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Dáil Éireann díospóireacht -
Wednesday, 21 May 1980

Vol. 321 No. 2

Plant Varieties (Proprietary Rights) Bill, 1979: Committee Stage (Resumed).

Question again proposed: "That section 6 stand part of the Bill."
SECTION 6.

At the outset I should like to mention two matters arising out of the earlier discussion on this Stage of the Bill. One point is important and the other rather trivial. I shall be putting down an amendment on Report Stage to delete section 1 (5) from the Bill. It will be recalled that a number of Deputies made the point, when we were considering section 1, that the UPOV Convention made no specific mention of wild plants. I accept this and propose to amend the Bill so that it, likewise, contains no specific reference to wild plants. In view of this change, it will be necessary to propose an amendment to section 1 of the First Schedule. We shall likely be discussing this later in the day.

I should mention that the word "rootstocks" which appears in the Bill in section 4 (12) and in the First Schedule, section 2 as two words "root stocks" should, in fact, be one word "rootstocks". The error will be rectified in a later print of the Bill.

I welcome the introduction of this amendment. It gives us heart that our discussions are really worth while when a point like this can be met.

We shall be dealing with that later. We are now discussing section 6. Is section 6 agreed?

We have almost exhausted the discussion on section 6 but the Minister was in possession and perhaps he has something further which he is anxious to say?

There is not a lot that I have to add on this. Section 6, as we already know, deals with priorities between applicants under section 4. There was a good deal of discussion on the problem of who would be entitled to rights. It is generally accepted that the person first in a position to validate his claim would be the person to whom the rights would be granted. This section is parallel with patent law. This law is in existence under patent law and there is not a lot more that I can add.

There was the possibility of claim jumping.

Yes. This matter was causing the most problems but it is fairly clearly defined.

Is the Minister satisfied that no-one will be able to come in at the last moment and jump ahead?

I would be satisfied.

Section 6 agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."

At what stage would regulations be made under this section in the case of an application? Would they be made at the stage when the person has merely indicated an intention to commence research into the production of a particular plant variety, or would they be made later on when the application has acutally been filed, containing all the information and all that remains to be done is that that information be examined by the office and subsequently protection granted. It would be very important to know at which stage these regulations are made. That would be the answer to the problems that we were raising under section 6. If regulations are made early, obviously claim jumping is not possible.

I also query one word in this section, the use of the term "regulations". That implies regulations under this Act of general application to all applications pending. It is not simply a question that the Minister will be making regulations in respect of each application? If this is so I am wondering why this has not been done under the Act. Why are we waiting to make regulations about this subject seeing that it is an issue of general application? The effect is that the Minister will be able to make rules about this matter over which the Members in this House will have no scrutiny unless they move to annul the regulations, which is a very drastic step which one does not wish to take. Why is this mechanism used? Why not write into the Act at least the principles on which this protection will be given, with perhaps some of the details left to be ironed out by regulations? To say baldly that the Minister will make regulations providing for the protection of the proprietary rights of applicants pending the final determination of applications for the grant of plant breeders' rights gives the Minister very great freedom to make any regulations he likes. One could say that if somebody writes a letter without any supporting evidence, saying that he is doing research on a variety which will be resistant to a certain type of fly, or something like that, he might sit back and do nothing for ten years. He would, because he had written that letter, prevent anybody else replying. I know the Minister would not be inclined to make regulations of that nature because they would be so sweeping in their effect. As far as the House is concerned we do not know that he will not make regulations of that nature. As far as I can see he could make any regulation he wished under the powers conferred by section 7. It would have been better if the Minister could at least have outlined the general principles under which those regulations will be made.

It will be applicants under section 4 who will be covered here. As regards protection of applicants, while the application is pending, they will apply for this protection at the time they apply for their rights. We know that presenting their cases will very often take a long time because they have a lot of data to present and so on. They will have to get provisional protection from the time they apply until such time as the rights are granted.

A temporary protection will only be considered when the applicant has done all the necessary work. The protection given is temporary because it will take time to process the application which could go on for a couple of years. It is only right that an applicant will have that protection in the interim period, that somebody else should not come in and jump the gun before him. That is the reason this kind of protection is provided under section 7.

Why is the Minister not laying down the principles under which he may make regulations under section 7? I would have thought that should be stated. Even if it is only to be a cross-reference to some other section in the Bill that cross-reference should be in section 7. It is not clear from reading the section what principles the Minister will use in making those regulations. It is badly drafted legislation when it does not contain some statement of the principles on which the regulations may be made. It is simply giving the Minister power to make regulations about a problem without any reference to any constraints on him.

It is fairly clear in section 7 which says that the Minister may make regulations providing for the protection of the proprietary rights of applicants pending the final determination of applicants for the grant of plant breeders rights.

Those regulations could take effect at any time. In the example I gave they could conceivably say that all the person needed to do was to write a letter before he started to do any research. That would simply give that person protection if the Minister so drafted the regulations. You can give protection to applicants pending the final determination of applications in any number of different ways. It should be made clear what principles the Minister would have to act under in making those regulations. Does the Minister see the point? I know what he will make the regulations for but the content of them is not in any way constrained by the provisions of section 7. If he wanted he could make the most draconian regulations.

I do not think there is any danger of that.

That is not the point.

I can understand that Deputy Bruton would like to see it more clearly defined. I am satisfied that the section as drafted is satisfactory.

I am not satisfied, not because I feel the Minister or any other Minister will do anything rash. In the interests of good legislation there should be some principle laid down here. If the Minister will not give some assurance that he will look at this with a view to seeing if it can be more specifically defined I will have to draft an amendment for Report Stage as the only way of getting the thing discussed. Unfortunately I do not think that I will be able to draft a good enough amendment because it is a very complicated matter. I do not know what would be the appropriate restraints. It certainly strikes me that there are none there now and that there should be some statement. Perhaps the Minister would look at the possibility of elaborating the section a bit.

We are more or less complying with the UPOV regulations which say in subsection (3) of Article 7:

Any member State of the Union may provide measures to protect the breeder against abusive acts of third parties committed during the period between the filing of the application for protection and the decision thereon.

It does not really give us much scope. If we want to become members of this club we have to follow the line laid down by the UPOV convention. Section 7 is merely fitting in with what they are saying in Article 7 (3).

Section 7 is only reproducing the words of the UPOV convention which says that it is up to member states to make the regulations. We should, therefore, make it clear in this Bill what principles we will be following. UPOV have left it to us. The fact they have done that does not entitle us to simply reproduce the UPOV convention without any further details.

We can have a look at this between now and Report Stage and if necessary amend it.

Question put and agreed to.
SECTION 8.

I move amendment No. 8a:

In page 12, line 53, and in page 13, lines 1 and 2, to delete "if he is satisfied that the applicant is financially and otherwise in a position, and intends, to exercise rights in a competent manner which would be conferred by such an authorisation,".

I believe this section is the most important section in the Bill and the amendment to it and the discussion on it are really the key to whether or not the Bill will work in a beneficial fashion. It is important to recap what is being done here. By this Bill people are getting a monopoly in respect of the sale of certain varieties of plant if they have developed that variety and patented it. Obviously, in giving anyone a monopoly one must have considerable protection against the abuse of that monopoly. In an earlier discussion on the Bill the Minister constantly referred to this section as providing the protection which is necessary against the abuse of a monopoly. He said that under this section, which provides for compulsory licences, if anyone feels that the person who has the licence, the monopoly, is abusing it he can apply for a compulsory licence. He can apply to have himself or other people given the same rights the monopolists have had exclusively up to then. The knowledge that somebody can apply for such a compulsory licence, is, therefore, a protection and an incentive to the monopolist against any abuse of his monopoly power. If the provisions for compulsory licensing are effective there will be no abuse of the monopoly but if they are ineffective there will be a danger of abuse and over-pricing. One of the dangers of the legislation in so far as it confers a monopoly is that the price charge for seeds to the farmer will rise considerably. In the absence of this legislation no royalties had to be paid to people outside the State who had developed varieties which were in use here.

We should dispose of the amendment first.

I am trying to establish why the amendment is important. The danger is that apart from necessary royalties there could be additional prices because of the monopoly position held by the people distributing the seeds. Although a provision for compulsory licensing has existed in British legislation for the past ten or 15 years no one has applied for a compulsory licence to my knowledge. Similar powers exist in the patent legislation here where people may apply for compulsory licences against monopolists in the area of industrial patent and that power has not been used. What is wrong with the power that it is not capable of being used? The material contained in this amendment may be the key to understanding why the compulsory licensing provisions designed to prevent monopoly of use have not been used. Under section 8 the applicant for a compulsory licence must satisfy the controller that he is:

financially and otherwise in a position, and intends, to exercise rights in a competent manner which would be conferred by such an authorisation,

It is not enough for some farmer who feels that he is being overcharged to apply for a compulsory licence to prevent the seed monopolist from overcharging. The farmer must be able to prove that he has the competence, the knowledge and the money to maintain the seed variety, market it, sell it and so on.

It is quite obvious that most people likely to be disadvantaged by this legislation by being overcharged simply would not have the financial competence to meet the very rigorous standards laid down in the section. The provision that he must be financially competent is particularly onerous. One of the reasons why he may not be financially in a position to do this is that he has been perhaps the victim of a monopoly. If somebody who distributed seeds here has been refused the right to retail the seeds, the rights in which are possessed by the patentee, the patentee may be consistently losing money because he cannot get the seeds for his consumers. The only way that man can get redress for his financial position is to apply for a compulsory licence to make the person who owns the seeds sell them. If he does so, even though the controller may be perfectly satisfied that an abuse has taken place and that the man should get a compulsory licence, he will be prevented by the provisions of this Bill from giving a compulsory licence to the seed merchant because he cannot satisfy himself that the seed merchant has enough money to be able to exercise the authorisation to distribute the seeds if he got a compulsory licence.

I presume that within the terms of this legislation, if there is even a doubt in the controller's mind as to the financial competence of the applicant, he must refuse. The onus of proof is on the applicant not on the monopolist who wants to prevent the compulsory licence being granted. If a person is working on credit how can he prove that he has the money? The banks will say that if he gets the compulsory licence they will give him the money but if not they will not give him the money. It may never be possible for an applicant to prove that he meets the terms of this section. Unless these few words are removed it is likely that no one will think it worth their while to apply for a compulsory licence.

The Minister may say that the reason that this compulsory licence provision has not been used in Britain is not that the powers are too onerous but that there has been no abuse. I would question that. Mr. M. Woodrow Wilson of the National Farmers Union in America made a submission on 22 April last to a sub-committee of the House of Representatives in Washington which was sitting on legislation very similar to ours. This legislation proposed to extend the number of plants that were covered by an Act which had been passed in 1970. Referring to the experience of the farmers of the operation of this Act since it had been passed in 1970 Mr. Woodrow Wilson said that seed prices had risen rapidly since 1970, that all farm production costs had been rising faster than the general rate of inflation during the past decade and that seed costs had been one of the leaders in the price rise. That has been the experience of legislation in the US similar to what we are passing. That seems to establish a prima facie case that this legislation is liable to operate in such a way as to lead to an abuse of monopoly by excessive prices being charged and that there is a need for a strong provision to prevent that happening by strengthening compulsory licensing. The inclusion of the provision that the applicant must satisfy the controller that he is financially sound and competent and able to exercise the authorisation will effectively prevent the protection which this section is designed to confer. I would ask the Minister to accept this amendment.

The proposed amendment would deprive the controller of any discretion as to the suitability of the applicant for a compulsory licence. There is no point in granting a compulsory licence to a person who will not be in a position to avail of it. Anyone who gets a licence must be capable of maintaining the variety true to form. Therefore, we must keep the existing provision. A power does not have to be used to be effective. The existence of the right to apply for a compulsory licence has been sufficient to deter breeders from abusing rights granted to them. This is the experience in other countries and I have no reason to believe that the same will not obtain here. There were many cases of applications being made for compulsory licences but when the breeders found out that this was being done in most cases they conformed. As to the question of who should be granted a compulsory licence, there is no point in putting a compulsory licence in the hands of a person who cannot exercise it. There is also the possibility of abusing a compulsory licence just as there is the possibility of abusing a plant breeder's licence. For those reasons we must keep the existing provision.

I submit that the danger of a person who has been granted a compulsory licence is far less than the danger of a person who has been granted an exclusive monopoly abusing that. If the person has been granted a a compulsory licence he is not the only one who has it. The original patentee has the monopoly already. Therefore, there are two of them and if one abuses it the other one, certainly in the matter of price, will be able to ensure that he does not by selling more competitively than he does. That danger is exaggerated.

I can see the Minister's point about the necessity to maintain the variety. I would prefer if the section were drafted in such a way as to say that the controller must satisfy himself that the applicant is capable of maintaining the variety. To say simply that in general he is financially competent to exercise the compulsory licence seems to be drawing the thing far too widely. I fear that, because of this provision, which places a very heavy onus on the applicant to prove all sorts of things to the controller's satisfaction, this power will not be used. Also I would like to clarify this question of the onus. Would it be up to the applicant to prove that he meets the provision of the section or will it be up to the person who objects to the granting of a compulsory licence to prove that he does not meet the section? If the onus is all on the applicant it seems that this section will not be effective.

Yes, the controller must be satisfied that the applicant is maintaining the variety true to form.

Would the Minister repeat that?

The controller must be satisfied that the applicant is capable of exercising his rights to a compulsory licence.

Is it up to the applicant to satisfy him?

Would the Minister agree that it is going to be very difficult for an applicant to get a compulsory licence when he has to satisfy all of these conditions and prove beyond all doubt that he does so? Even if the controller grants a compulsory licence to an applicant under this section, it will be open to the original licensee to contest that in the courts on the grounds that the controller has not satisfied himself fully of all the requirements, and if the controller knows that he can be brought to court if he grants an application unless he has proved to his own satisfaction beyond reasonable doubt that the applicant is competent financially, he will not grant it. He will tend to err on the side of not granting a licence for fear of being taken to court. Given that the onus is on him to be satisfied that all these terms are met, the tendency would be not to grant a compulsory licence. I would prefer if the section somehow were drafted to say that if the objector to the granting of a licence can prove to the satisfaction of the controller that the applicant is not competent financially to exercise the thing, then it shall be refused. The onus should be on the person objecting to the compulsory licence to prove that the applicant is not competent, not the other way round. Otherwise the section will not operate because of the excessive caution the controller will have to exercise in deciding to grant an application for fear that if he does the licensee will take him to court.

We must realise that the issuing of a compulsory licence is a very serious step to take. More than price is involved. The section says:

... financially and otherwise in a position, ...to exercise rights in a competent manner....

Really it is up to the applicant to prove that he is financially and otherwise in a position to exercise the rights being conferred on him. If he is not, it would not be correct to give him a compulsory licence.

I suggest an alternative. I see the Minister's point that he has to ensure that the variety is maintained and if an authorisation is granted to one person neither he nor the licensee will bother to maintain the variety. Rather than requiring the applicant to prove all of this before he gets a compulsory licence—which would ensure that he never does get it—would it not be better to put it the other way round? I have made one suggestion that the onus of proof could be changed and I would like the Minister to consider that. Secondly, would it not be possible to put into the section a provision that the controller shall in the granting of a compulsory licence lay down such conditions as he thinks fit for the maintenance of the variety, and in the event of these conditions not being met the licence will lapse? If that were done there would be much more likelihood of a licence being granted and of a more effective protection and it would be possible to ensure that the variety would be maintained. That might be a way out of the problem which is a genuine one. I see that there would be some difficulty in the amendment as drafted at present in the case of maintenance.

If the controller lays down conditions and the applicant cannot fulfil these conditions——

Does not fulfil them.

If he does not or if he cannot.

If that happens his licence would lapse automatically. He would lose the licence. Ipso facto it would be gone.

A lot of damage could be done in the process.

We could get over that by requiring as one of the conditions that the applicant, having got a compulsory licence, must keep the controller informed on a regular basis every six months or every year of what he is doing to maintain the variety. If that were done there should be no difficulty.

We appear to be getting away from the amendment, which is very definite and specific.

It seems that this amendment goes to the very central point of the Bill and is worthy of detailed examination. The whole purpose of the Bill is to confer a monopoly and the idea of the amendment is to give greater discretion to the controller to issue a compulsory licence in a situation where that monopoly is not being exercised in the public interest. From the point of view of the danger that can be associated with a monopoly situation it is very important that the hands of the controller should not be tied over much. It is really a question of finding the balance between the rights which will be conferred on somebody who is registered under the Act and the claims of somebody who wants to, as it were, break the monopoly. Under the Bill the applicant for a compulsory licence has to show various things but in particular he has to show the controller that he is financially "and otherwise" in a position to exercise rights.

The amendment suggests that should be withdrawn. I strongly urge the Minister to accept the amendment, because why should anybody bother applying for a compulsory licence unless he is in a position financially to utilise that licence? Secondly there is the looseness of the expression "and otherwise" because not alone must the applicant satisfy the controller that he is financially in a position to exercise the rights in a competent manner but also that he is otherwise in a position to exercise such rights. What does that mean? It could be interpreted in a very strict way. I urge the Minister to accept the amendment proposed by our spokesman in this area and remove this bar to somebody applying to the controller for a compulsory licence. If the Minister is not in a position to do that at this stage, would he give an indication that he would do so on Report Stage? Would he explain what is meant by "and otherwise"? How wide and how narrow will those additional words be? What is the intention of the Minister in having those words added after the word "financially"? Perhaps he would deal with the second point first and then consider the question of striking out, as suggested in the amendment, that entire provision?

It would be very difficult to list all the conditions necessary, but a fair explanation would be anything necessary to ensure the purity of the species involved. Many things could be included in that. It is very important that this provision should be retained because anyone who gets a licence must be capable of maintaining the variety true to form. The financial end is only one aspect of it. Certainly it is necessary that the applicant be financially capable of fulfilling his obligations—and there are financial obligations imposed in the granting of a compulsory licence such as this. We know it would cost a breeder a lot of money. Therefore, it is necessary for the controller to be satisfied that the applicant was in a financial position to fulfil his obligation and, since he would be getting the use of a right fairly granted to the person who produced the new variety, it is only fair that the person getting the compulsory licence should first prove his capacity to exercise the licence in a competent manner. I see nothing wrong with the provision.

With the greatest respect to the Minister and probably other people who have drafted similar legislation with almost exactly the same words in other countries, I believe the provision here does not afford as much protection as what I have suggested. Suppose somebody gets a compulsory licence and has satisfied the controller that he is financially competent and so on to exercise it, what is there to say that in a year or two he may not become bankrupt and be no longer capable of exercising the licence? All this section says is that he must prove competence at the time the application is granted. It would seem to be far more effective to adopt the approach I am suggesting, that he would not have to prove all of this beyond reasonable doubt before he got the licence but that a checking mechanism would be set up whereby he would have to continue reporting regularly to the controller on what he was actually doing to maintain it. If at some stage, perhaps three or four years later, having got a licence, he became incapable of maintaining and fulfilling it, his licence would lapse. That would afford a better protection against degeneration of the species than what is contained here, which only requires him to prove competence at the time he applies for the licence and does not seem to have any continuing supervision as to his continued financial competence as regards maintaining the variety.

Nobody can foretell what may happen in time. Circumstances may change for many reasons, such as bad health or he could go bankrupt in a very short time.

Something that is very common nowadays.

Yes, indeed. In that event I suppose the controller would have no option but to withdraw the licence if the holder were not in a position to fulfil his obligations.

Would the Minister not accept that would be virtually impossible as this section is now drafted as opposed to the way suggested by Deputy Bruton? On that point, has the Minister any information in regard to the situation in other countries that have enacted similar legislation under this convention? Has he any details of the provision in regard to the percentage of compulsory licences issued as against the percentage of registered rights under that legislation? It seems to me that, if this is the basis here or elsewhere on which the door is to be left open in the public interest, the key may not be turned but the door is fairly well closed. I see great difficulty in anybody being able to get through that door.

No, I understand we have not any similar case in other countries where a licence has been withdrawn for the reasons stated here today. The position is that the controller can have the position of an applicant reviewed every year and, if he finds the licence holder is not capable of fulfilling his obligations for any of the reasons we have stated, it is up to the controller to act accordingly. If an applicant cannot provide proof at the time of application, he will be unlikely to do so afterwards. Effectively he would not be able to use the compulsory licence.

Does that not afford sufficient protection? Surely it is not necessary for an applicant to prove before he gets the licence that he is capable of exercising it and afterwards to have mechanisms to ensure he does? It would seem that the argument for requiring to prove beforehand is invalidated if there are sufficient means to prove afterwards that he complies anyway. It seems the Minister is trying to have it both ways and that the legislation is simply designed to prevent people from getting licences.

Can we dispose of the amendment? We are having a lot of repetition. Is the amendment withdrawn?

I propose to introduce another amendment on Report Stage containing the material here but with added provisions to ensure that the maintenance of the variety is catered for. Although I am withdrawing the amendment at this stage, it is only with a view to introducing a further amendment. I am not satisfied that the Minister advanced any argument of substance as to why this amendment in principle should not be accepted.

Amendment, by leave, withdrawn.

I move amendment No. 9:

In page 13, subsection (9), line 46, to delete ", unless he is the applicant,".

This amendment is being made because the holder of the proprietary rights would not be expected to apply for a compulsory licence.

Amendment agreed to.

I move amendment No. 9a:

In page 13, after line 52, to add the following subsection:

"(11) The Controller shall grant a compulsory licence under this section if he is satisfied that—

(a) a demand for the plant variety is not being met on reasonable terms as to price or other considerations, or

(b) that by reason of the refusal of the holder to grant an authorisation on reasonable terms the development of agricultural or commercial activities in Ireland is being unfairly prejudiced, or

(c) the terms on which the holder is prepared to offer an authorisation are more onerous than the terms being offered by him in respect of the same variety in another country, or

(d) the terms as to royalty payments imposed by the holder in respect of the grant of an authorisation are unduly burdensome on the applicant, seriously impairing his ability to compete with the holder, where the holder through prior licence royalties and profits from exploitation of the variety has more than recovered the costs allocable to Ireland of the development of the variety.".

This is another amendment which is designed to ensure that a monopoly granted under this legislation is not abused and that the compulsory licensing provision will be used. Deputy O'Keeffe asked if the Minister had experience of these compulsory licensing provisions being used elsewhere. As I said earlier, the compulsory licensing provisions under our existing patents law have not been used even though the legislation has been law since 1960. My information is that the compulsory licensing provisions in the British plant varieties legislation, which has been in operation since 1968, have not been used either. This clearly indicates that these provisions do not have much value as at present drafted.

I also asked the Minister on Second Stage to obtain information on why these compulsory licensing provisions have not been used in other countries. I would be interested to know the results of these inquiries. In the absence of satisfactory information, and we have not had it yet, it seems the provisions are ineffective.

I already pointed out that the American Farmers' Union commenting on similar legislation said they felt that since the legislation was passed the price of seeds has risen more rapidly than the cost of living and other agricultural costs. This places the onus on the Minister to prove that this legislation does not have that effect. My amendment says that the controller shall grant a compulsory licence under this section if he is satisfied that the demand for the plant variety is not being met on reasonable terms as to price or other considerations, or that the refusal of the holder to grant an authorisation on reasonable terms to the development of agricultural or commercial activities in Ireland is being unfairly prejudiced; or that the holder of the licence is behaving in an unfair fashion in that while he is offering favourable terms for the use of his variety in one country he is offering more generous terms in Ireland; or that the royalty payment imposed by the holder on people selling on his behalf, with authorisation, is so severe that it interferes with the purchasers' capacity to compete—in other words, that excessive profits are being garnered.

Lest the Minister thinks that this amendment is simply concocted out of my head or that it is something I imagined one day when I was feeling in a particularly bloody-minded mood and wanted to make life awkward for him by putting forward amendments, I would like to point out that this amendment is based on a proposed amendment to Canadian patent law which was recommended by the working party on patent law revision which reported to the Department of Consumer and Corporate Affairs in Canada in June 1976. My amendment is modelled on the Canadian amendment and therefore, is reasonably well drafted. It is not a simple invention of my mind.

The purpose of compulsory licensing is to do precisely what this amendment sets out, namely, to prevent unreasonable prices being charged, to prevent the licensing system being used as a means of imposing disadvantageous terms on this country, preventing agricultural development or leading to excessive royalties being charged to Irish people. In other words, this amendment will impose terms to ensure that the controller will grant a compulsory licence in any case where there is a need to grant such a compulsory licence in the interests of preserving, developing and protecting our agriculture. This amendment should be accepted. Again I want to point out that it is adequately drafted and would achieve what we would all like to see.

The existing provisions of this section, subsections (1) and (2), provide for the granting of a compulsory licence as far as paragraphs (a) and (b) of Deputy Bruton's amendment are concerned. As regards paragraphs (c) and (d) of his amendment, I am satisfied that market forces will dictate that its holder of rights makes propagating material available on reasonable terms. Incidentally, charges in different states will not be identical. They could be affected by fluctuating exchange rates and, in particular, by the size of the market. If unreasonable terms are set by the holder of rights it is open to the aggrieved party to apply to the controller for a compulsory licence. The grounds for granting a compulsory licence are, I feel, sufficiently wide to cover the contingencies envisaged by Deputy Bruton.

In regard to the last phrase in (d) I do not propose to set specific figures in relation to allowable costs for developing varieties because it would not be a practicable possibility to work out such costs. As I have already said, a breeder could be working on 100 varieties at the same time only a few of which might prove successful.

In Canada it has been felt that it was possible to make provision for the allocation of costs in so far as the determination of the appropriate royalty to be charged for patented inventions is concerned. Obviously people who are inventing industrial inventions of a patentable character would also probably be inventing a number of them at the same time and the costs would be mixed. If it is possible to allocate costs in Canada in respect of patented inventions I cannot see why it should not be possible to do the same here in respect of plant varieties which have been brought into this country.

The Minister claimed that market forces would be sufficient to ensure that the terms of (c) and (d) were met. Then he said that it would not be possible to have the same prices charged because of exchange rate fluctations and the fact that this was a small market. It seems to me that he is contradicting himself because the exchange rate fluctuations can be worked out with a calculator. If exchange rates are going to be used as an excuse it seems that there is a danger that market forces will not meet the case that I am making. The fact also that we are a small isolated market means, as the Minister probably meant to mention, that we are liable to be charged higher prices for our seeds under this legislation than other people, perhaps in France or Germany, even for the same seeds. People will say that we are only a small market, that they are not going to make any great profit out of it so we can just stew in our own juice and will not get the commodity. The person who is refusing to give us the commodity could have a compulsory licence which would prevent anyone in Ireland from marketing the same plant variety in competition with him which would seem to contradict the Minister's assertion that market forces will sort the whole thing out. It would seem that in view of the reasons the Minister gave for the possibility of differential pricing he is contradicting his own assertion that market forces will solve the problem.

I do not accept either that the first two sections in the amendment, (a) and (b) concerning unreasonable charges and refusing to grant authorisations in Ireland, are satisfied by section 8 (2). In this the controller may grant a licence if the applicant has satisfied him that it is in the public interest to do so. First, it is up to the applicant to satisfy the controller and, second, it is a very vaguely determined public interest, which are the criteria under which the controller may or may not decide to grant a compulsory licence. The public interest is probably the most impossible thing to define that one could imagine. The socialist's view of the public interest is very different from that of the capitalist, the view of a practising Christian is very different from that of an atheist. The public interest is something that no one can define. It is something that has defied political philosophers for 2000 years, ever since Aristotle started to define it. Nobody knows what the public interest really means. It means whatever one would like it to mean.

Putting that provision in here is no protection against anything because it all depends on what the controller thinks is the public interest. The amendment is much more specific. It is objective and says he must grant a licence if he is satisfied that demand is not being met or unreasonable prices are being charged. Those are objective, definite criteria that one can go out and find and prove to be the case and it is not up to the controller to look into his heart and know what the Irish people think. If he is satisfied on the basis of certain objective facts that demand is not being met or that unreasonable prices are being charged then he must grant a compulsory licence. If somebody contests that, he is contesting it not on the basis of some nebulous concept of the public interest but on the basis of definite, specific criteria. This amendment is preferable to the vague concept of the public interest which the Minister is seeking to assert here. Perhaps the Minister would deal with that point.

Before the Minister deals with this point, perhaps he would deal with this very sensible amendment in the broader context. Does he not accept that this House can decide that it is in the public interest that compulsory licences be available on reasonable terms in reasonable circumstances? If the experience in other countries is that compulsory licences are virtually unobtainable what is the sense of putting through legislation of a similar nature in this House? Would the Minister not accept that we should go back to the broader issue in considering this amendment as to whether compulsory licences should be available when it is reasonable that they should be available? This amendment highlights a number of circumstances in which we can decide that such a reasonable situation exists. Surely the Minister should accept that a compulsory licence should be available if the demand is not being met on reasonable terms. Surely it is reasonable that we should insist that a compulsory licence be available to an applicant if we can prove that.

The other terms suggested in this amendment are also of a very central nature. If the Minister does not accept this amendment, is he saying that a compulsory licence should not be available if the development of agricultural activities here is unfairly prejudiced? By refusing to accept this amendment the Minister is, in effect, saying that. The Minister and all of us are interested in the development of agriculture. In those circumstances surely it is entirely reasonable that we should provide that it is in the public interest that if an applicant can prove that the development of agricultural activity here is being prejudiced a compulsory licence should be issued.

The same applies in regard to the possible situation where excessive prices are being charged by an existing holder. In considering this amendment we are in the situation where we have before us a section which apparently on its face is designed to facilitate the issuing of compulsory licences in certain circumstances. It is clear from a reading of this section and the discussion taking place here that an applicant for a compulsory licence faces a minefield of obstacles and that, in the light of the difficulties that are obviously incorporated in this Bill, and in the light of experience in other countries, such an applicant would never get through that minefield. Therefore, we would have no compulsory licences issued even when it is clear that it is in the public interest that such should be given.

I support the amendment proposed by Deputy Bruton and suggest to the Minister that it is in the interests of the country from many points of view that the entire procedure of obtaining compulsory licences should be liberalised. If we do not take the opportunity to do so now, we will effectively close the door on the issuing of compulsory licences in the future.

Experience elsewhere is not that these licences are obtainable but rather that where the question of seeking a compulsory licence was made known to the breeder he settles out of court on more reasonable terms. He did so rather than allow the controller to go ahead and issue a compulsory licence. The public interest provision covers the development of agriculture as well as other matters, so that there will be no problem in that area.

The public interest can mean anything one likes.

Deputy O'Keeffe felt it would not cover agriculture.

We are getting involved in repetition again.

The Minister is slavishly reproducing the provisions of the British Act. Instead of drafting a compulsory licence provision specifically designed to meet Irish conditions—Ireland being an agricultural country—he is copying slavishly the provisions of the British Act passed in 1968. That Act has not worked particularly well in Britain and it was designed for a country which is predominantly interested in industry. The Minister should look at this provision from the point of view of the country he represents and recognise that we should have a provision such as I have suggested which will protect Irish interests in the context of this legislation. The Minister has not said that my amendment would be contrary to the provisions of the UPOV Convention. It is obvious from his failure to make that assertion that my amendment would be consistent with UPOV. Instead of availing of the freedom he has to draft the provision in our own way to protect our own interests within the terms of UPOV, the Minister is copying word for word the provisions of the British legislation which was passed in 1968. He has not had any regard to the specific interests of the country. It is a bad thing that we should be always following British legislation in matters of this sort.

There is a precedent for having an Irish solution to an Irish problem.

The Minister is not searching very hard. I propose to introduce an amendment along these lines for Report Stage. In the meantime the Minister should consider the issues involved. I will withdraw my amendment, but I urge the Minister in the meantime to have a serious look at the points I made. They were not made in any partisan sense to do the Minister, or anybody else any damage. They were put forward in the spirit of making the best legislation for this country. I hope the Minister will come forward with an amendment of his own to meet my case. He has done so already in the case of other matters and I hope he will adopt a similar attitude to the arguments I made on this amendment.

Amendment, by leave, withdrawn.
Question proposed: "That section 8, as amended, stand part of the Bill."

Will the Minister outline the procedures to be followed by people when applying for compulsory licences? What type of documentation are they required to furnish to the controller? How long is it likely that the controller will have to spend considering an application? Will it be possible for the controller's decisions to be challenged in court by the licensee in the event of the controller having granted a licence thereby preventing the exercise of the licence by the use of the appeal to the court as a delaying tactic?

There is no specific provision for applying for the licence. It would be up to the applicant to apply in the ordinary way and provide whatever information the controller asks for.

How will the applicant be able to satisfy the controller to provide the documents the controller would need in order to decide that an application was in the public interest? That is very vague. How would one know what documents or evidence was necessary to satisfy the public interest?

The controller would have to be as flexible as possible and examine each case on its merits. I do not think I can go much further than that.

That is not much help to a person who might want to apply for a compulsory licence. Can the Minister say if we are required to have precisely this provision as to compulsory licensing within the terms of the UPOV Convention? Would it be possible for the UPOV Convention to have provisions which, for instance, set down specific conditions under which the controller should grant a licence?

Apparently, there is no specific provision laid down in the UPOV Convention. The position is that the applicant would have a complaint and he would have to justify that complaint to the controller.

From what the Minister has said there is no reason within the terms of the UPOV Convention why he could not accept the amendment I proposed. For that reason I am disappointed he did not do so. The section states that a compulsory licence shall not be an exclusive licence. The Minister was arguing earlier the reason why the compulsory licensee had to prove before he got the application that he was financially competent. He would have to maintain the variety. If he is not being granted an exclusive licence, in other words, if a licence is being granted to other people as well, it seems a little unfair to require him to be able to maintain the variety before he gets it if other people are getting it as well who presumably will be equally required to maintain the variety. Perhaps the Minister would answer that.

The position is that the person who would be granted a compulsory licence would not have a monopoly.

Who else would have it?

Anyone else who got a compulsory licence.

They would have to get a compulsory licence. The original licensee and the holder would have to maintain the variety.

Why does the Minister consider it necessary that such a licence may be granted by the controller only with the consent of the Minister? On the offchance that the applicant for a compulsory licence gets through the obstacle course of convincing the controller, why is it necessary that the consent of the Minister must be obtained before the controller can issue the licence? This seems to me to be merely an additional obstacle to prevent the issuing of such a compulsory licence. This is a very serious aspect. If the controller is to have charge of this office and if the applicant for a compulsory licence eventually by some miracle is able to convince him, why is the Minister involved at all? That leads to a second point.

Under the section the Minister may conduct such consultations as he considers appropriate before giving his consent. Is not that a very loose provision? We are talking about the exercise of a semi-judicial function by the controller when the applicant applies for a compulsory license. I presume the controller will conduct his affairs in a semi-judicial way. I would hope the procedures would be in accordance with the principles of natural justice.

The provision in regard to the Minister does not lay down any such conditions. The Minister is merely empowered to conduct such consultations as he considers appropriate. I do not want to be an alarmist but this raises the possibility of bringing the whole question into the political field, into the area of political representation. This is entirely inappropriate. I am not suggesting for a moment that the Minister would exercise his judgment unfairly on such an application, but what is the need for it at all? The Minister is given discretion to conduct such consultations as he considers appropriate without any reference to how that is to be done and what the procedure will be. If a point is made to the Minister by the applicant, what is the position of the original holder in replying to that point and vice versa?

If we say the controller is exercising a semi-judicial function, the fact that he cannot issue a compulsory licence without the consent of the Minister means that the Minister himself is put in the position of exercising a semi-judicial function. This is very relevant. It goes back to the basic point: why is the Minister involved at all? Under the Bill we are appointing a controller. We should let him do his job and keep the Minister out of it, and all that might follow from having a Minister involved in such a situation. That is a very important point. It goes back to the broad issues involved and to the core of the Bill. It will be virtually impossible for anybody to get a compulsory licence. It seems to be an additional step in the obstacle course.

We must remember that a compulsory licence is against the interests of the breeder and it is reasonable to have a safeguard for the breeder. We must assume that a breeder would have spent a considerable amount of money in propagating his plant. Therefore, it is reasonable to expect that there would be some safeguard to make sure his interests would be protected. It is for that reason that the Minister has to be consulted on the issuing of compulsory licences.

I wish to pursue this point with the Minister. Under subsection (9) when the controller receives an application he is obliged to give the holder notice of the application and give him an opportunity of hearing what the original holder has to say before returning the application. This is in accordance with proper procedures and the principles of natural justice. If the rights of the original holder are to be affected he should have an opportunity of being heard by the controller. In that situation, what is the function of the Minister? It has been suggested that it is in the interests of protecting the rights of the original holder, but his rights are already protected under subsection (9). Will the original holder have to go directly to the Minister, or get on to his local TD to lobby the Minister? That does not seem to be a procedure which we should incorporate in legislation. Would the Minister give the justification for including ministerial consent? It does not stand up, because the rights of the holder are already protected by way of giving notice and being heard before the controller.

It is a question of two heads being better than one. It is an appeal to someone higher than the controller. As I have already said, the breeder will have spent a considerable amount of money in developing the variety and the Minister should look at cases where the results of the breeder's work are being made available compulsorily to someone else.

The Minister has mentioned a court of appeal. Does he accept that the section as drafted is an additional obstacle to the granting of a compulsory licence? If the Minister is there, as it were, a second head providing a court of appeal, why then can he not overrule the controller in all circumstances? The controller may already have decided to issue the licence. This is not a proper appeal procedure. If the controller has decided to refuse the application the Minister will not have the power to say, "I have considered the matter and I believe you should grant it". That would be a one sided appeal procedure. The Minister is not there in an appeal capacity but more as a further preventive to the issue of the licence. The holder of the licence can get on to his TD to lobby the Minister, but the applicant cannot do so because if the controller has refused the application the matter does not even reach the Minister.

This brings me to another point. If the Minister thought that an appeal procedure would be wise, why not lay down a proper appeal procedure whereby either side could go to the Minister or to the courts in the event of a refusal by the controller? The Minister's justification for bringing in Ministerial consent on the basis of looking at it with one eye is not a proper appeal procedure.

I am not as familiar with the law or court procedure as Deputy O'Keeffe. I will have a look at the points raised by him and see if I can make a change in it. I agree the Deputy made valid points.

I agree with the case made by Deputy O'Keeffe. When speaking earlier I did not have a copy of the 1964 British legislation before me and I alleged wrongly that the Minister was following it slavishly. The British legislation is far more liberal as far as the granting of compulsory licences is concerned and I urge the Minister to study that Act. If it has been possible to operate the British Act for 16 years without all the dire consequences suggested by the Minister, it should be possible to operate a similar provision here. There is no provision in the British legislation for an appeal to the Minister in the case of a compulsory licence being granted—the controller has complete control.

I refer to section 7 (3) of the British Plant Variety and Seeds Act of 1964 which states that in entertaining applications and settling the terms of the compulsory licence, the controller shall endeavour to secure that the plant variety is available to the public at a reasonable price and that it is widely distributed and maintained in quality and that there is reasonable remuneration for the holder of the plant breeder's licence. There is not a thing in the British legislation about something as vague as the public interest and I therefore ask the Minister to examine the British provisions. I am not in favour of following British legislation when it is more restrictive than ours but if it is more liberal I would be happy to follow it.

The Deputy is now encouraging me to follow it slavishly.

I am—I do not mind so long as I am getting what I am looking for in this Bill. That Act has worked for 16 years in Britain. I would point out that it is not in the interests of a country like Ireland to be imposing restrictive provisions in relation to compulsory licences because we are likely to be importing more seeds than Britain who are more likely to be exporting seeds. Therefore, one might expect more restrictive provisions in the British legislation, and it seems ridiculous that Ireland should be imposing more restrictive conditions. Earlier I could not find the British Act, which was buried among my papers, but I eventually completed the excavation and found it. I urge the Minister to have a careful look at it and to consider amending this section radically.

Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill."

Why should it be necessary to extend the grant? It seems to me that a term of 16 years is long enough to ensure that a plant developer will make sufficient profit from a plant variety, having had 16 years to market it exclusively. This is rather odd. Whereas in the previous section there was a provision for Ministerial consent, there is not a word here about the Minister's consent being necessary for an extension of the holder's licence. If there was a case for Ministerial consent anywhere in the Bill I would have thought it would be in the case of a person who had had a licence for 16 years and who sought a monopoly of the variety for a further 16 years.

The reason for this is that in many cases a person who had a licence might have had it for years without getting any market for the plant on which he had spent so much time and money. He might not have had a sufficient financial reward for his work in propagating the plant.

If a licensee was involved with that variety, or an applicant was looking for a licence or people waiting for the term to end so they could go ahead with the variety without any licence, what would their rights be in that situation? Having granted monopoly rights under the Bill we are talking about having an extension of them.

In the last section there were very onerous provisions and conditions to be satisfied by somebody trying to breach the monopoly in regard to financial standing, public interest, discretion of the controller and the consent of the Minister. Here we have somebody who wants to extend the monopoly and it is very significant of the thinking that went into the drafting of the Bill that there are no onerous conditions on such a person. The section provides that all that has to be proved is that adequate remuneration was not received by the original holder. What is "adequate"? Is the controller to decide whether a sufficient profit has been made? Is it merely a question of sufficient profit, and if so, how much? Is it a question of covering expenses? Surely leaving it to the controller to decide whether the original holder got adequate remuneration is not a sufficient safeguard because of the possibility of abuse of the monopoly privilege. In that situation, what about the public interest? Surely the controller should be entitled, indeed obliged, to consider the public interest in the extension of monopoly rights.

I mentioned the position of somebody who was a compulsory licensee in relation to that variety. Why is the holder of the original grant not obliged to prove that he will exercise the additional monopoly rights conferred on him in a competent manner in the same way as the applicant for a compulsory licence under the previous section? I mentioned the question of Ministerial consent in regard to compulsory licence. Surely this is an obvious case where, if it is supposed to be a safeguard for the holder of the original licence, the function of the Minister should be there as a safeguard in the public interest and such extension should not be granted without having the matter examined in detail, if the Minister has any function under the Bill.

As regards notice and appeal, there should be a requirement to have all interested parties notified one way or the other. This may be difficult. The application for the extension of a monopoly might be in regard to some popular variety of cereal which might be of great interest to the agricultural community. We could find that bodies such as the IFA, Macra and so on would be interested in it but, under the section, the application could go through without them knowing about it. There is no obligation to give any notice about it nor is there any provision under the section in regard to hearing other people who might have an interest. Neither is there provision for an appeal by people who might feel that the controller's decision was incorrect or unjust for one reason or another.

The case I am making is that the question of an extension of a monopoly right is one which should not be allowed to go through without the most rigorous examinations. In talking about monopolies, the onus must always be on the person who wants the monopoly to prove his case to the hilt. Here we are providing that a monopoly can be extended for a further period on the flimsiest of grounds. All the applicant has to do is go to the controller and say he did not make enough money out of his monopoly and ask to be given another 20 years. As far as safeguards are nececsary under the Bill, this section, in the public interest, must be expanded and extended to ensure that the extension of monopoly rights are not granted save where the holder thereof proves his case to the hilt and it is in the public interest to grant that extension.

The Minister argued on the last section against amendments we had that it would not be possible to decide whether or not the amount being charged by a person who was the holder of an exclusive licence was unfairly high because of the various costs involved. How will it be determined in this case whether the holder has been adequately remunerated? If, for instance, the person is a holder of an exclusive licence in ten different countries and made a lot of money in France on selling the seed—admittedly he could not make money in Ireland because there was no market here during the protection period but towards the end of the period the market arose—would the controller take account of the profits made in France to decide that he had been adequately remunerated or would he be required to satisfy himself that he had received adequate remuneration in Ireland and, if he had not, would he be able to get an extension of the licence?

I support all the points made by Deputy O'Keeffe. The other side of the story would suggest that if a person has the right to get an extension of a monopoly because he has not been adequately remunerated during the period of the monopoly there should be an equivalent power to deprive him of the monopoly, even within the period of the grant, if he has been adequately remunerated in the shorter period. In other words, when a compulsory licence is granted, in all cases where, even within ten or five years less than the maximum period of the grant, the licensee has been adequately remunerated, the monopoly should be withdrawn. What is sauce for the goose is sauce for the gander. The same principle of adequate remuneration should apply both in the granting of compulsory licences and in the granting of extensions.

There is no question of extending the maximum period by 20 years. The controller could have given the maximum period at the start. If he gave less than that section 9 allows him to go to the maximum. If the controller was satisfied that the breeder did not get a reasonable return, having regard to all matters including the public interest, he would simply give him more time to exercise his rights but this does not give him any specific return as such. We are trying to encourage breeders. The extension would be only for a period between the minimum and maximum period for rights for a particular variety.

I accept what the Minister has said about the maximum period but does he not accept that the considerations I have raised should be taken into account in any such decision? It could be that the original period granted might be quite short.

We must give a minimum period.

Does the Minister not accept that in the extension of monopoly rights the points I have made in regard to the onus of proof on the applicant, the efforts he will have to make and the proofs he will have to produce should at least be as rigorous as those on the applicant for the compulsory licence under the previous section? Will the Minister consider withdrawing the section or, alternatively, tightening it?

The onus will be on the applicant to prove that he did not get a reasonable return from his investment. All returns here and elsewhere would have to be taken into account.

Even if we forget about the public interest and the rights of other people and if we talk strictly in monetary terms, will the Minister not accept that the term "adequate remuneration" is a very loose one? Are we talking about recovering costs or the level of profit? Has the Minister any idea of what would be adequate remuneration? If the applicant can produce figures to show that he has covered his costs and has got a return of only 25 per cent on his investment, would that be regarded as adequate remuneration? Would it be necessary for him to show he had made a lesser or a greater profit? If that is the criterion that is the sole basis on which the controller will make his decision, I think it is quite hopeless. I suggested some other provisions that should be included before a monopoly is extended. The term "adequate remuneration" is so loose the whole section is rather like a sieve. Any applicant would be able to make a case that he did not make enough money; most people whether salary earners or owners of a business, do not think they get enough money. We should have some guidelines if we are basing the whole business on monetary terms. If members of this House had to make a decision about what constituted an adequate remuneration, what would be their response? I should like the Minister's views on this point. Secondly, I urge him to give more thought to this section and insert more safeguards before monopoly rights are extended.

I am sure the Deputy realises that I cannot say what an adequate remuneration would be and I do not think it is expected that that should be written into the Bill. The onus is on the applicant to prove he did not get a reasonable return from his investment. I take it he would have to submit his accounts to the controller who would go through the accounts to see what had been the investment, what money had been spent and the returns over whatever period he had been granted the rights. The controller would decide on the basis of that information. I do not see how we could lay down what would be an equitable remuneration.

The Minister sought to convey to the House the impression that the power in this section would not be abused because of what is stated in subsection (2). That subsection states:

The Controller shall not exercise the powers conferred on him by subsection (1) of this section so as to purport to enable the plant breeder rights to which an application under this section relates to be exercised during a period which exceeds in length the relevant maximum period prescribed under section 4 (10) of this Act.

In other words, he cannot exceed a specified period.

Progress reported; Committee to sit again.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.
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