Consultation on Fees for Replacement Plant Variety Rights Act

As part of the current review of the Plant Varieties Act 1987 (see summary) IPONZ has released a wide-ranging consultation paper on the amount and structure of fees that should apply.

Currently there are four main types of fees applied by the Plant Variety Rights Office (PVR Office):

• Application fee: for the pre-trials initial examination of an application along with a contribution to administrative and fixed costs;
• Examination Fee: for examination of an application taking into account data from growing trials conducted by an independent party arranged by the applicant;
• Trials Fee: for growing trials outsourced by the PVR Office and examination taking into account the data obtained therefrom;
• Annual Grant Fee: a uniform annual renewal fee to keep the granted plant variety right active, commencing the year after grant.

In line with the pattern in other PVR schemes around the world the number of PVR applications has declined and stabilised at a lower level than around 20-years ago when fees were last reviewed. This has resulted in the PVR Office currently operating at a significant deficit, with income covering only about 30% of costs, mainly due to increased costs for growing trials and fixed costs. The deficit is currently covered by surplus from IPONZ administration of other intellectual property rights.

The consultation paper does not specify the amount of any proposed fee, but feedback is sought on what impact a doubling or tripling of fees would have on likely use of the regime, and what other mechanisms would be used to obtain a return on investment if PVR protection is not sought.
Currently the application fee depends upon the species to which the variety belongs. On the basis that the costs for the application phase is largely independent of species type it is proposed that a uniform application fee is introduced.

It is proposed to introduce a tiered renewal fee structure, with the annual renewal fee for years 1 – 5 the lowest, then increasing for years 6 – 10, and again for years 11 – 15, and finally again for any remaining period within the term of the PVR right. This would allow some time for PVR owners to assess the commercial viability of their variety and incentivise them to only maintain those that are profitable.

For the examination and trials fees it is proposed to re-group plant varieties into the following categories on the basis of involving similar levels of resources and personnel time:

• Agriculture and vegetable crops (includes wheat, barley, oats, potatoes, peas, tricticale, rye, forage brassicas)
• Fruit and nuts
• Ornamentals, trees, and other plants
• Pasture plants and amenity grasses (includes grasses, clover)
• Fungi (includes grass endophytes)

Currently, where the applicant opts for the PVR Office to organise the field trials, there is a fixed fee. There are options to (i) retain an upfront fixed fee structure, albeit increased and category based; or (ii) have a variable fees structure dependent upon the expenses incurred and paid at the end of field trials and examination, or (iii) a combination of upfront fixed and deferred variable fees, with the likely variable fees discussed with the applicant in instances where further specialist work was deemed necessary.

The consultation paper also acknowledges that the PVR regime provides public benefits in addition to private benefits and seeks feedback on to what extent this should inform the fee review.

It is expected that the proposed Maori Plant Varieties Committee will deliberate over less than 10% of applications. Feedback is sought on how the establishment and operating costs for the Committee should be apportioned.

Feedback on the questions in the consultation paper is sought by 25th August 2021 and will inform a more detailed discussion document on fee structure and levels expected to be released in October 2021.

Author: Quinn Miller

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