secondary data analysis and extensive
interviews.
Available documentation on the seed and agricultural input sector and the policy framework
concerning breeding, biotechnology and IPRs was compiled. Secondary data and previous
studies were also used to provide information about farmer seed management practices, thus
limiting the need for farmer surveys. Interviews were undertaken with relevant staff of IP
institutions; public research and seed production managers; and management of private seed
companies and biotechnology firms (see Annex I). A small number of interviews were conducted
by telephone. Given the complexity of the issues, the interviews were based on detailed guide-
lines rather than on written questionnaires (see Annex II). A concerted attempt was made to
develop uniform and comparable data sets, but the importance of pursuing specificity and
detail combined with the variable experiences and interests of the interviewees meant that it
was common to concentrate on particular aspects of the guidelines during an interview.
Interviews were conducted by the scientists in the case study countries; the European team
joined them in a number of visits: Louwaars in China, (northern) India, Kenya, Uganda; Tripp in
Colombia, (southern) India, Kenya, Uganda; and Eaton in China.
IPR institutions
The country case studies describe the background of particular IPR regimes and the nature and
scope of protection that is provided. Attention is paid to costs, technical and human capacities,
transparency and performance. An IPR regime is worth little until it can be efficiently
implemented and enforced, and institutional capacities must be assessed in their governance
environment. We sought the experiences and perceptions of the relevant staff of IPR institutions
and compared these to evidence from other stakeholders on their understanding of, and
confidence in, the IPR regime.
Plant breeding and seed supply sector
The case studies evaluate the experience to date with IPR regimes in public and private organi-
zations involved in seed provision, plant breeding and biotechnology. The study attempts to
relate changes in the IPR regime to changes in investments and output for plant breeding and
biotechnology programs. The study relates the introduction of new IPR regimes to changes in
research policies, trends in variety release, and the relative focus on hybrids or open-pollinated
varieties (OPVs). For seed enterprises, the study examines how specific aspects of IPR regimes
(such as scope of protection and enforcement options) play a role in determining investment
and protection decisions. In addition, the relation between public and private organizations,
21
including international research organizations, is examined. In the absence of relevant data
that would have allowed a before-after statistical analysis, the study assesses the relative
contribution of IPRs in light of concurrent changes such as market developments and
modifications in other legal frameworks.
Impacts at the farm level
The ultimate concern of the assessment of the experience with IPRs is to understand the
impact on the different types of crop producers, with specific emphasis on small-scale farmers
and the challenge of poverty alleviation. However, where the recent legal developments often
may not have visible and quantifiable impact on the breeding and seed provision sectors,
analysis of effects at the farm level is necessarily speculative. Large-scale farmer surveys have
thus not been undertaken, but interviews were conducted with representatives of farmer organi-
zations and NGOs. Attention was also given to any substantial examples of on-farm variety
development and local seed programs.
Challenges of the methodology
This methodology can provide valuable information, but it has some significant limitations as
well. Any study of laws, regulations or policies must bear in mind that the written and
implemented forms may differ significantly; it is necessary to describe both sides of the
picture. In addition, policies may not be well articulated or uniformly shared, and some aspects
of a legal framework may be more effectively implemented than others, leading to variation in
understanding and experiences. The necessary reliance on interviews means that much of the
interpretation is based on stakeholder perceptions, and these may be varied or mistaken (or at
times even deliberately misleading). These biases are inevitable and it was the task of the
researchers to identify and counteract them wherever possible, by understanding the context
of the interview and by ‘triangulating’ sources of information. In addition, some observations
and information were provided with the understanding that they were confidential; these
requests were respected but they further limit the scope of the analysis. Even though attempts
have been made to ensure as uniform a data collection strategy as possible, cultural
differences among countries and interviewees, and differences between researchers, inevitably
create some heterogeneity in data collection. As with many other studies, the quantitative data
are as good as their sources; we have attempted to approach the most reliable sources, but
can make no guarantees for the precision of national statistics.
Some of the data reflect a level of uncertainty among stakeholders and even contradictions in
interpretations and perceptions; such results are seen as an important indicator of the nature
of the impact of some IPR regimes. Finally, attributing impacts is particularly tricky in this field,
since the introduction of IPRs has commonly gone hand in hand with changes in other policies
that are directed to reducing public expenditures, commercialization or privatization of public
organizations, promotion of the private sector or changes in development policies.
The research and the analysis try to understand the performance and outcomes of new IPRs in
this broader policy and institutional context.
22
1.4 Structure of this report
This report starts with an overview of the basic issues in the application of IPRs to the plant
breeding industry (Section 2). The case study countries are introduced, including a description
of the breeding and seed sectors and the conventional regulatory frameworks in each country
(Section 3) and an analysis of the current status of IP regimes with regard to enactment,
management and enforcement (Section 4). The next sections analyze the impact of the recent
developments in the field of IPRs on the private (Section 5) and public (Section 6) sectors.
(The impacts of IPRs on biotechnology research, conventional plant breeding, seed production,
and marketing are closely interrelated for both private and public activities, justifying this
division by sector rather than by activity.) Section 7 discusses the impact on seed users, and
we draw our conclusions in Section 8.
23
2. IPRs and the plant breeding industry
2.1 Introduction
2.1.1 Rationale for intellectual property rights
IPRs are legal instruments that allow an inventor or author to exclude others from commercial-
izing an innovation for a specified period of time. IPRs provide a temporary monopoly, subject
to specific conditions, that governs the commercial exploitation of an invention, at the end of
which the subject matter is released into the public domain. The most common examples of
IPRs are utility patents, copyrights, and trademarks, but there are other important special
cases, such as the legal protection of industrial designs and plant varieties. This study focuses
on the IPR mechanisms designed to provide plant variety protection (PVP) and on the applica-
tions of the patent system to plant breeding and biotechnology.
The primary justification for the establishment of IPRs is economic. By offering a type of
monopoly for the commercial exploitation of an innovation, IPRs tend to provide an incentive
for creative endeavor by inventors and authors. An IPR system can also offer additional, more
widespread, economic benefits such as reducing transaction costs and clarifying ownership.
Nelson & Mazzoleni (1997) review the patent system and posit four theories to justify its
establishment. In addition to providing individual motivation for useful inventions, the patent
system also offers a systematic means of disclosing information related to inventions, fosters
the development of useful products based on inventions, and provides an orderly means for
stimulating derivative inventions.
There is also a moral dimension to IPRs; the Universal Declaration of Human Rights (Art. 27)
includes ‘the right to the protection of the moral and material interests resulting from any
scientific, literary or artistic production of which he is the author’. It is important to acknowledge
that IPRs include important qualifications; for instance, they are granted for a limited period of
time and they are subject to exceptions such as compulsory licensing and competition law
regimes (Maurer & Scotchmer, 2004) in the public interest. As the Commission on Intellectual
Property Rights (2002) pointed out, ‘an IP right is best viewed as one of the means by which
nations and societies can help to promote the fulfillment of human economic and social rights’.
IPRs may thus be seen as a means to increase a society’s welfare. Legal rights provide
incentives for inventors and authors to invest in their work and to produce useful products or
insights for the benefit of society. The patent system reflects this expectation of utility through
‘industrial application’ or ‘use’ requirements for new inventions; society does not intend to grant
patent rights on something that it won’t benefit from. For instance, these utilitarian goals are
expressed in the progress clause of the US Constitution. ‘Congress has the power to promote
the progress of science and useful arts by securing for limited times to authors and inventors
the exclusive right to their respective writings and discoveries.’ This also illustrates that in
order to increase welfare, society may need to put limitations on the rights that are granted.
In this sense, IPRs can be considered a contract between the inventor or author and society
(Hardon, 2004) in which rights are granted under particular conditions (e.g. the obligation to
24
publish the invention for the benefit of the further advancement of science) and society can
control misuse of the monopoly in the market (e.g. through compulsory licenses).
The establishment of an IPR regime requires careful consideration of the balance of economic
interests. If an IPR regime is too weak it will not provide sufficient incentives for invention or for
the orderly development of an industry. On the other hand, poorly conceived IPR systems may
assign excessive privileges, restrict access to knowledge, or limit enterprise growth and
diversification, and society at large may not benefit from the granting of the rights. Such
considerations of benefits and costs are evident in much recent debate about the patent
system. Davis (2004) suggests that the current patent system is characterized by increasing
social costs and decreasing social benefits and Andersen (2004) specifies a number of the
costs associated with the patent system, including the growing legal costs, the diversion of
investment into protectable rather than productive areas, and the inefficient monopolies
resulting from broad patents and threats of patent infringement. Patents are pursued not only
for the direct commercialization of a product but also as strategies to block or hinder compet-
itors’ endeavors or to acquire bargaining chips that may help gain access to another inventor’s
patents (Thumm, 2001; Reitzig, 2004). While such business strategies may not preclude social
benefit from a protection system, the balance can easily become skewed. Many observers are
concerned about the effects of the widespread promulgation of strong protection schemes that
have been developed in countries such as the US with the rationale that they will stimulate
strong commercial sectors elsewhere.
The economic outcomes affected by an IPR regime represent the interests of a wide variety of
stakeholders. In many cases there is no simple way of balancing these interests, and compro-
mises are required. The arena in which such compromises are sought is political, and ‘the
design of an IPR system at any one time is based on a particular constellation of political power’
(Andersen, 2004). As a result, IPR systems evolve over time and the analysis of IPR regimes
must therefore be situated within an understanding of changing national and international
political systems and priorities.
2.1.2 National and international aspects of IPRs
IPRs are territorial, i.e. they are based on national law and operate within the borders of the
country that grants the rights. National legislators thus have to consider the rights of their
citizens and the potential economic benefits in order to increase national welfare. Since
countries and their industries differ widely, the optimum contribution to increased welfare may
be achieved at different levels of protection. National policies on food security and public health
have resulted in conflicts that have led to the establishment of exemptions in several countries
(at certain points in time) for what are considered essential fields such as agriculture, food,
pharmaceuticals, and chemicals. The national interest has also been used to justify provisions
in national laws restricting or discouraging application for rights by foreign nationals.
Historically, informed governments have been able to structure IPR regimes to promote
domestic industry. The US did not recognize foreign copyrights until late in the nineteenth
century and Swiss and Dutch companies benefited when their respective governments delayed
25
the implementation of patents until the early 20
th
century. The recent development of East
Asian economies such as Taiwan took place with relatively little attention to IPRs (Wade, 1990).
Despite the wide range of historical trajectories for national IPR regimes, there have been long-
standing attempts to achieve greater standardization and harmonization. International harmoni-
zation of protection systems has been a key issue since 1883 when the Paris Convention
initiated a streamlining of the patent system in member countries. A number of mechanisms to
promote standardization have been put in place. The Paris Convention forms the basis for
international efforts to achieve mutual recognition of national IP practice in a group of member
countries. From the Paris Convention, the Patent Cooperation Treaty (PCT) was developed, a
worldwide system for simplified multiple filing of patent applications, with 124 member states
in December 2004. The PCT forms an important tool for facilitating the application process for
the filing of utility patents in member countries and facilitates the joint technical examination of
applications. Similarly, regional patent organizations in Africa (ARIPO, mainly in southern/
eastern Africa and OAPI, in West and Central Africa) take much of the burden of processing
patent applications from the offices of the member countries. Standardization at the
implementation level through PCT, the European Patent Office (EPO) or ARIPO leaves the
national integrity of IPRs intact, because the final responsibility for granting or rejecting the
application remains with the national patent offices. OAPI is the only multinational system in
which one application can be filed and result in a patent that is automatically effective in all
member states. The most important development for harmonized IPR systems was provided in
1993 by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This
agreement mandates the application of a range of minimum requirements for the protection of
intellectual property by all member states of the World Trade Organization.
Powerful arguments for harmonization include the belief that right holders are more willing to
transfer their technologies to other countries if their rights are respected in the same way as in
their own country, and the fact that transaction costs can be reduced when procedures are
harmonized. Lesser (1997b) strongly supports this view, while Correa & Musungu (2002) argue
that IPRs should remain a tool of national policy, and that further substantive harmonization of
patent law is not in the best interest of developing countries. Smith et al. (2004) cite changes
in the distribution of costs and benefits among countries and support the relaxation of some
international IPR rules. Scotchmer (2004) claims that harmonization will generally strengthen
protection. The Commission on IPRs (2002) states that developing countries should identify a
strategy for dealing with the risk that WIPO harmonization will lead to standards that do not
take their interests into account. (The controversy is particularly intense with respect to the
application of the TRIPS Agreement to developing countries. Does the application of the agree-
ment increase the welfare of these countries? Is there enough flexibility in the agreement’s
minimum requirements to allow for meaningful adaptation to the needs of developing countries?
With respect to the role of the patent system in food security in Africa, Taylor & Crayford (2003)
propose mechanisms to improve access to patented technologies and to increase flexibility in
the implementation of international agreements on IPRs. Follow-up discussions in the WTO in
Doha tabled such questions with special reference to patenting of pharmaceutical products,
triggered by limited availability of affordable HIV drugs in developing countries (McCalman,
2002).
26
Brazil and Argentina filed a formal request to the World Intellectual Property Organization
(WIPO)
1
to increase the role of the development agenda in its work.
The structuring of national law and international agreements must also recognize that the
establishment of IPRs involves a complex chain of institutional development that implies decades
of adaptation and elaboration (Chang, 2002). For instance, the exclusive rights provided by
IPRs are commonly implemented through contracts (usually called licenses in this context) that
transfer (all or part of) the rights to other parties for use in prescribed ways and markets. In
these cases the effectiveness of IPRs can then also depend on the traditions and implementation
of contract legislation in a particular country. This is only one example of the dependence of
effective IPR regimes on institutional capacities for devising, managing and enforcing appro-
priate legislation. The 2002 report of the Commission on Intellectual Property Rights places
particular emphasis on the development of these institutional capacities, as well as emphasizing
the underutilization of the flexibility that is included in TRIPS implementation at the national level.
2.1.3 Different property rights systems: applications to plant breeding
The emergence and development of effective IPR regimes are conditioned not only by specific
political, economic and institutional parameters but also by the type of innovations that are the
target of protection. This has resulted in a family of intellectual property rights systems for
different types of products. Copyright for literary, scientific and artistic works (including soft-
ware and its components) provides long-term protection of such works without formal scrutiny
(they are automatically protected once published) and usually includes a simple registration
system that assists in resolving possible claims. Industrial property rights relate to patents for
inventions, industrial designs, trademarks, geographical indications and trade secrets, all with
different regimes for registration, scope and duration of protection. Since these standard
industrial property rights were not considered sufficiently adapted to particular sectors, so
called ‘sui generis’ systems have been developed for the protection of plant varieties (plant
breeder’s rights), integrated computer circuits, and databases. In addition, technological
advance not only develops further types of innovation that are candidates for protection, but
technological change can alter the possibilities for protecting (and copying) innovations, as
illustrated by the controversies over the growth of the internet and its relations to copyright law
(Lessig, 2004), and the introduction of ‘business methods’ patents where software applications
can be protected by utility patent rights. IPR systems are not static. Society and inventors have
to review regularly whether certain IP systems are still optimal when facing such new develop-
ments and challenges that result from interpretation of IP laws by the courts.
Plant varieties present several important challenges for an IPR system. First, they are biological
products that are easily reproduced and whose very use entails multiplication. Second, the users
of the technology (and potential ‘copiers’) are millions of individual farms whose compliance
with any protection regime is difficult and expensive to monitor. Third, the agricultural sector
involves cultural values and food security and, in many countries, affects the livelihoods of the
1
WIPO is the UN organization that administers many of the international treaties and conventions that deal with IPRs, such as the
Paris Convention, the PCT, the Madrid Protocol on Trademarks, the Bern Convention dealing with copyrights, among others.
27
rural poor, making the imposition of any controls a sensitive political issue. Finally, the
development of new plant varieties has always relied to some extent on public research, partly
in response to the traditional public good nature of crop germplasm, and the application of
IPRs to the products of a publicly funded endeavor can be problematic.
The advent of modern biotechnology has brought additional challenges for the application of
IPRs in plant breeding. Not only is there the possibility to protect individual varieties and genes,
but the majority of the tools and processes of genetic transformation are patented. (The term
of protection of several early but still important biotechnology patents expires shortly.) In addi-
tion, many of the techniques of biotechnology that are becoming an increasingly important part
of conventional plant breeding are also protected, raising implications for the ownership of any
variety resulting from such research. This is also related to concerns that patents can actually
inhibit follow-on research, leading to a so-called ‘anti-commons’ in biotechnological research
(Heller & Eisenberg, 1998). Finally, because biotechnology allows a much more precise under-
standing of the genetic makeup of any crop variety, it opens the door to sophisticated screening
and reverse engineering techniques, providing new possibilities for utilizing or reproducing
protected varieties and leading to pressures for even more stringent protection.
There is no doubt that plant breeding research and seed provision are vital industries that need
to be fostered and stimulated. IPR regimes for plant breeding must play a central role in agri-
cultural development, but the challenge is to strike the right balance between incentives for
innovation and access to productive resources.
Despite the complexities of the plant breeding industry, the following is a list of possible
functions that could be expected from an IPR regime in plant breeding, recognizing that
controversy exists regarding the extent to which each of these functions is desirable:
In the interest of the rights holder:
i. to prevent farmers from saving seed of the protected variety, sharing the seed with
neighbors, or engaging in large-scale informal sale of the seed (‘brown bagging’);
ii. to prevent competing commercial seed producers from multiplying and marketing
the protected variety without a license;
iii. to prevent competing seed producers from using protected product names or logos;
iv. to prevent competing plant breeders from using a protected variety in the development
of a new variety.
In the interest of the public:
i. to put material in the public domain when rights have expired;
ii. to stimulate improvements and innovations that increase the choices available to
farmers.
Specific IPR systems are relevant to the breeding and seed industries. In this report we
concentrate on plant breeder’s rights and utility patents. The scope of protection may include
methodologies used in plant breeding, the physical products that this industry provides (seeds
and vegetative planting materials), and at times the disposition of the harvested agricultural
product. In addition, the trademark system is important to the seed industry for the establish-
ment of brands with commercial value, and trade secrets are particularly important for the seed
28
industry where breeders wish to avoid disclosure of the parents of hybrid varieties. There are
also a number of mechanisms used by the plant breeding industry, independent of any IPR
regime, that provide some level of protection, and this study examines their utilization.
2.2 The Plant Breeding Industry
2.2.1 Seed systems
IPRs in plant breeding may have effects on different components of the industry, or what may
be called the seed chain. This chain consists basically of three components: research and plant
breeding; seed multiplication; and marketing and distribution. These components have devel-
oped over time as specialized operations that are executed in various organizational patterns.
In industrialized countries, seed multiplication, marketing and distribution are almost solely
commercial operations. The situation in plant breeding is somewhat more complex. Commercial
enterprises dominate the market for high value seed crops like maize, cotton, soybean, vege-
tables and grasses, and companies that initially earned most of their revenue from seed multi-
plication and marketing now invest heavily in plant breeding in order to maintain their market
position. For lower value seed crops, such as small grains and legumes, public institutions such
as universities and government research institutes have an important position in plant breeding,
although the products are multiplied and marketed by private firms or co-operatives. Basic
research in plant breeding, such as the development of selection methods or research on the
genetic control of important characteristics, used to be the task of public institutions. However,
with the application of biotechnology to the field of plant breeding, and the associated opportu-
nities for patenting, private industry has been very active in these areas since the early 1980s.
This has been accompanied by a significant consolidation of the conventional seed companies
into a much smaller number of large multinational enterprises. For these companies, research
is not only a service unit to maintain the firm’s position in the seed market, but is a profit center
in its own right. In some cases such companies may detach themselves from the seed market,
leaving operations in seed production and marketing to specialized companies that license the
technology.
In most developing countries, the breeding industry has very different origins. Scientific plant
breeding has largely been the responsibility of the public sector, often stimulated by the results
of international research programs of the CGIAR centers. Plant breeding has been seen
primarily as a contributor to rural development and national food security and thus a public
responsibility. Similarly, seed production and distribution have been seen as vehicles for
technology transfer rather than a commercial operation. More recently, some countries have
stimulated commercial seed supply through privatization of public seed programs, encouraging
the development of domestic seed enterprises, and opening up their seed markets to foreign
investors. Developing countries currently show a wide range of public and private
responsibilities in the seed sector, although basic research and breeding for most crops
remains a public responsibility while a variety of public, parastatal and private enterprises cater
for seed production and marketing.
29
In addition to the formal seed system, there is a significant farmers’ seed system that uses
traditional methods of selection within and among varieties, on-farm seed multiplication, and
informal diffusion of seed from farmer to farmer (Almekinders & Louwaars, 1999). These
farmers’ seed systems still provide the vast majority of all crop seeds used by farmers in most
countries. Despite the fact that these farmers’ seed systems are built on traditional methods
and processes, they often involve modern varieties, some of which may have IPRs associated
with them.
2.2.2 Seed policies and regulations
IPRs are not the only type of legislation relevant to the seed industry. Both public and private
seed systems are subject to national seed legislation. Seed laws commonly include a variety
approval system and a seed certification and quality control system, managed by various
bodies and committees. A variety approval (or release) system identifies varieties that have
value for farmers and establishes a system by which the varieties are named and described.
The certification system introduces a strict generation control for seed production through
which commercial seed can only be produced from breeder’s seed (‘pre-basic seed’) through a
prescribed number of generations. The breeder is in most cases designated as the maintainer
of the variety and the sole source of this seed. Both variety release and seed certification
systems can be compulsory or voluntary. The conditions established by seed laws and policy
greatly influence opportunities for private enterprise, and seed policy change and regulatory
reform are the subjects of continuing discussion in many developing countries (Louwaars,
2002; Tripp,1997).
More recently, biosafety regulations have been developed to guide the introduction of gene-
tically modified crops (Traynor & Komen, 2002). Similar to seed laws, these regulations are an
important part of the regulatory environment of the plant breeding industry, determining what
type of transgenic varieties may be available and offering conditions for their multiplication and
sale.
International agreements on biodiversity provide the basis for additional national regulations
that affect plant breeding, especially through their positions on access to genetic resources,
Farmers’ Rights and benefit sharing. The major agreements are the Convention on Biological
Diversity (1993), covering all biodiversity and based on bilateral contracts; and the International
Treaty on Plant Genetic Resources for Food and Agriculture, entering into force in 2004 and
providing for a multilateral regime of access and benefit sharing, for a number of crops. Both
CBD and IT PGRFA have attempted to avoid conflict with national IPR systems. There are
however pressures from these bodies to directly connect to IPR systems, e.g. by including a
declaration of origin in IPR applications. In addition, MTAs that are currently in operation based
on these agreements may limit the opportunities to protect materials. Very few countries
currently have enacted and implemented national laws in support of these international treaties,
therefore, the present study did not focus specifically on the implications of these treaties.
Similarly the interplay between traditional knowledge, genetic resources and traditional cultural
expressions (folklore), on the one hand, and IPRs, on the other, is the subject of international
30
forums, especially the WIPO Intergovernmental Committee on Intellectual Property and Genetic
Resources, Traditional Knowledge and Folklore (the ‘IGC’) (seehttp://www.wipo.int/tk/en/igc/index.html). There are currently no substantial national regula-
tory frameworks that address this interaction, and it is not a subject of this report. However,
the outcomes of these debates, such as the currently debated declaration (or certificate) of
origin in IPR procedures, may have significant effects on the implementation of IPRs for the
breeding industry.
2.3 The protection of plants and varieties
2.3.1 Historical perspective
Higher organisms have been exempted from consideration by patent law until very recently,
and plant varieties have traditionally been subject to rather limited and very specific types of
IPRs. There were ethical, political, legal, biological and technical reasons for this treatment.
Ethical arguments include the notion that life is sacrosanct and that life forms should not be
subject to commercial control. In addition, there have been political arguments regarding the
concern that food security should not be the subject of commercial monopolies.
Legal and technical arguments arise from problems with the application of the patent system to
plants and varieties. First, the industrial use criterion had to be expanded to include agriculture
as well (as specifically included in the latest versions of the Paris Convention). Secondly, the
novelty criterion of the patent system was difficult to maintain where the natural diversity of a
plant variety is insufficiently known to the examiner. Third, the inherent genetic diversity within a
plant variety and the inevitable changes between generations create problems with the
description of the ‘invention’. Fourth, there have been arguments about whether standard
breeding methods constitute an inventive step. Fifth, the written description requirement that the
invention needs to be disclosed in such a way to allow someone ‘skilled in the art’ to reproduce
it is impossible in plant breeding; even if someone has access to the same parents and the
same selection strategies it is impossible to breed the same variety. This problem has been
solved for the patenting of micro organisms by the Budapest Treaty that allows a deposit of the
protected organism as a mechanism for overcoming the enablement requirement. Other
problems in the application of the patent system include the possibility that the patented
subject matter may replicate itself (even without human intervention), and customs that have
allowed the free movement of plant varieties within and among communities throughout the
world.
Nevertheless, there have been arguments for establishing some mechanism to reward the
creativity inherent in new crop varieties almost from the beginning of modern plant breeding.
The emerging plant breeding and seed industry in the USA and Europe created pressure to
develop specially designed protection systems (Van Wijk & Eaton, 2003). The first so called
‘sui generis’ system was the Plant Patent Act of 1930 in the US which applied only to vegeta-
tively propagated fruit and ornamental species, which does not preclude the use of the
protected varieties as parental material for sexual propagation (Henson-Apollonio, 2003). This
avoided the genetic diversity problem of sexually-propagated species and avoided some food
31
security issues by excluding edible tubers. In the years that followed, more generic protection
systems for plant varieties developed in Europe, beginning with methods such as protected
seals for seed from the original breeder (Germany) and monetary rewards (prizes) to breeders
issued by farmers’ organizations (Netherlands). The legal systems for the protection of plant
varieties that were enacted in Europe from the 1940s onward were harmonized through the
Convention for the Protection of New Varieties of Plants (Paris, 1961), which also established
UPOV (Union for the Protection of New Varieties of Plants) to support and expand the new
system. The UPOV system provides protocols for assessing and describing the unique
characteristics of a new variety, ensuring that it is distinct, uniform and stable (DUS).
The UPOV system was revised 3 times, in 1972, 1978 and 1991, gradually strengthening the
rights of the breeder. The rights defined under UPOV are known as plant variety protection
(PVP). Currently, 55 countries have ratified a UPOV Convention; 28 follow the 1991 Convention,
25 the 1978 Convention, and 2 still operate under older versions. An expansion of the UPOV
system took place in the early 1990s following the TRIPS agreement. PVP provides a protection
system that is rooted in the agricultural sector and has some key differences with the patent
system. Nevertheless, UPOV provides important harmonization functions. UPOV member
countries may have quite different laws, based on different Conventions and interpretations, but
almost all members use the same technical guidelines for DUS testing. This greatly facilitates
the sharing of information among countries and reduces the transaction costs. Some countries,
such as Switzerland, fully rely on foreign DUS reports, and thus don’t need to develop
specialized expertise and facilities.
The emergence of biotechnology has provided a second source of pressure for modifying the
patent system to include the protection of living organisms. In the US, court decisions caused
a gradual expansion of patentability (Landes & Posner, 2003). In the field of biotechnology this
started with the Diamond vs. Chakrabarty case of 1980 which confirmed the patentability of a
(genetically altered) micro-organism (Eisenberg, 1996). In 1985 sexually-propagated plant
varieties were ruled patentable (Hibberd case), opening the door to a flood of applications for
utility patents on plant varieties in the US. This was followed by the first patents on an animal
(an oyster, in 1987) and on a mammal (Harvard’s ‘onco-mouse’, in 1988). More recently, DNA
sequences where a utility has been described have been considered patentable matter, first in
the USA and subsequently in the majority of industrialized countries.
Since IPRs are national in scope, developments in the USA have few immediate implications for
other states operating a patent system, but they are indicative of the type of pressure facing
the plant breeding industry. There is currently a large diversity in patent legislation on plants
and varieties; only a few countries allow patent protection for plant varieties, some exclude
DNA patents, and some have special provisions in the patent system to limit the scope of
protection when patents are provided affecting living organisms. The European Directive on
the protection of biotechnological inventions includes a breeder’s exemption and a farmers’
privilege when the protection (e.g. on a gene) extends to a plant variety. However, bilateral
agreements between the U.S. or EU and countries in the South often require that the partner
country impose a level of patent protection that is comparable to that of the industrialized
trading partner (Correa , 2004; Henson-Apollonio, 2004).
32
There are serious concerns that patent practices in the USA and Europe have contributed
significantly to the oligopolization of the global seed industry, leaving four major international
seed companies controlling the majority of the market and relegating other seed companies in
industrialized countries to play only marginal roles.
2.3.2 Comparison of plant utility patents and PVP
The UPOV-based national laws for the protection of plant varieties (PVP) differ significantly from
the patent system with regard to the conditions for protection (distinctness, homogeneity,
stability, novelty and nomenclature: DUS-NN). DUS standards are adapted to the mode of
reproduction of the variety and relate to the average of the existing varieties. For example,
cross-fertilizing crops have a wide tolerance applied for uniformity, while requirements are very
strict for vegetatively propagated crops. An applicant variety is considered new under PVP
when it has not been offered for sale (anywhere in the world). There is furthermore no require-
ment for utility, such as a positive result of testing for the Value for Cultivation and Use (VCU).
Furthermore, the two systems differ with respect to two major exemptions to the protection:
the breeder’s exemption allowing breeders to freely use any protected variety for further breed-
ing; and a farmers’ privilege, providing farmers the right to reproduce seed of a protected
variety without the consent of the breeder. Table 1 summarizes the main differences.
The two exemptions are particularly crucial for understanding the differences in PVP between
the various UPOV Conventions, on the one hand, and the differences between PVP and plant
utility patents, on the other. Also the breeder’s rights laws of countries that are not members of
UPOV, such as India, Indonesia and African countries that base their laws on the model Law of
the African Union, address these basic exemptions as well. These two exemptions address the
two ‘lines of protection’ that IPRs offer the industry: protection against competing breeders
(breeder’s exemption) and protection against the customers (farmers’ privilege).
Breeder’s or research exemption
The Breeder’s Exemption is one of the cornerstones of plant breeder’s rights systems. It has
not changed in the subsequent UPOV Conventions. Even in the 1991 Convention everyone is
allowed to freely use any protected variety for further breeding, under the condition that the
results of certain breeding methods that produce so-called ‘essentially derived varieties’ (EDVs)
may fall within the rights of the breeder of the original variety. This is meant to reduce ‘cosmetic
breeding’ and reward conventional breeders even when their variety is slightly altered through
mutation breeding, repeated backcrossing or genetic transformation.
The Breeder’s Exemption is also a matter of discussion within the breeding industry itself.
Some larger companies would like to introduce the concept of ‘genetic distance’ in the EDV-
definition but other companies fear that this could lead to opportunities for strategic protection
behavior, monopolizing certain gene pools and effectively restricting the breeder’s exemption.
A discussion on the exemption itself among seed company representatives arose in a recent
seminar organized by the International Seed Federation (ISF, 2004). A call by one participant
for restricting the breeder’s exemption in a future UPOV Convention was countered by a strong
defense by another company of the need to balance access to parental materials and the level
of protection through PVP, which was later published on the company’s website.
33
There are major differences between the breeder’s exemption under PVP and the so-called
research exemption in utility patent systems. There is much debate on the research exemption
in the patent systems of several countries. Academic institutions have long been exempted
from patent claims for their research and education purposes based on the assumption that
such research had no commercial intent (Eaton & Tongeren, 2004). In several countries such
research exemptions are specifically included in the law; in others such as the USA it is an
interpretation of clauses on private and non-commercial use provisions. The situation is under
discussion as the result of a number of court rulings. Maley v. Duke in the USA seems to result
in a restriction of opportunities to use patented products or processes for research, and
indicates that scientists need a research license to use them. The research exemption would
only apply to research on the invention, and not researching with the invention (Eisenberg,
1996). Research licenses are commonly granted without the payment of royalties, but specify
the rights of the patent holder in case the research leads to something useful. Such interpreta-
tion would mean that a PVP-protected variety that is available for further breeding cannot be
used when it contains a patented gene. In the European Union, this conflict between patents
and PVP is solved by providing a specific breeder’s exemption and a farmers’ privilege in the
patent system when the scope of the patent would extend to a plant variety (Kiewiet, 2001).
In order to avoid these controversies there was an explicit ban in UPOV 1978 on ‘double
protection’. Many countries still maintain that position, but more and more countries offer
possibilities to obtain both patent and PVP protection on certain materials. This is one of the
key demands by the current trade negotiations between the USA and a number of Latin
American countries.
Farmers’ privilege or Farmers’ Rights
The right of farmers to save seed from their harvests to plant the following season is one of
the most contentious aspects of IPRs in plant breeding. Early UPOV Conventions assumed that
farmers were permitted to save and reuse seed of protected varieties. (UPOV refers to this as
‘farmers’ privilege’, although many believe it is more correctly described as a farmer’s right;
this report maintains the term privilege, to distinguish it from broader concepts of Farmers’
Rights, e.g. in the IT PGRFA.) In some countries the farmer’s privilege was interpreted rather
broadly. Perhaps the most notable case was the US, where farmers were allowed not only to
save but also to sell seed of protected varieties to their neighbors as long as the sales
accounted for less than half of total farm income. This led to extensive informal seed sale
(‘brown bagging’) and significantly reduced revenues for seed companies. The issue was not
resolved until an amendment to the US Plant Variety Protection Act (PVPA) and a Supreme
Court decision in 1995 that effectively prohibits farmers from selling seed of protected
varieties. The farmers’ privilege issue was addressed by UPOV in the 1991 Convention, which
allowed member states to specify crops for which the reuse of farm-saved seed in the same
farm would be permitted. For other crops, any transfer of seed (through sale, barter or gift)
between farmers is prohibited, and on-farm seed saving may be subject to restrictions or the
payment of royalties. Utility patents on plant varieties in the USA are even more rigid with
respect to the farmer’s privilege; a patented variety cannot be saved for subsequent use as
seed on-farm or in trade or exchange with other farmers.
34
These interpretations of the farmers’ privilege lead to major discussions in many developing
countries, many of which have chosen to use the provisions of the 1978 Convention when
introducing breeder’s rights. Making the transfer of seed from farmer to farmer illegal is widely
considered incompatible with traditions of seed handling and sharing among farmers. In addi-
tion, such a restriction is considered incompatible with ongoing discussions in the framework of
the International Undertaking (and the International Treaty on Plant Genetic Resources for Food
and Agriculture) about the concept of Farmers’ Rights which was to include provisions on the
right to save, use, exchange and sell farm-saved seed/planting material. However, Article 9.3
of the IT PGRFA made this provision ‘subject to national law and as appropriate’. Some countries,
notably India, explicitly include Farmers’ Rights in their national law.
Box 1. Saving of seed on-farm
One of the distinctions between plant breeder’s rights systems and utility patents is the right
of farmers to save (and in some cases exchange and sell on a non-commercial basis) seed
of protected varieties. Discussions about IPRs in the breeding industry consider this a key
issue in adapting IPR systems to the needs of the agricultural sector. Even within a single
country, the requirements and conditions of different agricultural systems are not uniform,
and it is possible to consider legal options that address this variability.
The Netherlands identified the need to restrict farm-saving of seed and planting materials for
some highly commercial crops, notably the production of vegetatively propagated flowers
like carnation, rose, and chrysanthemum. New varieties of these species can be propagated
by farmers very quickly to cover large parts of commercial farms, leading to inadequate
royalties for breeders and inadequate incentives for innovation in a sector that is very
important for Dutch agriculture. Dutch law that is compliant with UPOV 1978 includes
special provisions to make farm-level propagation of protected varieties of such species
without the consent of the breeder illegal. This arrangement leaves the farmers’ privilege
untouched in areas where they are considered useful and necessary (e.g. cereals).
Developing countries could use this example in designing the appropriate levels of
protection for different types of commodities which are included in various types of market
systems and have different implications for the development of domestic plant breeding
capacities.
35
2.4 The protection of plant biotechnology
2.4.1 Relevance of biotechnology in the plant breeding industry in
developing countries
Plant biotechnology emerged in the 1980s following the first transformation experiments
involving bacteria. Together with the developments in information technology, this has resulted
in a scientific revolution. The understanding of the function of various types of DNA, combined
with the ability to ‘cut and paste’ them in the genome of any living organism, has transformed
the science of plant breeding. Initially, the technology was used in a rather crude form which
led to herbicide resistant varieties, or using known functions of bacterial DNA, such as Bt. In
the case study countries that allow GMOs in the field, only Bt crops were found in commercial
production. All experiences in this report on the effects of patents in the plant breeding industry
are thus derived from one type of transgenic in one major crop (cotton).
However, a wide range of transgenics are ‘in the pipeline’ in laboratories in industrialized
countries, but also in the South. Atanassov (et al., 2004) identify 209 transformation events
2
in
developing countries, with over 50% of that total in China, South Africa, Indonesia, Argentina
and India. The pipeline includes events in many different crops and includes functions far beyond
the narrow scope of herbicide tolerance and insect resistance. Additional characteristics
include virus resistance, agronomic properties, fungal resistance and product quality.
2.4.2 Patents in biotechnology
The vast majority of the innovations in plant biotechnology are subject to patents, although the
scope of coverage varies considerably by country and technology. Patents are used to protect
biotechnology laboratory tools and reagents, genes and gene sequences, and processes for
transformation, regeneration and diagnosis. A genetically modified organism commonly
includes an inserted construct that contains a functional gene, a selection marker, a promoter
and other sequences that may all be patented (by different inventors). It is inserted using a
transformation method that is patented (possibly including improvements on an original method
that may itself be patented) and using equipment and other materials for which a research
exemption may be required. A freedom to operate analysis on the commercialization of a
product (variety) derived from such research may be required from a wide variety of patent
holders (as long as the patents are valid in the country where the variety or its products will be
used).Having a patent on a ‘new’ gene is thus no guarantee of freedom to operate when other
technologies or processes must be used to make the gene functional in a plant.
The patent regime for biotechnology affects not only the development of transgenic varieties
but also has important implications for the use of biotechnology in conventional plant breeding.
Various diagnostic tools and equipment used for such increasingly important activities as
marker- assisted selection may be protected. Even though a new crop variety may not contain
2
A transformation event is defined as the stable transformation (incorporation of foreign DNA into a living plant cell) undertaken
by a single institute, thereby providing a unique crop and trait combination.
36
any novel or protected genetic material, if its development relied on the use of protected tools
or processes it may be subject to license or restriction by a range of patent holders.
Box 2. Biotechnology processes and products
1. Biotechnology processes
Transformation methods: particle gun; Agrobacterium mediated transformation; other
bacteria mediated transformation. (Almost all transformations currently in use in
developing countries are derived from the first two.)
Marker systems: RAPDS, RFLP, AFLP, SSRs, SNPs are methods to analyze the structure
of DNA and the presence of particular characteristics in a given individual. Patented
molecular marker systems may be used under a research license.
Regeneration methods: these include medium, temperature, light etc. regimes to create
callus and plant (organs) out of cell suspensions. Many of these are published; methods
to achieve higher efficiency or to regenerate specific species are often kept secret,
since the use of such methods cannot be detected in the product.
Protected biotechnological processes are commonly provided under a research license.
Such license may include provisions that regulate ownership and revenue sharing in
case a commercial product is developed from the research. The holder of the rights on
the process does not have IP-rights on the product, but a certain level of co-ownership,
based on a contract.
2. Genes and sequences
Genes can be patented in many countries when their structure and their function can be
described by the inventor. Gene patents can be the basis of very wide claims, covering
many species and many uses.
Genes: functional genes include those for various types of Bt, herbicide tolerance, etc.
Selection markers: these include GUS and NPT2 and are used to check whether a cell is
based on a successful transformation event.
Molecular markers: these are often small sequences (DNA, RNA, protein) that can be
used to identify valuable characteristics, or to analyze the structure of a particular
genome.
Promoters: 32S (close to expiry of the patent)
Start/end sequences
GMO variety: in the USA GM varieties and groups of varieties can be patented.
3. Tools relevant to plant biotechnology e.g.
Biotechnology equipment: sequencers, microsatellite analyzers, PCR-machines and their
components. Similar to process patents, the inventor of a certain tool cannot claim IP
on a variety, but can have rights, based on a contract with the scientist using the
equipment.
Reagents: In most cases the inventor will obtain revenue through adding a mark-up on
the price of reagents that are necessary to use the equipment.
37
However, many patented technologies are not protected in most developing countries.
Binenbaum et al. (2003) indicate that since most commodities in developing countries may be
traded in regional markets but rarely reach the North and hence there may be considerable
opportunities for the use of protected technology without fear of immediate sanction.
The discussion about the possible monopoly effects of biotechnology patenting has triggered
an initiative that is similar to that for open-source software, which is attempting to counteract
the proprietary approach of large software companies. The idea in the agricultural biotechnol-
ogy sector is that new (preferably enabling) technologies such as transformation systems and
selection markers are developed in the public domain. These are then patented and licensed to
everybody under the condition that any improvements or products developed from them are
licensed out under the same conditions (see www.cambia.org). It is not clear yet whether this
process will yield enough open-source technologies to enable biotechnologists to develop
biotechnology-based plant varieties without major strings attached.
Another trend is the widening use of humanitarian licenses. A number of universities in the USA
have taken the initiative to reduce the number of exclusive licenses on their patented inventions
in order to retain control over opportunities to grant licenses on a preferential basis to users
that work for the benefit of the poor. The Generation Challenge Program of the CGIAR
(www.genesforcrops.org) has developed a format in its consortium agreement that will result in
an automatic humanitarian license to all users for the benefit of the poor of IP developed in the
course of the program’s activities (Barry, in press).
4. A transformation event
A successful transformation commonly involves a gene construct (gene, promoter,
selection marker and some additional bits of DNA) that has been inserted in a plant
through a particular process. The number of repetitions and the place(s) of the
construct in the genome determine the effectiveness of the event. Selection from large
numbers of transformants will lead to a new modified organism that can be the basis of
new varieties through conventional breeding, which may result in a range of new
varieties.
38
Table 1. Comparison of four IP systems for plant varieties.
Criteria UPOV ‘78 UPOV ‘91 Plant Patent (USA) Utility Patent (USA)
Protection Varieties of
species/genera as
listed
Varieties of all genera
and species
Asexually
reproduced plants
Sexually reproduced
plants
Exclusion Non-listed species - Uncultivated and tuber-
propagated plants
First generation
hybrids, uncultivated
plants
Requirements Novelty (in trade)
Distinctness
Uniformity
Stability
Novelty (in trade)
Distinctness
Uniformity
Stability
Novelty
Distinctness
Stability
Novelty (in invention)
Utility
Non-obviousness
Industrial application
Disclosure Description Description Description, including
photographs and
drawings
Enabling disclosure
Best mode disclosure
Deposit of novel
material
Claims Plant variety (listed
species)
Plant variety (all
species)
Plant variety
(vegetatively
reproduced, except
edible tubers)
Any invention: plant
(characteristic in any
variety), Plant variety,
genes, vectors,
enabling technologies,
equipment for
producing plants, etc.
Rights Prevent others from
producing/
commercializing
propagating materials
Prevent others from
producing/
commercializing
planting materials +
under certain
conditions: harvested
materials
Prevent others from
asexually reproducing,
selling, or using
claimed plant variety
Prevent others from
making, using, selling,
the claimed invention;
prevent others from
selling a component of
the invention
Exemptions For further breeding
For private and non-
commercial use
For further breeding,
restricted in case of
EDV
Farmers’ privilege:
permitted, taking into
account the legitimate
interests of breeder
Private and non-
commercial use
Experimental purposes
Research exemption Research exemption
Sexual reproduction of
the claimed variety
Products derived from
the variety
Duration 15 – 20 years
(depending on crop)
20 – 25 years
(depending on crop)
20 years from filing
or 17 years from
granting (prior to
8 June 1995)
20 years from filing or
17 years from granting
(prior to 8 June 1995)
Double protection No Yes No Yes
Source: adapted from Helfer (2002), Krattiger (2004) and Van Wijk et al. (2003).
39
2.5 Empirical research on the impact of protection of
plant varieties and plants
An IPR system is created to provide incentives for innovations based on the disclosure of their
methods in exchange for temporary exclusive production and marketing rights. A considerable
body of research has attempted to establish the nature and extent of the incentives created by
IPRs. A full review of this literature is beyond the scope of the current study (see Lesser, 1997a,
Srinivasan, 2001; Eaton, 2002), but it is generally acknowledged that the situation is quite
complex and that IPRs can fulfill a variety of roles in strategies to protect IP and to defend
market share (Granstrand, 1999). In the area of plant breeding, attention has concentrated on
the effects of the introduction of PVP in a number of countries, including the U.S., the U.K.,
Canada, Australia and Spain. Taken together these studies provide little conclusive evidence of
the effects of PVP in industrialized countries, and the results are thus open to various interpre-
tations.
Studies in the U.S. have examined the trends in varietal release together with questionnaire-
based surveys of breeders. Taken as a whole, these studies (Butler,1996; Butler & Marion,
1985; Perrin, Kunnings & Ihnen, 1983; Frey, 1996; Kalton, Richardson & Frey, 1989; Venner,
1997) indicate that private sector breeding in a number of non-hybrid crops has increased
following the PVP Act of 1970, but in the case of most crops, it would appear that PVP has
played only a moderate role in stimulating this activity. For example, in the case of soybeans,
considerable increases in breeding activity may be more attributable to growing demand for
the crop. In the case of wheat, Alston & Venner (2002) demonstrate that private sector invest-
ments have remained relatively static, while those of the public sector have actually increased
over 1970-1993.
Studies in other countries have also found inconclusive effects of PVP. Penna (1994) found a
statistically significant increase in the development of new varieties of some horticultural
varieties in the UK but not for others. In Canada, a survey of breeders reported some increased
breeding activity in horticultural crops, but less in grains or oilseeds, following the introduction
of PVP (Canada Food Inspection Agency, 2001). For Spain, Diez (2002) found a strong corre-
lation between the number of PVP certificates granted per crop species and the availability of
protection. It is difficult to draw firm conclusions on the effect of PVP in such studies because
of the alternative explanations for the correlations seen. For example, in the case of Canada,
impacts of PVP are difficult to separate from the effects of the U.S.-Canada Free Trade
Agreement.
One study has examined the effect of PVP in a developing country. Jaffe & Van Wijk (1995)
surveyed plant breeding companies in Argentina about their investments over the period
1986-1992. They concluded that PVP may have prevented domestic companies from reducing
or eliminating some breeding programs, and may have helped in reactivating soybean research.
Furthermore, MNCs operating in Argentina indicated that their investment decisions were
influenced primarily by other factors.
The evidence is often interpreted as an indication of the methodological difficulties of deter-
mining the impact of PVP. Even where there is longer-term data allowing a comparison of
40
before-and-after, there is no counterfactual situation. Attribution of observed changes to PVP is
still complicated by the longer-term nature of plant breeding as well as various other concurrent
or subsequent developments. Some have interpreted this evidence (Alston and Venner, 2002)
as an indication of PVP being a relatively weak form of protection, but this does not necessarily
imply that further increasing the scope of IPR protection will yield greater impact.
There are no attempts to document the effect of patenting on plant breeding but studies of the
introduction of GM crops have yielded other interesting information concerning the appropria-
bility of benefits by the breeder. GM crops are usually protected through patents (on the plant
and/or one or more genetic constructs ) which are implemented using methods such as user
agreements, supplier contracts and sales tied to agrochemical products. A growing number of
studies (e.g. Falck-Zepeda, Traxler & Nelson 2000; Pray et al., 2001 for Bt cotton in China) on
the welfare impacts of GM crops estimate the proportion of benefits accruing to three separate
groups: the breeding company, the farmers and the consumer (representing the rest of the
supply chain). Seed suppliers, such as Monsanto or Syngenta, are generally able to obtain
much higher margins from farmers for GM seeds, although the largest share of benefits is
typically enjoyed by adopting farmers. But whether making patent protection available for such
plants in developing countries has been an important factor in the decision to develop such
varieties has not been well studied. It is important to remember that private sector development
of GM crops was driven by the U.S. market situation where patent protection was introduced in
1980 but where PVP protection is relatively weak compared to PVP in e.g. Europe. This
complicates any eventual inference of the relative incentive effects of patents versus PVP.
Another growing body of literature examines the relationship between IPR regimes and some
measure of innovation, using a cross-section of national data and controlling for other factors
such as market size. One recent example is a study by Kanwar & Evenson (2003) who found a
significant correlation between an index of IPR strength and economy-wide expenditures on
research and development (R&D). A few studies have looked at the specific situation in the
plant breeding sector. Pardey, Koo & Nottenburg (2003) found a positive relationship between
IPR strength and the number of PBR applications for a sample of 42 countries over the period
1997-2001. Using a cross-section of 13 countries over various time periods in the 1990s,
Srinivasan, Shankar & Holloway (2002) found a positive correlation between IPR strength and
the number of PVP certificates granted. They also find a similar relationship for the number of
PVP certificates granted to foreigners, although the share of certificates granted to foreigners
is negatively correlated with IPR strength and market size. Pray, Courtmanche & Govindasamy
(2002) examined the issue of GM crops, revealing a positive relationship between field trials of
GM crops and both the availability of PVP protection and the frequency of biotechnology
patents for a cross-section of 58 countries over 1987-2000. A purely economic correlation is
calculated by Lesser (2002) between the strength of IPRs in developing countries and the level
of foreign direct investment.
While useful for quantifying the extent of correlation between IPRs and innovation, such studies
need to be interpreted carefully and do not provide very strong evidence that increasing the
scope of IPRs in any given country will lead to a corresponding increase in breeding activities.
The econometric methods and data used do not permit an evaluation of alternative explana-
tions for the correlation between IPRs and innovation. For example, in the studies above, IPR
41
indices could be capturing more generally the development of the legal system and the
enforceability of contracts. Furthermore, the samples in these studies are often dominated by
industrialized (OECD) countries, meaning that the relevance for developing countries of the
observed correlation is not necessarily apparent. At the same time, cross-section econometric
analysis over countries can be useful for identifying certain correlations and helping to define
the need for more research on causal relationships using case studies.
There has been less empirical research conducted on the effects of patenting in agricultural
biotechnology and little is known of the consequences. The risk that patenting of key
technologies would stifle more applied research because of the cost and inconvenience of
negotiating licenses was raised by Heller and Eisenberg (1998) in the context of biomedical
research, with the coining of the term, ‘anti-commons.’ Mazzoleni and Nelson (1998) also
indicated similar effects from broad patents in the biotechnology sector in general, referring to
the U.S. context, while Falcon & Fowler (2002) warn of the consequences in the case of
agricultural technology and genetic resources, in particular the patenting of gene sequences
and their functions. Oldham (2004) illustrates such concerns with reference to a recent patent
application concerning the regulation of flowering in rice, with additional claims potentially
covering maize, banana and wheat. Little systematic research has been undertaken in this area
with efforts concentrating on trends in the use of the U.S. patent system by the agricultural
biotechnology sector (e.g. Buccola & Xia, 2004). Concerns of an ‘anti-commons’ have clearly
been the motivation of researchers involved in establishing new clearing-house or ‘open-source’
initiatives, such as CAMBIA (mentioned in previous section) as well as efforts to establish widely
applicable humanitarian license clauses in research consortia directed at the poor, such as the
Generation Challenge Program. But the OECD (2004) points out that, aside from individual
examples, ‘there is no widespread breakdown in the licensing of biotechnology patents’.
Nonetheless, the OECD recognizes that most changes to the patent system have been
implemented without hard evidence or economic analysis, and thus continued vigilance is
necessary to ensure that access to inventions does not become excessively restricted.
2.6 Additional strategies to protect the interest of the
breeder and seed producer
2.6.1 Non-IPR protection mechanisms
The plant breeding industry does not rely solely on formal IPR systems to protect its varieties
and limit their use. The alternatives include biological processes, conventional seed law,
contract law, biosafety regulations, brands and trademarks, and secrecy.
2.6.2 Biological protection
The oldest, and still one of the most important, mechanisms for protecting a plant variety is
hybridization. Hybrids are the products of the cross between two (or more) inbred lines. The
discovery of the phenomenon of hybrid vigor opened new possibilities for producing high
yielding varieties and offered two distinct advantages for variety protection. The seed of hybrid
42
origin will lose some yield potential and other valuable characteristics (such as uniformity) in
subsequent generations, which drastically reduces farmers’ incentives for seed saving. In
addition, competing seed companies require access to the inbreds if they are to successfully
duplicate the hybrid variety (although IPRs may be needed to fully protect the parent lines from
use by competitors). The first commercial use of hybrid technology was in maize in the 1930s.
Hybrids have since been developed in most cross-fertilizing crops such as sunflower, canola,
cotton, cabbage, and high-value horticultural crops for which labor-intensive hand pollination is
economic. More recently, hybrid technologies have been developed and commercialized for
rice (China) and pearl millet (India). Hybrids overcome much of the uncertainty in the conven-
tional seed market, where factors such as the weather determine the degree of on-farm seed
saving and hence the demand for fresh seed. The use of hybrids provides a steady demand for
seed. Hybrid seed is more expensive to produce but if the varieties thus developed are superior
in homogeneity and yield potential, substantially higher seed prices can be charged.
A more recent example of biological protection mechanisms is the introduction of V-GURTs
(Genetic Use Restriction Technologies, operating at the variety level) (Louwaars et al., 2002).
Such technologies lead to sterile seed when reproduced without special treatments and would
ensure that commercial seed could not be saved by farmers for subsequent planting and make
it difficult for another breeder to use the protected germplasm. There are several such
mechanisms that are the subject of research based on genetic transformation. None of these
is yet commercially viable, but the possibility of a ‘terminator technology’ has led to widespread
debate in the popular press.
2.6.3 Seed laws
In the absence of IPRs, seed laws can be very useful for the breeding industry. For instance,
when seed certification is compulsory for all seed, the breeder can control the market to a
large extent by limiting access to breeders’ seed. Any unauthorized multiplication will not be
acceptable to the certification agency. This means, for instance, that a public research
organization can establish an exclusive contract with a seed company for the production of its
varieties, even in the absence of IPRs. Similarly, a private breeder may set a high seed price
for breeder’s seed or can develop a contract with more specific conditions concerning royalties
and market segmentation, supported by seed certification regulations. Variety release
regulations may also be used to offer some type of protection, for instance in limiting the
extent to which a company can market an essentially derived version of a released variety
(including the unauthorized use of a transgene) or prohibiting the sale of a released variety
under another name.
2.6.4 Contracts
Various types of contracts can be very effective in providing legally enforceable agreements
that restrict the use of a breeder’s variety and offer substitutes or complements to IPRs. Such
contracts are only useful if the provider of the genetic materials has exclusive access (secrecy),
rights (IPRs), or can offer other benefits for the other contracting party. Some contracts are
43
aimed primarily at preventing seed saving and multiplication while others are aimed at
protecting the germplasm from being used in competitors’ breeding programs.
One type of contract that is becoming increasingly prevalent, at least in the US seed market,
is the grower contract. This is a simple agreement (similar to that found on software) that
restricts the farmer from using or disposing of any part of the harvest as seed.
If it is possible to control the market for the harvested product, then another type of contract
can be enforced. The breeder can oblige a grower to use the plant variety in certain ways and
can impose restrictions on seed saving or multiplication. One important example is the cut
flower industry, where the output can only be sold in a limited number of wholesale markets in
Europe. If a flower variety is protected in the country where the major market is located,
growers in other countries may have to sign contracts limiting multiplication or unauthorized
sale, or risk being denied further access to the major market. The contract can be effective
even if the flower-growing country has no IPR system. A similar phenomenon is beginning to
appear in several Latin American countries growing Monsanto’s ‘Roundup-Ready’ soybeans and
Bt cotton. In the latter case, control over ginneries provides a convenient point of enforcement;
for soybeans there are indications that some grower associations appear ready to accept the
collection of a royalty at the point of sale (e.g. the grain depot) in order to ensure unimpeded
access to the technology.
Material transfer agreements (MTAs) are another form of contract that may be used in the plant
breeding industry. These may be established between genebanks or other public institutions
and private breeders, or may be used to govern transactions among private or public breeders.
The MTAs can establish exclusive access, stipulate the type of benefit sharing in the case of
commercialization, and generally prohibit legal protection by the recipient of the materials ‘in
the form received’.
A biotechnology company that owns genes or transgenic varieties (with IPRs established in one
country), may establish contracts for their access in another country, even if the latter does not
recognize the particular IPR. Thus there are examples of major biotechnology companies
entering into contracts with national agricultural research organizations for the use of particular
transgenes. The contract may specify how the genes are to be used, the rights to any technol-
ogies that are produced, and the obligations of the company (e.g. for providing training or
other assistance).
Another strategy for companies is to negotiate a contract with a particular level of government.
An example is the agreement in China between Monsanto /DPL and the Provincial Government
of Hebei that excludes others from selling Bt cotton in the territory of the province. This contract
does not rely on intellectual property rights. Similar arrangements in China have protected
national breeding/seed parastatals or companies from competition.
Finally, MNCs may find that the commercialization of transgenic varieties in developing
countries, including seed marketing, policing violations and enforcing rights, may not be as
profitable as licensing rights to a transgene to local seed companies. In developing countries
44
with well developed private seed enterprises, such as India and China, this type of contract
may be increasingly common.
2.6.5 Biosafety
Biosafety regulations are not meant to serve as IPRs, but primarily to protect the environment
and to promote the safe use of biotechnologies. However, details of the biosafety system can
create property-like rights. First, in cases where national IPR systems do not provide adequate
protection, biosafety regulations may be used to prohibit the sale of varieties that include the
unauthorized use of a privately owned transgene. In addition, biosafety data itself may be
valuable property.
3
The biosafety system generates data from extensive testing to demonstrate
environmental and food safety. Such testing is very expensive, especially when feed and food
trials are necessary and may require specialized testing facilities. Some countries require
safety data for each ‘event’, i.e. the introduction of a particular construct (gene, promoter, etc.)
at a particular place or places in the genome. When such a modified plant is used in conventional
plant breeding to produce new varieties, the construct and its place are generally not altered
and biosafety clearance for the new variety (on the basis of data from the original event) can be
quickly accomplished. In other countries, the biosafety data must be presented for every new
variety. Since such data are commonly confidential, access to the biosafety data has great
commercial value and creates the basis for contracts that create rights over the genes. For
example, in India genes cannot be patented, but Monsanto can control its Bt gene technology
through keeping its biosafety data confidential. Breeders who want to release a new cotton
variety that includes the gene construct have to enter into a contractual agreement with
Monsanto in order to satisfy the biosafety regulations in the country and such contracts are
likely to include a license fee based on the amount of seed sold.
2.6.6 Brands and trademarks
Brands and trademarks are part of intellectual property law but their utility in the seed industry
is often overlooked. Seed companies often register their brands or trademarks as a way of
distinguishing their products from those of their competitors. In the absence of other IP
instruments, the development of a strong brand image and reputation can protect a company
from some types of competition. It is much less common for crop varieties to be trademarked,
and there is usually a prohibition against the use of the same name as a trademark and under
PVP registration. The most important use of trademarks in the study was the practice of the
flower breeding industry to pursue trademark registration for its most popular varieties (using
different names than those for PVP). The trademark can be used and protected long after the
expiration of PVP on the variety.
3
A similar situation can be found in the pharmaceutical sector, where test data are needed by the producers of generic drugs to
register their products when the patent on the original product is due to run out. Extension of the confidentiality of the test data
can provide additional protection to the inventor beyond the legal term of protection (W.J. Louwaars, pers. com.).
45
2.6.7 Secrecy
In some instances secrecy is an effective way to protect markets, and the choice between
patenting and secrecy may depend on the type of technology and the size of the firm. In
industries where a long lead time is required for imitation, being first to market may be more
valuable than patent rights (Cohen et al., 2000). In plant breeding, the primary example of a
trade secret is the protection of the inbred lines used to produce a company’s hybrids. The
ability to exploit this type of secrecy depends to an important extent on the degree of physical
security that can be provided to plant breeding facilities and seed multiplication plots. In some
cases, companies can go to considerable lengths to protect their inbreds; a three-way cross
maize hybrid may be the product of a single cross (produced from two inbreds in one country)
and an inbred, with the final cross made in a second country. In the case study countries, trade
secrets are not protected by a separate body of law but come under standard trade laws. With
advances in biotechnology, secrecy becomes more difficult to maintain and less valuable. The
reverse engineering of new varieties becomes easier and the copying into new genetic
backgrounds is facilitated by the application of marker-assisted selection methods. The lead
time thus becomes shorter for breeding companies, secrecy as a means of protection is more
problematic, and IPRs assume greater value.
2.7 Summary
IPRs provide a legal mechanism meant to stimulate technological advance for the benefit of
society and the growth of enterprise. They will play an increasingly prominent part in the plant
breeding industry of developing countries by providing economic incentives for more productive
research and commercial seed provision. At the same time, it is important to recognize that
IPRs can only be justified by their contribution to the welfare of a society. IPR regimes in plant
breeding must therefore be seen as part of a wider strategy for developing an efficient and
equitable agricultural sector. IPRs are only one element of policies to stimulate the growth of
institutions that serve broader development goals. The impact of IPRs in agriculture in a
particular setting will depend on the performance of many other institutions, the status of the
public and private seed sectors, the technology available, and the type of farming and rural
communities. There are no simple rules that can be applied, and policymakers will have to learn
from their own, and others’ experience. It is particularly important to assess experience to date
in countries that have taken early steps towards establishing IPRs for plant breeding.
In the present study, we have tried to address a few basic questions regarding the current
experience with IPRs in plant breeding:
– Which IPR systems are relevant for the breeding industry; which choices have countries
made based on the international agreements and organizations to which they belong?
– What is the relative importance of IPRs in the context of the various economic,
technological and institutional factors that determine the development of the national plant
breeding and seed sectors? To what extent do IPRs support or counter these developments?
– To what extent can the incentives offered by an IPR system be achieved through alternative
legal or institutional mechanisms?
46
– What are the factors related to the implementation and enforcement of an IPR regime for
plant breeding; what are the institutional options and the costs involved?
– To what extent, and in what ways, do IPRs affect the conduct and performance of public
sector plant breeding?
– To what extent and in what ways, do IPRs affect the development of the private plant
breeding and seed industries?
– To what extent and in what ways, do IPRs regimes affect the access by different classes of
farmers to new varieties and seed?
47
3. Plant breeding and seed production in
the case study countries
3.1 Agriculture
China
The growth of agricultural production in China since the 1950s has been one of the main
accomplishments of the country’s development and national food security policies. China has
used 10% of the world’s cultivated land to feed more than 20% of the world’s population.
Except during the famine years of the late 1950s and early 1960s, the country has enjoyed
rates of production growth that have outpaced the rise in population, resulting in a significant
improvement in food availability. Since the middle of the 1980s, China has been a net food
exporter and since the mid-1990s China became a net cereal grain exporter. The rural house-
hold responsibility system, accompanied by price increases, has stimulated China’s agricultural
economy. From 1978-1984, grain production increased by 4.7% per year; the output of fruit
rose by 7.2%.
However, the one-off efficiency gains from the shift to the household responsibility system were
essentially reaped by the mid 1980s, and the growth rate of agriculture has since declined.
The declining trend is most pronounced for grain. While dropping below the rate of growth
generated in both the pre-reform and early reform periods, production of rice, other grains,
and cash crops continued to expand after 1985. In the meantime, rapid economic growth,
urbanization and food market development have boosted the demand for meats, fruits and
other non-staple foods, changes that have stimulated sharp shifts in the structure of agriculture
(Huang & Bouis, 1996; Huang & Rozelle, 1998). For example, the share of livestock output in
total agricultural production value more than doubled, from 14% to 30%, between 1970 and
2000. One of the most significant signs of structural changes in the agricultural sector is that
the share of cropping in total agricultural output fell from 82 to 56%. Within crops, grain area
has gradually declined, while cash crop area has expanded.
Colombia
Although commercial agriculture (e.g. coffee, tobacco) has been an important part of the
Colombian economy since the nineteenth century, agriculture has tended to grow more slowly
than the rest of the economy since the 1960s, in part due to the increasing importance of
manufacturing and service sectors. Nevertheless, in the late 1980s agriculture contributed
21% of GDP and 68% of export revenues. The country’s diverse topography contributes to a
wide range of commercial agriculture. Banana plantations are an important aspect of the
lowland economy, while coffee dominates the highlands, with about 20% of all cultivated land in
the country under coffee. More recently, the high central valleys have become an important
center for the production of cut flowers. Cattle ranching is also important throughout much of
the country. Commercial agriculture is characterized by the presence of strong commodity-
based producer organizations (e.g. coffee, oil palm, rice) that provide support for agricultural
48
research and lobby for agricultural policies favorable to their membership. Although public
support for agriculture has been important, there is a growing dominance of private investment
in agricultural research and services. Colombia’s agriculture is strongly dualistic, with 10% of
the farms accounting for 80% of the farmland. After an initiation of land reform in the 1930s,
there has been relatively little progress. Smallholders in the highlands grow a range of food
crops, including small grains, maize, beans and potatoes; those in coastal areas rely on maize
and root crops. More than 80% of the rural population is under the poverty line and rural
unemployment has been increasing, in part due to the fact that 800,000 ha have been taken
out of production in the past decade. The National Development Plan includes several initiatives
for revitalizing agriculture in the country, such as plans to increase investments in cotton and
maize production.
India
Indian agriculture is predominantly smallholder agriculture. The distribution of land holdings is
highly skewed and small farmers (less than 2 ha) constitute 80.3% of total farm holdings and
occupy 36% of agricultural land. The fragmentation of land holdings have reduced the average
size of holding from 2.7 ha in 1961 to 1.4 ha in 1996. Agriculture supports 72% of the
population and contributes about one-quarter to the national gross domestic products and
about 12% to the total exports in 2002.
Agricultural land area remained constant around 140 million ha during the last three decades.
The gross cropped area is 190 million ha, giving a cropping intensity of 136%. The area under
food grains is 122 million ha with a record production of 212 million tons in 2001/02. The
average productivity of rice and wheat -- two major food grain crops -- is 2.1 t/ha and 2.7 t/ha,
respectively. Much of the growth in food grain production occurred during the 1970s and
1980s with widespread adoption of the new seed-fertilizer technology in the irrigated areas.
Concurrently, the area under irrigation also expanded because of public investment in irrigation,
which further accelerated the adoption of the new technology. Presently, about 40% of agri-
cultural area is irrigated and fertilizer consumption (NPK nutrient) is 91 kg/ha. These growth
trends were also echoed in rain fed agriculture with the availability of hybrid technology and
emergence of the public and private seed industry. However, the growth momentum could not
be sustained during the 1990s because of a leveling-off in crop yields, particularly in the rice-
wheat system of northwest India, and slackening of public investment in irrigation and other
infrastructure for agriculture.
Since the 1980s, livestock, fisheries and horticulture sectors have also witnessed tremendous
growth. Non-price factors like irrigation, infrastructure development and R&D were the main
sources of growth, and the total factor productivity grew 1.5-2.0% annually since the green
revolution period, illustrating a crucial role of R&D (Evenson et al., 1999). With the increasing
commercialization of agriculture, there is greater participation in international trade and invest-
ment by the corporate sector is rising. There is now increasing pressure for rationalization of
agricultural subsidies, particularly for electricity, irrigation and fertilizers, and support to food
grain prices. Fiscal, administrative and legislative reforms are also undertaken to encourage
participation of the private sector in agricultural marketing and trade. On the inputs side, the
seed sector has received significant support from the government. These developments are
49
expected to transform Indian agriculture into a science-based sector. This coupled with
domestic product market and policy reforms will make Indian agriculture competitive
internationally.
Kenya
The Kenyan economy is agriculturally based with 85% of the population living in the rural areas.
The bulk of the farming population are small-scale farmers growing staple food crops to meet
household food requirements with little surplus for sale. A strong agricultural sector is
considered not only to be a major contributor to self-sufficiency in food, but a requirement for
the successful growth of both the secondary and tertiary production sectors of the economy.
Agriculture plays a major role in providing food, energy and incomes to a significant proportion
of the population, it also provides raw materials for the country’s manufacturing and distributing
industries. Over the last 30 years the contribution of agriculture to GDP has averaged 30%,
declining from 37% in early 70’s to 25% in 2000. Smallholders account for 75% of the total
agricultural production. Agricultural products constitute about 70% of the total export and the
sector employs about 75% of the total labor force. Formal employment in the agricultural
sector constitutes about 17% of the total waged employment.
Maize is Kenya’s main staple food although production has fallen short of demand due to
frequent droughts and low productivity. The area under maize has stabilized at around
1.5 million hectares with limited potential for further expansion given competition on land use.
On average, maize yields are 2 tons per hectare. The production of pulses has been declining
due to weather conditions, use of low quality seed and the high cost of inputs. The horticulture
industry is currently the third most important foreign exchange earner after tea and tourism.
Smallholder production constitutes 80% of all growers and produces 60% of horticultural
exports. This sector is expanding rapidly.
Over the last decade the agricultural sector (with the exception of horticulture) experienced low
and declining productivity in terms of export earnings, employment creation, food security and
household farm incomes. From a real growth rate of 4.4% in 1996, it declined to a zero average
growth in recent years. The country’s traditional exports, coffee and tea, face declining real
world prices coupled with low value addition that has led to low returns. Some of the reasons
for the decline in agricultural productivity include: poor governance in key agricultural
institutions; institutional failure due to lack of capacity by the private sector to take over
functions previously performed by the state; poor access to farm credit, high cost of farm
inputs, insecurity in certain parts of the country and taxation of farmers through local authority
cess; high prevalence of HIV/AIDS; low level of public funding and inefficient infrastructure
which has led to high cost of production. The new Kenya Rural Development Strategy proposes
to address these problems through a series of policy measures.
Uganda
Uganda’s economy has registered impressive performance since 1990 with real GDP growth
since 1995 averaging 6.7% and inflation decreasing from 33% in 1990 to a mere 3.5% between
2000 and 2004. Uganda is a predominantly agricultural economy. The agricultural sector
50
contributes over 40% to the gross domestic product, provides employment to over 80% of the
workforce in rural areas, and is the main source of export earnings (85%). Of the population of
25 million, 85% live in rural areas. Because nearly half of the population lives below the poverty
line and face food insecurity the government has put special focus on agriculture in its socio-
economic policies.
Food crop production contributes about two-thirds of agricultural GDP, while cash crops
contribute about 7%, the rest coming from livestock and fisheries. Approximately 44% of the
sector’s GDP is made up of commodities produced for home consumption, but the proportion
of agricultural production destined for the market is rising. In terms of value, cassava, sweet
potatoes, and cooking bananas are the most important, followed by coffee, maize and beans.
Production gains in agriculture have been driven by the positive policy changes, but technology
driven reforms have been limited. The majority of smallholder farmers hardly use improved
seeds, fertilizers, or agro-chemicals. Production intensification is seen as the driver of agricul-
tural transformation, if the gains made are to be sustained. In the Poverty Eradication Action
Plan, the government has formulated and operationalized the Plan for Modernization of
Agriculture (PMA) aiming at transforming subsistence farmers into market-oriented commercial
farmers. The National Agricultural Research System is a key player in the implementation of the
PMA.
Table 2. Selected Development Indicators for Case Study Countries.
China Colombia India Kenya Uganda
Population (Million) 1,280 44 1,049 31 25
% rural 62 24 72 65 85
% arable land area 15 2.4 54 8 26
Under 5 Mortality 38 23 90 122 141
GNI/capita (2002 $) 960 1,820 470 360 240
GDP growth 1990-2002 9.7 2.3 5.8 1.9 6.9
Source: World Bank (2004).
Table 3. Selected agricultural productivity indicators for Case Study Countries.
China Colombia India Kenya Uganda
Agriculture as % of GDP (2002) 15 14 23 16 40
Av. annual growth (%) in Agr. GDP (1990-2002) 3.9 -1.5 2.7 1.2 3.9
Crop production % over 1990-2002 56 6.4 24 23 39
Cereal yield increase 1980-2001 (%) 60 39 81 11 10
Agr. Productivity ( value added per worker), in $ (1995) 338 3619 401 213 346
Source: World Bank (2004).
51
3.2 Public Sector Research
China
China’s strong public agricultural research system has played an important contributing role in
growth in agricultural productivity. This has become even more apparent in the last ten years,
as growth has been based increasingly on technological change, replacing earlier input growth
(Huang, Hu & Rozelle 2004). China’s public agricultural research system includes more than
1,600 research institutes, employing more than 136,000 staff (including retirees).
Approximately 10% of this research is carried out at the national level while 90% takes place in
provincial and prefectural institutes. The total budget for agricultural research was $1,025m in
2002. About 73% is for crop-based research, of which 40% is devoted to crop breeding. China
has invested heavily in agricultural biotechnology research, estimated at $112m in 1999 and a
staff of more than 2000 (Huang & Hu, 2000).
China’s large agricultural research system needs to be assessed relative to the task at hand in
such a large country. After decades of increases between the 1960s and 1980s, financing for
public agricultural research stagnated or even declined between 1985 and 1995 (Huang & Hu,
2000). In 1996, the public agricultural research budget was equivalent to 0.4% of agricultural
GDP which is less than half of the FAO’s rule of thumb of 1% (Huang et al., 2003).
The public agricultural research system in China has also undergone a number of changes
(Huang et al., 2002). These include a shift from core funding to a competitive grant basis and
assigning responsibility to research institutes for raising their own funds. Increased commer-
cialization of the public agricultural research system is leading to overlapping roles and a drift
away from goals of food security, poverty reduction and environmental sustainability. Thus
despite impressive achievements, the system faces many challenges, particularly given the
projected growth in China’s population, income, and associated food needs.
Colombia
Public agricultural research in Colombia was formerly in the hands of ICA (Colombian Institute
for Agriculture and Livestock), but the government introduced an initiative to privatize research
in the early 1990s with the creation of an independent research corporation, CORPOICA
(Beintema et al., 2000). ICA remained as a regulatory entity, and all research functions were
transferred to CORPOICA. In theory CORPOICA is supposed to be supported by contract
research from producer organizations and private industry, but in fact the Ministry of
Agriculture and Rural Development still provides most of its budget by ‘outsourcing’ research
tasks. CORPOICA is responsible for research on most of the agricultural crops in Colombia, but
research for important cash crops is in the hands of a number of semi-public institutes
supported in part by grower associations (e.g. for coffee, sugar cane and palm oil). CORPOICA
inherited a decentralized structure, based on quite autonomous research stations throughout
the country; the corporation has only recently instituted a centralized matrix management
based on commodities and disciplines. CORPOICA’s budget for 2004 is $13.8m and it employs
about 300 researchers (compared to about 500 employed 10 years ago). CORPOICA has a
biotechnology department, although it has not done any transformations.
52
India
Responsibilities for public agricultural research in India are divided between the institutes of the
Indian Council of Agricultural Research (ICAR) and the state agricultural university system. ICAR
coordinates 89 research institutes, most of them specializing in particular commodities or
disciplines. ICAR employs about 4,100 scientists. Much of the responsibility for agriculture in
India is left to individual states, and 34 state agricultural universities (and 120 affiliated zonal
research stations) carry out research and outreach (with partial support from ICAR). The total
research expenditure in 2000 was estimated to be $625m i.e. 0.42 % of AgGDP (Pal & Byerlee,
2003), with about 55% contributed by central government and 45% from the states. It is
estimated that approximately $25m is spent on biotechnology research.
Kenya
The major responsibility for agricultural research is with the Kenya Agricultural Research
Institute (KARI), although some public agricultural research is also conducted by Kenyan univer-
sities. KARI has its headquarters in Nairobi and a number of experiment stations throughout the
country. KARI is one of the stronger NARIs in sub-Saharan Africa, but even so its operations are
severely limited by its budget. The KARI budget for 2004/5 is nearly $40m, which is a sharp
increase from the previous year ($25.5m), mostly due to a significant expansion of donor
funding, which covers slightly more than half the total budget. KARI has long experience in plant
breeding and has been particularly successful in producing maize hybrids for the highland
regions that constitute the major maize growing area of the country. KARI has invested in
biotechnology and has been involved for several years in the development of transgenic sweet
potatoes (with assistance from Monsanto). It has just inaugurated a biotechnology facility where
it will continue collaborative work with CIMMYT on transgenic insect-resistant maize and other
projects.
Uganda
Uganda’s public agricultural research is managed by the National Agricultural Research
Organization (NARO) which is also responsible for livestock, fisheries and forestry research. Its
budget for 2004-05 is $11.1m, 70% of which is provided by donors. NARO is currently in the
process of reorganization related to the PMA. The National Agricultural Research Act of 2003
outlines the development of an integrated agricultural research system that includes central
research functions, zonal research centers and the strong participation of farmers in setting
priorities through local farmer forums. NARO is expected to contribute to the PMA by making
its research demand driven and market responsive. Future funding for research will come not
only from central government and donor contributions but also from private contracts and local
governments. It is thus expected that NARO will generate a significant amount of its own
funding, although the Research Act leaves open the question of NARO control over generated
funds. The new policy envisions research funding rising from its current 0.6% of agricultural
GDP to 2%. NARO is responsible for plant breeding for most of the important food crops in
Uganda and its cotton varieties are the only ones currently used by the cotton industry.
53
International public research
The study also included consideration of IP management in the international agricultural research
centers (IARCs) of the CGIAR. This study looked in particular centers that have a physical
presence in the case study countries: ICRISAT (with headquarters near Hyderabad, India), CIAT
(with headquarters in Cali, Colombia and an outreach program in Uganda) and CIMMYT (with an
office in Nairobi, Kenya).
3.3 The Seed Sector in the case study countries
China
For many years, seed in China was supplied primarily by public seed production organizations.
Their monopoly on sales was removed with a new seed law in 2000. This law permits private
companies, research institutes or individuals to produce and market seed provided they obtain
the necessary certification from the provincial agricultural administrative department. In addition,
public seed companies and research institutes were allowed to retain some of the profits from
seed sales. The new law has strengthened a number of trends already visible in the seed sector
in the 1990s. While public institutes could already license their varieties and some private seed
companies had appeared, local markets were still monopolized by the public county-level seed
companies. This has now changed and many of the public seed companies at both county and
prefecture level have gone bankrupt or changed status to co-operative companies, selling
primarily non-hybrid or unprotected hybrid seed. In 2002, there may have been as many as
20,000 seed companies in the country, including individuals selling only small amounts at a
local level. A certain amount of consolidation has been taking place since then, underlining the
current unsettled climate for the sector.
Many research institutes are extending their traditional activities of breeding to include
production and marketing. From the other end of the supply chain, some seed companies have
begun investing in breeding activities. Although foreign companies began marketing maize
seed in the 1990s through Chinese partners, direct foreign investments in joint ventures (as
minority shareholders) in seed production and marketing have been permitted since 2002 only.
While there are currently more than 50 GMOs applying for approval, only 5 foreign applications
have been commercialized and these are all varieties of Bt cotton. However, the sown area of
these 5 varieties took more than half of the total Bt cotton area, but this market share is
declining. While the public research institutes have invested heavily in the development of GM
crops, regulatory approval appears to have been slowed down by concern over possible
effects on exports to Japan and EU markets. Nonetheless, the area sown to Bt cotton is
considerable. Bt cotton has been commercialized in China by a joint venture of Monsanto/Delta
& Pineland with two provincial level seed companies in Hebei and Anhui (Ji Dai and An Dai), and
also by the Chinese Academy of Agricultural Sciences who developed their own Bt constructs
in 1997.
The role of the government has been less pronounced in regulating the vegetable seed sector.
Private companies, including joint ventures with foreign companies, have been selling vegetable
seed in China since at least the early 1990s. Information about the extent of production and
54
seed sources is also less reliable given the small scale of production and the lack of government
attention. Nonetheless, vegetable production accounted for 15 m ha and, according to one
estimate, vegetable seed sales may be roughly one-quarter of all commercial seed sales (Koo
et al., 2003), although CCAP estimates it at not more than 10%.
Colombia
In the 1970s and 80s, the Colombian government had a heavy involvement in the seed sector,
with a state seed company of the Agrarian Bank (CRESEMILLAS) and subsidized credit that
supported the use of certified seed. The state company marketed mostly ICA varieties and a
few imported commercial hybrids of maize and sorghum. Government policy encouraged the
replacement of the state seed company by private firms, and these thrived under a regime of
support prices and government grain purchasing until 1990, when government policy changed.
At one point there were 25 domestic seed companies, but the current number is less than half
that; these are complemented by several MNCs. The domestic seed companies do most of
their business in rice seed (6 companies have their own rice breeding capacity). The largest
player in the market is FEDEARROZ, the rice growers’ association that has moved from simply
marketing inputs to breeding rice varieties and selling its own seed. There are several small
local companies that breed and sell their own maize hybrids, but the market is dominated by
hybrids from MNCs. The MNCs have the majority of the cotton seed market as well. A range of
public programs and producer organizations is responsible for seed production of many other
crops, such as wheat, barley, beans, and potatoes. For instance, the potato producers’
federation (FEDEPAPA) administers the production of certified potato seed (of public varieties).
Although beans are a very important crop in the diet of certain groups in Colombia, the majority
of bean production is based on traditional varieties and there are no commercial bean seed
producers. The majority of the cotton and maize varieties available for sale in Colombia are the
products of foreign private breeding.
India
One of the contributors to India’s Green Revolution was the development of state and national
seed corporations that provided seed of the new rice and wheat varieties, and of other public
crop varieties as well. With the exception of some vegetable seed production and import, the
presence of the private seed sector was not significant in India until the mid-1980s and was
limited to a few seed companies. Policy changes in the 1980s opened the doors to domestic
private plant breeding and seed production and also allowed the participation of foreign seed
companies, and the economy-wide reforms of 1991 further liberalized the seed sector,
particularly for the participation of MNCs. Since that time, the private seed industry in India has
expanded rapidly. Most of this expansion has been based on hybrid seed, beginning with hybrid
sorghum, pearl millet and maize. Public research had developed cotton hybrids by the early
1980s and private companies quickly adopted the technology, making India the world’s leading
producer of hybrid cotton seed. The prospect of hybrid rice drew a number of private companies
into this area, although hybrids still account for a tiny fraction of India’s rice. Vegetable seed
production is also mostly in the hands of the private sector, which largely produces proprietary
hybrids (including some imported seed) but also some public hybrids and OPVs. Most of the
public seed corporations still survive, although their performance and financial stability varies
55
widely between states. They are mostly relied upon for the production of non-hybrid seed of
major crops such as wheat, rice and pulses. Even for some of these self-fertilizing crops that
normally provide few commercial incentives, the private seed sector has made significant
inroads; for instance, private companies in Andhra Pradesh now provide more than half the
state’s rice seed (virtually all public varieties). Andhra Pradesh is one of the leading states for
seed production and its Seedsmen Association lists 440 members, 249 of whom have
processing plants. These range in size from large, diversified national firms (some with MNC
participation) to tiny local operations that may specialize in the multiplication and distribution of
seed of a single crop.
Kenya
Until recently, all seed production in Kenya was the responsibility of the parastatal Kenya Seed
Company (KSC), and no other commercial seed operations were allowed. KSC had exclusive
rights to all KARI varieties and also established its own breeding program, principally for maize
(and also wheat, pasture grass and sorghum). The policy shifted in the early 1990s, allowing
the entry of MNCs (including from South Africa and Zimbabwe) selling hybrid maize (and to a
lesser extent sorghum and sunflower). In addition, the policy change encouraged the develop-
ment of a domestic seed industry. There are currently three seed companies (besides KSC)
with their own breeding programs and several other small companies that produce and market
seed of public varieties. KARI and KSC signed an agreement providing royalties to KARI for the
use of varieties currently under KSC production, although some of the details of that agreement
are still in doubt, including the degree to which KSC has exclusive access. KARI now assigns
rights to its new varieties through a tendering process, in which KSC is expected to compete
with other firms.
Uganda
Uganda has never had a very strong seed sector, but its new policies for agriculture have
encouraged an expansion of activity. Earlier, virtually all seed (of public varieties) was produced
and marketed by the parastatal Uganda Seed Project, which had several production facilities.
This has recently been converted to Uganda Seed Ltd., which has been a candidate for
divestiture since 1998. Uganda Seed Ltd, continues to produce a small amount of seed, but it
is now challenged by five local companies that have emerged in the past few years (mostly
based on experience in grain trading and participation in seed acquisition for regional
emergency seed operations) Only one of these companies has its own plant breeding capacity
(and relies on IARC germplasm); most multiply and sell NARO varieties. Several multinational
and regional companies produce seeds in Uganda for export and some also market seed in
Uganda (mostly hybrid maize). Kenya Seed Company has a subsidiary in Uganda that sells
hybrid maize, pasture grass and vegetable seed. Most cotton seed is simply obtained from
ginneries and distributed free to farmers as part of a production inputs package, but a
company from Zimbabwe has recently proposed to take responsibility for the introduction of
new varieties and cotton seed production.
56
A note on floriculture
This project included an examination of the flower production sectors in Colombia, Kenya and
Uganda. Because virtually all of the plant breeding is done in foreign countries (with the
exception of some small, recent ventures in Colombia), the focus of this report is on the flower
producers themselves. Thus the main treatment of flower production is found in Section 7.6.
The floriculture sector is important in Colombia, Kenya and of growing importance in Uganda.
In Colombia, flower exports in 2002 accounted for over $672m in earnings and the industry is
credited with providing direct employment for 88,000 people (and indirect employment for a
further 75,000). Flower exports are diversified, with the largest proportion (28.7%) accounted
for by roses. In Kenya, cut flower exports provide $220m annually, with 70% of that in roses.
Uganda is a more recent entry in the field, under government policy to promote non-traditional
agricultural exports. Its exports of roses and flower cuttings earned $26.5m in 2003 (70%
from roses).
The planting materials are provided under contract by representatives of the breeders. The
price of rose plants consists of the cost of the plant itself plus a royalty, with these two
components of approximately equal value. Contracts stipulate that further multiplication is
either not allowed or restricted in numbers and subject to royalty payment. The contracts are
based on breeder’s rights (PVP or plant patents) in the producing country and/or the country
that imports the flowers (commonly The Netherlands or the USA). Since the PVP rights extend
to the harvested materials under UPOV 1991, breeders can claim royalties anywhere in the
chain.
3.4 Seed Regulation
Seed regulations in case study countries determine the types of varieties and seed that may be
sold. Similar to IPR regimes, such seed regulations can provide important incentives (or dis-
incentives) for the seed industry, and it is important to understand their scope. In addition, it is
frequently necessary to make conventional seed regulation compatible with new IPR regimes.
China
China’s first seed law was decreed in 1989 ( ‘Regulation for Seed Management of the People’s
Republic of China’), followed in 2000 by the ‘Seed Law of the People’s Republic of China’. The
old seed management regulation ruled that new varieties of the major crops must pass
2-3 years of trials and be approved at the state or the provincial level before being extended
and used. Currently this applies to rice, wheat, maize, cotton, soybean and one or two other
crops determined by the agricultural administration department at various levels of government.
The criteria for approval of new varieties are established by MOA or at provincial level and
usually include a yield gain of more than 5%, or a significantly higher product quality compared
to existing (check) varieties. The new seed law has not stipulated any approval mechanisms for
less important crops.
57
There are rules for seed production and management including licensing systems for seed
producers and traders. Based on ‘The Regulation of Crops Seed Production and Operation
Licenses Approval’ decreed by the Ministry of Agriculture (MOA), there are four types of
licensed seed companies of 1 million, 5 million, 1,000 million, and 3,000 million RMB Yuan
certificated capital respectively. The first type of company is permitted to produce and market
conventional crops seeds. The second can also deal with hybrids. The third type of seed
company can be involved in foreign seed trade in addition to production and marketing of any
kind of seeds locally. The fourth type of seed company can have its own breeding program.
All seed companies have the right to carry their own trademarks and have their own seed
packages according to their licenses.
Colombia
All varieties offered for sale in Colombia must be tested for agronomic performance and
officially released. The testing process involves trials in one or more of five agro-ecological
zones in the country (varieties are released for specific zones). These trials were until recently
run by ICA but a new regulation (Resolution 2046, which aimed to adjust Colombian seed
legislation to ‘the evolution in the domestic seed industry and to bring it in line with international
norms’) allows companies with their own plant breeding capacity to conduct these tests and
submit the results to ICA. All seed of agricultural crops sold in Colombia must be certified, and
ICA is the official certification agency. Some seed companies complain that ICA does not have
the capacity to fulfill this function efficiently and there is pressure from the industry for ICA to
license companies to certify their own seed. ICA certifies hybrid seed (e.g. from MNCs) without
physical deposit of the inbreds; the company supplies sufficient information about the lines and
ICA visits the seed production plots for confirmation. ICA is also responsible for monitoring
seed sale and detecting violations of regulations.
India
All public crop varieties must be officially released and notified, which includes performance
tests at either the state or national level and notification by the Central Seed Committee.
(Although varieties may be released at the state level, notification is a national level function.)
The national level performance testing is managed through the extensive All-India Coordinated
Crop Improvement Programs (AICCIP). Descriptors of notified varieties are recorded, but there
is currently no DUS testing done as part of the release process. Private varieties do not require
release or notification, but may be entered in the AICCIP trials. The fees for the private
companies are quite high, although there is a proposal to lower these. In practice only a
minority of private hybrids are officially notified (although companies acknowledge the data
from the tests is useful and the fact that a variety is notified is an aid to its promotion in the
market). Seed certification is managed by state seed certification agencies and only notified
varieties may be certified. Certification is not compulsory, even for notified varieties, although
various agricultural programs and subsidies require that farmers use certified seed. Most
private seed, and a substantial minority of public sector seed, is sold as ‘truthfully labeled’,
requiring the name of the variety and minimum germination and purity standards. Officers of
the state departments of agriculture are assigned to monitor seed sales and collect samples of
commercial seed to test for conformity with certification tags or truthful labels. The current
58
seed regulations are being reconsidered, partly in light of the PVP legislation, and a revised
Seed Act is expected by the end of 2004. This new act will make some form of variety
registration compulsory, and liberalizes seed certification, involving possibilities for self-
certification by companies. ICAR is currently working on the modalities of DUS-testing.
Kenya
Variety approval and release in Kenya was recently reorganized and placed under the auspices
of the Kenya Plant Health Inspectorate Service (KEPHIS). All varieties of field crops (public and
private) must be entered in National Performance Trials (NPTs) that are divided into agro-
ecological zones. The NPTs may take up to three years, although if the breeder presents
supporting field data the period may be less. DUS testing is also required for all varieties, and
this takes two years. After an initial year of evaluation seed companies may receive permission
for seed multiplication and test marketing of a variety. Seed of most field crops must be
certified, and KEPHIS also has responsibility for seed certification, which it manages from
several regional stations. Deposit of inbreds is not required for certifying hybrids or for
obtaining DUS, if the company provides descriptors of the inbreds and pays for KEPHIS to visit
company fields. There is some pressure from seed companies for possible accreditation to
certify their own seed, but no action has been taken. The certification requirement has been
enforced even in the case of small-scale formal seed production (e.g. by donor project-
sponsored seed producer groups) of crops such as beans and sorghum, although KEPHIS
indicates that in the future such seed of some crops (but not maize) can be sold as standard
seed, which only requires seed quality testing. KEPHIS insists that small scale farmers cannot
sell their saved seed of maize since it is not certified. They can however re-use it themselves or
share it with others (without selling). Kenya, Tanzania and Uganda have recently concluded a
harmonization of seed regulations for Eastern Africa. The new accord includes an agreement
that varieties released in one of the countries will have a ‘fast track’ in variety testing
procedures in the others and adopts common certification requirements, including a short list
of crops with mandatory certification. However, Kenya will insist that the other countries adopt
the OECD certification scheme before allowing seed to be imported. This insistence has kept
one MNC from selling its maize hybrids (produced in Malawi) in Kenya.
Uganda
Variety release in Uganda still follows the system established for public plant breeding.
Candidate varieties (public or private) must undergo a series of field trials that take at least
three seasons and include at least 7 sites; the trials are managed by NARO. If a variety
progresses to the most advanced stage, DUS testing begins, managed by the National Seed
Certification Service (NSCS). Performance and DUS data are presented to a committee that is
in charge of official variety release; NSCS maintains a national variety list. Seed of major field
crops must be certified by NSCS, although the agency is under-funded and the industry is
anxious to see a system in which companies can be accredited for certification. Uganda is part
of the recent Eastern Africa harmonization in seed policies and regulations.
59
Table 4. Variety Release, Case Study Countries.
Country Rice Maize Beans Cotton
China* 1996-1999:
237 public and 3 private
2000-2002:
189 public and 28 private
(54% of releases hybrid)
1996-1999:
170 public and 4 private
2000-2002:
105 public and
34 private
(All releases hybrid)
1996-1999:
107 public and 10 private
2000-2002:
85 public and 15 private
(8% of releases hybrid)
Colombia 1992-2003:
25 varieties (5 public)
1990-2003:
80 varieties (11 public)
1950-1989:
33 varieties
1990-2003:
20 varieties
(all public)
1990-2003:
29 varieties (6 public)
India
1995: 14
2000: 33
2001: 20
2002: 22
(all public)
1960-1999:
120 public hybrids and
OPVs + approx equal
number of unnotified
private hybrids
1995: 5
2000: 6
2001: 7
2002: 9
(mostly public) + many
unnotified private hybrids
Kenya
1960-1999:
17 hybrids+5 OPVs
(all public)
2000-2003:
43 private hybrids +
4 private OPVs.
8 public hybrids
1982-2003:
15 varieties
(7 since 1999)
(all public)
Uganda
2000-2003
12 varieties (all public)
1995-2003
12 varieties
(all public)
* For China, a ‘private variety’ is one marketed by, but not necessarily bred by, a private firm.
Source: Compiled by authors, based on data from CCAP, ICA, ICAR, KEPHIS, and NARO.
60
Table 5. Cost of Variety Release in Case Study Countries.
Country Procedures and cost
China Agronomic trials in one or more agroecological zones: $150 per season
Colombia Agronomic trials in one or more agroecological zones: $1,718 per zone for supervision
India Private sector entries in AICCIP trails: $217 per location per year
Kenya DUS test required. $600 per variety or inbred
National Performance Trials (NPT); $500 per year, per zone
Uganda Private sector entries in NARO trials pay $120 per site (5-7 sites)
Source: Compiled by authors from relevant national authorities.
3.5 Seed Use
China
The source of seed for farmers in China varies by region and by crop, including the focus
crops of this study (rice, cotton and vegetables). Marketed rice seed is divided roughly equally
between OPVs (214,000 Mt in 2002) and hybrid seed (250,000 Mt). Over 90% of the area
sown with hybrids uses seed purchased each year, while for OPVs this is estimated at 30%.
Hybrid rice seed has gained considerable market share since 1980, despite the higher costs
for farmers, and thus accounts for almost one-half of the sown area in rice. On the other hand,
approximately 35-40% of the rice area is sown with farm saved, or informally acquired seed.
Cotton seed is more heavily dominated by OPVs with hybrid seeds accounting for only about
15% of the estimated annual sale of 78,000 Mt. Purchased cotton seed from formal sources is
estimated to be 35% of the total seed requirement, highlighting the importance of saved and
exchanged seed. In 2003, approximately 56% of the cotton area was planted with Bt cotton
(James, 2003) and sales of Bt cotton seed are 58% of total sales. Since its release, Bt cotton
has been absorbed into farmer seed systems, with a considerable amount of seed saving and
crossing taking place. The situation in vegetable seed is quite different, given the extent of
development of hybrid varieties. Replacement rates are estimated to be almost 100% for most
major vegetables, such as Chinese cabbage, tomato, chili and cucumber (Hu, 1998; Koo et al.,
2003).
Colombia
Colombia’s dualistic agriculture is reflected in patterns of seed use. There are hardly any
private bean varieties marketed and most of the production is in local varieties. The vast
majority of seed is farm saved or informally acquired, even for those farmers who specialize in
commercial bean production. In rice, on the other hand, approximately half of the area is sown
with purchased seed each year. Seed purchase is quite high in this largely commercial enter-
prise, although the industry is concerned about the amount of unauthorized seed sale by
farmers. A little more than 40% of rice seed sales are by FEDEARROZ and the rest is divided
61
among 6 other companies. Maize is much more of a small-farm crop and the proportion of
purchased seed is much lower than in rice. However, the commercial maize sector, which
grows maize mostly for feed, is heavily dependent on purchased hybrid seed. Currently three
MNCs account for about 80% of the hybrid maize seed market. Cotton is also dominated by
MNCs, but official statistics indicate that the degree of seed saving varies widely from year to
year.
India
Seed use in India varies by crop and by region. Nearly 90% of rice seed is still home saved or
locally acquired, but there are important regional differences, with very little commercial seed
sold in some states, while in others, like Andhra Pradesh, more than one-quarter of rice
farmers buy commercial seed in a given season. The situation for maize is even more variable,
depending in part on the farming system. In some states a considerable portion of maize is
produced for home food and feed use and hybrids account for less than 10% of seed use. In
other states, where maize is more of a cash crop, hybrids account for more than three-quarters
of seed use. The vast majority of maize seed sale is proprietary hybrids, although state seed
corporations and some small companies sell public hybrids and OPVs. Most vegetable growers
use purchased seed from the private sector. Hybrids are important in tomato and cabbage,
which are mostly imported, but some public hybrids and OPVs are in the market. For cotton,
there are distinct regional patterns of seed use. Northern India relies to a large extent on OPV
cotton (in large part because suitable hybrids have not yet been developed for this region);
these are largely public varieties, produced by both private and public seed companies. In
central and southern India, in contrast, most of the cotton sown is hybrids (mostly private),
produced almost exclusively by private firms.
Kenya
The star performer of the Kenyan seed sector continues to be hybrid maize. Kenya was one of
the first countries in sub-Saharan Africa to produce hybrid maize and many farmers have long
experience with relying on hybrid seed. Most of these farmers are in the more productive
highland areas, where Kenya’s commercial maize production is centered. Nationwide, annual
purchase of commercial maize seed accounts for about 45% of maize area; the vast majority
of this is hybrids, with some OPVs (public and private) being sold in more marginal production
areas. Maize seed sale is still dominated by KSC, which accounts for roughly 90% of the market;
the remainder of sales is divided among six other companies. There is little seed sale for other
crops. A few companies sell a small amount of seed of KARI bean varieties and some of the
MNCs market sunflower hybrids. Virtually all vegetable seed is imported. Most seed of crops
for dryland areas (sorghum, millet, pigeon pea, etc.) is only produced through special donor or
government projects.
Uganda
Although seed production and sales are increasing in Uganda, the majority of the industry’s
business is still through special projects or NGOs rather than over-the-counter sales. The major
product is maize seed; sales in recent years were under 2,000 Mt, but jumped to nearly
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5,000 Mt in 2003. Beans are in second place, with roughly 800 Mt sold annually. Smaller
amounts of seed of sorghum, groundnuts and several other food crops are also sold. (About
7,000 Mt of cotton seed is procured from the ginneries each year.)
Table 6. Rice Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 30,000 464 (54% hybrid) 30% (OPV)
90% (hybrid)
Colombia 470 41 (all OPV) 50-60%
India 45,000 255 (98% OPV) 11%
Table 7. Maize Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 23,000 1,068 (90% hybrid) 96%
Colombia 550 2.5-3.0 (75% hybrid) 15%
India 6,100 28 25%
Kenya 1,600 15-20 (95% hybrid) 45%
Uganda 540 1.6 (2000/02)
5 (2003) (30% hybrid)
20-35%
Source: Area planted based on official statistics; other data based on expert opinion.
Table 8. Cotton Seed in Case Study Countries.
Country Area planted
(000 ha)
Annual seed sale
(000 mt)
Proportion of seed purchased
from formal sources
China 3,200 78 (15% hybrid) 35%
Colombia 44 0.76 35-65%
India 8,500 27 (35% hybrid) 65%
Uganda 160 (provided to farmers as part
of production package)
n.a.
Source: Area planted based on official statistics; other data based on expert opinion.
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Table 9. Examples of Annual Vegetable Seed Sales in India and China.
India China Crop
Hybrid (mt) OPV (mt) Seed Sale (m$) All seed (mt) Seed Sale (m$)
Tomato 28 300 11.1 464 44.8
Chilli 15 403 9.2 2,287 30.0
Cabbage 40 100 1.2 7,081 102.6
Cucumber 3 1,000 14.3 2,336 56.4
Source: India data from Anand 2003; China data from Koo et al., 2003.
Table 10. Seed Prices. Case Study Countries.
China Colombia India Kenya Uganda
Seed price
($/kg)
OPV
Hybrid
0.16-0.80
0.60-2.50
0.22-0.70 0.33
2.60
Rice
Seed/grain
Ratio
OPV
Hybrid
1.2-3.0
7-17
1.1-3.5 3.0
22.6
Seed price
($/kg)
OPV
Hybrid
0.48-1.00
1.55-2.63
3.14-5.23
0.33
0.54-1.32
1.00-1.56
1.50-2.23
0.70
1.44-1.72
Maize
Seed/grain
Price Ratio
OPV
Hybrid
4-12
8-12
16-20
3.1
5-13
6.7-10
10-15
Cotton Seed price
($/kg)
OPV
Hybrid
0.48-4.80
6.2
4.54 1.08-5.40
16.70
Source: Local estimates; seed/grain price ratios based on estimates of farmgate grain price.
3.6 Summary
The context of evolving national seed systems
Until fairly recently, seed supply in all the case study countries was in the hands of the public
sector and recent private sector involvement has been a function of policy change. Any assess-
ment of the specific impact of PVP regimes and other IPRs on seed industry performance and
investment must be seen in the context of these wider changes in the commercial and policy
environment. The country with the longest experience of private seed industry participation is
Colombia. However, the development of the private seed sector in Colombia depended to a
considerable extent on government support to agriculture, and this was drastically curtailed in
the early 1990s, before PVP was introduced. Thus the introduction of PVP met a small and
contracting private seed industry. India has nearly two decades of experience with a private
seed sector that is increasingly broad and diverse, but its PVP legislation is just being put in
64
place, so any assessment of the effects will necessarily be ex-ante. Kenya has PVP legislation
in place, but government policy has only cautiously opened to private seed sector participation
in the past few years, and the number of players is still limited. Uganda is also a recent convert
to private seed industry participation and has yet to enact PVP. China’s former state seed
provision system is now being converted to one in which many public institutes are able to
manage their own revenue generation and purely private seed enterprise is also encouraged.
PVP is only one factor to be considered in this sharp reversal of dependence on state-managed
seed production.
Incentives for formal seed provision
With or without PVP, national seed sectors tend to develop along certain pathways. The degree
to which PVP can alter or accelerate such processes may be limited. In all the case study
countries, hybrids are the major point of entry for the private seed industry (and in the African
cases, the major product of the previously dominant public seed sector). Where OPV seed
attracts private attention, as in rice, the clients are market-oriented farmers (relatively large-
scale in Colombia, small-scale in India) who value the qualities of commercial seed. Strong
consumer demand for a range of vegetables, whose seed is difficult to save even if it is not a
hybrid, is another important stimulus for the seed industry (as in China and India). In all cases, a
certain minimum size of market is necessary to elicit commercial response. The opportunity to
take advantage of transgenic crops depends on having a biosafety regime in place. In summary,
these biological, economic and regulatory parameters have at least as strong an effect on the
development of plant breeding and seed markets as do PVP regimes.
The status of public agricultural research
Much of the plant breeding and some seed production still depend on the public sector in all
the case study countries. In the smaller case study countries public research is either being
reconsidered (as in Colombia) or is highly dependent on donor contributions (Africa). In China
and India much larger public research systems are in place with significant government commit-
ment, but even these systems are undergoing transition, as they are forced to redefine their
roles vis-à-vis growing domestic private sectors. The national research programs also receive
support from international agricultural research, but it too is facing sharp questions about its
mandate at a time of changes in public research priorities, the strength of private agricultural
research, and the emergence of domestic seed enterprises as competing clients. It is public
agricultural research that faces the greatest challenges in adjusting to the new IPR regimes.
The role of conventional seed regulation
Plant breeding and seed production are already subject to a set of regulations on variety
release and seed quality control. These regulations have played an important part in determining
the current course of seed system development in the case study countries. In each case, the
regulations have provided incentives (or disincentives) for certain types of breeding and have
encouraged (or discouraged) certain commercial endeavors. The seed regulatory regimes
control the type of seed that is available and in some instances act to control the unauthorized
use of germplasm or sale of seed. Recently established IPR systems in the seed sector are
meant to act in concert with conventional seed regulation and in some cases they are the
65
impetus for further changes in national seed regulations. It is important to understand the
interactions between the two regimes.
IPRs in the context of wider policy and economic changes
Plant breeding and seed delivery in the case study countries are dependent on a range of
factors, including commercial sector development, seed demand, public research strategies
and seed regulation. IPRs are an additional factor in the equation. At this relatively early stage
in the development of national seed systems and the recent establishment of PVP and patent
regimes the majority of respondents claim that these IPRs will be a key factor determining seed
sector performance. Although its current role may be in the background, its future influence
may be very substantial, and it is important that its role should be played in harmony with the
rest of national seed policies and agricultural development aspirations.
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67
4. IP legislation and management in the case
study countries
4.1 PVP Legislation
The five case study countries provide a wide range of experience with IP legislation for the
protection of plant varieties. China, Colombia and Kenya are members of the 1978 UPOV
Convention and have had a PVP system in operation for several years. India has just enacted
PVP legislation and is still in the process of establishing implementation capabilities. Uganda
has no PVP legislation in place but a draft bill is before Parliament. The rest of this section
introduces the principal features of PVP legislation and administration in these countries.
China
Despite a longer history of other IPRs, PVP was introduced relatively recently in China. The first
‘Regulations of the Peoples Republic of China on the Protection of New Varieties of Plants’ was
decreed on March 20, 1997 and is effective as of October 1, 1997. However, the first appli-
cation was submitted only in 1999 when a ruling on ‘Implementation methods of the regulations
of the People’s Republic of China on the protection of new varieties of plants’ was decreed by
the MoA. In that year, China became a member of the 1978 UPOV Convention. There are
currently 41 species eligible for protection. This list concentrates on food crops and is based
on priorities from national and provincial specialists. Cotton is not yet eligible for protection
although the Ministry of Agriculture claims to have recommended its inclusion. Responsibility
for granting PVP titles is divided between the Ministry of Agriculture, which handles most food
crops, and the Ministry of Forestry, which is responsible for any woody species, including not
only forestry species, but also woody ornamentals. The Ministry of Agriculture established an
Office of Variety Protection for Agricultural Plants in 1999, which currently has 15 substations
throughout the country for DUS testing. China’s PVP legislation includes a broad farmers’
privilege for saving and reuse of own seed, which is perceived as important in a country with
many smallholder farmers. There is also no protection for essentially-derived varieties,
consistent with the 1978 UPOV Act. According to staff interviewed at the Ministry of Agriculture,
China is not yet considering amendments to make its PVP legislation conform to the 1991 Act.
But it is acknowledged that breeders would like the stronger protection and both they and
foreign governments are lobbying for such a change. Discussions with various individuals from
private breeding companies and other Ministries indicated that the Government is likely to
consider a move to the 1991 Act in the next few years.
Colombia
Although all countries of the Andean Community (Bolivia, Colombia, Ecuador, Peru, and
Venezuela) have agreed to a common regime of PVP, the actual implementation and enforce-
ment of PVP varies by country. Colombia joined UPOV in 1996. Much of the original pressure
for UPOV membership came from the floriculture industry, and the majority of PVP certificates
issued in Colombia are for flowers. Colombian officials stress that although the country is
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member of UPOV 1978, most of its rules conform to those of UPOV 1991; the length of
protection for field crops has been extended from 15 to 20 years and no crops are exempted
from protection. In addition, a recent ruling (Resolution 2046 of July 2003) prohibits farmers
with holdings greater than 5 ha from saving seed of protected varieties. Those with smaller
farms may save such seed but they are required to report to a local ICA official and give details
of how the home-saved seed will be processed and used. Administration of PBR in Colombia is
managed by the Office of Plant Breeders Rights and Seed Production, which is part of ICA. ICA
already had an office responsible for the regulation of seed production and this was assigned
the responsibilities for PVP when the legislation was enacted.
Kenya
The legal framework for PVP in Kenya was established in the Seeds and Plant Varieties Act of
1977 which was revised in 1991. Further details were defined in a supplementary issue of the
Act in 1994. An office for administering PVP began functioning in 1998 and Kenya acceded to
the UPOV convention in 1999. As in the case of Colombia, much of the pressure for joining
UPOV came from the horticultural industry, and the vast majority of the early applications for
PVP in Kenya were from foreign breeders. A decision in 2001 provided an amnesty for extant
public varieties, allowing them to be eligible for a full term of protection. This occasioned a
great increase in PVP applications for public varieties, but the provision is controversial and has
not yet been gazetted. Such varieties have thus not been issued with protection certificates.
More recently, there is a move to make Kenya compliant with UPOV 1991; issues of particular
importance are a more restrictive definition of essentially derived varieties (especially related to
flower mutants and the possibility of the addition of a transgene to a protected variety) and
greater control over farmer saving of seed of protected varieties (particularly the widespread
practices of saving and local sale of wheat seed). The administration of PVP was initially
assigned to KARI but in 1998 it was transferred to the recently established Kenya Plant Health
Inspectorate Service (KEPHIS) which also administers plant quarantine, crop variety release,
seed quality control and certification, and pesticide residue testing.
India
The Protection of Plant Varieties and Farmers’ Rights Act was passed in 2001, after long
debate. The original impetus for the Act came from India’s commercial seed sector, and the
government produced a first draft bill in 1993. However there was opposition to this draft from
both the industry and NGOs opposed to the implementation of TRIPS, and two further drafts
were produced and debated between 1996 and 1999. A Joint Committee of Parliament traveled
through the country collecting the views of the industry, NGOs, farmer groups and others and
redrafted the bill in 2000 for introduction to Parliament (Ramanna, 2003). In addition to the
official parliamentary enquiry, the issue was widely debated in India’s press. The resulting act
has a number of unusual features. The Act is exceptionally liberal in its definition of farm-level
seed saving, allowing farmers to save, use, exchange or sell (non-branded) seed of protected
varieties in the same manner that they were entitled to previously. It thus appears that selling
seed among neighbors is permitted, as long as the transaction is conducted informally and the
seed is not sold with any commercial denomination or packaging. The Act also provides for the
protection of extant varieties; any variety that has been officially released and notified is eligible
69
for protection for the specified period starting from the original notification date. In addition,
the Act includes extensive definitions of Farmers’ Rights, including the possibility of farmers or
farming communities registering their own varieties; the expectation that farmers can claim
compensation if a variety does not perform in the manner described by the breeder; and a
method of benefit sharing through a National Gene Fund. Some provisions seem to go beyond
the UPOV 1978 clauses, but UPOV is awaiting the implementation rules in order to judge
whether the Indian system is in conformity with the 1978 Convention. India has received
dispensation to access the Union under the old Convention. An authority is currently being
established under the Ministry of Agriculture to administer the Act. Rules and protocols for DUS
testing of 40 species have been established and the testing will be done by designated ICAR
institutes and state agricultural universities. The implementation of the 2001 Act is expected to
start in 2005.
Uganda
Like most countries in sub-Saharan Africa, Uganda is still in the process of establishing PVP
legislation in order to comply with TRIPS requirements. A draft Plant Variety Protection Act was
drawn up in 2002 and was still being debated in Parliament in 2004. There have been a number
of public meetings regarding the act, but unlike India, the impending legislation has not been a
subject of widespread debate, and both the private sector and NGOs complain that they have
not been adequately consulted. The draft act includes both provisions for PBR and, drawing on
model legislation from the African Union, for community and farmer rights. The act’s conception
of PBR is largely consistent with that of UPOV 1978, although it grants protection for field
crops for a period of 20 years. Its definition of Farmers’ Rights goes beyond UPOV 1978 by
allowing farmers to not only save seed of protected varieties but also exchange and sell (on a
non-commercial basis) such seed. In addition, farmers and farm communities may act as
custodians of local plant varieties, require prior informed consent for the use of such varieties
in plant breeding, and claim royalties as developers or conservators of varieties. Discussions
are still underway regarding the nature of the authority that would administer the Uganda PVP
legislation.
70
Table 11. PVP Legislation in Case Study Countries.
China Colombia India Kenya Uganda
Legislation Regulations of the
People's Republic of
China on the
Protection of New
Varieties of Plants
(1999). Member of
UPOV (1978) since
2000
Law 243 of
1995 establishes
PBR. Resolution
2046 (2003)
defines
limitations on
seed saving
Member of UPOV
(1978) since
1996
Protection of
Plant Varieties
and Farmers’
Rights Act
(2001)
establishes PBR.
India will apply
to join UPOV
Seed and Plant
Varieties Act
(Cap 326)
amended in
1991 and 1994
to establish PBR.
Kenya joined
UPOV (1978) in
1999
A draft Plant
Variety
Protection Act is
being debated in
Parliament in
2004. It defines
PBR as well as
farmer and
community
rights
Scope of
coverage
41 crops currently
eligible. Certificates
have been issued for
15 species to date;
cotton not eligible for
protection
All crops,
eligible. In
practice
certificates
issued for
7 agricultural
crops and
15 horticultural
crops
No crops
excluded, but
exemption for
varieties whose
commercial
exploitation
would be a
danger to public
order, public
health, etc.
No crops
excluded; to
date applications
have been
accepted for
31 agricultural
crops and
23 horticultural
crops
No crops
excluded
Length of
protection
20 years for woody
species (vines, fruits,
and ornamentals);
15 years for all other
crops
25 years for
trees and
horticultural
crops; 20 years
for field crops
18 years for
trees and vines;
15 years for
other crops
18 years for
trees and vines;
15 years for
other crops
25 years for
trees and vines;
20 years for
annual crops
Farmer seed
saving and
exchange
Seed saving and
exchange is
permitted.
(Local/informal seed
sale regulated by
seed law)
Farmers with
more than 5 ha
not allowed to
save seed of
protected
varieties. No
farmers’ privilege
for horticultural
or tree crops. No
seed saving of
transgenic
varieties
permitted
Seed saving,
exchange and
sale by farmers
is permitted, but
not sale of
‘branded seed’
Seed saving
currently
permitted, but
moving towards
UPOV 1991.
(Local seed sale
restricted by
certification
requirements)
Farmers have
the right to use,
exchange and
sell farm-saved
seed of
protected
varieties, but not
‘on a commercial
scale’
71
Table 11. (continued)
China Colombia India Kenya Uganda
Breeders’
exemption
Protected varieties
may be used for
breeding
(No protection for
EDVs)
Protected
varieties may be
used for
breeding
Protected
varieties may be
used for
breeding. An
essentially
derived variety
can seek
protection, but
requires
agreement from
original breeder
Protected
varieties may be
used for
breeding, but
moving towards
UPOV 1991
Protected
varieties may be
used for
breeding
Protection of
extant varieties
Protection offered for
varieties already
available in China up to
four years earlier,
when a species/
genera first becomes
eligible for protection
(application must be
made within one year
for woody species and
within two years for
agricultural crops and
is conditional on DUS
test)
‘Amnesty’ for
1 year when
PVP was
introduced for
officially
released
varieties.
Protection
period was
based on
remaining
period, counting
from year of
release. Widely
used for flowers
(over 200),
4 cotton, 2 rice
and 1 soya. ICA
chose not to
protect
Varieties already
released and
notified will be
eligible for
protection (from
date of original
notification)
Public varieties
already released
eligible for
protection (from
date of filing),
but decision
contested
Extant varieties
not eligible for
protection
Plant variety
patents
Hybrids can fall under
the scope of a patent
for a ‘breeding or
selection
methodology’
Plant varieties
cannot be
patented, but
GMOs may be
patented
because not
found in nature
No patents of
plant varieties
No patents of
plant varieties
No patents of
plant varieties
Source: Compiled by authors from interviews and relevant national authorities.
72
4.2 Other IP Legislation
China
In China, patents are administered by the State Intellectual Property Office (SIPO), which was
the first government agency established for IP protection. SIPO is an independent organization
in China and administratively at the same level as the Ministry of Agriculture. With respect to
patenting of biological material, China studied the different approaches pursued in the U.S., the
E.U. and Japan when formulating its own policy in this area. Living organisms, such as plants
and plant varieties, are not eligible for patenting but genes are eligible, as they are considered
to be only part of a living organism. As of 2003, there were more than 100 applications for
patenting of genes related to agriculture. Biological processes, such as genetic transforma-
tions, are also patentable. Breeding and selection methodologies are also patentable, which
effectively allows patent protection to extend to hybrid varieties. A number of such patents
have been granted but the scope of allowable claims and impact of these patents is not well
known. For example, in discussions with IP specialists of large MNCs active in China, none
seemed aware of the possibility of patenting hybrid breeding and selection methodologies.
China now has 20 years experience with its patent system. One hundred thousand applications
were filed in 2003 divided among the three types of protection administered by SIPO: invention
patents (which are similar to utility patents), utility models (which are similar to petty patents)
and industrial designs. About 50% of all applications for invention patents are filed by
foreigners, of whom about 60% use the PCT, whose use is increasing quickly. SIPO currently
has about 1,400 examiners, of which 1,200 work on invention patents and the other 200 on
utility models and industrial designs. Examiners with sufficient biological expertise for
biotechnological applications are not reported as a constraint at least in comparison to other
technological areas, such as business methods. Applications do not normally require more than
30 months to process.
Trademarks have been available in China since 1979 and are administered by the Trademark
Office of the State Administration for Industry and Commerce. The Trademark law was amended
in 1994 and again in 2001, when geographical indications were included to comply with TRIPS.
The 2001 revisions have only become operationalized in 2003. The Trademark Office is an
administrative management institute under the State Administration for Industry and Commerce,
one of the Ministries under the State Council. It operates independently of SIPO, although they
both participate in a high-level IP coordination group under the auspices of the State Council.
Examinations for trademarks are normally processed within a few weeks. Trademarks are used
by seed companies in China but their effectiveness is difficult to gauge. It is easy to find
examples of logos on commercial seed packages that are extremely similar to competitors’
trademarks.
The approval of varieties is completely independent from the trademark processes. Approved
varieties are marketed by all legal seed producers under their official name, which cannot be
trademarked (lack of novelty). If a variety name is first granted a trademark, then it may not be
used in the variety registration and should be rejected. Officials of the Trademark Office have
contact with the Ministry of Agriculture on an annual basis to check for double-use of variety
names.
73
Geographical indications (GI) must be applied for by a group such as a co-operative or asso-
ciation, with the capacity to certify the origin of the products under the GI. GIs are being used
for specialty, local agricultural products with a wider reputation. There were more than
100 registered as of March 2004, including for example a type of ‘fragrant pear’ from Xinjiang
Province. Agricultural products covered under GIs include other fruits and teas. The Trademark
Office plans to carry out awareness-raising activities on GIs at various levels of the offices of
the Administration for Industry and Commerce in an effort to promote development of farmers
and ‘brand agriculture’.
Colombia
In Colombia trademarks and patents are administered by two sections of the Industrial Property
Division of the Superintendence of Industry and Commerce under the supervision of Ministry of
Commerce. The New Creation Office (i.e. patent office) employs 15 examiners, one of whom
works on biotechnology. In 2003 this Division received 1,209 applications, 83% of which came
through the PCT; 291 patents were granted in 2003. In the same year, the office also received
176 applications for utility models (petty patents) and 239 applications for industrial design.
Genes and plant varieties cannot be patented (following an Andean Community agreement) but
micro-organisms ‘not found in nature’ and GMOs are eligible for patents.
In Colombia, similar to the other case study countries, official variety names cannot be trade-
marked. However, for crops that do not require the use of the official variety name in trade,
such as flowers, the varieties are effectively protected through this form of IPR. Even old
varieties can thus be controlled by the breeder after the expiry of breeder’s rights. The
Distinctive Signs Office (i.e. trademark office) is also responsible for brands and geographical
indications. Copyright is the responsibility of the National Copyright Directorate of the Ministry
of the Interior. There is communication between the Industrial Property Division and the PVP
office regarding variety denominations and the PVP Office. The various offices responsible for
IP interact from time to time (e.g. when international trade negotiations are in progress) and
although there is considerable sympathy for the formation of a single IP authority there are no
government resources to bring about such a change at present.
India
India’s patent system does not have experience with technologies related to agriculture. The
current law excludes the protection of plants and excludes methods of agriculture. The patent
office does not have any specific expertise in plant biotechnology, but it does have experience
with other areas of molecular science. Several modifications in the patent law were implemented
in 1999 to bring the system more in line with TRIPS. Exclusive marketing rights were introduced
for pharmaceuticals that protected the inventor in the market for 5 years, but these have been
superseded by a third amendment of the patent act which took effect 1.1.2005 through the
issuance of an ordinance by the President. This latest amendment allows product patents in all
fields of innovations, including the protection of micro-organisms and genes. It is unclear to
what extent agricultural exceptions will limit the scope of gene protection for plant varieties, but
the industry expects that case law will soon open the way for agricultural biotechnology patents.
74
The trademark system in India is well established. Official variety names cannot be protected.
Trade secrets fall under unfair competition in the trade laws.
Kenya
The Kenyan patent law is administered by the Kenya Industrial Property Institute (KIPI) under the
auspices of the Ministry of Trade and Industry. It has 20 examiners out of which seven have
knowledge of biotechnology. KIPI has received 401 national applications of which 100 were
granted and an additional 243 through PCT of which 69 were granted. There are also 2033
ARIPO patent applications designating Kenya (1103 granted in Kenya); 56 national utility model
(19 registered); 556 national industrial design applications (216 registered) and 86 through
ARIPO (64 registered). KIPI has an advanced documentation system. The Kenyan law allows
protection of both process and product patents in biotechnology but excludes patents on plant
varieties. Of the national patents granted by KIPI only two are plant-related. There may however
be biotechnology patents valid in Kenya through PCT.
Trademarks and patents are administered by KIPI under two acts, the Trade Marks Act Cap
506 and Industrial Property Act 2001. Trademarks can be protected in Kenya, but not official
variety names. KIPI is also responsible for geographical indications and trade secrets, however
these two are being defined in acts of parliament. Copyright is the responsibility of the Attorney
General Chambers. The communication between KIPI (patents), KEPHIS (PVP) and Attorney
General Chambers (Copyright) concentrates mainly on awareness creation and planning for
international negotiations. PVP cannot be administered outside the Ministry of Agriculture, so
coordination will remain an issue.
Uganda
Almost all patents come in through the regional patent office in Harare (ARIPO). The national
patent office has very few staff and does not have data available on plant-related patents that
are valid in Uganda. The office has a very limited capacity to examine applications and
concentrates on examining ARIPO and PCT reports with regard to specificities of the national
patent law.
75
Table 12. Participation in International Treaties and Organizations.
Treaty or
Organization
China Colombia India Kenya Uganda
UPOV 1978 convention,
since 1999
1978 convention,
since 1996
No 1978 convention,
since 1999
Observer
IT/PGRFA No Acceded 2004 Ratified 2002 Acceded 2003 Acceded 2003
CBD Ratified 1993 Ratified 1994 Ratified 1994 Ratified 1994 Ratified 1993
Cartagena Protocol Signed 2000,
not ratified
Ratified 2003 Ratified 2003 Ratified 2003 Ratified 2003
WTO Yes, 2001 Yes, 1995 Yes, 1995 Yes, 1995 Yes, 1995
WIPO Yes Yes Yes Yes Yes
PCT Yes, 1994 Yes, 2001 Yes, 1998 Yes, 1994 Yes, 1995
Source: Compiled from interviews and information on websites of international treaties and organizations.
4.3 The Management of PVP in Case Study Countries
4.3.1 Applications for PVP
The experiences of the three case study country PVP offices are quite different.
In China, there are 70 scientists assigned to DUS testing at the 15 designated stations and
another 16 examiners to test 41 species of crops. All PVP applications to date have used DUS
testing carried out in one of the stations; there is as yet no experience in the use of foreign
DUS reports. Applicants must complete a form that includes UPOV descriptors and other infor-
mation. Many applicants find this difficult to complete and the majority (80%) of applications for
PVP are prepared by an agent. The agents are licensed and they charge a fee of $350-500 for
foreign applications and approx $250 for local applications.
China received 1,150 applications for PVP between 1999 and 2003. Of these, 411 have
already been granted. Many applications made in 1999 have not yet been acted upon; for
those applications granted, the average time from application to approval is 17 months (Koo
et al., 2003). The vast majority of the applications are for field crops; maize and rice account
for 45 and 32% of the applications, respectively. More than three-quarters of the maize appli-
cations in the MoA office for PVP are for hybrids and more than three-quarters of the rice
applications involve either hybrids or inbred lines. Wheat, soybean and rape seed are the other
major examples of field crops seeking PVP. Two-thirds of the applications come from public
research institutions, mostly at the provincial and prefecture level. Applications at the Ministry
of Forestry PVP office are mainly for roses.
76
The PVP and Seed Production office in Colombia has a director and 6 technicians attached to
it. None of these work full-time on PVP, and most contribute to DUS testing when necessary.
ICA developed its own capacity for DUS testing for tropical crops from the initiation of the
office, and received advice and training from UPOV. However, the vast majority of PVP
applications are for ornamentals for which testing is done externally. Most foreign applications
for PVP are handled by local law firms with the requisite expertise. If DUS data already exist for
a variety the confirmation process usually takes about one year. If the data do not exist, the
applicant pays for testing in an appropriate country. The office has good relations with testing
authorities in France, Germany and the Netherlands.
Table 13. PVP Applications and Certificates Issued by MoA in China.
Crop 1999 2000 2001 2002 2003 Total
applications
Total certificates
issued (2003)
Maize 95 58 126 120 121 520 248 (178 hybrid,
70 OPV)
Rice (non-hybrid) 2 5 12 21 43 83 15
Rice (hybrid 4 4 17 31 53 109 25
Rice (inbred lines) 9 15 31 29 89 173 42
Wheat - 3 10 30 41 84 21
Soybean - 13 4 6 7 30 19
Rape seed (OPV) - 3 5 12 18 38 11 (6 hybrid,
5 OPV)
Pepper - 6 1 3 - 10 1
Cabbage 4 1 5 - 5 15 7
Groundnut - 1 5 1 3 10 5
Potato 1 - 3 - 3 7 1
Pear - 1 6 10 1 18 8
Other - 3 2 24 24 53 8
Total 115 113 227 287 408 1150 411
Source: Compiled by authors based on information obtained from Chinese Ministry of Agriculture. Data do not
include applications made to Ministry of Forestry for woody species.
77
Table 14. Source of Applications for PVP in China.
Source Number applications (and %) Number certificates issued (and %)
Public research institution
National 36 (3%) 13 (3%)
Provincial 319 (28%) 137 (33%)
Prefectural 329 (29%) 110 (27%)
University 85 (7%) 36 (9%)
Seed company 323 (28%) 107 (26%)
Individual 45 (4%) 8 (2%)
Foreign 13 (1%) -
Total 1150 100
Source: Compiled by authors based on information obtained from Chinese Ministry of Agriculture. Data do not
include applications made to Ministry of Forestry for woody species’.
Colombia has received 785 applications for PVP since 1996 and 448 had been granted by mid-
2004. The vast majority of the applications are for ornamentals; roses account for 62% of all
applications. The major examples of PVP for agricultural crops are rice (which has had
12 applications to date, with 6 granted) and cotton (25 applications and 8 granted).
Applications for other field crops include soybean, tobacco and potato, all from the private
sector. Although hybrid maize is an important crop in Colombia, sold by several local firms and
MNCs, there are no PVP applications for maize. Other important agricultural crops, including
beans and wheat, are similarly unrepresented.
78
Table 15. PVP Applications in Colombia.
Crop Applications made Certificates granted
Roses 448 (62%) 279 (62%)
Other ornamentals 214 (30%) 139 (31%)
Rice 12 (2%) 6 (1%)
Cotton 25 (3%) 8 (2%)
Soybean 8 2
Potato 5 3
Tobacco 4 3
Sugar cane 5 5
Other 6 6
(All agricultural crops) 64 33
Total 727 451
Source: Compiled by authors based on information provided by ICA.
In Kenya, PVP is one of a range of services and regulatory duties performed by KEPHIS, which
is a state corporation. KEPHIS employs 4 examiners and 10 technicians (in 3 locations) to
administer PVP applications. KEPHIS carries out DUS tests on most of the agricultural crops
that apply for PVP; more than 100 public varieties of 26 agricultural crops were submitted for
testing, the majority in 2001 when the amnesty was announced. Applications for ornamental
and horticultural crops come mostly from foreign entities and the DUS testing is usually done
abroad, although KEPHIS is renovating glasshouses and other facilities in hopes of assuming
more responsibility for the testing these crops. A significant proportion of the applications for
agricultural crops come from the Kenyan public sector and researchers are expected to
provide their own descriptors as part of the application process. KEPHIS then confirms these
descriptors in two years of testing in at least two sites. (Note that DUS testing is also part of
the variety release process in Kenya.) There are a number of instances where breeders and
KEPHIS dispute the nature or quality of the data provided, and this undoubtedly slows the
registration process in some cases. The majority of foreign applications are handled by local
agents, either law firms or members of local flower growers. KEPHIS proposes to make the
use of local agents for foreign applications mandatory.
Between 1997 and 2003 Kenya received over 600 applications for PVP. More than half of
these are for ornamentals, with roses accounting for 41% of the total. Among field crops,
maize has the highest number of applications, accounting for 9% of the total; all of these
applications are for hybrids. In the first four years nearly three-quarters of the applications for
Kenyan PVP were from foreign entities, but in the three most recent years about two-thirds of
the applications are from Kenyan public research and domestic firms. The rise in domestic
applications is partly due to the amnesty granted to previously released public varieties that
were allowed to apply for a full term of protection. The fact that this amnesty is being
79
contested, and has yet to be gazetted, is one of the explanations for the relatively low number
of PVP grants issued. One of the concerns was the ownership of the released varieties between
KARI and the Kenya Seed Company. By mid-2004 only 108 certificates had been granted.
Table 16. PVP Applications in Kenya.
Source of application Crop
Foreign Kenya
Public
Kenya
Private
Joint Public
& Private
Total
Applications
Granted
to date
Maize - 25 14 15 54 -
Wheat - 4 1 25 30 -
Barley - - 7 - 7 6
Sorghum - 2 - 5 7 -
Other cereals - 4 - 3 7 -
Rape seed 14 14 -
Sunflower - 5 5 - 10 -
Soybean - 7 - - 7 -
Other oilseeds - 3 - - 3 -
Beans - 6 1 6 13 -
Peas 7 - - - 7 -
Other pulses - 11 3 - 14 -
Potato - 4 - - 4 -
Cassava - 2 - - 2 -
Cotton - 1 1 - 2 -
Pasture grasses - 9 1 - 10 -
Tea - 12 21 - 33 -
Pyrethrum - 23 - - 23 23
Coffee - 4 - - 4 -
Macademia nut - 4 7 - 11 -
Sugar cane - 6 - - 6 2
Rose 248 - - - 248 61
Alstromeria 28 (?) - - - 28 9
Other ornamentals 33 - - - 33 6
French bean 13 - - - 13 1
Other vegetables 2 - 5 - 7 -
Fruit 5 - - - 5 -
Total 350 132 66 54 602 108
Source: Compiled by authors based on information provided by KEPHIS.
80
4.3.2 Retroactive protection
A decision that can have an important effect on the early performance of a PVP office regards
the protection of extant varieties. In most cases in industrialized countries, extant varieties
were not eligible for protection when PVP was initiated. But there are several instances in the
case study countries where extant varieties are eligible.
In its 1999 legislation, China offered a ‘window’ when it established PVP that allowed protection
for varieties that had been released up to four years previous to the initiation of the legislation.
Its effects do not seem to have been very significant.
Colombia had a transition regime or ‘amnesty’ of one year for extant varieties when PVP was
initiated, granting protection for varieties that were already in an official public registry, offering
protection for a period based on the remaining time between the date of registration and the
15 or 20 years of protection offered under the law. ICA did not opt for PVP because it
considered their varieties to be of public access, and would have had a conflict of interest.
However, the amnesty seems to have been very significant, since 229 applications were filed
under this transitional regime. The main beneficiaries of this were ornamentals, but
4 applications were filed for cotton, 2 for rice varieties of a local company, and 1 for soybean
of another local company.
The decision in Kenya to grant an amnesty to released public varieties was responsible for a
flood of applications from KARI for the protection of its crop varieties. If the amnesty is upheld,
and KARI is willing to pay the testing and maintenance fees, it could exercise control over these
varieties for another full protection period of 15 years. Although KARI has signed a separate
agreement with KSC providing royalties for the use of its varieties currently in KSC production,
the validation of the amnesty would mean that KARI could collect royalties from any other seed
producer for a wide range of its crop varieties. The fact that KEPHIS is purchasing testing
reports on very old flower varieties in the Netherlands seems to imply that such an amnesty is
also available for varieties whose protection has expired in Europe, thus providing for a very
significant extension of the protection in a major flower-producing country.
The new PVP Act in India will allow the protection of varieties that have already been released
and notified, but the protection period will begin from the original notification date. Only a small
proportion of commercial hybrids is notified and will be able to take advantage of this. The
major impact will be for public varieties, some of whose seed is currently marketed by private
companies or used as breeding lines. Many private companies are not aware of the possible
implications of such protection of extant varieties and it is not clear what, if any, rights the
public sector institutes will try to enforce in this respect.
4.3.3 Deposit of breeding lines
An additional concern regarding participation in a PVP scheme is the requirement for deposit of
germplasm, particularly inbred lines. The issue has not arisen in Colombia, as no hybrids of
agricultural crops have applied for PVP. In Kenya, KEPHIS currently does not have the facilities
81
to store inbreds and certifies domestic hybrid production by visiting seed production plots and
checking inbred descriptors against a list provided by the seed producer. In India, current law
requires that NBPGR manages all import of crop germplasm (for research or seed production
purposes) and allows them to take samples for deposit. This has been an impediment for some
firms wishing to import inbreds that cannot yet be protected in India, or germplasm under
development e.g. in shuttle breeding programs, as the owners may worry about the security of
such deposits. The new PVP law would require deposit of the inbreds of protected hybrids, and
opinion in the seed industry is divided. Some companies feel that this will cause no problems,
while others are wary about the prospect and are anxious to see how the system will be
implemented.
4.3.4 Costs and budgets
The costs of applying for and maintaining PVP in the case study countries are presented in
Table 14, along with relevant data from the EU and US for comparison. It should be noted that
the costs of application in the case study countries are substantial; in addition there are
significant transaction costs (justifying the use of agents in China and Colombia). In China
maintenance fees rise steadily over the period of protection, in Colombia they rise only through
the first 4 years, and in Kenya there is a flat annual fee for maintenance. It is important to
remember that these are only the costs of obtaining PVP and that other expenses related to
variety testing and release (VCU) must also be met.
Table 17. Costs of PVP Application.
Item China Colombia Kenya EU US *
Application $217 $233 $200 $1,060 $432
Testing $556 $1,396
($155 if done abroad)
$600 $1,300 – $2,825
(depending on type of crop)
$3,220
Granting of rights - $39 $240 - -
Annual maintenance
fee (by year)
(1-3): $181
(4-6): $236
(7-9): $306
(10-12): $398
(13-15): $517
(16-18): $672
(19-20): $ 874
(1): $78
(2): $155
(3):$ 233
(4-20): $311
(1-20): $200 (1): $350-470
(2): $470-705
(3): $590-940
(4-20): $705-1,175
(depending on type of crop)
None
* The U.S. does not charge annual maintenance fees. In addition, in the U.S. testing is undertaken by the breeder
and results supplied to the Plant Variety Protection Office; the testing fee in the table refers to an examination
fee.
Source: Compiled by authors from interviews and relevant national authorities.
82
China has quite high maintenance fees for PVP, compared to those in the other case study
countries, although some subsidies are offered for public sector applications. While this may
be justifiable given the large market for which exclusive rights are obtained, it is a frequent
complaint from the private sector, but also from public sector breeders. The prefecture level
public research institutes find it particularly difficult to apply for PVP due to a lack of funds
(Huang et al, 2003). During this study, research managers at the Guangdong Academy of
Agricultural Sciences pointed out, for example, that costs of a PVP (or patent) application can
approach RMB 10,000 while a researcher’s annual budget may be about RMB 20,000. A similar
complaint was made by the Rice Research Institute of the Hunan Academy of Agricultural
Sciences, who suggested that the application and testing fees for conventional rice varieties
should be lower than for hybrid varieties, given the different market segments targeted.
In the private sector, especially the breeders of ornamentals complain since they need to
protect a large number of varieties of a particular crop to start a significant production. The
local market for flowers does not seem to sustain such investments and several foreign
breeders avoid sending their elite materials to China as a result.
All income from the PVP office goes to the Treasury in Beijing. The fees charged are not
sufficient to cover the costs of testing, especially because of the large number of testing sites
and the resulting high investment budget for constructing facilities. In Colombia, the income
from the PVP office goes directly to ICA (and hence to the Treasury), but rough calculations
indicate that the PVP office is self-supporting. (Note that the current portfolio of applications in
Colombia implies a relatively small amount of DUS testing to be done in-country.) In Kenya it
was not possible to get a breakdown of the expenses and income related specifically to PVP
within the operations of KEPHIS but there is no requirement that PVP be self-financing.
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Box 3. Protection fees
Establishing the appropriate fees for protection is an important challenge for regulatory
agencies. High fees create a barrier to widespread participation, especially for public
institutes or smaller firms. On the other hand, low fees may cause financial problems for the
registration and testing authorities, leading to reduced efficiency and/or rent seeking.
There are basically two types of consideration in calculating appropriate fees: i) the extent
to which the agency establishes different fees for different types of crop variety and/or
applicants, and ii) the extent to which government subsidizes the protection agency as a
stimulus to national plant breeding activity.
With respect to fee rates, one option assumes that the cost of the authority’s activities will
be shared equally among all applicants and crops. This will probably involve a certain
amount of cross-subsidizing between crops (e.g. few applications and high costs in testing
sorghum can be compensated by many applications and relatively low-cost registration work
in rice).
Alternatively, countries may establish different fee levels for separate crop groups (based
on the actual costs of evaluation). This may lead to acceptable fees for crops with large
numbers of applications each year (e.g. major cereals). But it can also lead to prohibitive
fees if special facilities need to be maintained, and charged accordingly, for crops with few
applications per year (e.g. minor vegetables).
A third option is based on the value of the protection for the applicant. Fees for applicant
varieties with a potential large market can be higher than for varieties with a smaller market.
Fee levels for highly commercial crops like maize may not be useful for minor crops like
pigeon peas. This argument also underscores why it is difficult to make comparisons
between countries. Fee levels that are acceptable in a large country like China may not
stimulate applications in a smaller country like Uganda.
Countries could also establish different fee levels for different types of applicants. For
example, patent application and maintenance fees for independent inventors, small
businesses or non-profit organizations in the U.S. are now only 50% of the regular fees.
Countries may also subsidize certain operations of the testing authority, and they may
choose to reduce costs through international cooperation. In the European Union, for
example, national authorities share the responsibilities of testing particular species; Kenya
and Colombia purchase test reports for flower varieties from abroad. A limitation to this
option may be that some UPOV member countries share their test reports only with other
UPOV-member countries.
The need to cover the costs of variety protection has to be balanced by the need to
establish effective incentives for stimulating widespread invention and achieving equitable
results for all sectors of the farming community.
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4.3.5 Enforcement
To be effective, a PVP system must include adequate mechanisms for enforcement. The PVP
systems in Colombia, Kenya and China have only been in place for a short time, so there is a
limited amount of evidence available on enforcement capabilities.
PVP offices themselves are not actively engaged in enforcement. In Colombia, it is expected
that the breeder or seed producer will pursue any cases of infringement. In a recent example a
seed company asked the PVP office to examine particular fields and confirm that the cotton
variety being grown was the company’s. The company could show that the seed was not legally
acquired and used the PVP office testimony to obtain an out-of-court settlement. Another case
is being pursued where one company is marketing Brachiaria seed using the name of a popular
(protected) variety. The seed company licensed to sell the variety is trying to mount a legal
case. In general, the companies that sell rice seed are more concerned about the practice of
large-scale informal seed sale and hope that Resolution 2046, which limits seed saving of
protected varieties to small farms, will provide some relief. But the companies recognize that
they will have to detect the violators and bring cases. It does not help that the Colombian PVP
law currently has no description of penalties for violations.
In Kenya there have as yet been no major cases involving violations of PVP law. Probably the
major example is a dispute between a small seed company and KEPHIS regarding the
company’s rights to market seed of an old KARI maize hybrid.
In India, there is a provision in the 2002 Act for the establishment of an Appellate Board to
handle IP issues, so that knowledge can be drawn from different departments and experience
can be concentrated in this body.
Chinese institutes market their own products (which is not necessarily an efficient practice) for
fear of losing control of them if they attempt to contract out. Seed management stations under
county agricultural administration departments can check licenses and some are apparently
supporting breeders in claiming their rights and imposing fines. Several respondents however
complain that the level of knowledge of the courts is often insufficient to effectively enforce the
rights. One company manager explained that he pursues rather minor infringements mainly ‘to
educate the courts’.
4.4 Management and enforcement of patents in case
study countries
Experience with enforcing patents in the breeding industry has been very limited in the case
study countries. Only in China and Colombia are there a few varieties that contain patented
biotechnological inventions actually in the field, and enforcement is even more difficult than with
PVP, especially when it comes to pursuing illegal reproduction by farmers. One MNC is confident
that the recently concluded case in favor of the patent holder against a farmer in Canada will
facilitate enforcement in other countries as well, but large numbers of cases against farmers in
developing countries are not considered likely in the coming years.
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However, unlike PVP, patents in agriculture can draw upon experiences of enforcement of the
patent system in industrial applications. Law firms that have experience with patent infringement
cases are available in all case study countries, even though the number is very limited in
Uganda. The presence of vast international experience, concerns for respecting property rights
and the threat of future claims can affect behavior. An example is provided in India, where the
National Botanical Research Institute (NBRI) decided not to release its own Bt gene because it
is not sure whether it will have enough freedom to operate regarding other components of the
construct when the new patent law becomes operational.
4.5 Summary
Establishment of legislation
PVP has been (or is being) instituted in the case study countries in distinct ways. Although three
of the four countries with PVP laws are members of the UPOV under the 1978 convention,
there are significant differences between them in the details of their legislation and in the actual
performance of PVP. Much of the explanation for these differences is in the distinct characters
of the national seed sectors. In addition, the historical development of support for PVP varies
among countries. The major pressure for the initiation of PVP came from the foreign horticultural
industry in Colombia and Kenya. In China, the initiation of PVP was part of a wider policy to
promote the development of the domestic seed industry and to establish a framework for
interaction with foreign agricultural technology. The establishment of PVP in India had its major
impetus from a well-developed private seed industry; the industry is large enough, and there is
a similarly well developed civil society representing a range of rural interests, so that the public
debate about the nature of PVP was open and extensive. In Uganda, on the other hand, neither
the seed industry nor rural civil society organizations are well established. The debate about
the nature of PVP has been restricted to a small committee of professionals dealing with both
breeding and genetic resources. Many developing countries that currently face the establish-
ment of TRIPS-compliant PVP will find themselves in situations similar to that of Uganda.
Once PVP legislation is in place, further developments are possible. The moves in Colombia
and Kenya towards restrictions on seed saving of protected varieties are a case in point. It
remains to be seen how such modifications are interpreted and applied. Right holders may say
that they would not pursue seed saving by smallholder farmers, but farmers in any country
require assurances that seed saving restrictions are not be applied in an arbitrary or politically
motivated manner.
Plant varieties are not covered by patent law in the case study countries, although China offers
patents for some special types of varieties (particularly hybrids) through provisions for the
patenting of breeding methods. Trademarks are commonly used in all case study countries to
protect seed company names and marks, but not for official variety names. None of the case
study countries have particular exemptions in their patent laws that bring the patent system in
line with the PVP system when the scope of the patent includes a plant variety or a group of
plant varieties. It is still unclear how the Farmers’ Rights clauses in the Indian law will relate to
the patent system when the latter will allow the patenting of products, such as genes.
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The protection of extant varieties
One of the factors affecting the initial size of demand for PVP will be the decision on protection
for extant varieties. In many countries such a decision will be largely relevant to public varieties,
although private varieties may be affected in some instances (such as certain popular, notified
hybrids in India). If the public institutes are able to meet the fees for initial DUS testing, this
could result in a significant initial backlog of requests with little clear commercial purpose. It
should be possible to separate situations in which DUS testing is pursued as part of a plan for
seeking royalties and licenses from those instances where the public sector is simply trying to
ensure that private individuals do not usurp the products of their research. It is not clear if the
potentially high investment in maintenance fees for public varieties that remain off the shelf is a
good investment. In addition, such redefinitions of the status of public germplasm that is
already in use may upset relationships between the public and private sector, as the disputes
over the amnesty in Kenya illustrate.
Implementation of PVP
The ease of implementing PVP seems to be overestimated in several countries. It is incorrect
to believe that once PVP legislation is in place the rules and consequences will be clear for all
stakeholders, or that countries with similar legislation will have similar outcomes. In all cases,
the conduct of PVP is still being tested and refined. Establishing a PVP law and putting it into
practice are two separate challenges, and differences in the management of similar PVP
regimes help explain differences in outcomes and impact. Countries require considerable time
to experiment with the implementation of PVP and to understand the consequences.
The transparency of PVP management
An institution must be identified to manage PVP and for testing varieties. The duties may be
assigned to an existing agency, perhaps the one responsible for seed regulation, or a new
institution may be created. There are advantages of integrating PVP with an existing seed
regulatory agency, but also possible conflicts of interest. The agency must be seen to have
sufficient independence; for instance, there are some concerns in India about the fact that ICAR
will be assigned duties for DUS testing for its own varieties. Some parts of the private sector
also have concerns about deposits of inbreds. In addition, the agency must be transparent in
its interpretation of the rules.
Administrative and technical resources required to manage PVP
There is not yet sufficient experience to draw conclusions from the levels of participation in the
PVP system about the local resources required to manage PVP. In Colombia, a relatively small
number of private OPVs of commercial crops (rice, cotton, and soybean) have sought protection
and many of these are in production. In addition, a large number of horticultural crops have
been granted PVP, but the DUS testing has been managed externally. In Kenya, very few private
varieties of agricultural crops have yet applied for protection, but there has been a deluge of
applications for a range of public varieties (in response to an amnesty for extant varieties). This
has required an extensive amount of DUS testing, but what proportion of these public varieties
will attract maintenance fees remains to be seen. Kenya is also considering developing its own
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testing capacity for things such as ornamental crops, although it is not clear if this is an
efficient use of resources. In China as well, there is a large, and continuing, demand for PVP,
largely for public varieties.
Fees for PVP
Another factor affecting the demand for PVP is the level of fees. The high number of applica-
tions in Kenya and China in the early years of PVP is not necessarily an indication of the levels
of demand that will eventually emerge. Whether private companies or government institutes will
be willing to pay application fees and yearly maintenance will depend on their experience in the
market. In large countries with extensive seed markets, investment in PVP will be easy to
justify; for smaller markets and niche varieties the justification will be more difficult. The fees
are uniform, without regard to type of crop or seed market (so that the costs of protecting a
rice OPV, a rice hybrid, and a common bean variety are all the same, despite significant
differences in their potential earning power in the seed market.) There is not much difference in
the costs of PVP between the 3 countries in the sample, despite significant differences in
potential market size. (For the 3 countries it costs between $1,200 and $2,400 to register and
protect a variety for five years.) In addition, the countries take quite different approaches to the
adjustment in fees during the period of protection; in some cases fees are lower in the earlier
years (presumably to encourage testing the market). As experience with PVP systems develops,
it will be important to see how the fee schedules affect the willingness to seek protection for
different crop types (e.g. high-value horticultural exports versus local grain crops).
Financial sustainability of PVP authorities
Discussions about the level of fees charged for PVP are related to the question of whether a
PVP authority can be expected to be self-supporting. If it cannot, then justifications for public
investment are required. On the other hand, if it is self-supporting, care must be taken to
ensure that revenues are not being generated by the enforcement of a protection system that
encourages high-value applicants and locks out lower-value candidates. Questions of financial
independence (and of the appropriate level of fees) also depend on the relative participation of
public plant varieties (and the extent to which revenue is earned simply by moving money from
one government agency to another). It was not possible to assess the degree of financial
sustainability of the 3 case study PVP authorities in their early years of experience. The rapidly
expanding Chinese PVP system is certainly not self-financing at this early stage in its career,
while the Colombian system (which does its own testing on a very limited number of crops and
earns substantial revenues from the protection of foreign-origin IP) would appear to be viable.
Enforcement capacity
The PVP agency itself is rarely the body responsible for enforcement, and if PVP is to function
efficiently concomitant enforcement capabilities and resources must be developed. The few
cases described in Colombia indicate that sanctions for violations are not defined and that the
courts are not well prepared. Experience from China shows that it takes some time for the
courts to develop requisite expertise in this area. In all cases, private and public plant breeders
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must recognize that the major responsibility for identifying violations and pursuing cases rests
with them, implying additional investments of staff and resources.
Implementation of patents and trademarks
Patents in the breeding industry do not require specific implementation needs apart from a
capacity in the patent office to examine molecular biotechnology tools, methods and products.
Countries can benefit from regional (e.g. ARIPO) or global (PCT) harmonization of application
and substantive examination of applications. There is no or very little case law in the countries
studied about the width of the claims, the scope of protection, etc. Enforcement of patents in
the breeding industry can draw on the infrastructure in the case study countries for enforcing
patents in other industries even though experiences differ among the countries.
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5. Impact on seed companies
5.1 Seed Company Approaches to IPR
There has been significant private seed sector activity in many developing countries even
before the establishment of national IP regimes for plant varieties. In these cases companies
have tried to protect their products through other means (particularly through reliance on
hybrids and being ‘first-to-market’) and have rarely devoted many resources to the consideration
of IP issues. The MNCs that see a market for their (patent-protected) GMOs form an exception
to the above. They have protected their inventions in the main markets outside the OECD-
countries where possible. With the advent of PVP laws, companies must now reconsider their
strategies and investments in IP.
In India, seed companies are anxious to apply for PVP for their hybrids. Many private seed
companies compete, and seed production usually takes place with contract farmers in specific
areas of the country that have appropriate agronomic conditions and grower experience for
efficient seed production. The juxtaposition of many small seed producers for competing firms
and the impossibility of providing strict monitoring means that inbreds and other germplasm
may be stolen or traded. (The industry politely describes this as ‘cross-purchasing’.) Some
observers estimate that one popular cotton hybrid has leaked from the company that developed
it and is now produced and sold under different names by as many as a dozen competitors.
Another company spoke of its surprise at finding its sunflower hybrid entered by a competitor
in an AICCIP trial. The hope is that the new PVP law will allow companies more control over
their inbreds.
Many Indian companies decry the lack of contact with the public system and hope that the
establishment of PVP will usher in a new policy that provides greater access to public
germplasm. Most Indian companies express an interest in this possibility and a willingness to
pay for access to such material.
The private sector is now preparing for the implications of the new PVP law and of the seed and
patent laws which are due in 2005. Until recently, private companies in India could sell their
own varieties without having them released and notified, a requirement for public varieties.
Non-notified varieties could not be certified, but many companies prefer to sell their seed,
particularly hybrids, as truthfully labeled seed in combination with a well established brand
name. Private companies are well aware of the new PVP law, and most hope to register their
varieties despite what they generally consider weak protection. But there is considerable
uncertainty about what such registration will entail, and to what extent it will be regulated by
seed law or plant variety protection law. Most seed companies are adopting a ‘wait and see’
attitude. The companies understand that DUS testing will be required for PVP, and some
believe that DNA fingerprinting may be used (which is not likely to happen in the short term),
but opinions vary regarding the degree to which other tests will be required (as the new Seed
Law has yet to be finalized). Some observers are concerned about costs and efficiency of
managing large scale DUS testing that will be required. Although many companies welcome
the possibility of protecting their hybrids (especially for controlling the theft of inbreds), some
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express reservations about the requirement for depositing protected inbreds with NBPGR. In
some of the larger firms, new posts have been developed for monitoring and advising on IP
issues. The largest firms are developing considerable legal capacity. Some smaller companies
have tried to deal with particular violations of their IP (such as the imitation of brand names or
theft of inbreds) by hiring lawyers and occasionally pursuing court cases, but this has not
resulted in any strengthening of company IP skills. Companies that are part of larger commer-
cial holdings can draw upon the legal capacities of the parent company.
The situation is different for foreign seed companies operating in India that use biotechnology
in their breeding programs. They expect that the new patent law will provide effective protection
after an initial ‘maturation’ period, and many have filed applications, using a ‘mail box’ procedure;
such applications will be considered when the new patent law becomes effective in
January 2005. The use of this procedure addresses restrictions on late registration. At the
same time, companies are increasingly wary of working with technologies that may contain
components that could eventually fall under an Indian patent.
In China, private sector participation in the seed sector is developing rapidly, as a result of the
new seed sector regulation which eliminated the monopoly of the public seed companies. Many
smaller, start-up companies, have appeared and several larger ones are seeking partnerships
with foreign companies. Companies are concentrating attention on hybrid varieties for all major
crops, but not exclusively. Attitudes towards IPRs differ depending on the size and nature of the
companies. The larger companies, such as China National Seed Group, already make use of
trademarks and are applying for PVP titles. These tend to be well-resourced companies that
have their origins as public corporations that are in the process of some sort of privatization.
Such companies are devoting professional staff to IPR management, primarily PVP and trade-
marks. However, it is not clear how some of these companies that are engaging in breeding,
possibly with the use of transformation techniques or marker-assisted selection, are dealing
with FTO issues. Also a wide range of vegetable seed companies have been using trademark
protection for quite some time.
Many smaller Chinese companies, on the other hand, have established themselves in order to
produce and sell seed of competitors’ varieties ‘illegally’, reportedly without knowledge of
restrictions imposed by IPRs. Some of the larger companies describe the current situation as a
learning phase for a market which does not have a long history of IPRs. The CEO of one major
domestic seed company, active in maize and also in cotton, explained that they pursue as
many PVP infringement cases as possible because they feel it is necessary to ‘educate’ their
competitors, as well as the legal system, about the new rules of the game. Foreign seed
companies have been rather cautious about using the new PVP system. They are worried about
leakage of their material during the DUS testing and many are adopting a wait-and-see attitude
concerning the effectiveness of enforcement. In many cases, they cite perceived weak enforce-
ment possibilities as a reason for refraining from introducing elite material in the Chinese
market or in investing in major breeding programs (with partners). The situation with vegetables
is illustrative. Many domestic companies are applying for PVP protection but still seem to be
concentrating on hybrids. Foreign companies, some of whom even use China as a production
base for other markets, have generally limited themselves on the local market to introducing
older varieties whose protection has almost expired.
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In the other case study countries the domestic seed companies are relatively small and do not
have the resources to establish legal expertise. In Colombia, there are agents that help
companies apply for PVP. In Kenya, the new private seed companies have not yet applied for
PVP for their varieties, even for maize OPVs, partly because they view the process as involving
high transaction costs.
5.2 Seed Company Priorities
Although one of the objectives of PVP is to provide incentives for a wider range of breeding
strategies and objectives, the evidence from the private seed sector in the case study countries
provides few examples to date. However, the length of time that companies in these countries
have had to gain experience with PVP legislation is admittedly limited, so the evidence must be
interpreted with caution.
The majority of private seed company activity continues to focus on hybrids, and asked about
whether investments might be directed to OP varieties or crops because of IPRs, all responded
that they would concentrate on hybrids where these are feasible. Colombian rice breeding by
the private sector seems to be an exception, but this was already ongoing long before PVP
was established. Companies now seek protection for their rice varieties, but there is not
sufficient evidence to demonstrate increased private rice breeding activity due to the IP regime.
Most of the farmers who purchase rice seed manage commercial operations (average holding
about 32 ha) and many purchase seed rather than saving it, so the rice seed industry has a
reasonable market. Nevertheless, the considerable amount of informal seed sale, and the fact
that there are no criminal penalties described for PVP violations, means that incentives for the
seed companies are still limited. The advent of PVP in Colombia has not seen the emergence of
private plant breeding for crops such as OPV maize or beans.
In Kenya, the major hopes of the private seed industry rest with hybrid maize despite the
introduction of PVP. However, two companies are producing and marketing their own OPVs,
and KSC also markets public OPVs. It is interesting to note that the private companies have so
far not applied for PVP for these varieties. Private companies are not investing in breeding for
other non-hybrid seed crops, although the brewery funds some of the public barley breeding.
The flower sector claims that PVP is vital for the development of this sector. It is worth noting
that part of the rationale for Kenya’s proposed move towards UPOV 1991 comes from KSC
complaints about the widespread sale of farm-saved seed among wheat farmers; KSC is
currently the only firm supplying wheat seed.
In China, the PVP system has existed only four years but there is not yet much indication of
private sector interest in breeding OPVs. One of the largest, diversified seed companies, China
National Seed Group, indicated that PVP has not affected its hybrid/OPV mixture of products
and breeding strategies. Breeding with OPVs seems to be minimal and concentrates, as does
marketing of imported OPVs, on small market niches where there is demand from very profes-
sional, commercially-oriented growers who would not be interested in purchasing ‘counterfeit’
seed. Again both domestic and foreign companies do not yet have sufficient trust in enforce-
ment possibilities to consider OPVs seriously. According to some, PVP can help improve the
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protection of their hybrids through the protection of the inbreds, but those who can choose to
continue to use (modified) three-way crosses that provide a reasonable protection from
‘stealing’ inbreds by competitors. Foreign companies may market some OPVs but are not yet
bringing in elite material. Optimists claim that time is necessary for Chinese business culture,
as well as the legal system, to adjust.
Monsanto and Delta & Pineland’s experience with Bt cotton may indicate that confidence in the
patent system is not much greater. Aside from complaints by their Chinese partners of the
difficulties in enforcing the patent, Monsanto has clearly withheld from introducing its Bollgard II
technology in China awaiting new strategies that can effectively deal with the business
environment.
The Indian private seed industry is large and diverse and there is no single attitude that charac-
terizes the attitude towards breeding strategies. However, there is relatively little evidence at
this early stage that the new PVP law will elicit much additional breeding activity outside of
hybrids. There are a few private companies that already have their own OPVs (e.g. rice, cotton,
and certain vegetables); they expect the new legislation will help protect them from competitors,
but at this point they have no plans to expand their breeding in this direction. A few companies
say that if the PVP legislation is effective they may expand into non-hybrid seed, but many
others reject the possibility, at least in part because of the very liberal scope for farmer seed
saving and exchange. Some seed companies express interest in non-hybrids as a way into the
hybrid market. For instance, several companies began conventional rice breeding programs as
a way to gain a foothold on what they hope could be a lucrative hybrid rice market. One com-
pany in the sample hopes to begin mustard and wheat breeding, but again in the expectation
that hybrid technology will eventually become feasible. One large company has temporarily
abandoned its work on a transgenic mustard hybrid, but continues to market an OPV based on
its brand recognition for seed quality. The strategy of offering a wide range of products to
farmers in order to generate brand loyalty explains the fact that at least one large company
expresses interest in crops like soybean, not as an important generator of revenue, but as an
additional service to its clients of hybrid cotton and sorghum.
The existence of PVP legislation is reported to make foreign companies more willing to provide
their more advanced breeding lines and varieties to a country, but this depends on the level of
enforcement. In India, some local representatives of MNCs say that they still have only restricted
access to the parent company’s germplasm while others say that the situation is improving. In
China, companies seem to be playing a wait-and-see game, watching the experiences of mostly
domestic competitors in pushing through enforcement cases.
5.3 Protecting Bt Cotton
The most relevant example of the challenge of protecting a transgenic variety is the case of
Bt cotton, already grown in China, Colombia and India (and a future possibility for Kenya and
Uganda).
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China has the longest history with Bt cotton, both through a joint venture between Monsanto,
Delta and Pineland and the Hebei provincial seed company, and separate constructs and
varieties developed by the public research organizations of CAAS, including BRI. Bt varieties of
cotton have been quite successful in north China, in particular the provinces of Hebei, Shandong,
and Henan. It was estimated that almost one-third of all of China’s cotton area was planted with
Bt varieties in 1999, and 58% in 2003 (Pray et al., 2002; James, 2003). Difficulties in making
precise estimates illustrate the special challenges of protecting Bt cotton in China. Monsanto
and Delta and Pineland first introduced their 33B variety in 1999 in Hebei and two years later
introduced their 99B variety. Biosafety approval, although nationally coordinated, is granted on
a province-by-province basis and marketing of Monsanto’s varieties has extended gradually to
other provinces during the last six years, but not without reported delays (Pray et al., 2002).
Monsanto has some patent protection in China, including on their transformation methods and
the 35S promoter gene. But they do not have protection on the Cry1Ac gene construct. Given
that cotton is not yet eligible for PVP, this leaves trademarks and biosafety as possible modes
of protection.
It is commonly acknowledged by many involved in the sector that there is widespread illicit
production and marketing of Monsanto and Delta and Pinelands’ Bt varieties (see Pray et al.,
2004). During a random visit to seed shops in Henan Province, packages marked as 99B seed,
either illicit or counterfeit, were readily available. There are also no legal restrictions on farm-
saving of seed and Monsanto’s construct has reportedly been crossed into other varieties by
farmers (and breeders). A similar situation faces the public-sector developers of Bt cotton in
China even though BRI does have patent protection for its two Bt constructs. BRI acknowledges
the problems that their joint venture company, Biocentury, has had in enforcing the patents.
The Cotton Research Institute (CRI), based in Anyang City, Henan, also has Bt varieties
containing constructs licensed from BRI. CRI management explained that biosafety regulations
currently provided the most effective means to limiting illicit sales of their varieties, particularly
given the ineligibility of cotton for PVP, But a visit to another seed shop in Anyang also revealed
illicit or counterfeit CRI varieties (particularly CRI221) easily available. Thus neither BRI nor
Monsanto and Delta Pine Land’s Chinese joint venture (Ji Dai) is able to effectively control
unauthorized sales of their varieties. Many, though not all, claim that the situation is improving,
although the situation would be improved if PVP were available for cotton. Monsanto has yet to
introduce its Bollgard II technology in China. This may be due to IP considerations, or the
changing rules concerning foreign participation in the biotechnology and seed sectors.
India’s first Bt cotton was released through a joint venture between Monsanto and India’s
largest seed company, Mahyco, which it partly owns. Mahyco cotton hybrids that were already
marketed in southern India were transformed and submitted for biosafety approval. They were
made available to farmers in 2002. The release of the varieties and their subsequent perfor-
mance are the subjects of considerable controversy, as there are many anti-GM movements in
India. Mahyco claims to be satisfied with the sale of the transgenic hybrids (which are priced at
close to four times the cost of conventional cotton hybrid seed), but it faces a number of
uncertainties related to IP strategies. It is not possible to patent genes in India, and the PVP
system in not yet in force. It would appear that at present the only effective way of controlling
the unauthorized sale of Bt varieties is through the biosafety regulations. The year before the
Mahyco hybrids entered the market, a small seed company in Gujarat marketed an ‘insect-
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resistant’ cotton variety that turned out to contain the same Bt gene. Although the company
protested its innocence, claiming it must have been introduced through natural cross-fertiliza-
tion, the most widely accepted explanation is that company breeders crossed commercial
Bt cotton (from the US) with their own lines and produced a cotton variety that quickly became
very popular with Gujarat farmers. The company was prohibited from continuing by the
enforcement of biosafety legislation (i.e. their variety had not achieved clearance). Mahyco’s
own Bt varieties are only approved for certain states, but there is already a thriving underground
market for the seed in north India. There are many rumors of other ‘Bt’ cotton varieties for sale,
and although the majority are surely spurious, everyone admits that it is fairly straightforward
to use commercial Bt varieties to develop new varieties. Despite the losses in control and
royalty income by Monsanto/Mahyco, the widespread illegal introductions in Gujarat and other
areas may have opened up future markets for the company, thus falling under ‘optimum levels
of piracy’ strategies (G. Tansey, pers. comm.)
Monsanto’s strategy with respect to Bt cotton in India has now shifted towards technology
provision rather than direct marketing. A joint venture (Mahyco Monsanto Biotechnology Ltd.) is
providing the Bt gene for cotton to other Indian seed companies. A number of companies have
entered into agreements for access to Monsanto’s Bt cotton lines to use in their own breeding
programs. As the company does not ‘own’ the gene, the contract is based on access to the
biosafety data that will be necessary for approving any transgenic variety. At the same time, a
consortium of seven seed companies entered into agreement with the National Botanical
Research Institute for access to another Bt construct. That arrangement is currently on hold
because of uncertainties about NBRI’s freedom to operate, and some have turned to Monsanto
for quicker access to Bt technology. In addition, another company has entered into agreement
with Biocentury for access to the Chinese Bt gene for cotton.
Cotton is a less important crop in Colombia than previously, but it is now the subject of
considerable government effort at expansion. Monsanto introduced a Bt cotton variety there in
2004. Both Monsanto and the Colombian government are anxious that the experiment works
well, and considerable care has been taken to ensure that there is no unauthorized production.
The production and sale of the Bt variety is licensed to a local seed company. Farmers who
want to grow Bt cotton must register with a cooperative, through which they sell their harvest.
ICA and the seed company will monitor cotton fields to enforce access to the technology and
to ensure that growers comply with the requirements for planting a non-Bt refuge. The Bt
variety has been officially released, but does not yet have PVP. The Bt gene is not patented in
Colombia, but it is felt that the strict enforcement planned for the introduction of Bt cotton will
be sufficient to prevent any unauthorized activity. In addition, the recent Resolution 2046
makes it illegal for any farmer to save seed of any transgenic crop. Whether this type of
intensive investment in regulatory enforcement would be feasible for the more widespread use
of transgenic crops is uncertain.
The introduction of Bt cotton in Uganda is awaiting the establishment of a biosafety regulatory
system and although Kenya is further along in defining biosafety regimes it is only beginning to
consider the possibility of Bt cotton.
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5.4 Managing IPRs and collecting royalties
Having rights is only the start of operating IPR from a company point of view. When a company
itself cannot reach the entire market for its variety it commonly contracts with other seed
producers. In addition, contracts may be signed with the end-users, particularly in the cases of
flowers in several case study countries, and of genetically modified varieties and hybrids in
industrialized countries. These are either signed contracts or so-called ‘seed wrap’ or ‘bag tag’
licenses that automatically enter into force when the bag is opened.
Companies may need to put considerable effort in enforcing such contracts. They need to know
whether their licensees and customers live up to their obligations, i.e. whether they indeed
produce and market only the amounts that they pay royalties for. It is even more difficult to
control seed flows outside the contracts. In addition, the rights holders often have to establish
the thin line between permitted farmer exchange and commercial sales of illegal farmer-
produced seed.
Information and presence are the key elements in following up IPRs. Information is relatively
easy to get in countries with a strict seed law, i.e. where all seed in the market is certified by
an authority that can make its data available to the rights holder. Such authorities know exactly
which amounts of seed are produced of each variety, and they have a role in policing non-
certified seed in the market, providing valuable information for rights holders. In the absence of
such regulated systems (such as for horticultural crops in most of the world) or where such
systems are far from operational, the breeder has to follow-up on his rights himself. Licensees
may have a role in pursuing cases of illegal seed in their own markets. Alternatively, the market
intelligence staff of the seed companies actively follow up on the rights. In some cases
breeder’s/seed associations can play a role, or specialized agencies can offer assistance.
In the case study countries, seed associations are not primarily involved in pursuing royalties
for their members. This may be contrasted with some Latin American countries such as
Argentina and Uruguay where seed associations (ARPOV and URUPOV, respectively) are very
active in taking illicit seed traders to court on behalf of their membership, which includes the
majority of seed companies in these countries. Specialized agencies are active, especially in
the flower business, in some of the case study countries. For example, the international
company Royalty Administration International is active in many flower producing and importing
countries, including Colombia and Kenya.
5.5 Alternatives for protection
Conventional IPRs on plant varieties are not the only way that seed companies can protect their
products from being used by other companies or restricting farmers from saving seed. It is
worth reviewing case study country experience with other alternatives that may be employed
on their own, or in combination with IP instruments.
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5.5.1 Biological protection
An exceptional investment in plant breeding research has attempted to extend the range of
crops for which hybrid seed production is feasible; the incentives are both agronomic (the
higher potential yields) and commercial. In many countries, including those in this study, the
seed industry has been able to take advantage of this biological protection long before the
advent of IPR regimes in agriculture. It is thus interesting to examine the behavior of firms
regarding the protection of hybrids under new PVP laws. On the one hand, given that hybrids
bring their own built-in protection, it may be argued that companies would not bother with the
additional expense of seeking PVP for hybrids. This seems to be the case in Colombia, where
neither MNC nor domestic maize hybrids have sought PVP. The situation in Kenya is more
complex. The public (and parastatal) maize hybrids are seeking protection, but the maize
hybrids of the small domestic companies have yet to apply for PVP.
The possibility of industry applications of V-GURTs has a significant impact in the IPR discussions
in some case study countries. Even though the technology is not commercialized anywhere,
several respondents in the group of farmer representatives consider ‘terminator technology’
and IPRs as equivalents. Even though both may increase chances of concentration in the seed
industry, education seems to be required in this field. ‘Terminator’ is prohibited in India through
a special clause in the Act on Plant Breeders Rights and Farmers Rights.
5.5.2 Seed laws
Conventional seed law also can provide some aspects of protection against competitors. If
varieties must be officially released and registered, and if seed can only be sold if certified, this
may limit illegitimate use of company germplasm. For instance, certification rules would require
a company to demonstrate access to a legitimate source of breeder seed or inbreds.
This method is being used by NARO in Uganda. License contracts with seed producers are not
based on IPR, but on a gentlemen’s agreement about the NARO-ownership of the varieties and
backed by the seed law. Seed producers cannot produce commercial seed when they cannot
prove access to NARO-supplied breeder’s seed. Although this may not stop them from commer-
cializing such varieties abroad, such behavior may exclude them from future releases.
In China, companies are also able to protect against some illegal sales of seed through the
seed regulation which requires seed companies to be certified. Thus, smaller, ‘fly-by-night’
propagators or vendors can be shut down, or bags of seed removed from shops, by bringing
these to the attention of the local (county or city) office of the Administration of Industry and
Commerce. PVP seems to be more useful as a form of protection against established seed
companies, especially operating at a county-level, some of whom reproduce established and
registered varieties of other companies.
Kenya seems to use its seed law to protect local seed producers from competition by inter-
national companies. A recent interpretation of the seed law excludes imports from countries
like Uganda and Malawi, countries used for seed production by emerging regional and multi-
national companies.
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5.5.3 Contracts
Contracts are very commonly used in the seed sector. MTAs have been introduced as a
standard practice between genebanks and breeders and are commonly part of technology
transfer agreements between (public or private) breeders in case study countries and biotech-
nology firms or institutes. The study encountered several applications of contracts as a means
to obtain and enforce rights.
Some foreign companies in case study countries appear to concentrate on contracts to
manage their IPR on biotechnologies instead of commercializing them directly in the seed
market. This is the case in India for Bt cotton technology. However, contracts may be difficult
to monitor. In China, for example, there are contracts between Biocentury Transgene
Technology and some breeders of Bt cotton varieties, but the technology fee obtained by
Biocentury is significantly less than that expected from the estimated area of cotton containing
its Bt gene. A recent change in the management of Biocentury has resulted in the company’s
direct involvement in seed production and seems to have provided an increase in revenues.
Since the coming into force of the Cartagena Protocol, liability issues are becoming more
prominent in contracts involving genetically modified varieties. This development is expected to
reduce the transfer of such technologies (Sullivan, in press).
In Kenya, KARI entered into a contract with a major biotechnology company for access to Bt
technology. The contract stipulates how the genes can be used, who has rights on inventions
made on the basis of the technology, etc. It also prescribes that KARI will have to use new
versions of the technology (by the same supplier) as soon as they come onto the market. This
means that KARI will have to use any new Bt gene that is likely to be patent protected in the
future, and may also limit its opportunities to use other sources of Bt technology, such as
those that go out of patent. The institute is now bound to these conditions, even though it
knows that the patents on the genes and technologies are not valid in most of Africa, including
Kenya. The reasons for entering into the contract were twofold: get additional support for the
use of the technology (training), and the development of a good relation for future scientific
collaboration. The long term value of the rights are important for the company, even though it
does not see Africa as a profit center for years to come. On the other hand, it is questionable
how the potential long-term ‘losses’ for KARI balance the short term value of training and
access to the technology.
Uganda has entered into a contractual arrangement (MTA) with a German enterprise to supply
coffee germplasm on an exclusive basis, stipulating among other things benefit sharing when
the material is commercialized.
Contracts are particularly important in the floriculture sector, and are discussed in Section 7.6.
5.5.4 Biosafety
Biosafety regulations are not meant to create property, but primarily to protect the environment
and to promote the safe use of biotechnologies. Nevertheless, we have seen in the case of Bt
cotton in India that access to biosafety data is the principal protection mechanism currently
available to the owners of the technology.
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5.5.5 Trade secrets
Hybrid technology is a good example of a trade secret. But the protection offered by hybrids is
only as good as the physical security provided to the inbreds. In Uganda, where a local seed
company produces maize hybrids on contract for Monsanto, the lack of PVP for the hybrids
means that the operation must be very closely supervised at the seeding phase (all inbred
parent seeds provided by the company have to be planted) and by destroying the males
immediately after pollination, which adds to the cost of the seed.
There is evidence that in some cases in the Indian biotechnology industry, companies currently
prefer to maintain there innovations as trade secrets rather than seek (foreign) patents.
5.5.6 Business practices
Business practices can help to combat the illegitimate use of company varieties. The seed
industry in India has had to contend with high competition and very little legal protection for its
germplasm for nearly two decades. Many companies place great emphasis on the importance
of developing a brand image as a way of developing farmer loyalty and protecting themselves
from imitators. There are certainly limits to what can be accomplished through brand loyalty,
but the investment doubtless has payoffs. Although not all farmers can easily recognize or
depend on brand names, seed companies’ efforts to build up a loyal following with seed dealers,
on whom many farmers depend for advice, probably makes at least as important a contribution
to defending market share. But following up on the misuse of a brand requires time and
resources. One company has faced repeated instances of people selling ‘seed’ in falsified
bags, but it has only been able to catch the perpetrator twice, and the only case that made it
to court resulted in just a small fine. In those cases where Indian companies market their own
OPVs, management often responds confidently to questions about illicit competition by
referring to farmer loyalty. Nevertheless, these same companies are usually resigned to a
certain degree of leakage.
Practices of brand development are also common in China, but the case of Bt cotton shows
that there are clear limitations.
MNCs are particularly experienced in the use of other business practices to help protect their
varieties. The most important of these is selection of local partners, in the initial stages for
marketing and possibly also production. Companies repeatedly stress this issue in interviews.
While they will reinforce these agreements with contracts, they want to minimize the risk that
they will end up in a dispute with their business partner. MNCs have generally low expectations
of enforcing contracts in the study countries, and in any case once material has leaked out it is
too late. Thus MNC activity tends to build up at a gradual pace and pays attention to many
factors beyond IPR regimes. Many foreign seed companies have been active in some form or
other in China for over 20 years, often in only a modest form.
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5.6 Summary
IP and the evolution of the private seed sector
The emergence of the private seed sector in the case study countries owes relatively little to
national IP regimes. By far the most dynamic private seed sector in the sample (India) has
grown and diversified without benefit of any PVP regime but in the context of quite liberal seed
laws and in many cases through the use of hybrids as a way of appropriation (e.g. Pray &
Ramaswami, 1990) . Colombia’s private seed sector is more than two decades old, but private
seed enterprises in the other three countries are the outcome of fairly recent policy changes
that move away from public monopolies on seed production. Thus PVP is not a necessary
condition for initial private seed sector development, but it may contribute to its growth and
diversification. The nature and extent of this contribution will depend on the characteristics of
the national seed system. The only major example of private domestic plant breeding in
Colombia is for rice, and the establishment of PVP almost certainly encouraged the further
development of the industry, which is based on OPVs. Foreign companies also market protected
OPVs of soybean and cotton, but it is difficult to point to examples of the diversification of the
private seed industry in Colombia due to PVP. It is even more difficult to identify any effects of
PVP on the nascent private seed industry in Kenya, where the few products of private domestic
breeding have yet to seek protection and the hybrid maize offered by MNCs may not have PVP.
In Uganda, exclusive rights over public varieties given to local private companies have
contributed to the emergence of local seed enterprises, and it is worth noting that this was
done without any formal IP-legislation. Although the (foreign) horticultural industry pressed for
the establishment of PVP in Colombia and Kenya, and the national regimes certainly provide
added confidence and contribute to the perception of a better business environment for
expansion, neighboring countries with similar ecologies but less developed PVP (e.g. Ecuador
and Uganda) can still participate strongly in the industry (see Section 7.6). The course of
private seed sector evolution in China will depend on a wide range of factors, and the role of IP
is uncertain.
IPRs’ role in protection from competitors
Seed companies tend to take advantage of PVP and patents when it helps protect them against
competitors gaining access to their materials. Thus OPV rice varieties are regularly protected
in Colombia (as are cotton and soybean). Hybrid maize is not protected in Colombia because
the hybrids are relatively secure. Similarly, OPV barley has sought protection in Kenya, but
private hybrid maize varieties have yet to apply for PVP. In addition, those OPV crops that seek
protection are ones that are grown in commercial systems, where variety and seed quality are
important and where seed cost is a relatively small proportion of costs of production.
Where hybrids are used in diversified seed industries, such as India and China, hybrids attract
the majority of interest for PVP.
PVP and protection against seed saving
PVP systems can also limit farmers’ seed saving and hence provide additional incentives for
private seed provision, but there are no instances of this as yet in the case study countries
except for the flower industry where on-farm production of planting materials is fairly adequately
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regulated by the breeders. The two cases where there is movement in this direction in field
crops are Colombia and Kenya, and in each case specific complaints contribute to the argument
for change. In Colombia there is a considerable amount of seed saving and informal commercial
sale of farm-produced rice seed and the industry would like to control this; a new resolution
limits seed saving to farms below a certain size. In Kenya, there are complaints that wheat
farmers save and trade the majority of their seed, rather than buying commercial stocks, and
Kenya proposes making its regulations compliant with UPOV 1991. In these two cases, the
specific instances are related to relatively large-scale commercial agriculture where the extra
costs to farmers of obligatory seed purchase will probably be acceptable, but the changes in
law and regulation open the door to much wider control of seed use without any obvious
mechanism for discretion. In both cases authorities admit that it would be difficult to enforce
such requirements with smallholders (as well as being politically sensitive), and at this admit-
tedly early stage the evidence points to these limitations on seed saving as merely strength-
ening already existing seed production rather than providing incentives for diversification. Any
control on seed saving is explicitly ruled out in the Indian law, and this is one of the reasons
why the majority in the private seed industry does not predict any PVP-derived expansion in
investment in OPV seeds.
Implications of IPRs for structure of industry
The question whether IPRs will create a shake-out in the industry at the cost of the smaller
companies can not yet be answered in the case study countries. Such increasing concentration
in the industry could be due to the costs associated with protection (which is one of the reasons
why smaller companies in Kenya don’t yet pay attention to PVP). The situation in India, with
many small seed companies in operation, deserves particular attention. In addition, restricted
access to technology might become a bottleneck for smaller companies. One way to deal with
this is the formation of company consortia for access to (public) technology. There is at least
one example in India, and the idea has also been discussed in Latin America. Alternatively,
technology providers may change their business approach to license their technology to a wide
number of local companies instead of marketing the seeds themselves.
While it is assumed that the powerful multinational companies will be able to protect their
interests both with and without IPRs, medium-sized local companies have much to gain from a
secured market provided by license contracts or their own PVP-protected varieties. The
introduction of PVP could be helpful in stimulating these companies’ contribution to a diversified
seed supply (Srinivasan, 2004).
Relations with NARIs
Most local seed companies start with the multiplication and marketing of public varieties. In
most of the case study countries, a second step towards developing in-house breeding
capacity is also visible. This evolution may lead towards accessing public breeding lines rather
than public varieties, as is observed in India. The response of the public system is discussed in
the following chapter.
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6. Impact on public plant breeding and seed
production
6.1 IP policies
IP policies in NARIs may address three types of goal: revenue collection, recognition of
achievement, and technology transfer. These goals may not always be compatible, and the
development of adequate policies for the NARIs is a difficult task.
NARIs in China tend not to have written policies on IP management, in particular with respect to
patents and PVP. There are however policies in operation in the sense of guidelines and rules
understood by employees and management. The situation varies and is certainly different for
institutes working on transformation techniques, in contrast to crop research institutes. At BRI,
where patents are one of the principal means of assessing achievement, individual researchers
generally decide whether an invention has sufficient market potential to be patented, but they
do receive some general support. CAS has an office to assist researchers in conducting patent
searches and also in engaging the services of a patent agent for filling out applications at a
relatively inexpensive fee of approximately $250 (RMB 2,000). The costs of application must
generally be borne out of their research budgets although they may apply to a CAS fund for a
subsidy. Assigning the responsibility to the individual researcher is justified, according to BRI, in
order to allow the researcher to gain from a patent, both professionally and financially. The
provincial and national crop research institutes are less oriented towards patents, but increas-
ingly towards PVP. The Hunan Hybrid Rice Research Center (HHRRC) and the Rice Research
Institute (RRI) of the Hunan Academy of Agricultural Sciences both apply for PVP for their new
rice varieties that show market potential. In both cases, the director takes the decisions about
whether to apply for PVP on a case-by-case basis. The Rice Research Institute of the Guangdong
Academy of Agricultural Sciences (GAAS) seems to have somewhat less experience although
they have been granted PVP for at least three varieties. But research management indicated
that capacity to manage and enforce their rights is still being developed. They also do not see
as much use for PVP, given that their government financing is partly based on adoption figures.
At the broader level of GAAS, some of whose other institutes have been regularly granted
patents for more than 10 years now, there is a written IP policy. Decisions concerning applica-
tion for patents and PVP are taken by researchers and management in the institutes concerned.
But ownership of the resulting rights rests with the Academy. In general, the approach seems
to be different in each organization. As far as the crop research institutes are concerned, this
may be an indication of a period of adjustment after the introduction of PVP. Over all, PVP
varieties and hybrids fetch a slightly higher seed price than unprotected varieties.
In India, ICAR does not yet have a written IP policy, and its constituent institutes look to the
center for guidance and direction on these issues. ICAR has guidelines on its website for
seeking patents and instructions are being issued for DUS testing of extant varieties and
registration of germplasm. IP is managed there at the highest level, but with very limited
resources. There is only a small unit assigned to IP at ICAR headquarters. Similarly, most
Indian agricultural universities do not have an IP policy; in some cases a knowledgeable staff
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member may perform the role of IP advisor for the university, but without title or terms of
reference.
In the other case study countries CORPOICA, KARI and NARO are still developing their own
policies in this area. Attention to IP issues in KARI is divided between its lawyer and the head of
its biotechnology center. NARO recognizes that it needs staff with some IP expertise but is not
considering employing its own lawyer. Some institutions in Eastern Africa do have a written
(often draft) IP policy developed under the guidance of the Eastern Africa Regional Network on
Biotechnology (BIOEARN). These policies tend to concentrate on maximizing revenue.
NARI IP policies will have to strike a delicate balance among several factors, including the
division of attention between commercial and public service activities, an equitable division of
royalties within the institute, and the choice and enforcement of IP instruments.
In most cases NARIs will stand a better chance of earning royalties if they offer exclusive
access to their varieties or breeding lines, but that may clash with the expectations of public
service. Even if it can be demonstrated that an exclusive license provides the most effective
delivery route for a particular variety the NARI may still be accused of ignoring its public
mandate. Partly for this reason, KARI administration favors non-exclusive arrangements for its
varieties, and lost the chance to license one of its maize hybrids to a company because of the
exclusivity issue. In Uganda, NARO has licensed three maize hybrids on an exclusive basis but
has yet to define its policy on the issue. In India, a strong public service tradition makes it
unlikely that very many public varieties or breeding lines will be assigned on an exclusive basis.
One aspect of the IP-related policies is that the public sector sees one of its duties as counter-
acting concentration and monopoly in the seed sector by creating a strong position for the
public sector in the commercial seed industry.
6.2 Revenue generation strategies
The establishment of PVP allows NARIs to protect their germplasm and thus earn revenue from
seed companies through royalties on finished varieties and fees for access to breeding lines.
This potential for raising revenue is a welcome possibility for research administrators who have
to contend with inadequate public budgets, but there is considerable uncertainty regarding both
the level of revenues that can be expected and the effects that this revenue might have on
research programs. The possibility of NARIs raising some of their own revenue is of course not
solely dependent on the emergence of IP regimes.
India
The sale of source seed of public varieties to seed producers is an example of revenue gener-
ation that takes place in the absence of IPRs. In India, when private companies sell seed of
public varieties they are expected to buy the source seed from the public institution. For
instance, Andhra Pradesh Agricultural University sells more than 70 Mt of breeder seed of its
rice varieties every year. The system does not work for all crops, however. Private companies
rarely purchase fresh stocks of breeder seed of public vegetable varieties, preferring to
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maintain their own supply. The companies complain about the relatively high price of breeder
seed of vegetable varieties and point out that sometimes their requests for breeder seed are
not met. In addition, because vegetable seed is not certified there is no requirement for using
original breeder seed.
Many private seed companies complain that their access to public breeding lines has decreased
in recent years. On the other hand, public institutions often express resentment of the fact that
the private sector earns large profits from the products of public research and complain that
private companies are unwilling to share some of their own lines or knowledge with public
research. The degree of interaction varies by crop. There are a few examples where seed
companies feel they have acceptable access to public lines (through field days and other
contacts). In some cases (such as maize) this openness is a function of the influence of CGIAR
policies on open access combined with willingness of the crop program itself to share materials.
In the case of maize, the program’s coordination unit has a policy to develop lines and to share
these with all partners, including the private sector. For many crops, however, private
companies frequently say that it is much easier to get access to CGIAR germplasm than to
local public lines. There are also a few recent examples in which public institutes or universities
have entered into non-exclusive agreements with seed companies for access to breeding lines,
following guidelines set down by ICAR for such contracts. The Indian Institute of Horticultural
Research (IIHR) made a one-time sale of the parental lines of a tomato hybrid to several private
companies; some sell the hybrid under the original name while others modified the name.
Indian universities tend to be driven by strong public service mandates and many have no
experience of interaction with the private sector, while a few others establish occasional links.
The University of Agricultural Sciences in Karnataka sold access to three virus-resistant tomato
OPVs to ten seed companies. The assumption was that the companies would market these
varieties directly, although in many cases the companies’ objective was to use the germplasm
in their own breeding programs. A private company that has recently begun work on hybrid rice
has agreements with two agricultural universities for non-exclusive access to inbreds and a
large seed company occasionally buys germplasm for its vegetable breeding program from
universities.
China
Revenue generation strategies among crop research institutes in China vary by crop and
province. Many provincial crop research institutes in China have been selling rights to hybrid
varieties of rice and maize well before the introduction of PVP. Both the Rice Research Institute
of the Guangdong Academy of Agricultural Sciences and the Hunan Hybrid Rice Research
Center of the Hunan Academy of Agricultural Sciences (HHRRC) have licensed exclusive rights
to private companies for production and marketing. Before the new seed sector legislation
introduced in 2000, purchasers tended to be the public seed companies at national, provincial
and county levels. The Cotton Research Institute (CRI) of the Chinese Academy of Sciences
(CAS) has on the other hand traditionally generated revenue through the sale of marketing
rights to its seed, primarily OPVs. The Institute for Vegetables and Flowers (IVF) has also
concentrated on generating revenue from sales of seed, also relying on companies for the
marketing stage.
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A number of officials indicated that this process of selling new varieties has been enhanced by
the introduction of PVP. If an institute has acquired PVP for a variety, then it is in a position to
request a higher price. In many cases, auctions have been organized to obtain the highest
price. Agreements may be based on lump sum arrangements, such as the HAAS Rice Research
Institute which auctioned non-exclusive production rights to its new protected variety
‘Nongxiang103’ for more than $45,000 (RMB 380,000) in 2003. The Rice Research Institute of
the Guangdong Academy of Agricultural Sciences sold exclusive rights to a protected variety in
2002 for about $240,000 (2 mRMB). Such lump sum payments seem to be preferred by large
companies, according to Doneed Seeds Company, one of the countries’ largest diversified
seed companies. But royalty arrangements based on seed sales are also common, particularly
where the rights negotiated involve marketing but not production.
Uganda
In Uganda, NARO has recently licensed three maize hybrids to three different companies. The
companies were willing to enter into contracts and agree to pay royalties even though there is
no PVP in Uganda. NARO’s legal advisors believe that the institute can demonstrate ownership
of these hybrids, and in any case the country’s mandatory seed certification law would make it
difficult for another company to offer one of these hybrids for sale. NARO also hoped to contract
with the local brewing company for exclusive access to a sorghum OPV, but this agreement fell
through and the brewery simply pays NARO for source seed which it uses to produce commer-
cial seed for its outgrowers.
Colombia
In Colombia there are several important examples of the private funding of commodity research.
The cotton growers association has provided some funding to CORPOICA for cotton breeding
(the association originally asked to share in any royalties earned, but then agreed that royalties
would go to a fund for cotton research). There are several commodity research institutes in
Colombia (separate from CORPOICA) where growers associations fund plant breeding (e.g. for
coffee). Given the fact that PVP is well established in Colombia there are surprisingly few
examples of contracts between CORPOICA and the private sector. One of the problems is that
many public varieties are OPVs (beans, maize, wheat, oats) in which the private seed sector
has little interest even if they can be protected. The few recent examples of contracts with the
private sector have not turned out well; CORPOICA offered exclusive licenses on two maize
hybrids to two seed companies in return for a 3% royalty, but the seed companies and
CORPOICA blame each other for poor quality seed and CORPOICA has reverted to trying to
produce and market these varieties itself. They also had a similar experience with a cotton
variety.
Kenya
Kenya also has a well-established PVP law, but there are few examples of revenue generation
by the public sector to date. An important factor is the continuing uncertainty about the owner-
ship and protection of many of KARI’s older varieties that have been the exclusive province of
the Kenya Seed Company (KSC). The prior arrangement with KSC and the relatively recent
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liberalization of the seed sector that allowed competition with KSC also explain the relative lack
of progress in licensing KARI varieties. In addition, there are very few KARI crop varieties besides
maize hybrids that are of interest to the private sector. KARI has a non-exclusive agreement
with Kenya Breweries, who pay a royalty of 2.5% on the value of the seed of KARI barley
varieties that the company produces for its outgrowers. The brewery’s support for barley
breeding has also led to several new barley varieties seeking PVP with the brewery and KARI as
joint owners. In early 2004 KARI tendered 16 old and new maize hybrids, with the expectation
that various seed companies would bid for production rights. The outcome was disappointing,
however, and only three of the hybrids were contracted, in each case to very small seed
companies. In one case, the KARI Seed Unit will take charge of seed production and the
company will market the seed. KARI is now considering whether it should try to produce and
market some of the new maize hybrids itself.
Future prospects
The potential for revenue generation through royalties on public varieties and sale of breeding
lines varies by crop and by country. In India and China, the large and technically proficient
public breeding programs will certainly have things to offer for their diverse and well-developed
commercial agricultural sectors. In both countries there are many cases where private
companies, particularly smaller ones, produce seed of public varieties (mostly OPVs) and it is
likely that this will continue. Although most seed companies in India would prefer exclusive
licenses for public varieties, there are smaller companies that are satisfied with sharing a
market. But many of the seed companies either have, or aspire to develop, their own breeding
programs and naturally tend to promote their own varieties.
In China, several larger seed production companies, such as China National and Doneed, are
beginning to establish their own breeding programs, partly to ensure future sources of improved
varieties, given the uncertainty of competing for access to varieties at public institutes.
However, even though there will be many opportunities for NARIs in China and India to generate
revenue from protected germplasm, the NARI’s are not likely to rely on this income for the
operation of their different breeding programs.
In the other case study countries the situation is even less clear. Where NARIs are relatively
small and under-funded, there are relatively few opportunities for them to offer products that
the private sector is willing to pay for. The dilemma is that in order for NARIs to generate a
significant amount of revenue from private contracts they need sufficient public investment in
the first place in order to establish their capacities. In addition, national seed markets need to
be large and diverse. In Kenya, KARI’s disappointing experience in its recent tender of maize
hybrids is an indication of the problem. In Uganda, while NARO was completing the first
contracts with seed companies for production of its maize hybrids, the institute’s only maize
breeder resigned in hopes of joining the private sector.
An additional possibility for revenue generation by NARIs is through interaction with MNCs. In
such cases the NARI provides germplasm in return for a share of royalties on any varieties
eventually marketed (nationally or internationally). Several international seed companies are
active in India and there are a few cases where they have simply purchased non-exclusive
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access to public breeding lines. Once the PBR legislation is in place it can be expected that
these interactions may be strengthened and formalized. Additional understandings would have
to be developed to cover royalties or compensation when the MNC uses the germplasm
outside of India, and similar considerations are warranted for the larger domestic seed
companies with international marketing and research aspirations.
In Kenya, KARI has an agreement with Monsanto that provides Kenyan maize and cotton
breeding lines for possible genetic transformation in return for a share (as yet unspecified) of
royalties on any transgenic varieties. Interactions with MNCs may also be mediated through
IARC programs.
Incentives for individual scientists
A particularly important administrative issue for NARIs is the degree to which royalties earned
are shared with individual scientists. The emergence of private seed companies carry the risk
that innovative and active breeders are absorbed by the private sector, leaving few capable
staff in the public research institutes (Morris & Ekasingh, 2002). In general, staff promotion in
NARIs is determined by a fairly complex set of criteria, usually including research productivity,
publications, and service to the institute. For breeders, the number of released varieties is
often an important criterion for promotion. As NARIs begin to earn royalties from protected
varieties, there is the possibility that the breeders may also share directly in the financial
benefit. The NARIs in our sample are approaching this issue in various ways. Chinese NARIs
have the broadest experience in earning royalties through commercial seed sale, and breeders
generally are given a ‘bonus’ related to the level of royalties received. This was a common
practice even before the introduction of PVP. The provincial academies of agricultural sciences
and their institutes have developed their own approaches. Interviews revealed a range of
revenue-sharing schemes although a general feature was to ensure that not only breeders, but
other staff also benefited. It was not possible to gauge to what extent this is affecting
incentives and motivation at an individual level.
In India, ICAR does have a formula for sharing consultancy income with its scientists, but not
for sharing revenues from IP. CSIR however is working on a formula that would grant equal
shares to the inventor(s), the institute and a special fund at the Council.
In Kenya, KARI has yet to establish a policy, but is under pressure from the Kenya Plant
Breeders Association for the acceptance of a formula for division of royalties (based on type of
crop) with the breeder; the association is even lobbying to have this formula included in the
revised Seed Law (for both public and private sector breeders). The director of KARI admits
that deciding how to divide royalties within the institute, between and among programs, is a
significant management challenge. Despite Colombia’s experience with PVP, CORPOICA has yet
to establish a policy for the disposition of royalties, and NARIs in India and Uganda are only
beginning to consider the issue.
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6.3 NARI Seed Production
An alternative to contracting with private seed companies is the possibility of NARIs producing
and marketing seed themselves. Despite several decades of generally unhappy experience
worldwide with public seed production schemes, the problems of attracting private company
interest combined with pressures for demonstrating revenue generation capacity have
encouraged several NARIs to consider their own seed production strategies.
The situation in China is particularly complex, as there is a clear incentive and expectation for
many research institutes to generate a significant proportion of their own budgets, but this
clearly varies by province and by crop. The Institute for Vegetables and Flowers (IVF) has
always undertaken its own seed production and then sold to retailers, in order to maintain
control over parent lines. This situation, partly manageable because of the intensive nature of
vegetable seed production in terms of land use, has changed little with the introduction of PVP.
In the case of cotton and rice, incentives for generating income have led to some research
institutes establishing their own subsidiary companies for production and marketing. For
example, the Cotton Research Institute (CRI) markets essentially all of its varieties through joint
ventures with seed companies. In other cases, contracts granting exclusive access to new
varieties are negotiated with companies that have a special relationship with the institute. The
case of HHRRC in China is perhaps most illustrative. The director of the Center established the
Longping High-Tech Corporation which then established an exclusive rights agreement with
HHRRC. NARI diversification into seed production and marketing, whether by the institutes
themselves or a wholly-owned subsidiary company, has also been made possible by the
changes in the seed sector regulation, allowing private companies or others to produce and
market seed. The choice to diversify may reflect an expectation that revenues can be
maximized by maintaining direct control over production, as opposed to licensing.
In India, on the other hand, there is much less possibility that research institutes or universities
would attempt to produce and market seed on any appreciable scale. There are well established
public seed corporations and other government programs (such as parastatal agencies for
commodity development) that have the mandate for this type of activity. Although the role of
public seed production institutions is being challenged and reformulated with the rise of the
private seed sector in India, there is every likelihood that many of these public seed production
activities will continue in the foreseeable future. The up-scaling of facilities to provide source
seed under the National Seed Project illustrates this.
The smaller NARIs are in a difficult position when they fail to attract commercial interest in their
varieties but face mounting pressure for generating revenue and demonstrating that public
varieties are reaching farmers. KARI has a Seed Unit which was established to ensure that
source seed of KARI varieties was readily available to seed producers. An important rationale
for the creation of the Seed Unit was the fact that seed of many ‘orphan crops’ was not avail-
able to farmers because the few commercial seed enterprises took little interest in multiplying
the (limited) output of orphan crop breeding programs. It was thought that a more transparent
and efficient source seed facility would contribute to generating commercial interest and
fostering smaller seed enterprises. The Seed Unit has been an important player in donor
projects that support local groups in seed production. It is not clear if any of these producer
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groups can survive commercially, and the Seed Unit continues to see government and donor
programs as the major conduit for seed of orphan crops. In some cases the Seed Unit
coordinates the production and sale of commercial seed (e.g. potatoes) at KARI stations. The
unit is helping a small commercial firm produce seed of a KARI maize hybrid (the packaging
includes the company’s and the Seed Unit’s logos) and with the failure to attract more interest
in its latest offering of hybrids there is the temptation to expand into more commercial seed
production and marketing. This would be done under KARI’s newly established commercial arm.
A similar situation obtains in Colombia; CORPOICA has recently established a Seed Production
Unit whose principal aim is to provide source seed of crops with little commercial seed demand.
An inheritance from CORPOICA’s origins as a public entity is the expectation that it should
support various government programs that produce such seed, although the corporation is not
always reimbursed for the source seed that is requested. The Seed Production Unit also has a
mandate for producing and marketing commercial seed in certain cases. When CORPOICA was
disappointed in the performance of private companies contracted to produce seed of maize
and cotton varieties it began exploring the possibility of producing the seed itself.
In Uganda, the public seed enterprise has lost an important share of the market to newly
established private companies. It competes with these companies for the licenses for new
NARO varieties. There is no indication that NARO itself would like to venture into commercial
seed production.
6.4 Patents
An additional mechanism for revenue generation open to NARIs is the patenting of inventions
NARIs in China have the most experience among the case study countries. The Biotechnology
Research Institute (BRI) of CAAS owns approximately 10 patents and has another
40 applications pending, of which 2 have been submitted for overseas protection under the
PCT. BRI has patented two Bt genes and commercialized these in cotton varieties through a
joint venture with Biocentury Transgene Technology. Biocentury has licensed these genes to
the Cotton Research Institute (CRI). BRI receives one-third of the net revenues of Biocentury
with half of this amount going to the research group that developed the Bt cotton genes and
10% to the individual scientist. Revenue generation has however been much less than expected
due to difficulties in enforcing the patent. Most of CRI’s Bt cotton varieties are OPVs, IP
enforcement of which is very difficult with the local seed producers. Nonetheless BRI currently
generates about 15% of its income from patents, primarily other than Bt, and is expecting to
increase this significantly in coming years. BRI staff are assessed on both publications and
patents obtained, and advisory and financial support is available from CAAS for submitting
patent applications.
NARIs in India have limited experience in patenting and policies and modalities are being
established. However, there is a growing experience in patenting plant-based products and
processes for pharmaceutical uses (locally and abroad). The National Botanical Research
Institute (NBRI) used this experience for the international patent applications for its Bt genes
that have however not yet been commercialized. One commercially successful case involves a
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method for detecting the Bt gene in a plant. A scientist at the Central Institute of Cotton
Research (CICR) developed the technology and ICAR did the paperwork to acquire an Indian
patent and (through PCT) to pursue patents in several other countries. The detection kit is
being marketed by an Indian firm and royalties go to CICR. Although this is a success story,
the public system has no institutional mechanism to pursuing patents, or sharing costs and
royalties. The process involved a great deal of time from CICR and ICAR staff, as well as the
use of consultants. The present guidelines for contract research and consultancy are
inadequate to address the entire IP-related issue.
A contrasting case from an agricultural university involves a scientist obtaining a patent on a
method for gene insertion. Although the Department of Biotechnology (under the Ministry of
Science and Technology) is supposed to help with such applications, it was slow to respond
and the university scientist hired a patent lawyer using his own funds. The patent was eventually
granted (in the university’s name) but it is unclear if the university will even pay maintenance
fees and little likelihood that it will offer any help in pursuing commercial partners. State
Agricultural Universities look upon ICAR for policy guidance.
There is of course another side to NARI’s pursuit of patents for their inventions, involving the
rights to use patented genes or tools in NARI research. In all the case study countries
researchers are using technologies that are patented (at least in industrialized countries), for
activities such as genetic transformation or even marker assisted selection. Varieties or other
products have yet to emerge from this work, but only a minority of bench researchers are
aware of the implications of their use of protected technology, and NARIs in the case study
countries rarely commission an FTO or other reviews to address possible consequences. In
India, the National Botanical Research Institute (NBRI) which initially entered into negotiations
with a consortium of local seed companies for access to NBRI’s Bt construct for cotton is now
reconsidering its position.
The study found two very distinct attitudes in laboratories towards third-party IP: ignorance and
over-apprehension. As an example of the latter attitude, some institutes in ICAR, like IAR,I now
insist on prior permission for the use of IP in research. On the other hand, researchers that do
know about the possible consequences of patents may not realize that many patents are not
valid in their countries and that they can freely use the technologies in their territory. But lack
of awareness or lack of interest are also widespread.
6.5 Plant Breeding Priorities and Strategies
6.5.1 Research investments
The effects of pursuing compensation for the use of public varieties and breeding lines may
have important effects on the nature of public plant breeding. Certain crops are much more
likely to attract commercial interest than others, and one of the concerns is that the possibility
of earning royalties may shift resources to the more commercially attractive crops, even though
such a shift might not be in line with the NARI’s mandate for poverty reduction. Similarly,
research priorities within a particular crop may shift from solving production constraints in
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smallholder agriculture to increasing output in commercial agriculture. The study examined
evidence for shifts in NARI priorities regarding crop portfolios, breeding objectives and breeding
methods. There are some noteworthy trends, although not all can be attributed to the advent of
an IP regime.
The case of NARO presents an interesting example. Uganda’s new agricultural policy empha-
sizes that agricultural research is to be client oriented and market driven. NARO sees its
principal role as contributing to the development of commercial agriculture in Uganda and is
prepared to allocate its resources accordingly. Although this means that priority will be given to
crops such as hybrid maize (whose seed can earn royalties), the policy also assigns priority to
any crop for which market demand is evident, even if there is little immediate opportunity for
commercial seed sale. Thus NARO would invest significantly in cowpea research if there was
evidence of growing commercialization of cowpea production. The hope is that demand from a
particular industry or from ‘the market’ would be translated into specific funding for NARO
research. But if cowpea remained a crop that featured mostly in subsistence production, it
seems likely that NARO would assign it a lower priority. The possibility of earning royalties on
certain seed products contributes to this shift toward research for commercial agriculture. The
emergence of PVP in Uganda thus merely enforces a trend rather than being the instigator of
change in research policy.
Agricultural development policy is less well defined in Kenya, but KARI currently assigns high
priority to those crops from which it can earn some revenue. The major example is hybrid
maize, and the fact that past KARI research produced most of the maize hybrids that account
for more than half the country’s maize gives the institute confidence that hybrid maize will be a
major revenue earner, once KARI begins to offer a new generation of hybrids to the growing
number of seed companies operating in the country. The implications for other crops are less
clear, although KARI leadership acknowledges its public service mandate and admits that
Kenyan farmers grow a range of crops that do not figure in current seed company portfolios.
Colombia finds itself in a position somewhat similar to that of Kenya. CORPOICA is expected to
earn an increasing proportion of its own revenue and hopes that royalties from its varieties
make an important contribution. The greater diversity of Colombia’s commercial agriculture
offers several possibilities (maize, rice, cotton), but the choices are relatively few and the
implications for research investment on other crops are unclear.
It is difficult to predict the effect of the PVP legislation in India on the relative distribution of
research investment across crops. There is no indication at the present time that research
administrators have any plans to adjust their portfolios because of potential royalties. Institute
administrators believe that royalties, like other income of the institutes, will be remitted to ICAR
headquarters (and to the Treasury), thus providing limited incentives for shifting priorities in
favor of royalty-earning crops. Administrators of the agricultural universities that were inter-
viewed also emphasized their mandate towards serving the needs of their state’s farmers. For
instance, the director of research at Andhra Pradesh Agricultural University expects that rice
breeding will remain a high priority and that once PVP is in place the university will continue
selling breeder seed of its varieties (perhaps at a slightly higher price) to any interested seed
company, rather than attempt to negotiate licenses or royalties. ICAR leadership identifies a
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role for the public sector in complementing as well as competing with the private seed sector
as IPRs threaten to concentrate the market.
Given the many academies and institutes involved in agricultural research in China, it is also
difficult to identify changes in public research investments and priorities that are a direct result
of IPRs. Most institutes have crop mandates but the issue is the extent to which priorities within
these crops may be affected. Many of the crop research institutes already became more
oriented towards revenue generation through selling varieties or seed long before the intro-
duction of PVP. Most of the rice and cotton research institutes interviewed indicated that
developing varieties for all farmers, including poor farmers, remains a priority. In Hunan, the
Rice Research Institute concentrates primarily on conventional (OPV) varieties, and emphasizes
poor farmers as a target group even though its cheap seeds are also available to richer
producers. Although it earns almost half its income from seed-related revenue generation, it is
perhaps not likely to compete in more commercially-oriented hybrids given that another
institute, the Hybrid Rice Research Institute, has that mandate.
Some institutes in China have a mandate to focus on adoption targets, including in a few cases
a corresponding incentive in the amount of government funding. For example, the Rice Research
Institute of the Guangdong Academy of Agricultural Sciences receives extra financing according
to the area sown with their varieties, although the institute is also concentrating more on hybrid
varieties due to income generation possibilities. There may be a fair amount of overlap in the
variety characteristics sought by different types of rice farmers in those provinces.
Management of the Cotton Research Institute (CRI) of CAAS pointed out that one of their
mandates is to develop cotton varieties for poorer farmers, who show a preference for OPVs,
including for those in other agro-ecological zones such as Xinjiang in the north-west. The vege-
table seed market, which has been commercially-oriented for much longer, is quite different.
The national-level Institute of Vegetables and Flowers of CAAS has concentrated on hybrid
varieties and revenue generation. This would appear to have changed little since the introduction
of PVP.
The Biotechnology Research Institute (BRI) of CAAS is influenced more by patents than by PVP.
It has traditionally focused on the 5 major crops (rice, wheat, maize, soybean and cotton) and
expects less success were it to apply for research funds on other crops. The situation with
BRI’s Bt cotton, commercialized by Biocentury and CRI, illustrates the potential shifts that might
be expected to take place. CRI’s Bt cotton varieties have been quite popular and widely
disseminated, including among poor farmers. This is partly attributable to the difficulties in
enforcing the patents and royalty collection. Thus BRI has not realized nearly as much revenue
as was forecast. If this situation influences the institute and its partners to undertake research
that can be better protected, then this will probably entail a shift in breeding priorities more
oriented towards better resourced farmers. At this point, there is no indication yet as to how
BRI is dealing with this issue. Thus in China, there are examples of measures that can mitigate
against unwanted shifts in priorities due to IPRs, but this is only one aspect of a stronger and
longer-term trend towards increased commercialization of the NARIs.
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Even if a NARI’s crop portfolio remains unchanged, it is possible that breeding priorities may
shift within crops. Interviews with case study NARIs revealed some recent shifts in breeding
priorities, although it is difficult to attribute many of these directly to the advent of PVP. The
most consistently mentioned factor is market demand. In Colombia, public rice breeding now
places much more emphasis on grain quality than on yield per se. A recently released
CORPOICA potato variety failed to gain acceptance and researchers acknowledge this is
because of a lack of involvement of end-users in the research. NARO bean breeders point to
the importance of consumer qualities such as cooking time in determining the uptake of new
varieties. These experiences all indicate a growing realization of the necessity for public
research to take more cognizance of consumer and market demand, but as yet there are few
examples of changes in breeding priorities that can be directly related to demand as
interpreted through commercial seed enterprises.
But if NARIs become more dependent on income from private seed companies, it is fair to ask
whether breeding priorities may be affected. NARO has released a number of bean varieties
and several are produced, on a modest scale, by private seed companies. However, no seed
company is yet willing to invest in seed production of climbing bean varieties. It remains to be
seen if this will result in a diminished investment in climbing bean varieties within NARO.
6.5.2 Hybrids versus OPVs
There are other examples where the establishment of a PVP regime may directly influence
breeding strategies. This is particularly true for the use of hybrid technology There is an
expectation that IPRs offer incentives for the commercial exploitation of OPVs, diversifying
away from exclusive reliance on hybrids and their built-in ‘biological’ protection. But since the
commercial seed industry places value on hybrids despite legal protection, NARIs that respond
to demand from seed producers will continue to focus on hybrids. As we have seen, both
Kenya and Uganda place high expectations on hybrid maize as a source of revenue and
although both NARIs continue to develop maize OPVs they show no inclination to increase their
OPV maize research budget.
In China, where more than 50% of commercially marketed rice is hybrid, even some of those
NARIs that previously concentrated on rice OPVs are tending to shift towards hybrids because
they are seen as a much better source of revenue. The situation for hybrid cotton is somewhat
different and the effects of IPRs are probably limited relative to other factors. Only a small
minority of China’s cotton is hybrid, partly because there are not many suitable hybrids for the
North where most of the cotton is grown. A survey by CCAP indicated that yield differences
between conventional and hybrid varieties in the north of China are insufficient to cover the
higher price of hybrid cotton seed. Another reason is that cotton hybrid breeding is still not
popular, partly because the parents are controlled by a few institutes such as CRI. On the other
hand, the possibility of patent protection does appear to be a factor that motivated decisions
to invest in OPV Bt cotton at BRI, Biocentury and later at CRI. With respect to vegetables, the
Institute of Vegetables and Flowers has always concentrated on hybrids, and interviews did not
indicate any new shift towards OPVs as a result of PVP. Indeed, staff interviewed indicated that
the PVP system was too weak to ensure enforcement of the rights.
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In India, although public research pioneered the development of hybrid cotton, the majority of
CICR’s efforts are in OPVs. This means that public cotton OPVs still occupy the majority of the
market in northern India, where suitable cotton hybrids have yet to be developed, but that
public sector participation is much lower in southern India, where the majority of cotton is
commercial hybrids. In the latter case the rationale is that the public sector is expected to give
particular attention to poorer farmers in more marginal conditions. The public sector also took
the lead in developing India’s first rice hybrids, but the private sector is now heavily involved
and the majority of the (still small) hybrid rice area is grown with commercial varieties. There is
still considerable public investment in hybrid rice breeding in India, although the university in
Andhra Pradesh currently shows little interest in developing hybrid rice for the state’s farmers.
Similarly, the agricultural university in Karnataka serves the state’s tomato growers with OPV
breeding, leaving hybrid development to the private sector.
6.5.3 Participatory breeding
The orientation of public research towards the needs of smallholder farmers which gained
special attention in the 1980s has led to a wide range of participatory research processes.
Participation of the end-user should on the one hand provide better focused information for the
conventional breeding programs, and on the other hand empower farmers in the development
of their own improved materials with specific adaptation to their own environments and needs.
Where the former approach may feed into commercial seed production, the latter commonly
feeds into the farmers’ seed system that produces and disseminates seeds as part of crop
production.
NARIs interviewed did not have policies on sharing ownership over varieties that would be
developed through participatory approaches. Whether NARIs would continue to invest in
approaches that would only feed into local seed systems when revenue collection becomes a
guiding principle in research management is uncertain. NARIs may consider continuing these
programs as an important part of their public task in supporting less-endowed farmers and
reserve core funding from the government or redirect some revenues; or they may consider
such programs only if they attract donor funding.
6.6 Enforcement
Another administrative challenge for NARIs wishing to take advantage of PVP is the investment
required for the enforcement of agreements. If NARIs sell or license a protected variety to a
seed company, then enforcement is not their problem (although enforcement possibilities do
affect the value of a protected variety).
In China, rice institutes that are oriented towards revenue generation either sell or license the
variety to a company, in which they may even have an ownership share. This is generally the
case with the high-value rice varieties, particularly hybrids, developed by the institutes of the
Hunan Academy of Agricultural Sciences. Other institutes such as the Rice Research Institute,
Guangdong Academy of Agricultural Sciences have recently acquired their first PVP titles and
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do not yet have much experience with trying to enforce the right, or even commercializing the
varieties in question. The IVF has much more experience with their hybrid vegetable crops but
acknowledge that the difficulties of enforcing PVPs is a major factor in their decision to continue
exclusively with hybrids. BRI and BioCentury claim to have generated little revenue from their
Bt cotton because of problems with enforcement of patent protection. Staff from the Cotton
Research Institute are deployed to check local shops for illegal seed of their varieties in the
seed sale season. This is only partly effective as illegal copies of one of their Bt varieties were
readily available at a local shop in Anyang, where the institute is located. Without PVP protection,
they must rely on trademarks and, in the case of Bt cotton, patent protection and biosafety
regulations. CRI expects however that PVP would ease enforcement difficulties. The other case
study countries have little experience, but acknowledge that extra administrative effort will have
to be devoted to establishing agreements with seed companies, collecting royalties, ensuring
that adequate seed certification and/or sales data are available to verify seed quantities,
checking for unauthorized sales, and pursuing violations. Some research administrators,
particularly in India (where there is a large and complex commercial seed market) admit that it
may be difficult to pursue these issues thoroughly and a few say they would prefer more easily
managed commercial agreements, such as the one-time sale of varieties or lines rather than
the annual collection of royalties.
6.7 Impact on International Agricultural Research
Centers
6.7.1 IARC IP Policies
All of the IARCs with a crop breeding mandate have written IP policies, although some are only
in draft form. The actual implementation of these policies is still evolving. Several centers now
have their own in-house lawyer while others have assigned staff for responsibilities in IP
management. The CGIAR system has also established the Central Advisory Service on IP to
assist the centers and to facilitate the sharing of experiences in IP management practice.
Most IARCs have seen their principal role as supporting NARI breeding programs. In many
cases IARCs do not release their own varieties; NARIs either test and release IARC varieties or
use IARC germplasm in the development of their own varieties. Germplasm, both improved
varieties and genebank materials, is moved within and outside the system under material
transfer agreements (MTAs). The MTAs that accompany genebank materials is standard for all
of the centers under their agreement with the FAO and stipulates that no IPRs can be taken out
over the material in the form received. MTAs used with improved materials can vary, although
all versions of these MTAs would only allow that rights could be taken out if such protection
could be shown to stimulate wider distribution and use of the materials.
6.7.2 Interactions with Seed Companies
Most IARCs also provide their breeding lines to private seed companies, usually under MTAs
that prohibit the protection of the lines as provided. As domestic seed companies in the South
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develop increased breeding capacity, and as they compete with increasing effectiveness
against public seed enterprises, they will become an ever more important conduit for IARC
research.
In the case of maize, CIMMYT provides germplasm to seed companies that use this for devel-
oping and releasing their own commercial varieties. For instance, this germplasm has made a
valuable contribution to the rise of several small seed companies in Kenya. In Colombia,
CIMMYT has provided several maize hybrids to CORPOICA, which is expected to license them
to local seed companies (and collect royalties). In southern Africa CIMMYT licenses its own
hybrids and OPVs to private companies; the hybrids may be licensed on an exclusive basis for
a single country, but the OPVs are always offered on a non-exclusive basis. CIMMYT takes
responsibility for obtaining national variety release in these cases but has not pursued PVP and
does not collect royalties on these varieties. However, its recent work on Striga-resistant
hybrids in Kenya involves attention to PVP (See Box 4). The domestic breeding capacity in
China means that Chinese companies generally prefer materials from domestic institutes, or
Box 4. CIMMYT’s Collaboration with BASF for Striga-
Resistant Maize
The parasitic weed Striga is one of the most serious yield-limiting factors for many African
maize farmers. Hand weeding or conventional herbicide use are inadequate to control the
weed, which does most of its damage before emergence by attaching itself to the maize
roots. Research by the Weizmann Institute and CIMMYT indicated that an herbicide seed
coating could effectively control Striga by killing the weed as it germinated in the soil. The
innovation would require herbicide resistant maize varieties, and collaboration was initiated
with BASF, the owner of a mutant gene that conferred resistance to an imidazolinone
herbicide that BASF produced. The technology was already licensed for commercial use in
the US (for conventional post-emergence weed control in maize), and because it does not
involve a transgene the technology does not require biosafety clearance or regulation. BASF
facilitated access to maize germplasm (through Pioneer) and CIMMYT began to develop a
series of IR (imidazolinone resistant) maize OPVs and hybrids suitable to conditions of
Western Kenya, where Striga is a particular problem. BASF granted access to the IR gene
initially for research purposes only. CIMMYT has used its germplasm to develop three IR
maize hybrids that have passed Kenya’s variety approval tests. IR maize is one of the first
projects for the newly formed African Agricultural Technology Foundation (AATF), which
hopes to complete final regulatory and commercial arrangements. AATF has already drafted
agreements with three seed companies in Kenya to produce the IR varieties. It is expected
that royalty payments would be managed by AATF. However, further negotiation with BASF
is still required to obtain permission for commercial use of the gene in Kenya and to define
conditions for wider application of the technology (e.g. in neighboring countries). Although
the IR varieties could be the subject of PVP in Kenya, it is not clear how the IR gene itself
would be protected, if this were seen to be desirable.
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increasingly of foreign companies, to those of CIMMYT, but most Chinese wheat varieties have
CIMMYT materials in their pedigrees (according to data collected by CCAP).
In India, ICRISAT’s support of the domestic commercial pearl millet and sorghum seed sector
has been so valuable that companies are willing to subscribe to consortia that provide access
to breeding lines and inbreds (see Box 5); the subscriptions currently cover the cost of
ICRISAT’s hybrid pearl millet and sorghum breeding for India. It should be noted that NARIs in
India still maintain full access to ICRISAT’s breeding material, but the subscribers to the
consortia do not see this as a threat.
There is little commercial production of bean seed in developing countries (because of the high
rate of seed saving and the relative expense of commercial seed) so CIAT’s bean breeding
program has little experience with private seed companies. Most of the materials go through
NARS and particularly through participatory breeding and seed production programs. However,
there is a very high dependence on purchased seed for snap bean production and CIAT has
approached a foreign seed firm about possible collaborative research in Colombia, where CIAT
Box 5. ICRISAT and Seed Company Consortia
The growth of the hybrid pearl millet and sorghum seed business is one of the great success
stories of India’s seed market liberalization. A number of domestic seed companies began
producing and selling pearl millet and sorghum hybrids and then expanded into other seed
products. Hybrid pearl millet and sorghum seed remain profitable enterprises and a signif-
icant proportion of the germplasm is still sourced from the public sector, mostly from
ICRISAT. Until recently, ICRISAT has provided germplasm to any legitimate private company
or NARI. In 1999, ICRISAT approached Indian seed companies to discuss ways in which they
could support ICRISAT’s research, leading to the creation of two consortia (for pearl millet
and sorghum). Each member paid a modest annual fee for access to breeding lines and
NARIs continued to get free access to all material. Non-participating companies can have
access to some ICRISAT germplasm as well. In 2003 the relationships were re-examined
and a third consortium (based on ICRISAT’s recent success with developing hybrid pigeon
pea) was established. The three consortia have both full and provisional members (the
former pay an annual $10,000 subscription and gain access to a wider range of breeding
lines; the latter pay $5,000 and are limited to two years in that status). The pearl millet and
sorghum consortia each have 11 full members and 6 provisional members and the pigeon
pea consortium has 4 full and 2 provisional members. The consortia include a range of
Indian seed companies, although some of the very largest and smallest players in the hybrid
pearl millet and sorghum business are not members. A few companies from other Asian
countries are also included in the current membership. It is expected that the Indian
companies will apply for PBR for the hybrids they produce, once India’s PVP law is
operational. Members are asked to provide sales figures to ICRISAT in order to assess
uptake and impact, but no further royalties or payments are expected.
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offers disease-resistant germplasm and the company brings its own breeding capacities and
commercial experience.
When CIAT developed a new variety of Brachiaria (a pasture grass), called Mulato, it found that
the most effective way of promoting its diffusion was to license seed production and marketing
to a company in Mexico for a limited time (because of its commercial and technical capabili-
ties). The Mexican company in turn licenses local seed companies for distribution in Colombia
and several other Latin American countries. The Mexican company has to protect Mulato in the
name of CIAT in every country where it intends to commercialize it and it has agreed to pay a
royalty to CIAT on seed sales for the first ten years. A separate agreement provides additional
royalty payments to CORPOICA, (which participated in the research to develop the variety). The
royalties paid to CIAT go into a special royalty fund.
6.7.3 IARC Priorities
The past decade has seen a wide range of pressures from donors and other stakeholders on
IARCs regarding their roles and comparative advantage. There is a strong desire to make sure
that their products reach the smallholder farmer and thus an emerging attitude that product
development and distribution plans need to be a part of the research planning process. The
establishment of national PVP regimes and the strengthening of the private seed sector in
developing countries are two important factors in the environment of IARC priority setting, but
there is no uniform response. CIAT relinquished most of its interest in breeding for commercial
rice systems in Latin America in favor of concentration on subsistence growers and marginal
environments. ICRISAT, on the other hand, invests the majority of its pearl millet and sorghum
breeding resources for India in support of the commercial seed sector, and the research is
almost completely funded by the industry. In Africa, CIMMYT provides maize germplasm to both
NARIs and private companies but has yet to examine the implications or to see if the two
sectors complement each other or compete.
There is a strong fear in several centers that the regional nurseries in which the best varieties
(released or under development) are shared among members of a consortium of NARS for
testing under different environments, may collapse due to unwillingness of members to provide
their materials when their protection in all these countries cannot be guaranteed. This is a
response to the increased commercial attitude of several NARS that is supported by the rise of
IPRs.
6.7.4 IARCs and Biotechnology
Most of the commodity-focused IARCs have extensive biotechnology research programs. Many
of the tools and genes used by the IARCs are patented in the North (and some are specifically
licensed for research purposes) and there is little experience on how to proceed with products
based on licensed technology. CIAT believes that a transgenic virus-resistant rice variety it has
developed is nearly ready for deployment and commissioned an FTO search, which identified
the principal IP holders with whom CIAT needs to negotiate. CIAT admits, however, that it is
poorly prepared for such negotiations. Similarly, CIMMYT commissioned an FTO for its Bt maize
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varieties for Africa, but the next steps are yet unclear. Even CIMMYT’s negotiations for the non-
transgenic Striga-resistant maize have proven to be complex (see Box 4). ICRISAT has
developed a number of transformed crop lines but has yet to do an FTO on any of them.
The IARCs also have little experience in patenting their germplasm-related inventions. CIAT has
filed a patent jointly with EMBRAPA for a technique for Brachiaria transformation, and one on a
tissue culture technique (on guanabana, with potential impact on other fruits), but these have
yet to be granted. ICRISAT has yet to patent any technologies, although there are several
candidates. Most IARCs are developing their staff to identify which research streams might
result in patentable products and hence require different management.
Recently initiated CGIAR Global Challenge Programs are expected to yield a wide range of
patentable technologies through collaboration between IARCs and institutes in developing and
industrialized countries. The programs aim at making all protected technologies and materials
available in order to provide technology and products to the resource-poor on a non-exclusive
basis. However, terms such as ‘resource-poor’ are not yet well defined and require attention.
Box 6. Latin American Fund for Irrigated Rice (FLAR)
FLAR was created in 1995 to fill the gap left by CIAT’s decision to shift its rice breeding
priorities towards virtually exclusive concentration on marginal production zones. The
Colombian government (and others) expressed concern that commercial rice production
would suffer and subsequent discussions led to the creation of FLAR, which currently has a
membership of eight countries (plus CIAT). Each country has a single representative, which
may be a NARI, a rice producers association, or a group of seed companies. FLAR’s budget
is largely provided through members’ contributions. FLAR manages an extensive regional
program of rice breeding, directed by its members. FLAR does not produce finished
varieties but rather provides members access to breeding lines at roughly the F
5
or F
6
stage.
(CIAT’s rice breeding program provides germplasm to FLAR, covered by MTAs.) Each
representative or constituent member of FLAR is responsible for the registration and
protection of varieties it produces from FLAR germplasm. FLAR requires that any varieties
based on its germplasm be protected under national PVP, but FLAR does not receive any
royalties or additional payments from released varieties. Members can produce seed
themselves or license varieties to someone else and collect royalties. If a member produces
and markets a variety based on FLAR germplasm in another member country there is a
formula for determining the proportion of royalties that go to the second country represen-
tative. Companies outside the FLAR network may approach FLAR members for access to
germplasm, but any such exchange must be approved by the FLAR board. The first FLAR
varieties were released at the national level in 2003 (in Venezuela and Bolivia). The direction
of FLAR research is determined by its members, through the FLAR board. Recent interest in
pursuing an agreement with a US company for joint development of hybrid rice was recently
halted by the board, largely because the representative from Brazil (FLAR’s major
contributor) is developing its own hybrid rice research program.
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A newsworthy application of IP policy is found in the recent intervention by CIAT in a US patent
application for yellow (‘Enola’) beans, which might interfere with CIAT’s bean program in Latin
America where yellow beans are fairly common. In a wider context, this challenge serves as a
proof that the CGIAR, with its open access to genetic resources, is willing to defend this access
policy in a wider context. The effort and costs involved in challenging this patent may serve as
an example of how difficult it is for IARCs to deal with the protection of rights relevant for their
work.
6.8 Impact on Public Seed Enterprises
The establishment of IPRs is only one of the factors that have affected public seed production
activities in the past decade, leading to a general decline of the public sector in seed provision
in developing countries.
In India, the state seed corporations concentrate almost exclusively on the production of public
OPVs, although some of seed of hybrid maize is still produced by the public sector. The
Maharashtra State Seed Corporation now has its own breeding programs to complement the
ICAR varieties. As long as state universities and ICAR institutes continue to sell breeder seed of
their varieties, most state seed corporations may not see much change due to PVP, although
they are increasingly challenged by private sector activity, e.g. more than half of the seed of
public rice varieties in Andhra Pradesh is supplied by private companies. In other states as well
(e.g. Haryana) the private sector is getting involved in the paddy seed sector.
In China, it is difficult to define what should be understood by public sector seed production
since most of the seed production units that were operated by the national, provincial or lower
levels have been commercialized to such an extent that their decisions are almost exclusively
based on business considerations. Several have entered into joint ventures with foreign
companies.
The fate of the Kenya Seed Company, which has operated as a successful commercial enter-
prise with majority shares held by the Kenya government for many years, has yet to be decided.
Although it continues to dominate the market, management problems and irregularities during
the years of the former government have left doubts about its role, and even about the degree
of public ownership. It has lost its previous monopoly status, but many express the belief that
the government will still look to KSC as a guarantor of maize seed sufficiency and as such it
would expect certain concessions. But emerging policy also seems to expect that KSC will
have to compete on the basis of seed and varietal quality; the rights on the established hybrids
could provide KSC with some valuable assets to maintain its strong position in the market.
The former Uganda Seed Project has now been converted into Uganda Seeds Ltd. and has
been a candidate for divestiture for several years. It produces seed of public varieties only and
its future without significant government backing is uncertain, especially as local private seed
sector capacity continues to grow. Uganda Seeds can obtain licenses on public varieties like
any other seed company in Uganda.
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Although there is no longer any public seed company in Colombia, there is considerable seed
production that takes place with some public support. The government expects CORPOICA to
supply source seed of many public OPVs for crops such as beans and wheat to publicly-
supported programs for seed multiplication and distribution. A more difficult case is that of
FEDEARROZ, which is a producer association but also operates as a private seed company
(with its own breeding program and protected varieties). It receives some tax revenues in its
position as a producer cooperative and there are questions whether as a recipient of public
funds it should be allowed to maintain its monopoly access to FLAR rice germplasm for
Colombia.
6.9 Summary
IPRs and revenue generation in NARIs
The establishment of PVP regimes comes at a time when public agricultural research in
developing countries is being asked to take much more responsibility for revenue generation.
Among the case study countries, India is an exception, where revenue generation is encouraged
but not compulsory (and ICAR revenue flows back to the treasury). These demands for revenue
generation are not entirely explained by the emergence of PVP, but administrators certainly see
the possibility of earning income by licensing their varieties and other inventions as an
important response to the challenge of achieving greater financial self-sufficiency. The public
sector appears to be a major supporter in the push towards PVP in most countries. The degree
to which such royalties can fulfill that promise depends on farmer demand for public varieties,
the efficiency of the domestic seed delivery system, and the ability of public breeders to
compete with their private sector counterparts.
In Colombia there is little evidence so far of potential revenue generation from public breeding.
In Kenya, the fact that most of the maize hybrids grown by farmers are products of public
breeding would indicate the possibility of substantial revenues, but the domestic and foreign
private plant breeding sector is expanding rapidly. In Uganda, public plant breeding has not yet
resulted in a widespread use of public varieties by farmers, and because it concentrated on
OPVs until recently it has not contributed to the nascent seed industry. The private sector is
still insignificant in terms of breeding. In India, although the vast majority of hybrid seed is now
the product of private plant breeding, huge areas of wheat and rice are planted to public
varieties, and even though only a fraction of that area is planted to purchased seed, the royal-
ties could be significant. But it would appear that there are no plans at present to shift away
from the practice of selling breeder seed to any legitimate seed producer. In China, the system
is in a state of flux, as public breeding institutions for major crops are making the transition to
take partial responsibility for revenue generation. As there are substantial quantities of public
varieties of many important field crops grown with purchased seed (especially hybrid rice and
maize), the revenue generating possibilities are substantial. But public funding and broader
mandates are also important.
In summary, the expectations of NARI management for the amounts of revenue that can be
generated are quite high. For comparison, the income of universities in the USA from
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intellectual property rights is approximately 2-3% of their annual turnover (J. Barton, pers.
comm.). Income from PVP on plant varieties is likely to be more predictable than patent-based
revenues (Fischer & Byerlee, 2001).
Can NARI plant breeding keep pace with the private sector with regard to human resources?
The degree to which a PVP system can help generate income for NARIs depends to a large
extent on whether NARIs can keep control of plant breeding skills and resources for commer-
cially important crops. The experience of India in the past two decades is instructive; as policy
changes encouraged the emergence of private plant breeding, the expertise for commercial
(largely hybrid) seed crops began to shift from the public to the private sector, even for sup-
posedly ‘marginal’ crops like sorghum and pearl millet. As the private seed sector developed in
India, NARI staff were hired away, and the private sector now offers an attractive alternative for
recent graduates. Even where public sector research leads the way, as in hybrid rice, the
commercial potential soon attracts resources (and results) to the private side.
The current situation in China is more difficult to characterize. Large companies are investing in
breeding activities, particularly for hybrid maize and rice, and breeders from public institutes
are getting involved. By helping to generate revenues, PVP is providing the institutes with
resources that can be shared with breeders as an incentive for them to stay. The large invest-
ments in the application of biotechnology by CAAS may also be providing a scientific and
prestige-related counterbalance to the lure of the private sector, where many companies do not
yet have such resources. Thus there are uncertainties about the extent to which the private
sector will be able to offer alternative employment to the best plant breeders.
In the smaller countries in the sample, the ability of the NARI to retain plant breeding personnel
and resources in the face of an expanding private seed sector is much more in doubt. In Uganda
NARO is struggling to maintain its maize breeding program. In Kenya KARI’s traditional partner,
KSC, is now a rival, with a separate breeding program, and other domestic companies are
assembling their own breeding resources. The emergence of PVP thus comes at a time when
there are many uncertainties about the role of NARIs vis-à-vis the private sector in terms of
mandate crops and the division of labor between upstream and downstream research.
NARI administration of IPRs
The advent of PVP and the increased use of patented technology in agricultural research place
an additional burden on NARI administrations to establish IP policies and procedures. Most
NARIs in the study are moving very slowly in this direction, hampered by a lack of experience
and resources. In most cases IP policies are still being drafted. Skills required for activities
such as the pursuit and enforcement of PVP, organizing patent applications, and understanding
freedom to operate, are in short supply and in any case would not be fully employed in most
NARIs under current circumstances, but they are all required at certain key junctures in NARI
technology development. In this regard, there is a difference between the national and provin-
cial level institutes of the academies of agricultural science in China. The former generally have
much more resources to assist scientists with IPR matters, in particular patent applications.
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Another administrative challenge is the management of royalties received by the NARI.
Decisions must be made about sharing such income more widely within the institute (to support
less commercial research but at the risk of diluting the incentives offered by the royalty system).
There is also understandable pressure that some part of the royalty earnings from a protected
variety or a patented technology go to the scientists responsible for the innovation. In any
public research system this can create potential inequalities, but in some developing country
NARIs these could be quite problematic. In Kenya, for instance, a small share of the royalties
(in line with proposals from the plant breeders association) from a widely-used maize hybrid
could dwarf the breeder’s normal salary and significantly jeopardize the institute’s incentives for
research in other crops. There are also more mundane administrative challenges. For instance,
if NARIs hope to earn income from the sale of source seed, they need an efficient and
transparent service in place. Such a system exists in some Indian NARIs, but is less well
established in some of the other case study countries.
Implications of PVP for NARI priorities
A major problem with revenue generation from PVP is that the potential opportunities are
patchy. There is a danger that this heterogeneity may be translated into inequitable and
questionable public research resource allocations. Why, for instance, should hybrid rice
research earn much more than wheat research just because of differences in seed systems?
Although it makes sense to assign research resources to crops and problems for which there
is high farmer demand, commercial seed systems often provide imperfect signals of that
demand. There are already indications that these signals from the seed system and associated
PVP are making their marks on NARI priority setting. This can be seen with the case of hybrid
rice in Hunan and Guangdong provinces, as well as with the longer running approach to
vegetable breeding in China. NARO in Uganda is encouraged to concentrate on research where
commercial contracts or PVP will provide revenue, and KARI’s calculations for income are
based on hybrid maize.
NARIs need to manage their IP to maximize the benefits of public investments to society and to
ensure equity in the distribution of these benefits in line with national policies (Fischer & Byerlee,
2001, 2002).
IARC IP policies and resources
IARCs have policies on IP that stipulate that the Centers can protect inventions and materials
under the condition that this protection will ensure that the subject material will be available to
stakeholders; in such situations provisions will be negotiated in the licenses with the intent that
such material will be given out royalty-free for use for the poor. Centers are committed to
having their products reach the smallholder farmer at little or no cost. Several centers have
some staff assigned to IP with legal background, plus access to CAS-IP, in order to improve
IP Management practice and to also focus on product development and distribution issues.
Resources are however limited and the increasing pressure to show impact at the local level
will stretch current capabilities.
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The IP issue is central in the balancing of relationships between seed companies and NARIs.
As IARCs develop wider relations with domestic commercial seed sectors, and NARIs place
increased emphasis on earning royalties from their germplasm, IARCs have to balance between
giving materials directly to seed companies or going through NARIs that the can earn royalties.
In many countries, companies seem to prefer direct relation with the IARCs. When IARCs can
earn royalties on their materials, they find themselves in the same position as NARS with regard
to possibilities that opportunities for revenue generation may affect priorities. Contrasting
examples are provided with CIAT’s rice and ICRISAT’s sorghum.
The dilemma of public seed production
The growth of the private seed industry (and the demise of many parastatal seed companies)
would seem to provide a more effective link between public plant breeding and farmers’ fields,
with the added incentive of royalty earnings. However, many public varieties do not attract the
interest of commercial seed enterprises, and this encourages NARIs to organize their own seed
production and marketing. Such temptations are clearly evident in some of the smaller NARIs in
the study. In addition, many NARIs still find themselves with obligations to public seed production
efforts. The problem is that in most countries the conventional private seed sector does not
have the incentives to produce and market the full range of public sector varieties for which
there may be farmer demand, such as beans, but the public sector has shown itself incapable
of organizing an efficient alternative. In China, the old system of seed production and
distribution by public companies is shifting quickly to dominance by private companies. Few
public breeding institutes are expanding into seed production, with the exception of the IVF
which has long produced and marketed its own seed.
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125
7. Impact on seed users
7.1 Diversity of Seed Firms
One of the principal arguments in favor of PVP legislation is that it will provide incentives for a
wider array of seeds from which farmers can choose. The impact of PVP legislation on the
seed industry in the case study countries was discussed in a previous section and although it is
still too early to say anything definitive about how changes in domestic seed industries will
affect farmers, some preliminary observations are possible.
When India’s new PVP law is functional, and if the new seed law requires that all varieties be
registered, there could be at least two major effects at the farm level. On the positive side, it
will be easier to control the illegitimate seed producers whose products cause confusion and
uncertainty. If companies can control the illegal use of their germplasm (e.g. theft of inbreds)
by others, some of the fly-by-night operations that sell seed of uncertain origin will be curtailed.
Although the net effect will be to reduce the number of players, it may bring positive benefits.
For example, cotton farmers, particularly in southern India, currently confront an exceptionally
complex market. It is generally acknowledged that in some cases a popular hybrid is being
marketed under several names (because of illegal access to inbreds or commercial seed); in
other instances, small companies go in and out of business, marketing hybrids of uncertain
provenance. Eliminating the smaller, illegitimate players in the cotton seed business could bring
added transparency to the market. On the other hand, if the new PVP and seed laws raise the
costs of bringing a new variety to market, small companies that specialize in niche markets will
have fewer incentives to operate. However, there may be few current examples of private seed
companies investing breeding resources in small, specialized markets that can access
proprietary materials through licenses from colleagues.
Perhaps a more relevant concern is the potential impact on public plant breeding for marginal
environments. When such breeding can be linked to delivery by small private seed companies it
is possible to imagine that the additional regulatory costs would discourage this type of activity.
Evidence from Andhra Pradesh shows that even small private firms are fairly conservative in
promoting new public rice varieties until there is evidence of sufficient demand. The initial
activity in promoting the new rice varieties (and in meeting the needs of niche environments)
depends in large part on the activities of certain larger farmers who test new public varieties
and serve as seed sources for their neighbors (Pal et al., 2000). Whether such a system will
continue depends on public plant breeding policies.
Although some commercial seed activities emerged in China in the early 1990s, the truly
private seed companies started selling seed only after the implementation of the new seed law
in 2000. There has been a recent proliferation of seed companies, and many of these are
selling Bt cotton seed. Some of this is legitimate and properly regulated, but much is legitimate
seed sold in unapproved areas, pirated seed, or simply spurious imitations. This exceptional
competition has driven the price of all Bt cotton seed down, but farmers pay the price of
risking the use of fraudulent or poor quality seed and the legitimate seed producers do not get
adequate compensation. Recent analyses have argued that better enforcement of IPRs in Bt
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cotton would drive some of the smaller, illegitimate players out of the market and improve
overall productivity (Pray et al., 2004).
In both Kenya and Uganda farmers would certainly benefit from a wider range of seed sources,
but the opening of these markets has been related to changes in national policies rather than
PVP per se. In recent years farmers have increasingly complained about the quality of KSC
seed; some of the complaints are related to grain sold in imitation seed bags by fraudsters but
some may be the product of lax quality control by the company itself. In any case, farmers
have been eager to try hybrid maize seed from other companies, even when it is significantly
more expensive. The increased competition has been responsible for other innovations, such
as the availability of smaller pack sizes, but has yet to elicit a wider range of crop seed into the
market.
In Colombia, PVP was instituted at a time when government support to agriculture had declined
and the seed industry was contracting. Farmers have a modest range of choice of companies
for rice and maize seed, but there is little indication that the industry is diversifying further.
7.2 Farmer Priorities
There are also concerns about the extent to which PVP may shift plant breeding priorities,
particularly for the public sector. We have seen several examples of how such priorities may be
changing, although it is difficult to attribute such changes to PVP alone. In Uganda, NARO
administrators and scientists consistently talk about using public plant breeding to serve the
development of commercial agriculture. They express considerable faith in finding the commer-
cial potential of most crops, and have less time for examples concerned solely with subsistence
agriculture. This may likely to affect the distribution of funds between crops e.g. at the cost of
attention to locally consumed crops like beans and cassava, and put more emphasis on the
selection of high-yield potential maize at the cost of yield stability under low-input conditions.
The private seed companies that have beans and other locally important crops in their portfolio
confirm that this is mainly to cater for the demand of aid agencies and that they don’t see a
future for these products when that demand disappears. In India, ICRISAT’s clients for hybrid
pearl millet and sorghum breeding are now the members of the company consortia, and those
companies naturally target commercial opportunities. For instance, they see particular impor-
tance in breeding for dual purpose sorghum that can be used for both food and fodder. The
requirements of those farmers that depend on sorghum as a subsistence crop will be less in
evidence.
7.3 Local Seed Production and Plant Breeding
The majority of farmers in the case study countries rely on farm-saved or other non formal
sources of seed for many crops. Farmer-to-farmer seed exchange has been a key mechanism
to transfer the green revolution technologies to farmers that could not be reached by the
formal seed systems. This ‘lateral spread’ system is the basis of the inclusion of modern
varieties in the farmers’ seed systems.
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A more recent mechanism to reach smallholder farmers in ecologically diverse countries are
the different farmer participatory approaches to plant breeding and variety selection (Sperling
et al., 2001). Farmers become partners in breeding and in testing a wide range of (nearly)
finished varieties on farm with the intention to either develop small-scale seed enterprises or to
feed new varieties into the local seed systems.
Varieties selected in such participatory initiatives often bypass the regulatory system. Such
initiatives could be affected by IPRs in two ways. First, NARIs that seek revenues from their
research are likely to give very little priority to such participatory approaches because they will
not likely lead to commercial varieties. Those varieties that are the products of participatory
plant breeding may not meet uniformity standards, or participating farmers may reject the idea
of ownership (Salazar et al., 2004). Second, given the ecological and sociological diversity in
which participatory plant breeding programs operate, there is a requirement for access to a
wide range of genetic materials for breeding and testing. When more materials are protected
by PVP or patents, there are fewer opportunities for participatory approaches.
7.4 Seed Saving
One of the major concerns about the establishment of PVP legislation is that it may restrict
farmers’ ability to save seed. The new Indian legislation specifically guards against this
possibility and many seed companies feel that the law provides too much flexibility, not only for
seed saving but also for extensive sale of saved seed under the rubric of ‘seed exchange’. This
is formally limited to genuine farmers, but may be misused by local operators for profit. In any
case, Indian farmers who are used to saving commercial seed or obtaining seed of new
varieties from their neighbors will notice no difference when the new law is in place. Similarly,
the proposed PVP law in Uganda permits seed saving of protected varieties.
In Kenya and Colombia, both of whom have several years of experience with PVP, changes are
being proposed that will affect farmers’ ability to save seed. In some respects these changes
are in response to the practices of commercial farmers that reduce seed sales. In Colombia,
the seed industry complains that it suffers from widespread informal seed sale, where certain
farmers produce and sell seed to their neighbors. Resolution 2046, which prohibits seed
saving on properties of greater than 5 ha (and requires permission from ICA for seed saving on
smaller farms) is meant to address this problem. If this is enforced it would raise the cost of
production for certain rice farmers who are used to buying informal seed or saving their own
seed, but in the context of the current seed market it may not have any other notable effects,
as very few OPVs of other crops currently grown are protected (soybean may be the major
exception). It could theoretically make a significant difference, for instance, in the case of
protected potato varieties, whose yearly replacement with certified seed would add greatly to
the costs of production. There are also uncertainties about the interpretation of the farm size
limitation. If a farmer with 6 ha of land grew 3 ha of beans, the obligation to buy certified seed
(of a hypothetical protected variety) would imply a significant investment. The actual effects of
the resolution will be determined by its interpretation and management.
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In Kenya, there are plans to revise the legislation so that it is compliant with UPOV 1991, which
allows breeders to restrict seed saving of protected varieties. Probably the principal case of
contention is wheat farmers, who use a large proportion of saved or locally-purchased seed.
Many of these are fairly large farmers who at one time were more frequent customers of the
Kenya Seed Company. The farmers contend that they would still be willing to buy KSC seed if it
were of good quality and appropriate varieties. KSC, on the other hand, claims that the farmers
are simply trying to save money, and that they are often abetted by the KARI station at Njoro
that provides some seed (of its own released or experimental varieties) to local farmers, who
then multiply and save it. No matter who is right, if a restriction on seed saving were introduced
in Kenya, it might be possible to enforce with wheat farmers, who are relatively large, few in
number and operate in a delimited environment. However, Kenyan wheat farmers’ current
range of choice for seed is much more restricted than the options available to Colombian rice
farmers. In addition, a very large number of (mostly public) food crop varieties are in line for
PVP in Kenya. Although there is no threat that a wholesale application of a restriction on seed
saving would be enforced for subsistence farmers (it would be administratively impossible and
politically unwise), there are legitimate questions about how farmers could be protected from
the arbitrary application of such a law.
7.5 The views of farmer groups
The emergence of IPR regimes has caused a certain amount of concern among farmers and
farmer groups, although relatively few farmers are conversant with the issues. Among the most
prominent concerns are the dangers of excessive commercial control of the seed market,
possible restrictions on seed saving, and the possible fate of local varieties. Several spokesmen
of farmers’ organizations who were interviewed indicated that they do not see many advantages
of IPRs for their members. They claim that IPRs will lead to monopolies that will increase seed
price and that will reduce the focus on the needs of farmers who will not benefit from foreign-
bred materials. They fear that such monopolistic tendencies will not easily be curtailed in
developing countries by anti-trust measures. Representatives from India and East Africa
indicated that they do not expect such negative effects to take place immediately, but are
concerned about the growing concentration of the seed market in certain areas. They fear that
large commercial interests will gradually exclude alternatives (including the public sector). Local
commercial seed companies will either be marginalized or purchased by the larger firms.
In general, these farmers did not distinguish between PVP and patents. The introduction of PVP
(even the weak form in India) is seen by some farmer organizations as a first step in a process
that will lead to strong patents. The capacity of the governments to balance the interests of the
industry and smallholder farmers in this process is considered very limited given considerable
international pressures. The TRIPS-plus negotiations in several countries are presented as an
illustration of this pressure.
In India, the new law allows farmer groups (or NGOs representing farmers) to pursue the
protection of farmers’ varieties. There is little activity yet in this area, but one NGO expressed
interest in documenting farmers’ varieties, even if direct benefit-sharing turns out to be difficult.
Another NGO pointed out that a considerable amount of capacity-building is required before
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there is the possibility of protecting farmers’ varieties. In addition, some NGOs already have
experience in public interest litigation in support of issues related to Farmers’ Rights and the
new legislation will almost certainly provide further opportunities.
7.6 Flower producers
The flower producers of Colombia, Kenya and Uganda can be considered ‘seed users’ as well,
and most of their production depends on the use of protected germplasm. Like seed users for
agricultural crops, they are for the most part unacquainted with local PVP regulations. Most
flower producers in Colombia and Kenya are only vaguely aware of the PVP offices in their own
countries. They are well acquainted with the royalties that they pay on planting material, but
these payments are negotiated with the flower breeding companies in Europe or elsewhere.
There is no standard format for paying royalties to the IP owners, and the nature of the contract
depends in part on the length of the relationship and the trust between the two parties.
Royalties may be charged on the planting material or on the marketed product, depending on
species. In the former case, initial contracts may stipulate that the royalties for the lifetime of
the planting material (e.g. usually four years for roses) be paid in advance, but once business
relations are established the royalty payments may be spread out over the production period.
In certain cases, a producer may negotiate for exclusive rights to produce a particular variety.
There is surprisingly little difference in the level of royalties between rose varieties, which
appear to account for about 3-6% of the cost of production for flower growers. For roses, the
royalty cost is roughly equivalent to the cost of the planting material itself. The major cost of
production is labor.
The monitoring of growers’ conformity to royalty agreements is managed by occasional visits
to their farms by breeding company representatives. The growers put much value on a good
relation with the agent of the breeder since only through him can they access varieties that
fetch a good price in the market. Some of breeder representatives are appointed agents
resident in the country and others come from abroad. In Colombia, a Dutch company, Royalty
Administration International (RAI), has an office that looks after the interests of a number of
flower breeding firms. Those who monitor the flower growers are aware of the quantity of
breeding stock contracted by the grower and check for evidence of excess production.
A second method of monitoring production is by reviewing export statistics. In Uganda, for
instance, all flower exports go through one handling agent.
At present the major means of controlling illegal flower production is through close monitoring
of the wholesale markets. Most flowers destined for Europe pass through a single market in
the Netherlands and statistics from this market are closely monitored. Flower-producing firms
depend on a limited number of wholesale outlets and this means that it is fairly easy to spot a
company’s extra-contractual production. The control over product markets is the principal
instrument for enforcing royalty agreements. For instance, there was a landmark seizure of
20,000 roses in Miami exported from Colombia and Ecuador for Valentine’s Day 2004.
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The varieties are also grown by legitimate producers in Colombia, although it appears that the
varieties are not protected by PVP in Colombia. The roses were the property of a US breeding
company and the seizure was made on the basis of violations of trademark rather than PVP.
RAI, Colombian security officials and US Customs collaborated in the operation.
Given the possibility of controlling illegal production through the withdrawal of contracts and the
relative ease of monitoring wholesale markets, it is fair to question the role of PVP regimes in
producer countries for the flower industry. Many producers in Colombia and Kenya say they
saw no particular change in their conditions or markets when their countries joined UPOV. On
the other hand, these producers may not be aware of the degree to which their choice of
varieties (presented in catalogues to the growers) may be influenced by the breeding
company’s confidence in the business climate of those countries with PVP legislation.
The case of Uganda illustrates that a country can attract a buoyant flower production industry
without a PVP regime. If the flower varieties are protected through PVP in the country of desti-
nation (or if they are trademarked), then PVP in the country of origin may be irrelevant. The
Dutch flower industry is however lobbying for strong IPRs in the main production countries to
create additional ways to tackle infringements. This is particularly important where additional
wholesale markets develop, such as direct exports from Kenya to the Middle East and other
parts of Africa (or as the domestic market for flowers expands). Some producers in Colombia
believe their industry is better positioned than that of neighboring Ecuador (which does not
have a functioning PVP system and suffers more illegal flower production). With respect to
attracting new contracts, a local PVP regime also gives a breeding company the option of
bringing (or threatening) a local court case.
The discussion has focused on large commercial flower growers, but it is worth asking what
the possibilities are for small-scale production (and how PVP might apply). Unfortunately, most
commercial flower production requires considerable infrastructure (greenhouses, irrigation) and
hence it is not feasible on a small scale. Even where outgrower production is possible (for
those species that can be grown in open fields), current regulations in the North regarding
environmental and social conditions make monitoring smallholder production very unattractive.
There was a case several years ago in Kenya where large firms organized the production of an
Alstroemeria variety through outgrowers. The breeding company did not charge royalties on
the variety initially, but when expanded sales encouraged it to begin charging royalties, the
economics of outgrower production collapsed. Although the exercise of PVP was the initial
cause for the failure of the outgrower scheme, the other economic and regulatory factors that
have since appeared now make smallholder flower production uneconomic.
The situation with flower production may be quite similar to a number of other high-value
commodities, such as export vegetables, tropical fruits, and possibly estate crops, where the
rights can be controlled through export markets rather than by enforcing protection of the
planting materials themselves.
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7.7 Summary
Limitations on seed saving
Farmers’ seed systems are the main source of seed for most crops in the case study countries.
IPRs may restrict this practice. This could affect access to new varieties by farmers who
cannot afford frequent purchase of seed from formal sources. In this respect the potential of
plant patents is of most concern, but the changes in some national PVP regulations already
introduce these issues, especially if legislation designed for the commercial farming sector is
extended to subsistence crops.
Expanding choice
Farmers need choice; in some countries this choice is currently expanding through the opening
of the seed sector through economic policies and changes in seed regulations. When the
commercial seed market expansion is very rapid and uncontrolled, IPRs can help control rogue
traders (e.g. in India, China). However, restrictions on small seed enterprises and semi-
commercial operations may jeopardize seed supply of some local varieties supplied commer-
cially, as in India. In addition, the breeding of niche varieties and their delivery by small seed
companies may be threatened.
IPRs seem to secure access to a wide range of varieties by flower growers in the case study
countries, but only when the implementation of the IPRs contributes to a trustworthy business
environment. These IPRs are not necessarily operational in the production countries, as long as
they can be exercised in the main wholesale markets. Where the introduction of PVP is strongly
pursued and the lobby for strengthening the system comes primarily from this sector, non-
specific IPRs like trademark protection appears a very strong tool for the flower breeders.
Addressing marginal farmers
It is likely that NARS’ focus on revenue generation, supported by the introduction of IPRs, and
may divert their attention from the needs of marginal farmers. Choices of crops, variety
characteristics, and breeding strategies are less likely to take account of the needs of more
marginal farming populations. This is particularly relevant to participatory methods in breeding
and variety selection, although the impact of such approaches is quite variable at the moment.
On the other hand, there are some indications in India that a strong and diverse seed industry
may want to diversify into more marginal markets.
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8. Lessons
This study has attempted to survey and analyze the design, management and impacts of
various IPR instruments applied to plant breeding in five developing countries. Because many of
the principal IPR strategies have only been in place a few years (or are still in the final stages of
approval), and because the incentives provided by any IPR regime usually interact with various
other factors, it is difficult to identify unambiguous conclusions regarding the possible contribu-
tions and concerns that IPR regimes might present for plant breeding in developing countries.
We have attempted to make the precision of the conclusions provided in the ‘Summary’
sections of Chapters 4-7 consistent with the level of evidence that is currently available.
Despite the preliminary nature of the report’s conclusions, we believe that the analysis points to
a number of significant lessons that need to be presented and disseminated. This final chapter
outlines the most important of these. Some of these lessons merely indicate the importance of
vigilance and monitoring, while others imply the need for immediate action. The following
presentation directs the lessons in a somewhat arbitrary fashion (given overlaps in interests
and mandates) among: those with a general interest in the subject, particularly donors; national
policymakers concerned with the design of IPR instruments; policymakers and officials engaged
in the implementation of IPRs; national representatives and others engaged in trade negotia-
tions; and those concerned with broader issues of national agricultural development policy.
General
It is too early to attempt a statistical or even a quantitative analysis of the impact of strength-
ened intellectual property rights on plant breeding and seed production in developing countries.
In most developing countries the introduction of IPRs for plant breeding is a recent event which
coincides with a series of other processes that have been set in motion, including the liberaliza-
tion of domestic agricultural markets, increased globalization, and a reduction of public expen-
diture for agricultural research and seed production. All of these trends have a marked effect
on the seed and plant breeding sectors. Although these concomitant trends may be compatible
with a move towards strengthened IPRs in plant breeding, it is very difficult to attribute
particular outcomes to changes in IPR regimes alone. But the difficulty in identifying clear
causality at this early stage does not mean that IPRs are unimportant. On the contrary, IPR
regimes may lead to significant changes in plant breeding and seed production, and the subject
warrants careful future study and monitoring.
There are several priorities for careful monitoring. These include assessing the extent to which
IPR regimes (and other policy changes) in particular countries influence the priorities and
products of public plant breeding, affect the structure and concentration of the domestic seed
industry, and determine the options available to smallholders. On a global level, it is particularly
important to monitor how IPRs are treated in multilateral and bilateral negotiations, and how
IPRs determine the role of MNCs in technology provision in developing countries in order to
ensure that the significant concentration witnessed in the industry can be counterbalanced by
measures that allow more widespread access to the tools and processes of biotechnology.
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Although it is possible to conclude that this study only examines the very partial implementation
of relatively weak IPR regimes, it is important to bear in mind that the case study countries
capture a good deal of the wide range of experiences among developing countries with large
populations of resource-poor farmers who have established IPRs for plant breeding. Political
realities, limitations in administrative resources, and varied economic incentives in most
developing countries indicate that it is unrealistic to expect rapid establishment and effective
enforcement of the type of IPR regimes that are found in some industrialized countries. In any
case, IPR regimes should be part of developing countries’ development pathways and consistent
with their own priorities and capacities instead of being externally imposed. Donors and others
hoping to support these processes must be prepared for a long-term and individualized
development of national agricultural institutions.
Support for specifically-tailored IPR regimes is possible because of the range of options that
are available for providing the types of incentives that many believe (incorrectly) to be
associated only with uniform and rigid IPR regimes. The following sections on design and
implementation provide further details on the flexibility that is available for pursuing a more
responsive approach to IPRs.
It is important to clarify that respecting individual country priorities and circumstances in the
design of IPR regimes does not imply that opportunities for harmonization and cooperation
should be forgone. Mechanisms such as UPOV and PCT facilitate the implementation of IPRs
and reduce transaction costs. But the object of harmonization is to provide economic benefits
(such as the development of regional markets) rather than to promote coalitions whose
standards are dictated by their strictest partners.
Donor support for the development of appropriate national IPR regimes should not be limited
to providing information and resources for the technical options related to design and imple-
mentation. Such support should be accompanied (or indeed, preceded) by encouragement for
open and informed national debates among all stakeholders regarding options for IPRs as well
as wider issues related to agricultural development. Such stakeholder involvement is also
encouraged by Art 9. of the International Treaty on Plant Genetic Resources for Food and
Agriculture.
Although IPR regimes must be developed at the national level, and much donor effort should
support individual processes of debate, design, and implementation, there are also issues
related to international public goods that require attention. In particular, the conduct of inter-
national agricultural research will be affected by decisions regarding IPRs in plant breeding.
International agricultural research should support the development of local farmer capacities,
strengthen national public research, and encourage the growth of domestic private seed
sectors. This is a delicate balance, with much scope for contradiction and compromise, and
more study is required to identify appropriate IPR instruments for supporting these multiple
goals.
A further issue that requires attention at the international level is access to some of the basic
tools and processes of biotechnology. In many cases, plant breeders in developing countries
are using tools and processes that are protected in the North through patents, and they are
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uncertain of the possible legal implications for the new varieties that they might develop aided
by such technology, as well as the status of the agricultural products grown from these
varieties. In addition, there is lack of clarity about access to certain technologies (and
supporting information) that have, or will soon, go out of patent protection and are presumed
to enter the public domain. Concerted attention at the international level is required.
The design of IPR instruments
Policymakers need to understand that IPRs are important not because countries may be
required to accede to the conditions of an international agreement but rather because they
offer possible mechanisms for stimulating research, enabling access to technology, and
promoting enterprise growth, all for the good of society. As such, they are merely one tool in a
range of policies that may be applied in specific contexts to further agricultural development.
Carefully designed IPRs for plant breeding can make an important contribution, but they are
unlikely to be effective unless combined with other policies (e.g. for supporting public agri-
cultural research, providing an enabling environment for agribusiness development, and
empowering smallholders). Policymakers should understand that IPRs for plant breeding are
not a magic bullet that automatically stimulates or redirects agricultural growth, but they can
be an important part of a comprehensive agricultural development strategy. Under the right
conditions, IPRs can help support, but do not themselves create competitiveness and diversity
in plant breeding and seed supply.
Given the value of well designed IPRs for agricultural development, policy makers should not
treat IPRs as a negotiable bargaining chip in trade negotiations or other international
discussions.
In most countries, the implementation of an IPR regime for plant breeding should be seen as a
long-term process, subject to monitoring and adjustment. The nature of patent rights in the
field of biotechnology is a subject of debate in most industrialized countries, and developing
countries should approach the revision of their own patent systems armed with adequate
information. Similarly, the establishment of a PVP office is not necessarily sufficient to initiate
widespread changes within the seed industry. It often takes considerable time for the testing
infrastructure to be established and for plant breeders to become conversant with the system.
In some cases companies may be hesitant to invest in protection that they either feel is
unnecessary or unenforceable. In other cases, even fairly weak IPR regimes are welcomed by
the seed industry, especially when they help protect companies against infringement by
competitors.
Not only do IPRs in plant breeding have to be seen in the context of a wider range of agricul-
tural policies, but IPR regimes themselves must be carefully tailored to specific situations. It is
important that countries recognize that they have choices in designing legislation consistent
with the TRIPS Agreement and that there are still opportunities for debating and interpreting the
Agreement itself. There is a range of instruments that may be established to fulfill the require-
ments for a sui generis system of IPRs for plant varieties. The UPOV Conventions offer some
important advantages, but do not exhaust the possibilities. Even within the UPOV Conventions
there is room for national policymakers to define specific aspects of coverage, such as what
species, if any, are subject to limitations on seed saving. Similarly, there are several options
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with respect to tailoring national patent regimes for agricultural biotechnology. For instance,
when EU patent law was broadened to effectively include plant varieties within the scope of
biotechnology patents, and EU Directive introduced a farmers’ privilege with reference to the
PVP laws that a standard interpretation of patent law would not have included. This illustrates
the flexibility available within IPR systems. The key elements in IPR systems that can tailor them
to the specific conditions of individual national seed sectors include the specific terms of the
farmers’ privilege and the breeder’s exemption, the relationship between different IPRs (patents,
PVP, trademarks, trade secrets), the exhaustion of these different types of IPRs, and possible
differential treatment of particular crops.
Policy makers need to consider the resources required for the establishment or strengthening
of IPR systems. Institutional capacity to deal with the processing of applications and the granting
of rights is quite variable among countries. Many countries will find it difficult to identify staff
with sufficient legal and/or scientific skills to establish PVP offices and testing facilities, and the
opportunity cost of this personnel may be considerable (e.g. the release of experienced plant
breeders for variety testing). Cooperation and harmonization can lower some of these costs
(e.g. the utilization of external DUS tests or reliance on regional or international organizations
such as PCT). Because IPR regimes should further national agricultural development goals
rather than merely signal compliance with treaty obligations, the choices related to the degree
of cost recovery for IPR offices are not straightforward. On the one hand, fee rates that make
an office self-supporting should be welcome, but on the other hand care must be taken to avoid
unfairly taxing or discouraging applicants, and especially smaller players.
PVP and patents are not the only (or even necessarily the most effective) instruments available
to policymakers to help provide incentives for plant breeding and seed production. Particularly
in countries where neither public nor private plant breeding has yet to have a substantial impact
on the majority of farmers, the establishment and enforcement of effective seed laws and
support for contract law and responsible business practices are likely to offer more immediate
incentives. Trademark protection may be an underrated IPR in the debate, but is highly valued
by the private seed sector. In addition, it is important to remember that most regulatory
systems, including IPRs and conventional seed laws, present dangers of gate-keeping and rent-
seeking, and policy makers must be vigilant in establishing transparent administrations.
The introduction of transgenic varieties to developing countries presents special challenges,
but does not necessarily imply the adoption of extraordinarily strong IPR regimes. Limited
experience to date has shown that in the absence of IPRs for GM plant varieties and biotech-
nological inventions, MNCs have resorted to biosafety regulations in an attempt to protect their
technology (e.g. India). Biosafety organizations are however not appropriate for such purposes,
and policymakers can offer an appreciable contribution by limiting an expansion of the role of
biosafety regulations and by creating a clear division of responsibilities among various agencies
for regulating the use of GM varieties. In many cases, the enforcement of extant seed laws can
offer an appreciable improvement in limiting unauthorized sale of GM seed. In some cases,
controls over output markets for GM crops may provide a significant level of protection. None
of this implies that PVP or relevant patent law should not also be pursued for GM varieties but
indicates that GM varieties, on their own, are not a sufficient rationale for establishing overly
rigid IPRs; other types of regulation may be effective (or indeed a prerequisite), particularly in
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the early stages of development of GM seed markets. Nonetheless, further research should
concentrate on the extent of IP protection necessary for stimulating the development of GM
varieties where desired.
The implementation of IPR regimes
Policymakers must consider the institutional arrangements for PVP. A PVP authority may be
included as part of an existing seed regulatory agency or may be established as a separate
organization; the expense of setting up a separate entity must be balanced against possible
concentration of power or conflict of interest. In addition, there must be confidence that the
PVP authority is independent from the interests of public plant breeding organizations.
The challenges of adequate enforcement for IPRs in plant breeding should not be under-
estimated. There is very little legal capacity in most countries to support IPR regimes for plant
breeding. Although the application procedure for PVP may be quite straightforward, for instance,
neither IPR-holders nor courts appear to be prepared for addressing cases of infringement.
The experience of the case study countries is that the enforcement of PVP is often difficult,
undermining confidence in the system. Implementation of IPR regimes must include attention to
strengthening the court system’s knowledge of IPRs in plant breeding, and the ambitions and
scope of any IPR system must be consistent with the capacities of the legal system, including
contract enforcement. Developing such legal capacities is not only a technical issue but also a
process of institutional development that requires political commitment.
There is a danger that the implementation of IPR regimes for plant breeding will proceed using
standard models rather than taking account of the specific circumstances of individual
countries. For the establishment of PVP, there are a number of important parameters that
require careful consideration. These include: the designation of which species are to be
covered; fee structures (and possible subsidies or differentiation by crop); the nature of the
breeder’s exemption for use of protected varieties; and the implications for farmers’ abilities to
save, exchange and sell seed in accordance with local custom. For patents the choices are
similar: which processes and products are patentable (e.g. sequence information or only
functional genes) and the scope of protection, including the restrictions on the free use by
breeders and by farmers. For trademarks, the key question is whether a variety name can be
protected.
Despite the necessity of defining the parameters of IPR instruments as carefully as possible to
fit national goals and circumstances, there are limits to the levels of specificity and targeting
that are feasible. Because of these limitations, policymakers must be vigilant to analyze the
implications of arguments made for further strengthening IPRs. For instance, although a
legitimate case may be made for providing legal boundaries on the degree to which large
farmers can multiply and sell seed of protected commercial varieties of a particular crop, a
general limitation on seed saving may have very adverse affects on many smaller farmers
growing other crops. Similarly, although rigorous restrictions may need to be applied in the
case of plant breeding involving transgenes, strict general interpretations of breeder’s or
researcher’s exemptions may be inimical to national plant breeding.
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Because the establishment of IPR regimes is a gradual process (and the regimes should
respond to changing conditions in national plant breeding capacities, seed markets, and farmer
priorities), careful monitoring is required. Policymakers need to assess whether particular IPR
regimes are actually providing incentives for seed system development consistent with national
agricultural goals. This includes analyzing if farmers have equitable access to an increasing
diversity of crop varieties and if the structure of the commercial seed market provides
confidence for participants while at the same time encouraging new entrants.
In the only case study country with legislation that includes Farmers’ Rights (India), there is not
enough experience to assess the degree to which this offers useful incentives for the develop-
ment or promotion of farmer varieties. Further monitoring is required.
IPRs in international negotiations
IPRs need to be considered in international agreements that tackle related issues, in particular
biodiversity and trade. National policies towards international agreements on biodiversity,
negotiated by representatives with environment (CBD) or agriculture (IT/PGRFA) background
need to be in line with the choices made in the field of IPR, which are primarily derived from
economic and trade policies. It must be clear how IPRs relate to national sovereignty over plant
genetic resources and rights of indigenous communities (CBD), and Farmers’ Rights (IT/PGRFA)
in order to avoid conflicts of interpretation. This requires a capacity in IPR issues with a much
wider group of policy makers than commonly envisaged.
For many countries, the possibility of being required to establish particularly restrictive IPRs for
plant breeding is more likely to be a product of bilateral trade agreements (most often with the
US but also with Europe) than to derive from TRIPS obligations. National policymakers need to
be prepared to enter such negotiations with a full understanding of the implications of such
‘TRIPS-plus’ agreements for their national plant breeding and seed systems. They also need to
research their room for maneuver in interpreting and modifying any such requirements imposed
by potential trading partners.
Implications for agricultural policies
This study has emphasized that IPR regimes in plant breeding should provide incentives for
diversifying and strengthening plant breeding and seed production. This implies that policy-
makers cannot consider IPR regimes in isolation from wider issues of national agricultural
policy. Three relevant concerns here are the future of public agricultural research, the develop-
ment of a robust domestic seed sector, and the empowerment of farmers.
Research policies
The role of NARIs is a subject of considerable debate in light of generally declining national
budgets and the growth of the private sector. Many NARIs are uncertain of whether to
complement or compete with the private sector and hence are confused about how to take
advantage of IPRs. Policymakers need to set clear guidelines in this area. NARIs need to
distinguish between using IPRs in order to control the use and delivery of their varieties, on
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the one hand, and seeing IPRs as a contributor to institute budgets through royalty collection,
on the other. In the former instance, there may be cases where the assignment of some type
of IPR is necessary to provide a seed company with sufficient incentives to deliver a public
variety to farmers. In the latter instance, many NARIs look upon IPRs as a way to counterbalance
reduced public funding for research and show a keen interest in the opportunity to earn revenue
on existing and new varieties. In some cases this interest is translated into a shift in priorities
towards research that is most likely to earn royalties. However, most NARIs seem to have little
knowledge about the costs of obtaining and enforcing IPRs, and there is little realistic assess-
ment within the NARI’s of their capacity to compete with the private sector in producing commer-
cially viable products (or in rewarding and maintaining staff for this task).
There are also a number of unresolved issues for NARIs in terms of basic research goals and
their relation to IPRs. NARIs have many valuable assets to contribute to plant breeding, including
their own varieties, breeding lines, and basic research. But they are not equipped to establish
or assign their rights in order that public research makes the strongest possible contribution to
agricultural growth. Neither are most NARIs organized to acquire access to complementary
technology on equitable terms or to assess their ‘freedom to operate’ with protected techniques
and tools.
The use of IPRs depends on negotiations between right holders and users of technologies.
There is no sign of equality in negotiations anywhere in the world for access to technologies for
R&D or for use of protected products. Individual parties, especially NARIs are no match for the
legal and negotiation skills and resources of major technology firms. NARIs need assistance to
formulate IP policies and strengthen their legal and negotiation capacities. National and
international platforms for institutional IP-managers may provide opportunities to exchange
experiences and promote institutional learning.
The strategies that NARIs adopt for utilizing IPRs will depend on answers to fundamental
questions about the role of public sector agricultural research. These questions are beyond
the scope of this study, but experience in the case study countries highlights that the issues
deserve more attention from policymakers. For instance, they must recognize that the mainte-
nance and development of public scientific capacity requires attention to an appropriate mix of
incentives (professional, public service, and monetary) and that the way NARIs choose to
interpret IPR regimes determines how these incentives are presented. Different approaches to
shaping relations with the private sector as a technology provider or distributor may be taken
into account in this debate, from license contracts to joint ventures or full privatization of
(parts of) the public research system. IPRs play an important role in these relationships. In
addition, the way that NARIs manage IPRs has a significant bearing on the extent to which
germplasm resources are shared more widely. Policymakers must recognize that systems of
international germplasm exchange are being threatened by an almost exclusive focus on the
possible financial advantages accruing to the control of germplasm, without appreciating the
importance of equitable access.
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Breeding and seed sector policies
Policymakers also need to ensure the development of the domestic breeding sector. With
respect to biotechnology, local companies are generally at a disadvantage to MNCs. With few
exceptions, domestic firms do not have the resources to invest in high technology and must
depend on MNCs and advanced research institutions that protect their inventions. There are a
few examples of incipient consortia of local seed companies formed to negotiate access to
biotechnology, and national policy should support such efforts.
IPR regimes will only be effective when there is an enabling environment for the growth of
commercial agriculture. Policies need to be in place that support the type of information
provision, contract enforcement, business practices and credit availability that stimulate
agribusiness development and that encourage private seed production and plant breeding.
Although many national seed and plant breeding sectors have experienced significant recent
development, and judicious use of appropriate IPR instruments can facilitate further growth,
there are still serious challenges with respect to delivering useful varieties, particularly of non-
hybrids and so-called ‘orphan crops’ to smallholders. The combination of limited and isolated
markets with widespread seed saving means that even fairly strong IPR regimes are unlikely to
elicit commercial interest in the near future. On the other hand, there is sufficient evidence that
public seed provision schemes are generally ineffective. Therefore policymakers must find
ways of combining (largely) public plant breeding, appropriate formal seed delivery (most likely
private or cooperative), and support to local seed diffusion mechanisms, to serve the farmers
dependent on these crops.
There are no indications in the case study countries that PVP unduly contributes to a concen-
tration in the seed sector that leads to monopolistic behavior. Early experiences in biotech-
nology patents in the case study countries are insufficient to establish any evidence for
concentration. The vast number of transgenics in the pipeline in both the (inter-)national private
and public sectors calls for a critical assessment of the developments in the coming years.
Monitoring could be done on the number of seed suppliers for any crop; the number of
competing proprietary key technologies (e.g. insect resistance) in crops; the development of
the levels of ‘technology fees’ relative to seed costs, etc. This is an area in which industrialized
countries could provide some useful guidance given their longer experience in monitoring and
regulating anti-competitive practices, including in agricultural input markets, in particular.
Rural development policies and empowerment of farmers
Finally, it is worth reiterating that the purpose of IPR regimes in agriculture is to provide
appropriate incentives for science and commerce to better serve the nation’s farmers. National
policies need to ensure that farmers are conversant with, and participate in, debates regarding
possible IPR regimes; that they are well-informed consumers who understand their rights in
agricultural input markets; and that their interests and priorities are reflected in the work of
public agricultural research. From a good governance perspective, this is now (under the IT-
PGRFA) an issue of Farmers’ Rights.
141
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I - 1
Annex I.
List of persons interviewed for the study
General
– Peter Button - UPOV Secretariat Geneva
– Stuart Coupe - ITDG, [email protected]
– Jean Donnenwirth - International IP Manager Pioneer, EU-office
– Krieno Fikkert - Office for Plant Breeder’s Rights, MoA, The Netherlands
– Jean-Christophe Guache - Managing Director, Limagrain
– Rolf Jördens - UPOV Secretariat Geneva
– Gisbert Kley - Board member DSV-Lippstadt
– Peter Lange - Director KWS-Einbeck
– Manfred Pohl - Patent attorney (Patline) representing KWS
– Michael Roth - Monsanto St. Louis
– Gary Thoenissen - Rockefeller Foundation
Participants of workshops in Wageningen and Washington
– J. Barton, Stanford Law School, Standord CA, USA
– D. Byerlee, World Bank, Washington DC, USA
– I. Ekanayake, World Bank
– H. Ghijsen, BayerCropScience, Gent, Belgium
– J. Hardon, Foundation Agromisa, Wageningen, The Netherlands
– P. Heisey, USDA, Washington DC, USA
– King, International Food Policy Research Institute, Washington DC, USA
– B.-W. Koo, International Food Policy Research Institute, Washington DC, USA
– S. Kumar, Michigan State University, East Lansing MI, USA
– M. Maredia, Michigan State University, East Lansing MI, USA
– A. Michiels, International Food Policy Research Institute, Washington DC, USA
– E. Pehu, World Bank, Washington DC, USA
– Pray, Rutgers University New Brunswick NJ, USA
– R. Rajalathi, WorldBank, Washington DC
– G. Tansey, Hebden Bridge, UK
China
IP Organizations + other Government offices, China
– HE Yuefeng, State Intellectual Property Office (SIPO) = patent office
– LI Yianmei, State Intellectual Property Office (SIPO) = patent office
– LUI Bo, PVP Office, MoA
– SUN Junli, PVP Office, MoA
– SUN Xue Mei, MoA GMO Biosafety Office
I - 2
– LIU Hai Peng, MoA GMO Biosafety Office
– REN Gang, Trademark Office
– HUA Jie, Trademark Office
– HU Li, Trademark Office
– SUN Yongjian, Ministry of Science and Technology (MOST)
– CHEN Linghao, Ministry of Science and Technology (MOST)
– WANG Jie, State Environmental Protection Agency (SEPA)
– CAI Li, State Environmental Protection Agency (SEPA)
– XUE Dayuan, State Environmental Protection Agency (SEPA)
Public Sector Research Organizations, China
– LI Ruiyun, Institute for Vegetables and Flowers, CAAS
– WANG Qinfang, Biotechnology Research Institute, CAAS
– WANG Kunbo, Cotton Research Institute, CAAS; Anyang, Henan Province
– GUO Xianmuo, Cotton Research Institute, CAAS; Anyang, Henan Province
– XING Chaozhu, Cotton Research Institute, CAAS; Anyang, Henan Province
– ZHAO Xinhua, Cotton Research Institute, CAAS; Anyang, Henan Province
– LIU Jinhai, Cotton Research Institute, CAAS; Anyang, Henan Province
– YUAN Longping, Hunan Hybrid Rice Research Center (HHRRC)
– WAN Yizhen, Hunan Hybrid Rice Research Center (HHRRC)
– ZHANG Yuzhuo, Hunan Rice Research Institute
– ZHAO Zhenghong, Hunan Rice Research Institute
– LI Xiaofang, Guangdong Rice Research Institute
– WANG Feng, Guangdong Rice Research Institute
– HUANG Qing, Guangdong Rice Research Institute
– HUANG Nongrong, Guangdong Rice Research Institute
– BAI Song, Guangdong Rice Research Institute
– LIANG Jingcai, Guangdong Academy of Agricultural Science (rice)
– CHEN Qinling, Guangdong Academy of Agricultural Science (rice)
– LUO Shaojia, Zhejiang Academy of Agricultural Science (rice)
– LU Hongxing, Zhejiang Academy of Agricultural Science (rice)
– CHENG Shihua, China National Rice Research Institute
– HU Huiying, China National Rice Research Institute
– FU Qiang, China National Rice Research Institute
– NI Jianping, China National Rice Research Institute
– YAO Haigen, Jiaxing Agricultural scientific institution (Zheijiang) (rice)
Private Companies, China
– ZHOU Weihua, China National Seed Group Company (rice, maize, cotton, vegetables)
– ZHANG Mengyu, China National Seed Group Company (rice, maize, cotton, vegetables)
– CUI Yingji, China National Seed Group Company (rice, maize, cotton, vegetables)
– HAN Yaomin, China National Seed Group Company (rice, maize, cotton, vegetables)
– HAN Gengchen, Beijing Origin Seed Technology Inc (maize)
– ZHAO Yuping, Beijing Origin Seed Technology Inc (maize)
I - 3
– WANG Weizhong, Doneed Seed Company (D'long) (rice, maize, cotton, vegetables)
– WANG Li, Doneed Seed Company (D'long) (rice, maize, cotton, vegetables)
– Monsanto, China office
– YANG Yuanzhu, Yahua Seed Academy (rice)
– FAN Xiaobing, LongPing High-Tech Seed Corporation (rice)
– TANG Buocheng, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– LIU Fenghua, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– ZHENG Aizhong, Biocentury Transgene (China) Co. Ltd (Bt cotton)
– WANG Zhongyu, Gold Sun Agricultural China Co. Ltd (Maize, Rice)
– LIU Shukun, Gold Sun Agricultural China Co. Ltd (Maize, Rice)
– LI Degnhai, Shandong Denghai Seeds Co., Ltd (maize)
– LIU Jingguo, Shandong Denghai Seeds Co., Ltd (maize)
– WANG Tianxiang, China Trademark & Patent Law Office Co. Ltd (Patent Agent)
Others, China
– P. Gooren, Royal Netherlands Embassy, Agricultural Counsellor and attaché
– R. Konijn, Royal Netherlands Embassy, Agricultural Counsellor and attaché
– Seed shops, Anyang, Henan Province
Colombia
IP institutions & other Government offices, Colombia
– Ana Luisa Diaz, National Coordinator, Plant Breeders Rights and Seed Production
– Giancarlo Marcenaro, Deputy Superintendent for Industrial Property
– Alix Céspedes de Vergel, Patent Office Director
– María del Socorro Pimiento, Trademark Office Director
– Luis Angel Madrid, Head of the Colombian Delegation for the Free Trade Area of the
Americas (FTAA) on IP issues
– Juan Lucas Restrepo, Former Viceminister of Agriculture
– Ricardo Torres, General Coordinator of Research Project on ‘Policy Design on Access and
utilization of genetic resources’
– Santiango Perry, Head of Corporación para el Desarrollo Participativo y Sostenible de los
Pequeños Agricultores Colombianos, CDPSPA
Public sector research organizations, Colombia
Corporación Colombiana de Investigación Agropecuria, CORPOICA
– Luis Arango, Executive Director
– Tito Díaz, Deputy Director for Strategic Research
– Andrés Leignelet, General Coordinator, Management and Technology Innovation Program
– Jorge Suárez, Seed Coordinator
– Víctor Núñez, Director Biotechnology Unit
– Alba Marina Cotes, Researcher, Integrated Pest Management Unit
I - 4
Centro Internacional de Agricultura Tropical, CIAT
– Aart van Schoonhoven, Director, Science Park (AgroNatura)
– Zaida Lentini, Plant Biologist/Geneticist, Biotechnology Unit & Rice Project
– Cesar Marinez, Rice breeder
– Stephen Beebe, Head, Bean Project
– Edith Hess, Head Information and Communications Unit
– Joe Tohme, Head Agrobiodiversity and Biotechnology Unit
– German Arias, Head Legal Office
– Rafael Posada, Head Impact Project
– Daniel Debouck, Head of Genetic Resources Unit
Private Sector, Colombia
– Luis Sanin, Executive Director Fondo Latinoamerica de Arroz de Riego, FLAR
– Andres Toro, Colibri Flowers S.A.
– Eduardo Villota, Director General, Semillano Ltda & Head of Asociación Colombiana de
Semillas, ACOSEMILLAS & Head of Latin American Federation of Seed Associations (FELAS)
– Luis Enrique Acevedo, Royalty Administration International, Latin America
– Sabina Cajio, Auditor Royalty Administration International, RAI
– Rafael Aramendis, Regulation Manager for Andean Region, Central America and the
Caribbean
– Jose I. Bolaños, Andean Research & Development Coordinator & Andean Biotechnology
Research Coordinator
– Gustavo Mejia & others, Unique Latin Roses LTDA (Esmeralda Farms Holding)
– Pablo Robledo, Attorney PBR
– Rafael Aramendis, Monsanto
– Jose I. Bolanos, Dupont
Farmers’ association, Colombia
– Augusto del Valle, Head of Federación Nacional de Papa FEDEPAPA
India
IP institutions & other Government offices, India
– H.C. Bakshi, Joint Controller of Patents and Designs, Patent Office, New Delhi
– Ms Premlata, Assistant Registrar, Trademark Office, New Delhi
– Dr K.K. Tripathi, Advisor (IPR), Department of Biotechnology, Ministry of Science and
Technology, Government of India, New Delhi
– Prem Narain, Joint Secretary (Seeds), Ministry of Agriculture, Government of India,
New Delhi
– S.V. Singh, Director (Seeds), Ministry of Agriculture, Government of India, New Delhi
– Babu Rao S., Managing Director, Andhra Pradesh Seeds and Development Corporation,
Hyderabad, Andhra Pradesh
I - 5
Public research organizations, India
Indian Council of Agricultural Research
– Dr Mangala Rai, Director General, Indian Council of Agricultural Research, New Delhi
– Dr G. Kalloo, Deputy Director General (Crops and Horticulture), Indian Council of Agricultural
Research, New Delhi
– Dr S. Nagarajan, Director, Indian Agricultural Research Institute, New Delhi
– Dr J.P. Mishra, Assistant Director General (Intellectual Property Rights), Indian Council of
Agricultural Research, New Delhi
– Dr G.S. Dhillon, Director, National Bureau of Plant Genetic Resources, New Delhi
– Dr K.R.M. Swamy, Director-in-charge and Head, Division of Vegetable Crops, and other
Heads of the Division and senior scientists, Indian Institute of Horticultural Research,
Bangalore, Karnataka
– Dr P. Singh, Director, and senior scientists, Central Institute of Cotton Research, Nagpur,
Maharashtra
– Dr M. Ilyas Ahmed, Scientist-in-charge of hybrid rice program, and Scientist-in-charge,
biotech programs, Directorate of Rice Research, Hyderabad, Andhra Pradesh
State Agricultural Universities
– Dr Kulkarni, Nodal scientist for IPR, and Dr P. H. Ramanjini Gowda, scientist with seeking
patent for his innovation, University of Agricultural Sciences, Bangalore, Karnataka
– Dr A. Padmaraju, Director Research, Andhra Pradesh Agricultural University, Hyderabad,
Andhra Pradesh
Other public research organizations
– Dr Rakesh Tuli, Scientist Bt transgenic program, National Botanical Research Institute
(Council of Scientific and Industrial Research), Lucknow, Uttar Pradesh
International Centre for Research in the Semi-Arid Tropics, ICRISAT
– Dr Dyno Keatinge, Deputy Director General,
– B. Hanumanth Rao, IPR Officer, scientists of crop improvement programs
– C.L.L. Gowda, S. Nigam, C.T. Hash, K.N. Rai, Scientists of crop improvement programs
– J.H. Crouch, F. Waliyar, Scientists of biotechnology program
Private seed sector, India
Seed companies
– Uday Singh, President, Seed Association of India, and Managing Director, Namdhari Seeds,
Dr N. Anand, Director Research, Namdhari Seeds, Bangalore, Karnataka
– Raju Barwale, President, Association of Seed Industry, and Managing Director, Maharashtra
Hybrid Seed Company Ltd (Mahyco), Mumbai, Maharashtra
– R.V. Kaundinya, Managing Director, and A.R. Sadananda, Director Research, Emergent
Genetics India, Hyderabad, Andhra Pradesh
– Dr M.J. Vasudeva Rao, Senior Vice President, Advanta India, Bangalore, Karnataka
I - 6
– Dr M. Vinod Kumar, Manager (Regulatory issues), Proagro Seeds/Bayer Crop Science,
Gurgaon, Haryana
– Raman Modi, General Manager, and rice breeders, Hybrid Rice International (Proagro
group), Hyderabad, Andhra Pradesh
– L.P. Aurangabadkar, Director Research, Ankur Seeds, Aurangabad, Maharashtra
– R.S. Arora, Managing Director, Century Seeds, New Delhi
– Dr Y. Yogeswara Rao, President, Andhra Pradesh Seedmen Association and Managing
Director, Vikky’s Seeds, Hyderabad, Andhra Pradesh
– M. Prabhakar Rao, Managing Director, Nuziveedu Seeds, Hyderabad, Andhra Pradesh
– P.S. Dravid, President, JK Seeds, Hyderabad, Andhra Pradesh
– Dr N.K. Singh, Head Product Development and Dr A. Gopinath, Manager, Syngenta India,
Pune, Maharashtra
– Vinod G. Broker, Managing Directors, Pocha Seeds, Suyash Seeds, and Prakash Navalakha,
Navalakha Seeds (small seed companies in Pune)
– Dr A.S. Kataria, Director, Seed Association of India, New Delhi
Private agricultural biotech companies
– R.D. Kappor, National Regulatory Manager, and P.P. Reddy and H.H. Basappa,
plant breeders, Monsanto India, Bangalore, Karnataka
– Dr Koen Wentink, Chief Logistics, and Dr K.R. Rajyashri, Director Research, Avesthagen,
Bangalore, Karnataka
– Dr K.K. Narayanan, Managing Director, Metahelix, Bangalore, Karnataka
NGOs/FO, India
– Dr Anil Gupta, Professor, Indian Institute of Management, Ahmedabad, Gujarat, and
Executive vice chairperson, National Innovation Foundation and Sristi
– Dr M.D. Gupta, Senior researcher, Suri Sehgal Foundation, ICRISAT, Patancheru, Hyderabad
– Dr A. Nambi, IP expert, MS Swaminathan Foundation, Chennai, Tamil Nadu
– Mr Akkineni Bhavani Prasad – Farmers’ Association of Andhra Pradesh, Hyderabad
Kenya
IP-institutions and other government offices, Kenya
– Spencer Mathioka, Actg Director, KIPI
– Reuben Lang’at, Patent Examiner, KIPI
– Stanley Atsali, Patent Examiner, KIPI
– Eunice Njuguna, Lawyer, Kenya Industrial Property Institute
– C.J. Kidera, Managing Director, KEPHIS
– M.O. Gunga, Examiner of PVP, KEPHIS
– J.J. Gichuki, Deputy Director PBR, Ministry of Agriculture
– Prof. Kingoriah, Executive Secretary, National Council for Science and Technology
– Solomon Kuria, Trade officer, Ministry of Trade Kenya Government
I - 7
Public research institutes, Kenya
Kenyan Agricultural Research Institute
– Romano Kiome, Director
– Betty Kiplagat, Legal Officer
– J.A. Ochieng, Assistant Director Crops (Maize breeder)
– Jane Ininda, Maize breeder
– Dr Kahiu Ngugi, Senior Bean Breeder
– J.B. Kamau, Cassava breeder
– Kiarie Njoroge, Maize Research Coordinator
– Dr Kabiro, Centre director, KARI-Tigoni
– G. Ombakho, Mazie breeder, KARI-Kitale
– L.F. Ragwa, Assistant Director Seed Unit
– Ben Odhiambo, Biotechnology Coordinator
Universities
– Levi Akundabweni, Chairman, Dept of crop science, University of Nairobi
– Prof Ogada, Moi University Holding, Moi University
International organizations
– Stephen Mugo, IRMA Coordinator, CIMMYT
– Dr Majiwa, Programme Manager, African Agricultural Trust Fund
– Richard Boadi, Legal counsel, African Agricultural Trust Fund
– Nancy Muchiri, Public Relations Officer, African Agricultural Trust Fund
Private sector, Kenya
– Obongo Nyachae, Executive Secretary, Seed Traders Association Kenya (STAK)
– Saleem Esmail, Chief Executive Officer/Maize breeder, Western Seed
– Graig Nelson, Marketing Manager, Pannar Seed Co.
– Valentine Miheso, Seed Sales Manager, Monsanto Kenya
– Johnson Thaiya, Seed Operations Manager, Monsanto Kenya
– Mosses Onim, Proprietor, Lagrotech Seed Company
– S. Omamo, Production manager, Lagrotech Seed Company
– Peter Rukwaro, Production manager, Valentine Flowers
– Samwel Gathara Kiarie, Representative, Pioneer Seed Company in Kenya
– Charles Nga,nga, General Manager, Faida Seed
– Francis Ndambuki, Research Manager Maize, Kenya Seed Co.
– Peter Veal, Regional Representative, Syngenta Company
– Wilfred Munyao, Farm/propagation Manager, Sian Roses
– Sunders, Production Manager, Magana flowers
– J. Kamau, Production Manager, Magana flowers
– John Njenga, Lead Auditor & Activity CEO, Kenya Flower Council
– Francis L. Oyatsi, Deputy Managing Director, Kenya Seed Company
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– Rose Kauri, Company Secretary, Kenya Seed Company
– Hosea Sitienei, Sales Manager, Kenya Seed Company
– James Boit, R&D Manager, National Cereals and Produce Board
– Bruce Mc Arthur, Country Manager, Seed Co
NGOs/FOs Kenya
– Caleb Wangia, Winrock International: Seed Production & distribution
– Mercy Karanja, Chief Executive, Kenya National Federation of Agricultural Producers
– Leonard Nduati Kariuki - KENFAP Nairobi, Kenya
– Philip Kiriro - East African Farmers Union - Nairobi, Kenya
Uganda
IP-institutions and other Government offices
– Ltd. Bayiga, Fiona: Senior State Attorney/ Assistant Registrar, Ministry of Justice
– Mugoya, Charles: Uganda National Council for Science & Technology
– Bazaale, Joseph: Head, National Seed Certification Services, Ministry of Agriculture [MAAIF]
– Kyazze Lubega, Jean: Law Reform Commission, Ministry of Justice
Public research organizations
National Agricultural Research Organization NARO
– Otim Nape, George: Ag. Director General, NARO
– Aluma, John W.: Deputy Director General, Research, NARO
– Bigirwa, George: Head of Maize Research Program, NAARI/NARO
– Imanywoha, Justus: Maize Breeder, NAARI/NARO
– Kyetere, Denis: Maize Breeder & Director of Research, CORI/NARO
– Ogen, Michael: Bean Breeder, NAARI/NARO
– Opio, Fina: Director of Research, NAARI/NARO
– Sserunjogi, Lustus: Cotton Breeder & Director of Research, SAARI/NARO
– Wasswa, Mulumba: In-charge National Genetic Resources, NARO
University
– Rubaihayo, Patrick: Professor, Makerere University
International organizations
– Abebe, Demessie: Association for Strengthening Agricultural Research in Eastern &
Central Africa [ASARECA]
– Kirkby, Roger: Head, CIAT Uganda
I - 9
Private sector
– Gareeba Gaso, Emmanuel: General Manager, Uganda Seeds Ltd
– HiteshPanchmatia: MD, Bon Holdings Ltd - Cotton
– Kaijuka, Chris: Managing Director, FICA Seeds Ltd
– Kashaija, Steven: Cottco Uganda Ltd - Cotton
– Lutaaya, Yassin: Local Seed Merchant, Rakai District, Uganda
– Mugisa, Boniface: Seed Manager, Monsanto International, Uganda
– Ndemo, Job: Country Manager, Kenya Seed Company, Uganda
– Mulumba, Stanley: Uga Rose Ltd - Flower Firm
– Okot, Josephine: Chair, Uganda Seed Trade Association & GM Victoria Seeds Ltd
– Paku & Ravi: Dunavant Cotton, Uganda
– Pandya, Kashap: Xpressions Ltd - Flower Firm
– Rodneys, Nicolai: General Manager, NASECO Seeds Ltd
– Rutten, John: FIDUGA Flower Firm & Chair, Uganda Flower Exporters Association [UFEA]
– Peter Benders, Mairye Estates - Magic Flowers
– Yan Krul: Mairye Estates - Magic Flowers
NGOs/FOs
– Chemisto, Wilson: Kapchorwa Commercial Farmers Association, Uganda
– Kagweri, Florence: Bakusekamajja Women Farmers Group, Iganga District, Uganda
– Kambale, Daniel: Kasese Farmers Group, Uganda
– Mayiga, Rosemary,: Community Enterprise & Development Organization [CEDO]
– Gonza, Peter, Community Enterprise & Development Organization [CEDO]
– Mpeirwe, Arthur: Program Manager, IPR & Biotechnology Policy, ACODE
I - 10
II - 1
Annex II.
Interview questions
1. Guidelines for interviews: IP-institutions
Preparation before visiting office
1) If relevant - review the IP-offices webpage
2) To which international conventions, treaties, IP organization the country is a member of
(including WTO, WIPO (which versions of which agreements, protocols, etc.), UPOV, CBD,
IT/PGRFA (check with lead team if necessary)
3) National legislation on trademarks, trade secrets, geographical indications
4) Review state of laws, regulations, judicial review, case law
5) Reviewed state of laws, regulations, judicial review, case law, etc. as much as can be
found
6) Note the names of high profile IP law firms, names of developed country law firms that
have regional branches in the country, professional associations, etc.
1. General
1.1 What is the organization of IP Offices in the country - Patent protection, Plant Variety
Protection? Trademark, Copyright, others (e.g. database and geographical indications)?
1.2 What is the cross-office relationship between/among the various IP Offices?
1.3 What is the procedure for the appointment of Directors for these offices?
1.4 When was (were) the institution(s) established? (Perhaps ask for a brief history of each
office.)
1.5 In case of a regional system: what is the relationship between the national and regional
office?
1.6 How are IPRs enforced in your country?
1.7 Do you have any special protection for infringement or ‘stealing’ of Trade Secrets?
1.8 Do you consider the courts to be effective in terms of helping owner enforce their IPRs?
1.9 Is the judicial system in your country active in interpretation of IP laws? If so, would you
describe a case that has gone through your courts system and what affect that case has
had on the way IPRs are awarded by your office.
2. Patent office
– legal issues
2.1 Does the country have a patent law, what revisions to the law have been made?
2.2 What interpretation of the law is given towards protection with regards to patents for
plant varieties, plants, genes, biological processes such as transformation
-compositions, processes?
2.3 Who is in charge of the interpretation? How are decisions appealed?
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2.4 Is there a system that includes the possibility of seeking petty patents/innovation
patents, or one that only allows for utility patents? What is your experience?
2.5 Are there special provisions in the patent law for biological inventions - such as
exemptions for non-commercial use (would this include seed saving and exchange?) or
a research exemption allowing further breeding?
2.6 How is the regional harmonization of patent regulation and practice /or: How would
envision that a regional, harmonized system would work in your region? - and what are
the effects on biological patents?
2.7 Does the country have special provisions ref TRIPS 27(3) b: plant variety protection or do
plant varieties fall under the patent system? How did the legislation come about? How do
you regard this outcome?
2.8 (If the country have laws on trademarks, trade secrets, geographical indications), how
are these implemented in the agricultural field (specifically seed related) and how are
these enforced (general impression of officer)?
– Institutional/general implementation issues
2.9 How many applications do you get in the national office:
• patents – national or PCT filings
• try to estimate proportion related plant biological inventions? (This could be difficult to
determine. It might be better to ask for an example of a biotech patent that has been
issued and then go from there to try to get a feel for how many biotech inventions
involving plants.)
• Breeder’s rights? – probably ask at the PVP-office again
2.10 How many examiners do you have in your office?
• For patents with knowledge of biotech, natural products, microbiological
• For breeder’s rights (if handled by patent office)
2.11 How long does it normally take for an application to go through examination?
2.12 Does your office publish patent applications? If so, what is the process?
2.13 Is it possible to obtain copies of the examination records of a particular patent?
2.14 What is the appeal process? –How often does a rejection get overturned upon appeal?
2.15 What is the opposition practice?
2.16 What is the procedure for reexamination? –for invalidation of issued patents?
2.17 What are the requirements to be an examiner? how do you maintain/upgrade their
knowledge and skills?
2.18 Does the same person carry out both search and examination?
2.19 What searching resources do your staff have?: computers, access to databases
2.20 How do you do your search for plant/biotech patents? (contract out, CD-Roms, On-line,
scientific community in the country)
2.21 How are patent agents/attorneys certified?
2.22 How is the office funded - % Government / % fees / . . . .
2.23 What is your fee schedule? Is there a one-time charge at application or is there also a
maintenance fee. What are the amounts?
2.24 Do you consider the amount of the fee prohibitive for certain applicants? - Do you have
different fee amounts based on the size/status of the applicant?
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2.25 What sort of political pressures do you perceive influencing/pressuring in your
agency/office, Could you give examples?
2.26 Do you carry out educational or awareness-raising activities?
3. Plant Variety Protection
3.1 Does the country have special provisions ref TRIPS 27(3) b: plant variety protection or do
plant varieties fall under the patent system? How did the legislation come about? How do
you regard this outcome?
3.2 Does it conform to UPOV – which Convention? – is the country a member of UPOV
(under which convention?) - expl.: a country may comply with a UPOV convention without
being a member!!
3.3 What aspects may be different from UPOV? – if different: any plans for change??
3.4 For which crops is protection currently available? Is there a list of crops (under UPOV ’78)
or all crop plants protectable? In the latter case – for which crops has the law been
implemented so far?
3.5 Who is responsible for the testing of applications? (breeder, office, any institution as
certified by the office)
3.6 What training do the examiners have?
3.7 What is their link with the national research institutes / breeding stations?
3.8 In case they have a dual task – how do you avid conflicts of interest?
3.9 In case they have an official task only: do they have enough work? (there may be only
1 or 2 applications per year)
3.10 Do you get applications for protection from public research institutes or only from private
breeders/seed importers
3.11 Number of applications for PVP (total, by crop specifically for target crops); trends
(over years) in terms of numbers and source of applications,
3.12 Number of applications vs. number of certificates granted – trends.
3.13 Is there any regional cooperation in DUS-testing?
3.14 Do you accept (or promote) the use of foreign DUS-reports?
3.15 Does the DUS-testing follow the UPOV-guidelines?
3.16 What resources are available: access to databases, trial fields?
3.17 How do you do you establish novelty, and how do you identify the most similar varieties
of common knowledge for each application?
3.18 How are examiners certified? (if you use outside examiners in line with the Australian
system)
3.19 How is the office funded - % Government / % fees / . . . .
3.20 Is there a one-time charge at application or is there also a maintenance fee. What are
the amounts?
3.21 Is there evidence that this fee is prohibitive for certain applicants?
3.22 Are there provisions for compulsory licensing?
3.23 Do you receive influences/pressures in your agency, What kind, by whom?
3.24 Do you carry out educational activities?
3.25 Do you consider the courts capable enough in terms of enforcing IPRs?
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4. Scenario
Discuss what actions your office, a company, or the legal system would be expected to take if:
• A farmer sold seed of a company’s protected (conventional) variety to a neighbour
• A farmer sold seed of a company’s (GM) variety to a neighbour
• There is evidence that a competitor is using one of a company’s inbred lines in a new
hybrid
• There is evidence that a competitor is producing and selling one of a company’s varieties
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2. Guidelines for interviews: Private Companies in the seed sector
N.B. It is important to note when there is an explicit or implicit reluctance to share potentially
sensitive information for particular questions. – Do mark such matters in your report!!!
1. Nature of Company
(may need to BRIEFLY clarify these issues at time of interview if not known beforehand)
1.1 What is the ownership structure? (eg. private limited, joint venture, etc.)
1.2 Is the company national or international?
1.3 How long has the company been in business?
1.4 How was it established?
2. Company Varieties
2.1 How many varieties (for target crops) does your company market?
2.2 Obtain a list of current and past varieties of target crops with release dates, relative
market share, distinguishing characteristics
2.3 What specific traits and markets do you concentrate on?
2.4 What are the major trends in type of variety or market that your company targets?
Explain any changes, including the relative importance of IPR legislation.
2.5 Discuss trends in seed price and reasons for these trends, including any influence/cost
of IPRs.
3. Marketing of Non-company Varieties
(i.e. varieties not developed by another company or a public institute)
3.1 Does the company produce seed of any public-sourced varieties? (Identify them)
3.2 How does it acquire the rights for these varieties? (Exclusive license?)
3.3 What payments are made to the public institute (for source seed, royalties, licenses,
etc.)? Estimate proportion of seed price.
3.4 Are there plans to continue marketing public varieties? If there are any changes, what are
the reasons; what role do IPRs play?
3.5 Does the company produce seed of other companies' varieties? (Identify them)
3.6 How does it acquire rights for these varieties? (Exclusive license?)
3.7 What payments are made to the other company (for source seed, royalties, licenses,
etc.)? Estimate proportion of seed price.
3.8 Are there plans to continue marketing other companies' varieties? If there are any
changes, what are the reasons; what role do IPRs play?
4. Company Breeding Programme
4.1 Does the company have a research/plant breeding programme for the target crop(s)?
4.2 How many breeders work on the target crop? (If possible, budget proportion devoted to
plant breeding research; try to separate proportion for biotechnology)
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4.3 Germplasm sources. What proportion of germplasm from public sources? Specify these
sources. Arrangements for acquiring access to this germplasm.
4.4 Any changes recently or envisioned in access to public germplasm. Reasons for any
changes, including relative role of IPRs.
4.5 How have IPRs affected your relationship with national and international public sector
research organizations (access to material, capacity building, information, collaborative
research agreements, marketing)? Describe specific experiences.
4.6 Germplasm sources. What proportion of germplasm used in breeding programme from
other companies? Specify these sources. Arrangements for acquiring access to this
germplasm.
4.7 Any changes recently or envisioned in access to other companies' germplasm. Reasons
for any changes, including relative role of IPRs.
4.8 Effect of IPRs (patents, PVP, trade secrets, trademarks) on dealings with national or
international companies (access to material, technologies, marketing, licensing
agreements, exchange, etc.)
4.9 How have IPRs affected the company research programme in terms of investment, types
of crops or traits, research focus or methods (biotech, hybrids, etc.)?
4.10 Do IPR regimes encourage the company to invest more in non-hybrid varieties?
5. Use of Biotechnology
5.1 Outline the company's current and projected use of biotechnology, including any GM
varieties.
5.2 For the following technologies, check if the company uses each of them. If so,
(a) do you know if the technology is protected in your country? (b) under what terms was
it acquired? (c) will this affect the commercialization of products?
• AFLPs, microsatellites, microarrays
• Gene gun, agrobactor mediated, selectable markers
• Genes, gene constructs, vectors, promoters
5.3 Are there instances in which your institute has tried to acquire protected technology
(including databases) and was unable to do so? What were the reasons? Did your IP
policy play a role?
6. Protection of Company Products
6.1 How does the company protect its research products (particularly for the target crop)?
6.2 Discuss the use of PVP, patents, trademarks, trade secrets (e.g., inbred lines).
6.3 What other business management techniques are used to protect company products
(physical security measures, personnel practices, types of contracts, types of business
partner)?
6.4 Are there differences between protection practices for domestic business and foreign
business?
6.5 Discuss trends in the use of these various protection methods and practices. To what
extent does recent national IPR legislation have an effect on these trends?
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6.6 What aspects of IPRs influence the company's use of these instruments (costs,
timeliness, granting procedures, associated variety registration/certification
requirements, culture, reliability, enforcement potential, international/regional
collaboration or harmonization)?
6.7 Are IPRs affecting your market shares or those of your competitors?
6.8 How does the company enforce its IPRs? Are there specific cases of (suspected)
infringement (if so, describe)? What are the costs to the company of monitoring and
enforcement?
6.9 If you could make use of geographical indications, are there specific varieties you would
like to protect?
Scenarios
Discuss what actions the company or the legal system would be expected to take if:
• A farmer sold seed of the company's protected (conventional) variety to a neighbour.
• A farmer sold seed of the company's protected (GM) variety to a neighbour.
• There is evidence that a competitor is using one of the company's inbred lines.
• There is evidence that a competitor is producing one of the company's varieties.
• A competitor adopts a similar product name, brandname or logo.
7. Company IPR resources
7.1 Does the company have an IPR policy? (If so, describe or obtain a copy.)
7.2 If the company has no IPR policy, why not?
7.3 Any recent evolution in company policy.
7.4 Advantages and disadvantages to the way IP issues are handled in the company.
7.5 How many personnel handle IPR matters for the company (full-time, part-time)? Does the
company outsource professional services (e.g., attorneys) for IPR issues?
7.6 Try to estimate what IPR management costs the company (as proportion of final seed
cost).
7.7 How does the company manage DUS testing? (depending on national application
procedure; DUS = distinctness, uniformity, stability)
8. Access to Technology
8.1 How have IPR regimes affected the company's relationship with national and international
public sector research organizations, including CGIAR centers (access to material,
capacity building, marketing, collaborative research agreements)? Describe specific
experiences.
8.2 How have IPRs affected the company's participation in South-North linkages related to
germplasm and technology?
8.3 What have been the effects of IPRs (patents, PVP, trade secrets, trademarks) on dealings
with national or international companies (access to material, technologies, marketing,
licensing agreements, exchange, etc.)?
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3. Guidelines for interviews: Public Sector Plant Breeding Institutes
1. General IP policy and management
1.1 Does the institute have an IP policy? When was it established?
1.2 Provide details of the policy and if it is written, obtain a copy.
1.3 What is the policy used for? Does it apply to all crops?
1.4 Is there a mechanism for review/revision?
1.5 What personnel are assigned to IP in the institute? (Provide details on numbers,
part/full time, training, special training).
1.6 Is there an expectation that the institute should generate some of its own revenues?
If so, what place do IPRs play in this strategy?
1.7 Has there been any discussion about how the institute's IP policy relates to national rural
development policy? (For instance, is it expected that research products should be
available to the poor?)
1.8 How does the ability to protect the institute's technology, and the dependence on
protected technology, affect the institute's research policy?
• Increased (or changed) revenue
• Concentration of research on protectable technologies/crops
• Leaving certain types of research to the private sector
2. The IP policy related to the institute’s own innovations
2.1 Who has authority to sign MTAs, licenses in the institute?
2.2 Try to obtain an example of an MTA and/or license agreement
2.3 Who is in charge of filing for PVP?
2.4 Who is in charge of filing for patents? (Provide examples, where relevant.)
2.5 Are there examples of filing for trademarks? What are they and who has done the work?
2.6 If royalties are received, what proportion goes to: the institute, the specific crop
programme, the scientist?
2.7 Is the employee asked to assign his/her rights to innovations to the institute?
2.8 Is the employee asked to assign his/her copyright on data, manuscripts, etc. to the
institute?
2.9 What aspects of these assignments of rights are specified in the employee’s contract?
2.10 Are there examples where employees have left the institute, taking things with them?
2.11 Are there private spin-offs that have been established from public innovations from the
institute?
3. IPRs in practice in the institute
3.1 How many of the institute's varieties are currently protected? (Try to get specific lists,
by crop)
3.2 Identify the varieties that currently receive royalties.
3.3 How many of the institute's varieties are currently seeking protection?
3.4 Estimate the amount or proportion of current budget of institute derived from royalties
on crop varieties; what is the projection for 5 years? (Try to break down by crop.)
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3.5 Are there factors that limit the feasibility or attractiveness of seeking protection for plant
varieties (e.g., length of testing and approval process)?
3.6 How many of the institute's biotechnology innovations are protected? (Obtain a list, or
major examples.)
3.7 How many of the institute's biotechnology innovations are seeking protection?
3.8 Identify the biotechnology innovations that currently receive royalties.
3.9 Estimate the amount or proportion of current budget of institute from royalties on
biotechnology; what is the projection in 5 years? (Try to break down by crop.)
3.10 Are there factors that limit the feasibility or attractiveness of seeking protection for
biotechnology innovations?
4. Institute's policy related to protected innovations from elsewhere
4.1 Does the institute's policy cover the use of others’ protected innovations (protected
varieties, biotech tools, genes)?
4.2 Does the policy cover IPRs on jointly developed products?
4.3 Are there patented varieties that cannot be used in crossing programmes? If so,
who owns the patents?
4.4 For the following technologies, check if the institute uses each of them. If so,
(a) do you know if the technology is protected in your country? (b) under what terms
was it acquired? (c) will this affect the commercialization of products?
• AFLPs, microsatellites, microarrays
• Gene gun, agrobactor mediated, selectable markers
• Genes, gene constructs, vectors, promoters
4.5 Does the access to any of the above technologies rest on understandings about
segmentation in commercial application (e.g., only for the poor; only for domestic use)?
4.6 Are there instances in which your institute has tried to acquire protected technology
(including databases) and was unable to do so? What were the reasons? Did your IP
policy play a role?
5. Relations between the public breeding institute and seed companies
(public or private)
5.1 Inventory of institute varieties currently in commercial seed production. Inventory should
include: variety name; seed producer(s); type of protection (if any); type and amount of
compensation (including royalties and fees).
5.2 Describe major examples of relations with seed companies; terms of license (e.g. ever
give exclusive license?). Is there a standard procedure/license for seed companies, or is
it ad hoc?
5.3 What resources/strategies does the institute devote to enforcement of agreements with
seed companies?
5.4 How are relations between the institute and seed companies likely to change in the next
five years? Why?
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5.5 Are there mechanisms that allow the institute to supply germplasm (source seed) of crop
varieties (protected and unprotected) that are not in commercial seed production to
farmer groups or to individual farmers for multiplication and informal seed sharing?
Are there factors that make this difficult?
6. Research priorities (at the institute or programme director level)
6.1 Have there been changes in investment by crop in the institute over the past decade?
(Get statistics where possible, e.g., number of breeders.) What are the major reasons
(and do IPRs play a role)?
6.2 What is the current (and projected) strategy for ‘orphan crops’ that are unlikely to attract
commercial seed production?
6.3 What is the policy for staff promotion, and to what extent is it related to factors such as
varieties released, farmer uptake of varieties, royalties generated, number of
publications, etc.? (Do ranking)
6.4 For focus crop(s), have there been changes in breeding priorities (e.g., drought versus
insect tolerance) or type of farmer targeted in past decade? If so, why?
6.5 For focus crop(s) have there been changes in sources of germplasm used in breeding
programme in past decade? If so, why?
6.6 For focus crop(s) have there been changes in breeding strategies (hybrid v. OPV, MAS,
transformations) in past decade? If so, why?
6.7 For focus crop(s) have there been any efforts at participatory plant breeding or other
close interaction with farmers? Will changes in IPR regime have any effect on these
efforts?
7. Research priorities (at the scientist level)
(For programmes with many breeders, it may be useful to interview a small sample to
understand the degree to which institute policies and priorities are understood.)
7.1 Describe the institute's IP policy.
7.2 Who in the institute has the authority to sign an MTA?
7.3 For focus crop(s), have there been changes in breeding priorities (e.g., drought versus
insect tolerance) or type of farmer targeted in past decade? If so, why?
7.4 What is the policy for staff promotion, and to what extent is it related to factors such as
varieties released, farmer uptake of varieties, royalties generated, number of publica-
tions, etc.? (Do ranking)
8. Access to technology
8.1 Access to germplasm (South-South): Has access changed in the past decade? If so,
how and why? To what extent are IP issues contributing?
8.2 Does participation in regional/international collaboration improve access to protected
technology for research purposes?
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