I move: "That the Bill be now read a Second Time."
The purpose of this Bill is to update the Plant Varieties (Proprietary Rights) Act, 1980 to take account of new developments in the area of plant breeder's rights, which have been adopted internationally since the Act came into force and to provide for Ireland's ratification of the International Convention for the Protection of New Varieties of Plants, as revised in 1991.
States which are party to the convention constitute the International Union for the Protection of New Varieties of Plants, known as UPOV.
UPOV currently comprises 13 member states of the European Union and 22 other states including the USA, Australia, Canada and South Africa. The convention as revised in 1991 was signed by Ireland, subject to ratification, in February 1992 and the proposed Bill will give effect to the provisions of that convention.
The Plant Varieties (Proprietary Rights) Act, 1980 provided for the establishment of a system of plant breeder's rights in Ireland based on the principles set down in the International Convention for the Protection of New Varieties of Plants as revised in 1978. The central principle of the UPOV Convention is that the breeder of a new variety of plant is granted a title of protection, the effect of which is that the breeder has the exclusive right to reproduce and sell material of the variety and to authorise others to do so on conditions which he may specify throughout the territory where he has been granted plant breeder's rights. He can also apply to the appropriate authorities in other states to have the same rights granted to him in respect of his variety. Accordingly breeders are enabled to obtain royalties from reproduction of their plant material and protection against infringements of their rights.
The Irish plant breeder's rights system is administered by the Office of Controller of Plant Breeders' Rights. The controller who is an official of the Department of Agriculture and Food holds his office under the general supervision and direction of the Minister for Agriculture and Food but acts on his own and not under the name of the Minister. Under the Act, the controller is responsible for any decision taken under the Irish plant breeder's rights system including the granting of compulsory licences. The scale of operation of this office is modest but nonetheless since 1980 it has received 487 applications for plant breeder's rights and has issued 354 grants of plant breeder's rights of which 112 are still extant, published 34 Official Journals of Plant Varieties and maintained the Register of Plant Breeders' Rights.
Ireland acceded to the UPOV Convention in 1981 because Irish plant breeding interests needed protection against infringement of varieties bred by them, many of which they also exported. As a country where agriculture is of such importance we needed to have access to the very best varieties of grasses, sugar beet and cereals which might not otherwise have been available to us in the absence of a national system of protection for plant variety rights. Most of the varieties for which plant breeder's rights are taken out are varieties that are of very considerable significance to Irish agriculture.
The main conditions to be satisfied for the grant of a breeder's right are that the variety must be novel, distinct from other varieties of the species, uniform, stable in its reproduction and be given a suitable name or other designation. Novelty is essentially a legal condition to be satisfied at the time of filing the application for breeder's rights. Distinctness, uniformity and stability are established by means of growing trials under agreed protocols. The results of such technical examinations can be purchased from other member states under bilateral agreements.
In relation to agricultural crops, the breeder's right is circumscribed to the extent that under the various marketing of seed regulations only seed of a variety which has been officially certified by the Department of Agriculture and Food may be marketed. The seed can only be of varieties registered in the "National Catalogue of Agricultural Plant Varieties" or the "European Community Common Catalogue of varieties of Agricultural Plant Species" which is an amalgam of all member state catalogues. Acceptance of varieties into the national catalogue is based on growing trials which establish value for cultivation and satisfactory use under Irish conditions.
There have been many advances in the biological sciences since the UPOV Convention of 1978 was signed and those changes have impacted on the legal protection of new varieties. The International Convention for the Protection of New Varieties of Plants was revised in 1991 to strengthen the protection afforded to holders of plant breeders' rights and to enable them to obtain a fair return on the investment made in their varieties from all the persons making commercial use of such varieties.
Under the existing convention there were clear weaknesses in the system in that other breeders could use a protected variety in order to produce a new essentially derived variety to compete with the protected variety without payment of any royalties to the breeder. This problem arises from the unqualified nature of the breeder's exemption in the 1978 UPOV Convention.
The plant breeder's exemption is the cornerstone of the plant breeder's rights system in that a plant variety may be freely used to create other varieties by crossing of two varieties and selecting from their progeny a variety that will be better than the original. However, various plant improvement methods such as selecting mutations of vegetatively propagated varieties or back-crossing sexually reproduced varieties have had the effect that often, at little cost, another breeder produces a new variety from the protected variety. Such a variety is considered an essentially derived variety and will possess all the characteristics of the initial variety and will differ from the initial variety in one or a limited number of characteristics. The second breeder thereby takes full advantage of the investment made by the breeder of the initial variety without making any contribution to the costs of the development of the initial variety. The revised 1991 UPOV Convention therefore discourages such types of "cosmetic" breeding. Additionally breeders were concerned at the extent of the use by farmers of seed saved from previous harvests to grow their next crop without payment of financial contribution for use of the protected variety.
The European Community, under Council Regulation 2100/94 EEC, has set up a separate system of community plant variety rights, based on the UPOV Convention but operating parallel to the national plants breeders' rights system in each member state. Under the community system breeders can obtain with one application complete protection throughout the European Union for their variety, but they are precluded from exercising national rights in respect of the same variety or from subsequently submitting applications to individual countries in the EU for a national grant of plant breeders' rights. The Community legislation, however, requires member states to provide corresponding penalties for infringements of community rights as apply for infringements of national rights and I have provided for this in section 12.
Under the Bill, protection will be extended to all plant genera and species of the plant kingdom whereas heretofore rights applied to varieties of cereals, grasses, potatoes, fruit trees, ornamental shrubs and roses only. However, in practice, I expect that only a limited number of applications for plant breeder's rights will be received from Irish breeders, namely for the small number of cultivated species on which breeding work is being done and which it is necessary to protect, and from nationals of other member states of UPOV who wish to market selected varieties in Ireland.
The right to apply for a grant of breeder's right belongs to the breeder and, where the grant is made, the breeder's authorisation is required in order to carry out certain acts of exploitation of the variety. Section 18 of the draft Bill provides that the breeder's authorisation is required for acts in relation to the propagating material of the protected variety, and in certain circumstances to harvested material of the protected variety. These are cascading provisions; that is to say, unless the breeder has had a reasonable opportunity to exercise his right in relation to propagating material of the protected variety, he can exercise his right in relation to harvested material obtained through unauthorised use of such propagating material. If the defendant can demonstrate that the breeder has had a reasonable opportunity to exercise his rights in relation to the propagating material the breeder is barred from exercising his rights against the harvested material in question.
Sections 16 and 19 respectively provide for the exhaustion of the breeder's right and for the application of exemptions to the breeder's right which are, however, narrow. The holder of a breeder's right can only exercise it and be paid royalties once in every production cycle. Breeder's rights are, however, not exhausted where further propagation of the protected variety takes place. The minimum period of plant breeder's rights under the Bill is set at 30 years for trees, vines and potatoes and 25 years for all other species. I propose on Committee Stage to introduce an amendment setting a maximum period of protection for any species or plant grouping.
The Bill also provides that the holder of plant breeder's rights shall have the same rights in respect of a dependent variety. Dependent varieties are those whose production requires the repeated use of the protected variety, namely hybrid varieties and essentially derived varieties. An essentially derived variety is a variety that is predominantly derived but still clearly distinguishable from the initial variety by a limited number of characteristics. It is typically obtained by selecting natural or induced mutants within the variety, by back-crossing and transformation by gene technology.
The extension of rights to the dependent variety means, in plain terms, that the holder of rights in an essentially derived variety cannot exploit the variety without the permission of the holder of rights in the initial variety. The holder of rights in the initial variety does not, however, hold plant breeder's rights in the essentially derived variety. It is accordingly envisaged that the two holders will reach a commercial agreement which will allow the holder of rights in the essentially derived variety to exploit them. If, however, there is no such agreement between the two parties, the holder of rights in the dependent variety may apply to the controller for a compulsory licence where the holder of the rights in the initial variety unreasonably refuses to authorise exploitation of the essentially derived variety.
A compulsory licence is only issued in the public interest and requires that the holder of the breeder's right in respect of whose variety such a licence is issued shall receive equitable remuneration. Legal provision for compulsory licensing of exclusive rights in the public interest is standard in all member countries of UPOV.
The 1991 Convention requires a member country of UPOV to safeguard the interest of the breeder during the period between the filing or the publication of the application for the grant of plant breeder's rights and the grant of such rights. The holder of the breeder's rights is entitled to claim equitable remuneration in respect of such acts as would have infringed his exclusive rights had the grant been in force during the period of interim protection. I have made such provision in section 8.
Section 19(1)(d) provides for the farm saved seed exemption which has come about more through traditional practices rather than legal rights in the area of protection of intellectual property. The UPOV Convention of 1991 provides that a breeder's right may be restricted within reasonable limits and, subject to safeguarding the breeder's legitimate interests, permits a farmer to use the farmer's own farm saved seed on his own holding. The section applies the equivalent provisions under national legislation as apply under European Union regulations for the community protected variety. The Minister will have powers to specify by order the species, such as cereals, fodder plants, oil and fibre plants and potatoes, to which the restriction applies. The Minister will by regulations lay down the necessary arrangements to enable the farm saved seed exemption to operate.
Farmers who have saved seed of varieties of these species will be liable to pay holders of plant variety rights equitable remuneration, which must be sensibly lower than the royalty charged for the use of those protected varieties. The amount to be charged is for the holders and farmers collectively to decide between themselves. Small farmers will be exempt from the requirement to pay for the use of the farm saved seed. Small farmers under community legislation are those whose cereal and fodder plant production area would not exceed 15.13 hectares excluding permanent pasture established more than five years and in the case of potatoes one whose production area does not exceed 6.3 hectares.
The Minister, when making regulations and orders in connection with the farm saved seed, will apply the provisions of the Community legislation establishing implementing rules on the agricultural exemption for farm saved seed — Commission Regulation (EC) No. 1768/95 of 24 July 1995.
A particular problem arises for breeders of ornamental varieties such as rose bushes and pot plants, in that they face major difficulties in enforcing their rights, particularly in relation to royalty payments. These varieties are easily propagated and pass through many channels before they reach the consumer and are sold from a wide range of sales outlets. Unless the breeder knows the source of the plants being sold, he cannot establish whether the material being sold has been taken from an authorised propagation. It is not only the breeders of ornamental plants but also traders who properly pay royalties who are put at a disadvantage by illegal propagation of plant varieties.
I propose on either Committee or Report Stages to insert a provision to enable breeders to exercise their rights more effectively by tracing plant material back through the supply chain from the retail sales outlet. Under this provision the holder of a breeder's right for the protected variety or his or her agent will serve an information notice on the trader asking him or her where he or she has obtained the harvested material being offered for sale. If the trader does not supply the information within the time limit laid down in the notice, certain presumptions will operate in any subsequent infringement proceedings in the civil case, unless the defendant proves otherwise or shows he or she had a good reason for not supplying the information in the first instance.
In any proceedings in court between the holder of the rights and the trader, the holder of the breeder's right will have to prove the link between the harvested material which was the subject of the information notice and the harvested material which is the subject of the infringement proceedings in order to activate the presumptions. The presumptions are that the harvested material was obtained through the unauthorised use of the propagating material, and that the holder did not have a reasonable opportunity before the harvested material was obtained to exercise his or her rights in respect of the unauthorised use of propagating material.
Any information obtained by means of an information notice can only be used in proceedings in connection with infringement of plant breeder's rights and any abuse of such information can be similarly proceeded against in the courts.
The Bill also makes provision for the annulment and cancellation of grants of plant breeder's rights. Revocation or nullity is retroactive to when the grant was made, whereas cancellation is from the current date. Revocation or nullity arises where the grant of a breeder's right should not have been made in the first place, while cancellation will arise if the holder fails to meet obligations imposed on him or her arising from the grant of such a right.
The Bill is based on the principles of the UPOV Convention as revised in 1991, which I indicated earlier was signed by Ireland, subject to ratification, in February 1992. The Bill will establish equitable relations between breeders, between holders of breeder's rights and patent owners, and between holders of breeder's rights for ornamental plants and traders.
I encourage breeders to retain the scent of ornamental plants, flowers and shrubs. Many breeding programmes seem to lose the exotic and beautiful scents we used to get when we travelled around the countryside in the old days.