Options Paper Released for Plant Variety Rights Legislation

The principle issues the Options paper addresses are:

• whether New Zealand should meet its relevant obligations under the CPTPP by either acceding to UPOV 91 or ‘giving effect’ to it;
• how the PVR regime can be compliant with the Treaty of Waitangi (the Treaty);
• if New Zealand ‘gives effect’ to UPOV 91 what changes are required to align our regime with UPOV 91.

Unlike the other CPTPP members New Zealand negotiated the option to either accede to UPOV 91 or to ‘give effect’ to it. In the case of the latter it can adopt any measures it deems necessary to protect indigenous plant species in fulfilment of its obligations under the Treaty of Waitangi, provided that such measures are not used as a means of arbitrary or unjustified discrimination against a party. It is noted that giving meaningful effect to the Treaty of Waitangi requires the Crown to give consideration to kaitiaki interests – in this context being Māori guardianship, protector or caretaker roles in relation to taonga species, being native birds, plants and animals of special cultural significance and importance to Māori. Giving meaningful effect to such kaitiaki interests would involve a system that allows for the refusal of a PVR if kaitiaki interests would be negatively affected and the impact could not be mitigated to a reasonable extent such as to allow the grant. Given that UPOV does not allow member states to apply additional criteria for the grant of a PVR in relation to all plant genera and species, MBIE favours the option of giving effect to UPOV 91 rather than acceding to it. MBIE further favours achieving this by having a system that is UPOV 91 compliant in relation to non-indigenous plant species, but that allows for kaitiaki interests to inform decisions on whether to grant applications in relation to varieties derived from indigenous plant species. MBIE also considers that kaitiaki interests should not be a factor in post-grant review of a PVR as this would create too much uncertainty for plant breeders.

All applicants would need to make an information disclosure statement regarding the origin of the plant material used to develop their variety and, if relevant, who the kaitiaki are, whether the breeder has engaged with them, and whether any kaitiaki interests could be affected by the varieties commercialisation. Similar to the system used in relation to the Patents Act 2013 this would involve having a Māori Advisory Committee. However, unlike the Patents Act provisions, the decision on whether to allow the grant would be made jointly by the Commissioner and the Chair of the Māori Advisory Committee.

MBIE does not support the proposal of some submitters that plant breeders should not be granted exclusive rights to authorise the propagation of new varieties derived from indigenous plant species under any circumstances. MBIE considered that excluding new varieties derived from the plant material of indigenous plant species from PVR protection would result in little to no regulation of plant breeding of these species.

MBIE considers that the PVR legislation is not the right place to define ‘kaitiaki’ and ‘taonga species’ and that the legislation should instead be focussed on the origin of plant material. In this regard it proposes the following principles:

1. Where plant material originating in New Zealand from indigenous plant species (indigenous plant material) has been used to develop a new plant variety, there is a presumption that there are kaitiaki who may have interests in the indigenous plant material.
2. Generally, iwi, hapū or whānau who hold mana whenua over the rohe in which the plant material has been sourced in the wild may have kaitiaki interests in indigenous plant material.
3. Iwi, hapū and whānau may also have kaitiaki interests in plant material from species that are not strictly indigenous to New Zealand – for example, species that were introduced to New Zealand on the migrating waka, like kumara. We refer to these in the remainder of this Part as non-indigenous species of significance.
4. Where the indigenous plant material or plant material from non-indigenous species of significance has been used to develop a new plant variety but its regional origin is not able to be identified, those who hold mana whenua over the rohe where the variety has been developed (e.g. the location of the nursery) may have a kaitiaki interest in the new variety.

As with the earlier 2005 draft Bill MBIE favours including a definition of ‘breed’ which will exclude being able to obtain a PVR merely on account of discovery of a plant in the wild. It is also noted that the UPOV 91 definition of ‘variety’ is potentially narrower than the current definition as it applies to the lowest known rank of a botanical taxon, whereas the replacement of ‘homogeneous’ by ‘uniform’ and ‘reproductive material’ by ‘propagating material’ are considered non-contentious. To be compliant with UPOV 91 the scope of rights will need to expand from being based on reproduction for sale to include a wider array of rights around the commercial exploitation of a variety, including the rights to import for non-reproductive purposes, export and authorise stocking of propagating material.

To be UPOV 91 compliant the term of 23-years from the date of grant for woody plants or their rootstock will need to extend to a minimum of 25-years from the date of grant, although MBIE considers there is no case for extending the term beyond the 25-year minimum.

It will also be necessary to extend protection to essentially derived varieties (EDVs) such that if the initial variety the EDV was derived from is protected by a PVR, then the EDV cannot be commercially exploited without the permission of the owner of the PVR in the initial variety. There are several options for defining what constitutes an EDV. MBIE considers that the UPOV 91 definition of EDV is too ambiguous and favours defining an EDV as a derived variety in which the difference between the initial variety and the derived variety makes no difference to the commercial value of the variety.

UPOV 91 extends the rights of PVR owners over harvested material (produce), which can be the entire plant or parts thereof, where that harvested material either cannot be used for propagation or can also be used for another purpose - such as consumption. At its minimum UPOV 91 requires that PVR owners be given rights to control the commercial exploitation of the harvested material when the material was obtained through the unauthorised use of the propagating material and the PVR owner did not have a “reasonable opportunity” to assert their rights over the propagating material. As the vast majority of UPOV members only apply this minimum criterion MBIE does not support further extending the PVR owner’s rights over harvested material. Even at the minimum it is noted that it will create some uncertainty for retailers who may not be aware of whether the harvested material comes from unauthorised use of propagating material.

In UPOV 91 the default rule in relation to farm saved seeds is that the consent of the PVR owner is required, but member countries can invoke an exception to this under which farmers can save seed for use on their own farm and are free to sell harvested material from that saved seed as long as it is not used for propagation. MBIE favours the Australian approach of invoking the exception, while providing for the possibility that regulations will be made that provide exceptions to that exception in relation to some varieties in order to better balance the interests of breeders and farmers.

MBIE seeks further views on whether algae should qualify for PVR protection. It is noted that there is nothing in principle that should stop algae qualifying, but that there could be practical examination issues as well as Treaty of Waitangi issues. Currently only Australia provides such protection.

MBIE does not support the enhanced rights under UPOV 91 being retrospectively applied to prior grants, but seeks views on whether they should only be available to applications filed after UPOV 91 provisions get enacted or whether applications filed before but granted after the enactment of UPOV 91 provisions should qualify.

Other changes that MBIE proposes are to:

• Provide regulations that specify how a compulsory licence application will be dealt with (these will most likely be modelled around those used in the Patents or Trade Marks legislation.
• Specify in the Act that compulsory licence applicants must have made reasonable efforts to obtain a licence on reasonable terms and conditions within a reasonable period of time.
• Make it clear that a compulsory licence can only be exercised on a PVR within New Zealand.
• Clarify that compulsory licences are non-exclusive.
• Provide that relief for infringement can be either an award of damages; an account of profits; and/or an injunction.
• Repeal the criminal offence provisions as the activities in question would fall within the ambit of the Fair Trading Act.
• Implement the exhaustion of rights provisions of UPOV91 whereby the PVR owner’s rights in material placed on the market by them or with their consent are exhausted upon sale apart from when that material is used for propagation. Apart from that exception, the PVR owner has no rights to control the further exploitation of that material.
• The ‘objection after grant’ provisions will be expanded to encompass the nullification and cancellation provisions of UPOV 91 and the associated provisions, including counterclaiming to infringement proceedings, will be modelled around the patents legislation.
• Restricting the provisional protection provisions so that infringement proceedings can only be commenced once the PVR is granted.

Author: Quinn Miller