TITLE OF THE DISSERTATION

A CRITICAL STUDY ON PLANT BREEDERS RIGHTS IN RELATION WITH IPR

By

M. V.R.PRASAD, M. KRISHNA KOUSIKI

2014055, 2014065

5 Year Integrated B.A.,LL.B. (Hons.) Course

Title of the Seminar Paper

LAW AND AGRICULTURE

Under the supervision of

Shri. K. SUDHA

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYAPRASTHA “, SABBAVARAM, VISAKHAPATNAM-531035
ANDHRA PRADESH, INDIA

Date of Submission

1
 CERTIFICATE

This is to certify that the dissertation entitled - A CRITICAL STUDY ON PLANT BREEDERS
RIGHTS IN RELATION WITH IPR for the Seminar Paper to Damodaram Sanjivayya National
Law University, Visakhapatnam is a record of original work done by
Mr./Ms. under my supervision and guidance to my satisfaction.

SIGNATURE OF THE GUIDE

Visakhapatnam

Date:
 TABLE OF CONTENTS

CERTIFICATE

ABSTRACT

LIST OF ABBREVIATIONS

I. INTRODUCTION

1) OBJECTIVES OF THE STUDY

2) HYPOTHESIS

3) RESEARCH METHODOLOGY

4) SCOPE OF THE STUDY

5) HISTOROICAL BACKGROUND

II. TRANSFORMATION OF SEED INDUSTRIES

III. INDIAN SEED BUSINESS

IV. IPR AND PBR

V. PBR—THE INDIAN VERSION

VI. INTELLECTUAL PROPERTY RIGHTS ANDAGRICULTURE: INTERESTS OF

DEVELOPING COUNTRIES

VII. SUGGESTIONS & CONCLUSION

VIII. REFERENCES
ABSTRACT

Intellectual Property Rights are basically assumed to protect everything from original plays and
novels to inventions and company trademarks. So the concept of Plant Breeders’ Rights (PBR)
might seem a little strange. The main reason is that Intellectual Property rights were not
originally extended to include plant variety management, because the agricultural sector happens
to be vital for meeting the food requirements of the people at large and granting exclusive rights
to any specific individual would therefore be flawed. However plant breeders’ rights are essential
for economic growth of any nation and it is of utmost importance to encourage the farmers to
contribute for the development of new plant varieties, thereby accelerating agricultural
development.
Plant Breeders’ Rights are also a form of intellectual property which is specifically designed to
protect new plant varieties. The right as defined by UPOV is, an exclusive right over the
commercial production and marketing of the reproductive or vegetative propagating material of
the protected variety. These rights are assigned to the breeder of a new variety of plant which
gives him/her exclusive control over it; be it seeds, flowers, fruits, foliage or the like. Protection
of Plant Varieties and Farmers Rights Act was framed in India in the year 2001 to grant rights to
the farmers as well as the breeders. This Act is significant in both domestic and international
context because India was one of the first countries in the World to have passed legislation in
this regard. As per the Act, breeders can claim the Intellectual Property Right, provided their
varieties are novel, distinct, uniform and stable and are given an exclusive right to produce, sell,
market, distribute, import or export the variety.
LIST OF ABBREVIATIONS

 CBD - CONVENTION ON BIOLOGICAL DIVERSITY

 CGIAR - CONSULTATIVE GROUP ON INTERNATIONAL AGRICULTURAL
RESEARCH
 FAO - FOOD AND AGRICULTURE ORGANIZATION
 IPR - INTELLECTUAL PROPERTY RIGHTS
 LSC - LIFE SCIENCE COMPANIES
 MNCS - MULTI NATION COMPANIES
 NAROS - NATIONAL AGRICULTURAL RESEARCH ORGANIZATIONS
 NGO - NON GOVERNAMENTAL ORGANIZATION
 NSC - NATIONAL SEED CORPORATION
 PBR - PLANT BREEDERS RIGHTS
 PPA- PLANT PROTECTION ACT
 PUP - PLANT UTILITY PATENT
 PVA - PLANT VARIETY ACT
 TRIPS - THE AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS
 UPOV- THE INTERNATIONAL UNION FOR THE PROTECTION OF NEW
VARIETIES OF PLANTS
 WIPO - WORLD INTELLECTUAL PROPERTY ORGANIZATION
 WTO - WORLD TRADE ORGANIZATION
 CHAPTER - I

INTRODUCTION

Intellectual Rights (IPR) and plant Breeders' Right (PBR) are the most discussed and debated
issues in the context of present day agriculture and seed industry. PBR is the right of the breeder
to enjoy the benefits for a restricted period out his novel and distinct cultivar. The WTO also
provides that varieties must be protected by patents or by Sui genris system such as provided
under the UPOV1. In which variety must have the novelty, distinction, uniformity and stability.
The total cultivated areas under most crops are declining or stagnating and the yield performance
of the seeds now used are below the potential. This led to the introduction of hybrid varieties by
government, private sector seed industries and farmers with the increasing role of private seed
companies, the private sectors share is now more than 60% and the rest is contributed by the
public sector. But with the intensification of IPR and IBR issues, the seed industry is through
merger and acquisition phase to sustain future growth and to adopt new technologies by
investing in the R &D. TRIPS Agreement puts forth a test on PBR as it stipulates: “members
shall provide for the protection of plant varieties either by or an effective sui genris system or by
any combination thereof, UPOV conventions of 1978 dealt with rights or farmers, researchers
and breeders, and directed towards breeders and placed restriction on the right to use of farm-
saved seeds by farmers. Indian Plant Variety Act (PVA) has considered both the Acts, in some of
the with some additional features. PBR legislation must be simple and its implementation cost
effective and less-time consuming, as seed companies in developing countries are typically
small. The revised IPR situation may give boost to the scientific community, seed companies and
put India in a respectable position in business arena as well as encourage inventions to make the
Indian scientists competitive2.

The most discussed and debated issue in the field of agriculture, science and technology today is
IPR. Specially patents and PBR Indian agricultural scientists, traders and politicians are in

1
“The National Seeds Policy, 2002”, cf: http://agricoop.nic.in/seedpolicy.htm. The Government has approved the
National Seeds policy and has adopted it aiming to raise India’s share in global seeds trade to at least 10% from the
current 1%. Cf: http://www.indiaagronet.com/indiaagronet/Technology_Upd/seedTech_3.htm, last accessed on
1:00pm, 10/10/2018
2
http://www.hdfcsec.com/company/resAnalShow.php?fileR=2002012816510526&icode=SYNGENTA&dir=2002/0
1/28, last accessed on 1:30pm, 10/10/2018
dilemma over how to protect bio-wealth as well as breeders' right on the cultivars developed by
him. On the other hand, the global concern is drifting agriculture into the commercial era, which
is leading to further concerns for access, trader-elated disputes and conventions. According to the
WTO agreement, the foreign nationals will have access to our bio-wealth, and India as a member
of Convention on Biological Diversity (CBD) to oblige for providing access to our bioresources
on equitable sharing basis to all stakeholders. The bitter experiences of patenting our
bioresources by others are due to lack of strong protection strategy in the country. Unless the
government formulates proper patenting strategies and promotes public awareness to this reality,
we will be loser and the developed countries will exploit our valuable genetic resources.

The major advantage of our country is its varied agro climatic zones, which helps us in evolving
new crop varieties. India already experienced green revolution through increased productivity by
developing new high yielding varieties. So, evidence is there that India has strengthened
agricultural research through scientific infrastructure and achievements. After all the plant
varieties used by the Indian farmers are indigenous, not foreign hybrids India should use these
advantages by developing proper protection system for the developed hybrids and varieties, and
push our agricultural system to the status an industry3.

Sustainable agricultural growth cannot be achieved without agricultural research. lndia's

investment in agriculture research has been stagnating at 0.32% of the total agricultural GDP in
the last two decades. This does not compare well with 0.56K investment made by 51 other
developing countries and an average of 2% by the developed countries history has shown that
impact of agriculture research is decisive. In the advanced countries private investment in agri-
research is increasing. Generally, the expenditure of leading Crop breeding agribusiness
companies ranges from 8.3 to 14.8% of total revenue with an average of 11.5%. In general, it is
felt that 5.7% revenue of a company, as minimum investment in R&D, is necessary to ensure an
accepted level of competitiveness in the market place. The outlay or Indian seed companies in
the R&D are 2-6% of total turnover4.

3
D.Sharma, In the Famine Trap (New Delhi, 1997)., last accessed on 2:00pm, 10/10/2018
4
Food and Agriculture Organisation of the United Nations, Seed Policy and Regulations in the light if the
international treaty on PGRFA and the Cartagena Protocol on Biosafety, Twenty-Seventh FAO Regional
Conference For Asia And The Pacific, 2004, last accessed on 10/10/2018
After green revolution, the in area under cultivation slowed down or stagnated. On the other hand
the performances of the seeds now used are below their potential. The urgency to produce and
procure hybrid and high yielding varieties is felt by the government, private sector seed
industries and the farmers alike. If Indian economy has to grow at 7% per annum and also, if
export base has to be expanded, the value agricultural output must increase at annual rate of
4.5% between 1997- 2002, was about 2.77 % during the period 1980 to 1994. Growth rate during
tile 90s (2.4%) has been slower than the 80s (3.2%) has been a deceleration in yield rate in
respect of both food grain and non food grains. To achieve high economic growth rate,
employment opportunities and to remove the incidence of poverty, high growth rate in
agriculture has been essential. Yields of crops have raised many folds but still the productivity
level in India is much below the global average: in most of the crops. We need to raise crop
productivity by 200 to 500% to reach regional benchmarks. Indian farmers can bridge this gap to
match the international standards through the use Of hybrid seeds and transgenic crops2.
According to estimates, 93% of the increased food production has to come from increased
productivity unit land5.

1) OBJECTIVE
The objective of this assignment is to study the Intellectual Property related aspects of the plant
breeders as to how it protects them as they invest time and money in raising new plant varieties
and breeds.
2) HYPOTHESIS
It is the presumption of the researcher that the plant breeders face problems as they come under
agricultural class in Indian economy where they are not awarded enough for what they produce.

3) RESEARCH METHODOLOGY
Doctrinal method of research is followed for this assignment where the secondary source would
be articles, journals and other related literature and tertiary source would be internet and other e-
material. The mode of citation used in this paper is Harvard Blue Book Citation.

3.1) Research Questions

5
Council for Biotechonlogy, Article: Farmers (India), http://www.whybiotech.com/index.asp?id=4515, 10/10/2018,
3:00pm
  Treating plant breeders as agricultural class is justifiable or not?
 What would be the consequences if plant breeders are brought into commercial class?
 Which law would protect them if plant breeders are brought into commercial class?

4) SCOPE OF THIS STUDY

The scope of this study would extend to the extensive research on plant breeders rights, the
historical aspect as to how it evolved, the rights of plant breeders, and as to how Intellectual
Property law protects the rights of plant breeders. The classification of plant breeders in
agricultural class and how far it is justifiable and its consequences would come under the ambit
of this study.

5) HISTORICAL BACKGROUND

Guild members in mid-15th century Venice, averse to direct competition from former
apprentices, passed a law prohibiting the apprentice from entering the trade until about 18 years
had lapsed. That edict, according to intellectual property (IP) historians, marked the origins of
patents. Indeed, the duration of a patent (20 years from date of filing the application) is said to be
modeled after that apprenticeship period in long-ago Venice. Yet some easily copied creations
were not granted similar IP protection, in Venice or anywhere else, until many centuries had
passed. Plants are one example of this. Food, fiber, and ornamental crops (F1 hybrids excepted)
carry in themselves the ability to regenerate true to form, whether sexually or asexually. Anyone
holding a seed or a cutting immediately possesses all the skills of the master to recreate the
variety of plant from which the seed or cutting came. Yet not until 1930 (the U.S. Plant Patent
Act) did legal restrictions apply to the use of plant materials for regenerative purposes, and even
then protection only applied to asexually propagated plants (excluding tubers). An additional 30
years passed before a harmonized format for legislation covering IP protection for all plant
varieties emerged. That is the International Convention for the Protection of New Varieties of
Plants, or UPOV in its French acronym, an international treaty first adopted in 1961 and revised
several times, the latest in 1991. The form of intellectual property created by UPOV is known
widely, if informally, as plants breeders’ rights (PBR). This chapter describes the acts and modes
of operation of PBR under UPOV-compatible national legislation. While every effort is made
here to be complete and accurate, it would be impossible discuss all of the considerations
needed to appreciate every
possible contingency. Persons wanting to learn more should refer to the text of UPOV and other
official documents, such as at the UPOV Web site. The Handbook chapter PBR in the
Developing World discusses the effects of PBR laws and the available alternatives at the national
level.

CHAPTER - II
TRANSFORMATION OF SEED INDUSTRIES

The introduction of hybrid development in all the major food crops and vegetables has led the
private seed industry to grow and mature. At present, hybrids account for 40 - 50 % of the sales
of total commercial seeds and return most of the profit to private seed industry. The profitability
of the hybrids was realized long back when double cross maize hybrid was commercialized in
the USA as early as I930s. They were priced at approximately 10-12 times the price of the
commercial varieties. The introduction of single cross hybrid in maize during 1960s pushed the
price further which led private seed industry to concentrate on hybrid development in key crops
of agricultural importance6.

During 1980s, due to the commercialization of hybrids leading to high profit margin in seed
business, several agrochemical companies including Sandoz, Ciba-Geigy, DuPont, Monsanto
and Unilever started acquiring small seed companies. But it did not work well, and again during
1990s they started diverting them towards seed and biotech business7.

Genetic engineering is a technique to transfer a gene from one species to another and the
outcome is transgenic product, technique includes identification and isolation of DNA, its
purification, cloning, vector construction, and multiplication in stable host, transfer to target
species, expression of target genes, of gene products in genetically-modified organism (GMO),
path from inception of agricultural biotechnology industry to field production of commercial
products was full of obstacles, ranging from scientific and technological challenges, to legal and
regulatory hurdles, to economic factors and social concerns. Slowly, the agrochemical-cum-seed
companies are getting into biotechnology research as the transgenic product starts entering into
market, and this convergence has changed the structure of the traditional seed business and
product pricing. Therefore, attempts are being made to separate the value of technology from the
value of seed in the form of a ‘technology premium' to be paid by farmers when they purchase a
product improved by biotechnology. Getting IPR in case of transgenic plant product is very easy
for a company and

6
Ramesh Chand and Suresh Pal, Policy and technological options to deal with India’s food surpluses and shortages,
Current Science, 84(3), last accessed on 10/10/2018, 3:30pm
7
Bureau Report, Seed industry seeks infrastructure status, The Hindu Business Line, last accessed on 10/10/2018,
4:00pm
to block the development of a product to maximize value recovery, minimize litigation and access
the technology such as Bt-based insect protection in cotton, maize, etc8.

The new competitive strategies that likely to focus these areas in seed industry, in view of IPR and
PBR9, are as follows: -

i. Pricing based on separating the value of the technology from the values of the seed,
ii. Market segmentation,
iii. Product development by using classical breeding and genetic engineering, and
iv. Sales and market distribution.

8
Vandana Shiva, Critique of Seed Bill, 2004, http://www.navdanya.org/articles/seed-bill-2004.htm, last accessed on
10/10/2018, 4:30pm
9
C Niranjan Rao, Indian Seed System and Plant Variety Protection, Economic and Political Weekly, last accessed
on 10/10/2018, 5:00pm
 CHAPTER - III

INDIAN SEED BUSINESS

The major fallacy in Indian agriculture is that of the farmers the previous year’s farm-saved
seeds rather than buying new seeds with the increasing role of private seed companies the
composition of Indian seed industry has reached a ratio of 60:40 between private and public
sector by turnover, though National Seed Corporation (NSC) has led the development of network
for quality seed multiplication and supply. Consumption of seed, including farm saved seed, rose
by as much as 7% in the last four years. Although trends differ from region to region, seed
market can be divided into three main categories— seed from government institutions,
commercial seed, and farm-saved seed. Each category accounts for roughly similar proportions
of the total seed Volume. Presently, the seed industry is passing through a crucial phase of
mergers and acquisitions to sustain future growth and to adopt new frontier technologies. The
merger tendency of Indian seed companies with big multinational corporations is mainly driven
by need to invest more in the R &D and remain competitive in the race of developing genetically
modified crops. The other reason forcing Indian seed companies to join up with MNCs is that the
latter have enormous marketing muscle power10.

Asia has become the worlds' largest seed consumer in 1990, and in 1994 the consumption was
43.2 million tones with an increase of 1.3 percent/year. US companies are the largest foreign
investors but the European investors are also trying to catch up the Asian seed market 11. The
agrochemical companies of Europe are expanding their business into seed to capture the whole
Asian market. European seed companies are also trying for joint ventures with the Indian seed
companies for research and development, production and marketing of these products in India12.
The Indian private seed industry is also undergoing major changes in its organizational,
functional and

10
Patricia Kameri Mbote, Community, Farmers’ and Breeders’ Rights in Africa: Towards a legal framework for sui
generis legislation, University of Nairobi Law Journal (2003), P. 120, last accessed on 10/10/2018, 5:30pm
11
Pratibha Brahmi*, Sanjeev Saxena and B. S. Dhillon, Current Science, 86(3), last accessed on 10/10/2018,
6:30pm
12
International Center for Agricultural Research in the Dry Areas (ICARDA), Seed Policy - a Widening Arena,
http://www.icarda.org/News/Seed%20Info/SeedInfo_25/news.htm, last accessed on 10/10/2018, 6:00pm
operational structure to underline the emerging dynamism in responding to modern science and
biotechnology-based innovations in seed development. The seed industry is dominated by the
government policy that excludes farmers and seed producers, and the potentiality of Indian seed
industry is held up by bureaucracy-scientist - politician syndrome. Though from market place the
growth of Indian seed industry is seen vigorous, this growth has been achieved against heavy
odds. From the industry side the complaint is wide spread— both the seed industry and farmers,
the vital links in the chain, are not parties to policy decisions13

Indian seed industry is going through one of its greatest periods of change. They are scratching
their heads to develop strategic tie-ups with MNCs to survive in the business. Why is this
happening around the globe? The present combination of several life science activities into a
single company is leading towards the strategic decisions for tie-ups. Life science companies
(LSC) are the firms that use their knowledge of living organisms to produce seeds and
agrochemicals for plant production, veterinary products for animals and therapeutic products for
human health care. LSCS have invested heavily in biotech activities to combine application of
knowledge derived from various life science disciplines. Majority of the LSCS have been
developed from the chemical companies as the agrochemicals and seeds are the important
components of life science, but afterwards the structural change happened with the induction of
pharmaceutical sectors14. The chemical giants have acquired seed companies in 1960s and 1970s
but these attempts were not successful because breeding varieties and selling seeds required
different skills and approach. Only in 1980s the agrochemical and seed activities became
worthwhile to be a part of an integrated plant production and protection strategy bee cause of
technology and regulatory support system. The social and political issues in Europe and North
America motivated movements for sustainable development, which forced the agrochemical
companies to compensate the business through seed business. The earlier pharmaceutical sectors
of creating chemical compounds have become biological industry as there is for service in both
the sectors. Now the competition between the seed companies is basically the competition
between genes. Because of the genomics research the

13
Donna U. Vogt and Mickey Parish, Food Biotechnology in the United States: Science, Regulation and Issues,
Domestic Social Policy Division, last accessed on 10/10/2018, 7:00pm
14
Philippe Cullet, Seeds Regulation, Food Security and Sustainable Development, Economic and Political Weekly,
August 6, 2005, P. 3607, last accessed on 10/10/2018, 7:30pm
major game in the LSC is about the sequencing of the plant genome of important crops and the
patenting of these newly discovered genes through functional genomics studies.

CHAPTER - IV

IPR AND PBR

IPR provides the legal ownership to a person or company for a discovery or an invention and
their exclusivity for commercial exploitation as well as right to protect the intellectual property
like tangible property owned by one over a prescribed period of time. In Uruguay Round (1994)
with these objectives of IPR, Trade-Related Aspects of Intellectual Property Rights (TRIPS) was
established. 'IRIPS Agreement also no longer permits the free exchange of resources and restricts
the unauthorized copying or imitation. TRIPS formulated the minimum standards for IPR about
the patentable subject matter. TRIPS Agreement came into effect on 1 January 1995 and has to
be implemented in phases by developed and developing nations15.

Agreement on TRIPS puts forth a test on PBR as the TRIPS Agreement stipulates: "members
shall provide for the protection 01 plant varieties either by patents or by an effective sui generis
system or by any combination thereof, Illus. PBR system defined: by the International
Conventions for the protection or new Varieties of Plant (UPOV) is presently the effective
system for protecting plant varieties. The purpose of UPOV to ensure PBR is to have an
exclusive property right on new plant varieties in order to provide incentive to the development
of agriculture and to safeguard the interests or plant breeders and seed industries. The earlier Act
of 1978 or revised Act of 1991 or both will be considered ‘effective' is presumably subject to
interpretation within the WTO16.

The IPR laws are different in different countries this creates obstruction in the international
trade, therefore, to solve the trade problems Agreement was signed in the Uruguay round of
GAIT summit. in 1995, PER legislation was enforced by 27 countries that were the members of
the UPOV. India is not a member of the CPOV neither it has developed any sui generis system to
protect the rights of the breeders. WTO provides that the plant varieties must be protected either

15
Donna U. Vogt and Mickey Parish, Food Biotechnology in the United States: Science, Regulation and Issues,
Domestic Social Policy Division, last accessed on 10/10/2018, 7:30pm
16
Muzaffar Assadi, Seed Tribunal: Interrogating Farmers’ Suicides, Economic and Political Weekly, October 28,
2000, P.3808, last accessed on 10/10/2018, 8:00pm
by patents or by sui generis system such as Plant Breeders' Right (PBR) provided under the
UPOV. The model and guidelines are available in UPOV for a sui genris system for Plant
Breeders Right (PBR) in which variety must have the novelty, distinction, uniformity and
stability. The lack of sui generis system or legal regime for PBR in India has kept her vast
reservoir of natural genetic resources open to biopiracy.

UPOV conventions of 1978 dealt with rights of farmers, researchers and breeders. It was revised
in and most of the contracting countries are now on their way to implement the Act into their
national laws. The 1991 UPOV convention directed towards breeders and placed restriction on
the right of the farmers regarding use of the farm-saved seeds. The fourth convention of
Germany endorsed the farmers' right and enabled the member countries to enact their own PBR
to their interest17.

Even though many countries are considering the PBR system, knowledge about its socio-
economic implications is meager, So far there only a few studies carried out in the USA. The
impact of PBR on socio-economic context has to be studied on the lowing aspects18:

 Investment by seed companies in technology development and crop breeding

 Access to the public germplasm collections/ banks
 International transfer of germplasm
 Exchange of seeds among farmers

IPR issue has become a new element in the seed industry as all the transgenic seeds make use of
several technologies for their development. Even in cases where a technology is novel and
patented. it may be dependent on earlier developments, therefore cannot be freely used even by
the inventor. The IPR issue in case of transgenic is so called "freedom to operate" which can be
defined as legal access to all technologies required launching a product. As the progress is on for
the development of transgenic crops having both input and output traits, the IPR issues will
become much more complicated. The development of transgenic involves the rights related to
PVR, plant

17
M R Madhavan and Kaushiki Sanyal, Seed Bill 2004: PRS Legislative Brief,
http://www.indiatogether.org/2006/jun/law-seeds.htm, last accessed on 10/10/2018, 8:30pm
18
Ratna Ganguli, Seed Bill won’t find Safe Passage, http://economictimes.indiatimes.com/articleshow/1056293.cms,
last accessed on 10/10/2018, 9:00pm
patents; patents related to transformation technology, selectable marker employed the target
gene, the promoter, the regulator proteins, etc. Any Single event can block the commercialization
of the product and increase the cost for developing the seed business. The current restructuring of
the seed industry is being technology-driven and influenced by IPR issues, the winner will be
those companies who are able to deal with IPR issues and can quickly bring new quality products
in the market19.

19
https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/plant-breeders-rights, last accessed on
10/10/2018, 8:45pm
 CHAPTER - V

PBR—THE INDIAN VERSION

Indian plant Variety Act (PVA) includes elements of both the UPOV (earlier 1978 Act and
revised 1991 Act) with new features.

Special Features

(a) Protection of "essentially derived varieties20

The Indian PVA has considered both the Acts, in some of the aspects with some additional
features, such as PVA also covers the protection of essentially derived varieties. This clause
restricted the marketing of a newly developed variety if it is genetically similar to a protected
source variety and demands authorization from the breeder who has protected it. Introduction of
this principle of ‘essential derivation' strengthens the protection of existing protected variety.
Then the question carne how to determine the ‘essentially derived variety", which needs
clarification further-

(b) Community and Farmers' Right21

The term farmers' right has been coined to recognize the rights of farmers over their contribution
to conservation and crop development and the sharing of their knowledge on adaptive traits. The
concept of farmers right is defined by FAO Commission on Plant Genetic Resources for Food
and Agriculture as: "rights arising from the past. present and future contributions of farmers' on
conserving, improving and making available plant genetic resources, particularly those in the
context of origin and diversity" PER under UPOV excludes the farmers from producing and
exchanging the seed material except only with the permission of the concerned breeders.

20
The Hindu: Special Correspondent, Yediyurappa supports agitation against Seed Bill, The Hindu, last accessed on
10/10/2018, 9:00pm
21
Suman Sahai, Seedy Affair: Put Draft Anti-farmer Bill Through House Scrutiny, The Times of India,
http://timesofindia.indiatimes.com/articleshow/1061662.cms, last accessed on 10/10/2018, 10:00pm
Therefore, in adoption of PBR, the farmers' practices of seed multiplication would be illegal and
can be considered as theft. In 1978 Act, this is allowed as farmers' privilege, but in the revised
Act (1991), this privilege was made optional for the member States because Of the interest of
private seed industry. One condition henceforth is that "legitimate interests of the breeder- i.e.
the royalty that should be paid to the breeder, are taken care of. The implications of UPOV 1991
became visible in USA on this aspect and the US Congress restricted the farmers' privilege by
amending the US Plant Variety Act. 199422.

The Indian PVA goes beyond, and allows the farmers' privilege since it explicitly recognized
community and fanners' right by including a specific clause on this issue. The violent oppositions
from fanning community in some parts of the country against IPR forced to include this clause.
The draft legislation for PVP and Farmers' Rights and Biodiversity Act has been developed for
adoption. India will be the first country to legalize these Acts and this will be a distinct sui
generis system for IPR when it will be implemented. India will be the first country, which will
facilitate the breeders in terms of PBR legislation in which support for and rights of farmers and
farming communities are specifically provided for. Consequent upon this clause, the main
problem for India will be that there is no international agency duly - acknowledged by the Food
and Agriculture Organization (FAO) to oversee the functioning of these legislation worldwide.
The major problem in the implementation of farmer’s right is the differential approach towards
the property. The IPR on seeds to farmers does not make any sense to communities where seed is
the property of the community and does not belong to any individual. If IPR is given to any
individual, it should not lead to exploitation of the germplasm identified by the farming
community. To be able to respect farmers' right, operational procedures to recognize and reward
the contributions of the farming communities need to be developed23.

22
The Hindu: Special Correspondent, Yediyurappa supports agitation against Seed Bill, The Hindu, last accessed on
10/10/2018, 10:00pm
23
Andrew T. Mushita & Carol B. Thompson, Patenting Biodiversity? Rejecting WTO/TRIPS in Southern Africa, 2
Global Envtl. Pol. 65 (2002), last accessed on 10/10/2018, 9:30pm
 CHAPTER - VI

INTELLECTUAL PROPERTY RIGHTS ANDAGRICULTURE: INTERESTS OF

DEVELOPING COUNTRIES

Intellectual property rights (IPRs) can be loosely defined as legal rights governing the use of
creations of the human mind. This term covers a bundle of rights, each with not only
different scope and duration but with a different purpose and effect. All IPRs generally
exclude third persons from commercially exploiting protected subject matter without the
explicit authorization of the right holder for a specified duration of time. This enables IPR
owners to use or disclose their creations without fear of loss of control over their use, thus
helping in their dissemination. It is generally believed that IPRs help encourage creative and
inventive activity and make for orderly marketing of proprietary goods and services.
Protection against unfair competition is the underlying philosophy for all IPRs, although
there are some specific rules in international IP law targeted towards this. IPRs are limited to
a defined territory and have historically been attuned to the circumstances and needs of
different jurisdictions24.

The IPRs that raise quite distinctive issues for the agricultural sector are patents and plant
breeders’ rights. Geographical indications are another form of IP relevant to this sector in that
they are mostly, though not solely, applied on agricultural products and are briefly dealt with
later in this paper25. Patents are granted for novel, non-obvious and useful inventions and
generally give the legal right to exclude others from making, using or selling that invention for
a limited period, usually, 20 years from the date of application. All patent laws allow some
exceptions. For instance, almost all jurisdictions exclude from patenting inventions that are
contrary to morality, public order or public health. Again, not all jurisdictions allow the
patenting of inventions on living material such as plants and animals or even of
biotechnological processes resulting in such
24
Suman Sahai, Seedy Affair: Put Draft Anti-farmer Bill Through House Scrutiny, The Times of India,
http://timesofindia.indiatimes.com/articleshow/1061662.cms, last accessed on 11/10/2018, 1:00pm
25
www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx, last accessed on 11/10/2018, 1:15pm
products. Similarly, use by others is allowed in limited circumstances, such as for purposes of
research, or through compulsory licenses authorized for specific purposes by the government or
courts26.

Plant breeders’ rights (PBRs) were developed to reward conventional breeding methods used to
develop new plant varieties. Such sui generis protection is weaker than patent protection in that
right holders cannot exclude other breeders from using the protected variety to develop other
varieties and cannot prevent farmers from re-using the seed obtained from the new variety. The
protection lasts usually for 15-20 years depending upon the type of plant. The criteria used to
grant such protection is also somewhat weaker than that used for patents. New plant varieties
have to follow three criteria known as DUS: they have to be distinct (D) from earlier known
ones, uniform (U) or homogeneous i.e. display the same essential characteristics in every plant
and stable (S) i.e. retain the same essential characteristics upon reproduction 4. With the
development of hybrids, plant breeders have also resorted to trade secret protection to prevent
the misappropriation of the undisclosed parent lines. Typically, seed produced by hybrid plants
do not produce the same quality plant in further generations and hence farmers have tore-
purchase seed for every crop season in order to maintain yield or other characteristics of the
new plant variety. This is also known as “biological protection” as distinct from legal
protection27.
The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1995,
when fully implemented, will unambiguously strengthen protection of intellectual property rights
(IPRs) almost worldwide, a feat not achieved by any other single international treaty ever before.
In particular, it will bring important standards of patents, PBRs and geographical indications in
major developing WTO member countries closer to those in major developed countries. TRIPS,
however, does not harmonize IP laws and procedures but only sets minimum standards that can
be implemented differently in different legal systems. The agreement also permits certain widely
recognized limits to these IPRs. Nevertheless, future methods of doing business, including in the
agricultural sector, May inevitably change in developing countries not only on account of TRIPS
implementation but also because of increased awareness and changing attitudes towards IPRs
amongst domestic innovators. Developed countries were obliged to be in compliance with TRIPS

26
www. http://dipp.nic.in/English/Policies/FDI_Circular_2014.pdf, last accessed on 11/10/2018, 1:30pm
27
Mary Knudson is an economist with the Institute of Public Policy Studies. LeRoy Hansen is an agricultural
economist with the Resources and Technology Division, Economic Research Service, U.S. Department of
Agriculture, last accessed on 11/10/2018, 1:30pm
provisions by January 1996, while economies in transition had time up to end of 1998 to do so.
Developingcountriesweregiventimeuptoendof1999toimplement almost all these provisions while
least developed countries can do so by200628.

TRIPS have engendered considerable academic debate on the economic implications of

strengthened intellectual property protection in developing countries. However, notwithstanding
the recent spate of theoretical and empirical studies on the effects of strengthened IPR protection
on foreign investment, international trade, and transfer of technology, there remains considerable
uncertainty on the precise nature and dimension of these ‘positive’ effects. Nevertheless, under
certain circumstances and for certain sectors more than others, the strength of patent protection
has been shown to be related to trade. Weak patent protection in large, industrializing countries
has been shown to be a significant barrier to manufacturing exports from OECD countries. There
is also some evidence to show that under specific conditions weak patent and other IP protection
could diminish flows of foreign direct investments. It is not possible to make a clear statement on
the effects of strengthened IP protection on the transfer of technology as there is no clear
measure of the quality of technology transferred. Much of the uncertainty of recent econometric
studies also arises on account of the lack of an accurate measure of the strength of IPR protection
and reliable data over a period of time for different countries29.

More importantly, there is hardly any study that shows the effect of strengthened patent
protection on domestic inventive activity in developing countries. For developing countries, we
could still be fairly close to the situation described by Fritz Machlup in the context of the patent
system in the US in 1958: “If we did not have a patent system, it would be irresponsible, on the
basis of our present knowledge of its economic consequences, to recommend instituting one.
But since we have had a patent system for a long time, it would be irresponsible, on the basis of
our present knowledge, to recommend abolishing it.”
Since Machlup’s time there have been many studies that show that patents are not necessarily the
most important economic instrument for generating innovation, except in certain industries such

28
A pure-line variety is the product of four to nine generations of self-fertilization. Offspring from asexual
reproduction and pure-line breeding are genetically identical to the parent plant, last accessed on 11/10/2018,
2:00pm
29
Purchased seed and certified seed are terms used interchangeably in this report, although seed firms may sell seed
that is not certified. However, certified seed sets a standard against which other seed must compete. The seed firm
hopes that its brand name stands for quality, last accessed on 11/10/2018, 2:30pm
as pharmaceuticals or specialized chemicals. In the present context, patents have proved to be
important also to the biotechnology industry. However, an evaluation of the “all or nothing”
option is not very meaningful and it is important to study the effect of varying the ingredients of
the patent system.

For instance, Scherer, after a detailed study, was persuaded that technical progress would not
grind to a halt if a uniform and enlightened policy of compulsory licensing at “reasonable
royalties” were implemented. Others, like Nelson, recommend patents with narrow scope so that
further inventive activity is not blocked. There is, however, need for more studies that show the
economic effects of limiting patent rights and the scope of protection, particularly since these are
going to be the main differences amongst countries in a post-TRIPS world. Such differences can
impact on national and global strategies for agriculture and the environment30.

IPRs for agricultural goods in developing countries raise more particular problems and policy
issues. Even ignoring the moral, ethical or biosafety dimensions of agricultural biotechnology,
these problems can be grouped under three separate though not mutually exclusive headings as
those related to31:

 Equity: farmer’s privilege to save seed, farmers’ rights to obtain remuneration for landraces
or for rural innovations incorporating traditional knowledge;

 Public domain or public interest: such as those raised by the patenting of research tools,
oligopolistic control of food supply or food security, role of the public sector, encouraging
follow-on inventions and lastly
 Environmental concerns on maintaining biodiversity and biosafety.

It would be beyond the scope of this paper to discuss all these issues, particularly those relating
to the environment. However, many of these questions have been raised in the proposals made
by developing countries in the preparations for the new WTO round of negotiations and will be

30
Denicolo, V. & Franzoni, L.A. (2004) Patents, secrets, and the first-inventor defense Journal of Economics &
Management Strategy, 3,517-538, last accessed on 11/10/2018, 2:45pm
31
Gilbert, R. & Shapiro, C. (1990) optimal patent length and breadth. Rand Journal of
Economics 21, 106-112, last accessed on 11/10/2018, 3:00pm
elaborated in that context as well as in the context of the experience of developing countries with
transgenic crop varieties.

Section 2 of this paper briefly sets out the current relevant standards of TRIPS on patents and
plant breeders’ rights. Section 3 explains the ambiguities present in this text and the differing
interpretations made so far, including as reflected in the laws of select WTO members. Section
4 reviews the experience of developing countries with transgenic crops and the issues raised by
this. Section 5 gives a brief introduction to another relevant IPR, viz. geographical indications,
including the relevant provisions of TRIPS and the scope for their revision. Section 6 assesses
the prospects for the review of the TRIPS provisions on biotechnological inventions and PBRs
in the WTO and makes a normative assessment of where the interests of developing countries
would lie in possible negotiations on this issue. Lastly, section 7 presents some concluding
remarks and identifies the areas of further research needed for a fuller understanding of this
subject32.

Protection of Biotechnological Inventions and Plant Varieties under TRIPS33

TRIPS obliges, with a few exceptions, that patents be available in all fields of technology for
inventions that are new, involve an inventive step (or equivalently, are not obvious to persons of
ordinary skill in that field) and are industrially applicable (or equivalently, are useful). Again,
with limited exceptions, TRIPS lays down those patent owners must be given the right to
exclude others from making, using, selling or offering for sale the patented invention, including
products directly obtained through patented processes. It, however, allows limited exceptions to
patent rights, including the grant of compulsory licenses under certain conditions.
TRIPS also explicitly allow exclusions of patentable inventions that are contrary to public order
or morality, including those that are prejudicial to the health or life of humans, animals or plants
or to the environment in general. However, inventions excluded on these grounds, must also be
prohibited from commercial exploitation in that jurisdiction. Further, such inventions cannot be
excluded merely because their use is prohibited by domestic law. In other words, these
inventions

32
Hall, B.H. & Zeidonis, R.H. (2001) The patent paradox revisited: an empirical study of
patenting in the U.S. semiconductor industry, 1979-1995 RAND Journal of Economics. 32, 101-128, last accessed
on 11/10/2018, 3:15pm
33
Hayenga, M.L. (1998) Structural change in the biotech seed and chemical industrial complex Agbioforum 2, 43-
55, last accessed on 11/10/2018, 3:30pm
have to be determined to be prejudicial on a case-by-case basis before they can be excluded from
patent grant34.
The provisions of most relevance to the agricultural sector is Article 27.3(b) of TRIPS, which
allows the exclusion from patenting of plants and animals and essentially biological processes
for their production, even if such inventions are otherwise eligible for patents. It does, however,
require the patenting of eligible inventions covering ‘microorganisms’ and ‘microbiological’ or
‘non-biological’ processes and products thereof. These terms are not defined, leaving
considerable scope for interpretation. TRIPS also require the institution of an ‘effective’ sui
generis law for the protection of plant varieties. Unlike in the case of other IPRs, TRIPS does
not oblige compliance with the pre-existing international treaty on the protection of plant
varieties, UPOV, nor does it lay down in any further detail the scope or duration of such
protection. TRIPS, however, requires this sub-section, 27.3 (b), to be revisited in 1999 and such
a review is currently underway in the TRIPS Council of the WTO35.

Differing Interpretations of Article 27.3(b) of TRIPS

Clearly, at the time of the negotiations on TRIPS, the US and the EU differed on their
approaches to patenting of biotechnological inventions. While the US believed that ‘anything
under the sun made by man’, except for human beings, was patentable, the EU was grappling
with strong internal resistance to patents on living organisms. The US had been granting patents
on living materials since the landmark decision on the patentability of micro-organisms in 1980.
It granted its first plant patent in 1986 in Ex parte Hibberd and its first animal patent on the
famous Harvard oncomouse in 1988. However, since the debate had not yet been settled in
Europe, it was agreed to retain a minimal agreement while committing to revisit this provision
within four years from the entry into force of TRIPS i.e. by 1999. It was expected that with the
passing of the European Biotechnology Directive, under discussion at the time of the
negotiations, there would be scope to push for accepting the patentability of all eligible
biotechnological inventions, including of genes, plants and animals. With the rapid adoption of
transgenic plants in many countries in the last few years, the small number of successful
multinational agricultural biotechnology companies,

34
http://nopr.niscair.res.in/bitstream/123456789/19462/1/JIPR%206%282%29%20109-120.pdf, last accessed on
11/10/2018, 3:45pm
35
https://www.ficciipcourse.in/ippro/course/training-material, last accessed on 11/10/2018, 4:00pm
originating mostly in the US, is particularly interested in the worldwide adoption of plant patents.
They argue that Plant Breeders’ Rights (PBRs), with breeders’ exemption and farmers’ privilege,
are not sufficient to recoup their huge investments on R&D to develop these innovative products.
Indeed, there is evidence that private sector investments in the development of new plant
varieties has, in the absence of adequate IPR protection, mostly taken place in crops amenable to
the production of hybrids and even PBRs are not sufficient to ensure appropriability36.

In the period since the finalization of the TRIPS draft text, some legal scholars have ventured to
grapple with the intricacies of interpreting the provisions of the TRIPS Agreement and have
suggested differing ways of implementing them in developing countries. The reason for these
diverse views may lie, in part, in the fact that TRIPS was the result of bitter North-South
negotiations, reflecting strong economic interests on the part of the right owners as well as those
benefiting from weaker levels of protection for Intellectual Property Rights (IPRs). This conflict
of interests was resolved through ‘constructive ambiguity’, which each side interpreted
according to their convenience. Interpretation of ambiguous clauses in certain ways may be one
means of ‘clawing’ back much of what was lost in the negotiating battles in TRIPS. More so as
the TRIPS negotiations have no official record and there are areas where the text is unclear and
liable to differing interpretations. These differing interpretations will have to be finally resolved
in the dispute settlement mechanism of the WTO. Disputes have not yet arisen in the WTO on
many of these controversial areas, in part because developing countries have time up to the end
of 1999 to implement most of the provisions of TRIPS. Unfortunately, few questions were raised
on the implementation of Article 27.3 (b) in the recent reviews of legislation in the TRIPS
Council and hence there is little guidance on this issue from within the WTO. The results of the
on-going review in the TRIPS Council should throw more light on this issue, when the results
are made public37.

Some commentators on TRIPS opine that since the term ‘invention’ has not been defined, there
is some scope for making further exclusions. For instance, in the context of biological or genetic
materials, substances as found in nature are excluded in almost all jurisdictions as these are
discoveries and not inventions. The disagreement arises over whether WTO members can
exclude
36
http://www.fao.org/docrep/007/y5714e/y5714e03.htm, last accessed on 11/10/2018, 4:30pm
37
http://www.wipo.int/sme/en/documents/upov_plant_variety_fulltext.html, last accessed on 11/10/2018, 4:45pm
naturally occurring biochemical substances, such as sequences of nucleotides (DNA) where these
have been isolated through technical processes. Can the lack of definition of the term ‘invention’
permit these to be excluded or will the limitation to exclude only ‘essentially biological
processes’ mean than all other technical processes and products thereof have to be patented, if
otherwise eligible? Some believe that TRIPS calls for allowing product patents on gene
sequences and other such products of nature, when isolated through technical processes, even if
the final product merely reproduces what is found in nature. The new European directive now
clarifies that inventions that consist or contain biological material shall be patentable, if
otherwise eligible. Even if such biological material has previously occurred in nature, it must be
patentable if it is isolated by means of a technical process, and of course, if new and non-
obvious. Thus, genes, including human genes, are unambiguously patentable in Europe, if these
can be shown to be non-obvious and industrially applicable38.

Others even argue that ‘microbiological’ processes could be defined restrictively under TRIPS. It
is also not clear how ‘microbiological’ processes differ from ‘essentially biological’ ones. The
recent EU Biotechnology directive throws some light on this when it restricts ‘essentially
biological’ processes to natural phenomena such as crossing and selection. Further, what if only
one of several steps in a process is microbiological and the remaining are essentially biological?
The recent European directive would consider this to be an essentially microbiological process.

Microbiological or other39

One of the first comprehensive works in this genre is the Max Planck Institute’s study Beier and
Schricker, Eds. (1996). This represents a step forward from the past work which merely
reproduced the provisions of TRIPS. There are now two more such analyses available: Gervais
(1998) and Correa and Yusuf, Eds. (1998). In addition, there are numerous papers published in
law journals on different aspects of the TRIPS Agreement, wherein the exclusion is specifically
40
stated to include cells and subcellular components such as genes . Technical processes and
products

38
http://www.iphandbook.org/handbook/ch04/p05/, 11/10/2018, 5:00pm
39
www.upov.int, last accessed on 11/10/2018, 5:15pm
40
See UNCTAD (1997), p.34
thereof continue to be patentable under this directive as they were under the EPC. However, it is
not clear that the European interpretations have to be accepted by all WTO members.

The exclusion of ‘plants and animals’ in Article 27.3 (b) of TRIPS is clearly broader than that of
‘plant and animal varieties’ given under the EPC (and reiterated in the new EU directive) or in
many other national patent laws. In the TRIPS negotiations, developing countries were aware of
the confusion caused by the EPC wherein the exclusion of plant varieties was interpreted as not
excluding plants as such. The broader term used in TRIPS thus excludes both plants and animals
and plant varieties and animal breeds. However, it is yet unclear whether the extension of the
rights of the process patentee over the product directly obtained, including through patented
genetic engineering processes, would override the exclusions of plants and animals. In other
words, if a patentable process of genetic engineering leads to a product that is a plant or an
animal, would these products benefit from the extended protection or would they be excluded as
no product patents can be granted on these? In Europe, such an extension was allowed even
before the new biotechnology directive of July 1998. If TRIPS were to be interpreted in this
way, the protection given to biotechnological inventions under TRIPS is stronger than would
appear by a simple reading of these exclusion provisions, at least for patentable processes41.

Significantly, in the new EU directive, farmers’ privilege to re-use farm-saved seed has been
included as an exception to the rights granted by plant patents. Parallel to the exception for farm-
saved seed, a farmer may use patented livestock or other animal reproductive material for
pursuing his agricultural activity but not for sale. It is not clear if this is a significant concession
to farmers and should be adopted as a model by developing countries in the event of the
introduction of patents for plant and animal inventions. Given the high investment involved in
the new reproductive and genetic technologies in crop and livestock improvement, it is likely
that this kind of exception will lead to very high initial price of innovative products, if and when
commercialized, thus benefiting only the more well-to-do farmers. On the other hand,
widespread use of this exception could lead to more innovators resorting to trade secret and
technological protection, thus depriving society of the disclosure requirements entailed by
patents and PBRs.
41
http://www.upov.int/about/en/benefits_upov_system.html, last accessed on 11/10/2018, 5:30pm
Interestingly, some developing countries that have implemented TRIPS so far have taken
advantage of the ambiguities in the text to exclude substances found in nature, even if these are
isolated or transformed through technical processes. Both Brazil and Argentina have formulated
fairly broad exceptions in their implementing legislation. In Brazil’s Law No. 9.279 of May
1996 to Regulate Rights and Obligations Relating to Industrial Property, Article IX excludes
from patentability42:
“All or part of natural living beings and biological materials found in nature or isolated there
from, including the genome or the germ plasma of any natural living being, and any natural
biological processes.” Similarly Argentina in its new law no. 24.481 ‘Invention Patents and
Utility Models Act’, in Article 7 (b) excludes from patentability:
“All biological and genetical material existing in nature or its replica, in the biological
processes implicit in animal, plant and human reproduction, including the genetic processes
relating to material capable of conducting its own duplication under normal and free conditions,
such as they occur in nature”.

The Andean Group also adopted a similar exception in its 1993 decision no. 344. Interestingly,
Mexico allowed the patenting of plant varieties in its patent law of 1991 but excluded this in
amendments made in 1994 upon accession to NAFTA. Clearly, these provisions do not go as far
as the new European Directive as genes as found naturally in plants, humans or animals, cannot
be patented even if technical processes were utilized to isolate them. Mexico, however, excludes
the patenting of only human genes in this way. Some feel these laws are incompatible with the
requirements of TRIPS43.

There are other developing countries that have voluntarily gone further in protecting
biotechnological inventions than required under TRIPS. In its latest patent law of 1994,
Singapore significantly departed from its traditional policy of following the UK, when it
removed any specific bar to the patentability of plants and animal varieties. It even goes farther
than Australia, which bars the patentability of human beings. However, Section 13(5) of its
Patents Act, 1994 permits the Minister to vary these provisions “for the purposes of maintaining
them in conformity with developments in science and technology”, a loophole left to undo
any possible blocks to
42
Australian Government: www.ipaustralia.gov.au/plant-breeders-rights, last accessed on 11/10/2018, 5:30pm
43
http://www.fao.org/3/a-bq624e.pdf, last accessed on 11/10/2018, 5:45pm
research.

The Korean Industrial Property Office has recently revised Examination Guidelines for
Biotechnology Inventions that allows patents on animals (excluding humans), parts of an animal,
a process for creating an animal and a use thereof, confining exclusions to those that are liable to
contravene public order and morality. An invented animal is said to have met the inventive step
requirement when it has a distinctive characteristic or provides a useful effect which could not
easily be anticipated from the known species to which it belongs and is reproducible. Inventions
relating to genes whose utility is not described or cannot be inferred are deemed to lack industrial
applicability. A genetically engineered method of diagnosing or treating human beings is deemed
to lack industrial applicability, by definition, as also all methods of such treatment44.

In its recently adopted patent law, Trinidad and Tobago allows no exclusions to plants and
animals or to their varieties, thus going beyond TRIPS requirements to allow for their patenting
as well as for essentially biological processes for their production. Under this law, the only
exception allowed is on grounds of public order or morality45.

On plant variety protection the level of ambiguity in TRIPS is even greater as TRIPS does not
lay down any criteria on scope of duration of such protection. Most developing countries and
many developed countries did not have any form of protection for plant varieties until very
recently. No official guidance is available so far from the WTO as to how the word ‘effective’
would be interpreted in this context. There was a proposal by the US in late 1998, in the context
of the built- in agenda to be discussed at the next WTO Ministerial Conference, to consider the
desirability of incorporating key provisions of UPOV, presumably of the 1991 version, in to
TRIPS. This gives an indication that at least one major demandeur country would like to see
UPOV standards in the implementation of TRIPS46.

The US has had a law on plant variety protection for some kinds of asexually reproduced plants
since 1930 and on sexually reproduced plant varieties since 1970. Since 1994, it has
considerably

44
https://www.lawteacher.net/free-law-essays/human-rights/plant-breeders-rights.php, last accessed on 11/10/2018,
6:00pm
45
https://slideplayer.com/slide/12664312/, last accessed on 11/10/2018, 6:15pm
46
http://www.iphandbook.org/handbook/chPDFs/ch04/ipHandbook- Ch
%2004%2005%20Lesser%20PBRs%20Intro.pdf, 11/10/2018, 6:15pm
weakened the farmers’ privilege and breeders’ exemption in its plant variety protection law.
Some European countries like Germany and Netherlands had instituted such protection for plant
breeders since the ‘40’s and ‘50’s. The UPOV came into being in 1968 but has had a very
limited membership until recently. The main thrust towards worldwide protection of plant
varieties came only with the TRIPS Agreement. With TRIPS there has been a rush to join
UPOV, although this is not required. Most developing country members preferred to join the
1978 version. There are crucial differences between the 1978 version of UPOV and the revised
one of 1991, which entered into force in April 1998. The extension of time given to join UPOV
1978 ended in April 1999. Only UPOV, 1991 is open to membership now47.

Clearly, WTO developing country members do not need to model their sui generis legislation on
UPOV at all. However, the UPOV is the only international model available so far on PBRs and
given the uncertainty on how the term “effective” will be interpreted, following UPOV, 1978
seems clearly a preferred option for many. Since it was UPOV 1978 that existed at the time of
the TRIPS negotiations, this version could be considered as a model for developing countries to
frame their legislation, provided that it is otherwise TRIPS-compatible. Such a law may contain
provisions for the ‘breeders’ exemption’, allowing the use of the protected variety for breeding
purposes and may also contain the ‘farmers’ privilege’, allowing farmers to retain seed for their
own use or for across-the-fence non-commercial exchange or sales of seeds. UPOV 1991, on the
other hand, disallows some of this flexibility in that the exchange or sale of seeds by farmers is
disallowed as it obliges an exclusive right of reproduction of the protected variety. Both versions
allow restrictions on the free use of exclusive rights for reasons of public interest and subject to
the payment of an equitable remuneration to the right holder.

Today, many countries have such sui generis laws for the protection of new plant varieties as
evidenced by the 43 current members of UPOV, of which thirteen are developing countries, the
latter bound only to the 1978 version. Significantly none of the Asian developing countries, other
than China, are members of UPOV, although many allowed the patenting of microorganisms and
microbiological processes even before this was a TRIPS requirement. Other developed countries
also became members in the period from 1993: Austria, Finland, Norway and Portugal. Greece

47
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/380005/plant-
breeders-rights-handbook.pdf, last accessed on 11/10/2018, 6:30pm
and Luxembourg are the only two EU members yet to join the UPOV. It is expected that
membership of UPOV will climb from the present 43 to at least 60-70 by early 2000’s in part on
account of TRIPS48.

Many developing countries have adopted plant variety protection laws conforming to UPOV,
1991. Developing country exporters of cut flowers and ornamental plants like Kenya and Chile
see effective PBR protection to be in their long-term interest as it facilitates access to new and
better plant varieties. For instance, Bolivia, Colombia and Ecuador have PBR laws conforming
substantially to UPOV, 1991 as do other developing countries such as Morocco, Costa Rica,
Venezuela. Members of the OAPI in francophone Africa are to adopt similar laws soon.
Argentina, Chile and Mexico protect all genera and species even though they follow UPOV,
1978. Given the national treatment requirement under TRIPS it may work in the interest of
developing countries to protect all genera and species as reciprocity cannot be applied. Further,
“all” will mean, in practice, applications for a few hundred at best, of which the top few
ornamental plants will cover the majority. Developing countries that already have some
capabilities in plant biotechnology and wish to encourage such research further, whether in
private or in the public sector, need to seriously consider instituting stronger protection through
the UPOV, 1991 model and perhaps, additionally through patent protection49.

Clearly, different countries see their national interests as differing and have accordingly varied
the scope of protection afforded to biotechnological inventions and to PBRs, even while possibly
complying technically with TRIPS.

Experience with Transgenic Crops in Developing Countries and the Way Forward 50

Transgenic or genetically modified crops are a very recent phenomenon globally. Between 1996
to 1998, the global area under such crops has increased fifteen times, from 4.3 million acres to
69.5 million acres, reflecting exceptionally high adoption rates by farmers by standards of new
technologies in the agricultural sector. The main break-through has come in improvements to

48
http://www.wipo.int/edocs/lexdocs/laws/en/zm/zm051en.pdf, last accessed on 11/10/2018, 6:45pm
49
https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1747-1796.1998.tb00011.x, last accessed on 11/10/2018,
7:00pm
50
https://www.nda.agric.za/doaDev/sideMenu/geneticResources/docs/undrestandingPlantBreedersRights.pdf, last
accessed on 11/10/2018, 7:15pm
herbicide tolerance and insect resistance of crops. The five principal transgenic crops in
1998were, in descending order of importance, soybean, corn/maize, cotton, canola/rapeseed and
potato. Soybean and corn alone account for 82% of the global area under transgenic crops. 74%
of the global area is in the US, with 15% in Argentina, 10% in Canada and the remainder in
Australia, Mexico, Spain, France and South Africa.

Thus this technology has been as readily adopted in some developing countries as it has in some
developed countries. Indeed, China was the first country to commercialize transgenic in the early
1990’s and by 1996, the global area under such crops was almost split equally between
developed and developing countries. Argentina’s area under transgenic crops increased three-
fold from 1.4 million hectares in 1997 to 4.3 million hectares in 1998, mostly due to the increase
in herbicide- tolerant soybean, which now constitutes over 60% of the total area under that crop.
China introduced BT cotton only in 1998 but of the 63,000 hectares, about 10,000 hectares was
of a product developed locally by the Chinese51.

The economic benefits of transgenic crops to developing countries would depend upon a number
of factors such as need for the particular crop, for instance, level of infestation of the targeted
pest or weed density, crop performance under local agro-climatic conditions etc. So far,
transgenic crops have reduced the use of herbicides or insecticides and have increased average
yields. For the US, a study indicates that of the $240 million of total economic surplus, 53%
went to US farmers, 26% to the seed company, 12% to consumers and the balance 9% to the rest
of the world. The farmer/company benefit ratio of 2:1 is similar to that for conventional
agriculture in the US.

Similar studies need to be done in developing countries that have adopted these new
technologies. For studies done on the economic benefits of hybrid crops in developing countries,
the benefits to farmers seem to be of similar magnitudes. For instance, for hybrid sorghum in
India, seed companies captured 18.5% of the benefit while farmers captured 81.5% (Pray and
Rama swami, 1999). These studies also show that the seed prices were considerably higher for
hybrids developed in the private sector than those developed in the public sector. However, the
value of increases in farmers’ yields outweighed the increase in the cost of seeds. Indeed,
farmers in developing
51
https://www.researchgate.net/publication/236658842_Intellectual_Property_Rights_System_in_Plant_Breeding,
last accessed on 11/10/2018, 7:30pm
countries are no more under any obligation to buy newly developed seeds than are farmers in
developed countries. In both cases, farmers make the decision to buy improved varieties after
taking into account the economic benefits. However, it is true that poorer farmers in developing
countries who depend on external finances, usually at usurious rates of interest, and are usually
without crop insurance, are less capable of sustaining losses and are thus, more risk averse.
Solutions to these generic problems must be found and should not detract from the benefits of the
new generation of agricultural biotechnologies52.

The potential for the benefits of agricultural biotechnology for developing countries go beyond
the adaption to local conditions of the present generation of transgenic crops developed in other
markets to solve problems of pest attacks or weeds. This technology has the potential to solve
some of the problems of malnutrition, disease and low agricultural productivity that are
53
particular to developing and least developed countries . For example, it was recently
announced that genetically modified rice may help reduce iron deficiency anemia or vitamin A
deficiency. Similarly drought-resistant plants or those that tolerate high levels of soil toxicity
could help improve yields and lead to greater food security. It is clear that this potential must be
fully tapped and this technology further developed for the benefit of humanity. While strong IPR
protection, combined with other appropriate policies, may help develop such a potential, there
are fears that the resulting products may not be available or may be far too expensive for most
consumers in these countries. These fears are exacerbated by the recent trend on mergers and
acquisitions in theseedandlifesciencessectors.Thetenlargestglobalseedfirmscontrol 30% of the
seed sales in the world (Herdt, 1999). Increasingly, the new seeds being developed are controlled
through IPRs that belong to these top companies. On the other hand, so far agricultural research
and seed distribution in developing countries has been overwhelmingly in the hands of the public
sector. However, public sector research is suffering from an acute shortage of funds in many of
these countries. Increasingly, private firms, mostly foreign firms or joint ventures, are stepping
up their research efforts in these countries. These firms are reluctant to introduce new varieties
that can be appropriated easily by other rival seed companies in the absence of strong IPR
protection.

52
http://docs.manupatra.in/newsline/articles/Upload/BFB4F8F3-8EE9-45CD-BB8C-842F9E03012C.pdf, last
accessed on 11/10/2018, 7:45pm
53
http://www.waeaonline.org/UserFiles/file/JAREJanuary20188Hervouet118-150.pdf, last accessed on 11/10/2018,
8:00pm
Presently, in countries like India, which are yet to adopt even PBRs, these companies confine
their research to hybrids. Even here, seed of single cross hybrids of maize are not being marketed
because of the still high cost of seed production and the lack of IPR protection (Pray and
Basant,1999)54.

Changes in IPR regimes, particularly as related to the agricultural sector are particularly relevant
to the way international agricultural research is organized through the centres of the Consultative
Group on International Agricultural Research (CGIAR) and the National Agricultural Research
Organizations (NAROs). Developing countries have been dependent on the CGIAR system for
the free exchange of germ plasm and scientific knowledge. Roughly 15% of the research budget
of the CGIAR centres is devoted to genetic engineering and these centres have become key
players in agricultural biotechnology. Yet few patents have yet been applied for by these centres
and in many cases proprietary technologies may be used without formal consent. This is mostly
because of a historic lack of familiarity with IPRs. There is now increasing agreement that these
centres should take out defensive patents in order to stake out their claims and ensure access.
There is no wadiscernible global trend of increasing collaboration between private and public
sector institutions. Initiatives such as the Consortium for Genomics Research in the Public Sector
of Cornell University in the US have raised interest in national public sector research
organizations in developing countries such as Brazil, China and India as well as in the CGIAR
centres (Herdt, 1999). The IPR policies of the CGIAR system should be closely watched by
developing countries for emulation in their NAROs and other research institutions55.

Given the fact that much of the new, proprietary technologies in the agricultural sector are
increasingly in the hands of the private sector companies of developed countries while
traditionally, in developing countries, it is the public sector that has, by far, the larger research
capabilities, collaboration is an important way of acquiring technologies in developing countries.
In the agricultural sector, unlike in industry, research products developed elsewhere have to be
adapted to local conditions. Stronger IPR protection may give an incentive to right holders to

54
In 2016, a patent from EPO cost (at least) e28,540, and a PBR cost e7,180 (EPO, USPTO, USDA websites). See
Appendix A and appendix table A1 for a detailed description of patenting and PBR costs, last accessed on
11/10/2018, 8:15pm
55
This is consistent with findings about patent values in the patent literature (Schankerman and Pakes, 1986). See
Wright et al. (2007) for an overview about agricultural innovations.
collaborate in order to disseminate these technologies more widely. More importantly, for
countries with the appropriate level of education and skills, increased investment in R&D with
strengthened IPR protection may provide the needed incentive for domestic innovations that are
required locally and would, at the very least, help create “bargaining chips” that could be used to
gain access to desired technologies or promote collaborations. There are issues relating to equity
and biodiversity that relate to the sharing of benefits from the commercialization of products
incorporating genetic material or traditional knowledge taken from developing countries. These
issues are more relevant to industrial biotechnology, especially as related to the pharmaceutical
sector, than to agriculture. In the agricultural sector, plants must necessarily be adapted to the
agro- climatic conditions of the region in which they are grown. For example, the recent
biotechnology revolution in agriculture in the US is based, for the most part, on the genetic
modification of in- situ plant varieties. Similarly, two varieties of wheat Norin and Brevor used
in the Green Revolution originally came from Japan and the US. However, there is the issue of
rewarding farmers for their farm-grown varieties that may have useful traits that, although not
reproducible stably, could form the basis for breeding new varieties susceptible of being
protected by PBRs. At the minimum, if the nature and scope of plant variety protection is further
elaborated in any future review of TRIPS, developing countries may like to see more
transparency in ensuring that right holders disclose the origin of the in-bred lines used to produce
new plant varieties. The complex conceptual questions of the nature and scope of such farmers’
rights and the way to reward them has to be left to a more specialized forum such as the FAO or
WIPO56.

Geographical Indications

Another area of IPRs related closely to agriculture that is part of the built-in agenda on TRIPS is
geographical indications. Geographical indications are distinctive signs identifying products of
several undertakings located in a specified geographical area. No one enterprise or even group of
enterprises owns this distinctive sign and therefore, unlike trademarks, there is no right conferred
on any entity to grant or refuse authorization on use. Instead, all undertakings located in the
specified geographical area are allowed to use the geographical indication on the specified

56
In France, an interprofessional agreement established in 2001 between farmers and seed companies led to the
creation of a fee paid by a farmer when he sells his output. If he buys the seed from the seed producer (and does not
self-produce), the fee is refunded. In Australia, the seed producer can choose the royalties on FSS (based on the
farmers’ production) at the same level as the royalties on commercialized seed varieties.
products produced by them. All other entities are prohibited from doing so. Well-known
geographical indications, particularly in agricultural products, mostly belong to the ‘old world’,
synonymous with Europe, while being used widely in the ‘new world’, i.e. the Americas and
Oceania. These factors have made it very difficult to develop an international agreement in this
area. Even the TRIPS Agreement has not completely satisfied the demanders of such
protection57.

Few countries protect geographical indications and unlike other IPRs, there is rarely a specific
law protecting them. There are diverse ways and levels at which geographical indications are
protected under the laws of different countries, including through trademark law, in particular
certification or collective marks, labeling or other regulations, in particular those relating to
alcoholic beverages or laws on unfair competition. In common law jurisdictions geographical
indications are also protected through passing-off action. There is presently considerable
confusion in the TRIPS Council on what the obligations under TRIPS imply and how they are to
be implemented. The main demandeurs in the negotiations on geographical indications were,
undoubtedly, the European Community and Switzerland. The main opponents were the US,
Australia, Canada, Chile and Argentina and others who wanted to protect their existing use of
geographical indications of European origin, particularly in the area of wines and spirits. Some
countries, like India, attempted to broaden the scope for additional protection under Article 23
from wines and spirits to beverages, such as tea, with little success during the TRIPS
negotiations58.

TRIPS provides for two levels of protection: at the basic level, all geographical indications must
be protected against use which would mislead the public or constitute an act of unfair
competition. This obligation is met with in most countries that permit such geographical
indications to be registered as collective marks or certification marks and/or which allow
passing-off actions to be instituted in civil courts, as is the case in common law countries. Many
civil law jurisdictions accord such protection to geographical indications under unfair
competition laws. Had this been the only obligation under TRIPS, most developing countries
would have been incompliance59.

However, in addition, under Article 23 TRIPS obliges the protection of geographical indications
57
www.fera.defra.gov.uk/plants/plantVarieties/plantbreedersRights/compulsoryLicence.cfm, last accessed on
11/10/2018, 8:00pm
58
http://www.fera.defra.gov.uk/plants/publications/gazette.cfm , last accessed on 11/10/2018, 8:15pm
59
http://www.fera.defra.gov.uk/plants/publications/gazette.cfm, last accessed on 11/10/2018, 8:30pm
on wines and spirits per se or in absolute terms, without requiring any test of confusion or
likelihood of deception to be met. In the special case of wines and spirits TRIPS Article 23.1
prohibits the use of translations of geographical indications or attachment of expressions such as
‘kind’, ‘type’, ‘style’, ‘imitation’ to products not originating from the place indicated, even
where the true origin is clearly indicated. Thus, if ‘Champagne’ were such a protected
geographical indication the use of a label stating “Champagne style sparkling wine, Made in the
USA” would be prohibited. This type of higher protection for wines and spirits was only
available in the EU prior to TRIPS. In implementing this provision, several developed and
developing countries have opted to provide a uniformly higher level of protection to all eligible
geographical indications, irrespective of sector, subject to certain registration requirements. This
is found in the relevant laws of Germany, New Zealand and Brazil. Japan provides the higher
level of protection through a notification issued under its Law Concerning Liquor Business
Associations and Measures for Securing Revenue from Liquor Tax. Others have sought to
implement this higher level of protection for wines and spirits through special laws, following
bilateral agreements with the EU,
e.g. Australia’s Wine and Brandy Corporation Amendment Act, 1993. Yet others, like US and
Canada have declared a large number of geographical indications to be ‘generic’ or ‘semi-
generic’60.

The lack of consensus in this area is reflected in the fact that further negotiations and review was
built into the text of TRIPS. Article 23.4 calls for negotiations for the establishment of a
multilateral system of notification and registration of geographical indications for wines eligible
for protection in those members participating in the system. No time limit was set for the
commencement of such negotiations. However, Article 24.2 calls for a continual review of the
implementation of this section, with the first review to take place within the first two years of the
WTO i.e. by end of 1996. Under the first such review, conducted in 1996, it was decided to
commence preparatory work towards negotiations on the multilateral registration system. This
work gained momentum only in 1998 in the TRIPS Council. The EU has placed the resolution of
the registration system at top priority, in outlining its goals for the new round of trade talks in the
WTO but does not expect to see this happen in this time period. On the limited issue of wines
and
60
http://www.defra.gov.uk/environment/gm/regulation/registers/consents/index.ht m, last accessed on 11/10/2018,
8:45pm
spirits, it can be expected that the EU would be some link to negotiations on agriculture in the
new round, as it did in the Uruguay Round61.

During the 1996 review it was decided to also review the scope of protection under this section.
These efforts are still continuing in the Council for TRIPS, with the European Union,
Switzerland and many Central European countries also having an active interest in such
expansion to other products such as cheese, chocolates, beer or embroidery. Developing
countries that have expressed an interest so far to include other products are Morocco, India,
Egypt, Mexico, Venezuela, Cuba, Turkey and Nigeria. Certainly, the value of exports of
agricultural products from some developing countries of certain varieties of tea, rice, fruits,
vegetables, meat or other products would be greatly enhanced if there could be an agreement
under TRIPS to protect such specific geographical indications at the same level as wines and
spirits62. However, it must be recognized that there is strong opposition from other developed
and developing countries to any attempt to expand the scope of protection on geographical
indications and it is not realistic to expect any movement on this matter in the near future. It is
likely that even the major demandeur on this issue, the EU, will first seek to implement the
agreed provisions in TRIPS before seeking actively to extend them further.

Prospects for amendments to TRIPS in the WTO in the immediate future

Prospects for any amendments to the TRIPS provisions on biotechnological inventions appear to
be quite dim for the moment. For years, environmentalists in Europe stalled the European
Commission’s proposal for a directive that would harmonize patent laws in the EU for
biotechnological inventions. The appellate body of the European Patent Office (EPO) had, with
its most recent judgment, virtually placed a block on patents for plant varieties. Ironically, this
issue in being currently adjudicated in US courts too. Further, the stiff opposition by consumers
in Europe to the sale and consumption of genetically modified foods has also clouded the debate
on patents on biotechnological inventions. The European directive on the patenting of
biotechnological inventions was finally passed in mid-1998 and is to come into effect mid-2000

61
The Plant Breeders' Rights (Information Notices)(Extension to European Community Plant Variety Rights)
Regulations 1998 , last accessed on 11/10/2018, 8:45pm
62
The Plant Breeders' Rights (Farm Saved Seed)(Specified information) Regulations 1998, last accessed on
11/10/2018, 9:00pm
in all the EU countries, bringing Europe closer to the US level of patent protection. However,
within three months the Netherlands, the only country to have voted against the directive, had
challenged it in the European Court of Justice on several grounds, including morality, and there
is, once again, legal uncertainty on the patenting of biological materials in the EU. NGOs based
in developed and developing countries have been actively campaigning against patents for
biological materials, voicing concerns on morality and ethics as well as on biodiversity. This
potential for an emerging coalition between powerful lobbies in developed countries and
governments of developing countries may, in part, explain why the international business
community and demandeur developed country governments do not seem to want to change these
TRIPS provisions as yet, despite the 1999 built-in review process. However, some discussions on
these IPR issues would be possible if biotechnology is raised in the negotiations on agriculture in
the new round. The international business community and the demandeur governments are
reluctant to re-open the debate on Article 27.3(b)63

One reason could be that the legal uncertainty has not quite ended in Europe and any premature
re-opening on the international debate could endanger the advances already made in Europe in
this area. There is also a fear that any alliance between powerful environmental lobbies in
developed countries and governments of developing countries at this stage could jeopardise
chances of obtaining improvements to these provisions of TRIPS at a later date. Others may
believe that the wording of TRIPS can be subject to interpretation, drawing upon that given in
the recent European Biotechnology directive. For instance, there may be considerable scope even
in defining ‘microorganism’ as some view the term as extending to genes, or in defining the
products of ‘microbiological processes’ as these could include plants and animals. These issues
can only be settled in dispute settlement. Moreover, there may be technical solutions available to
ensure appropriability on proprietary agricultural biotechnologies as farmers’ ability to save seed
may, to some extent, be restricted by the use of hybrids or in the future, possibly more effectively
by using ‘terminator’ type technologies, more generally called Genetic Use Restriction
Technologies. Lastly, as developing countries have time up to 2000 to change their laws to
implement this

63
https://www.researchgate.net/publication/309133772_Protection_of_Plant_Varieties_Breeders'_Rights_and_Farmer
s'_Rights_in_India, last accessed on 11/10/2018, 9:30pm
provision of TRIPS, it may be considered premature to review this so early64.

One more reason for such caution could be the preparations being made by developing countries
to demand changes in TRIPS. As a response to the US proposal of end 1998 many developing
countries from Latin America, Africa and South Asia have proposed revisions to TRIPS as a part
of the built-in review process. India made a submission in the Committee of Trade and
Environment as early as 1996 to amend TRIPS to oblige patent applicants of biotechnological
inventions to disclose the country of origin and information on prior informed consent for
biological materials and traditional knowledge, wherever this was relevant. This proposal has
been reiterated in the run up to the 1999 Ministerial Conference. Some Latin American and
African countries have suggested that TRIPS give effect to the provisions of the Convention on
Biological Diversity, including the protection of traditional knowledge, innovations and practices
of indigenous peoples and local communities. Others want a clarification that only genetically
modified microorganisms should be patentable 65. This inertia to change the TRIPS Agreement
seems paradoxical as there are, undoubtedly, many ambiguities and gaps that the demandeurs for
higher levels of IP protection in both these sectors, pharmaceuticals and biotechnology, would
like to see fixed as soon as possible. These include patents for plants and animals, clarification
on adherence to UPOV, 1991, prohibition of parallel imports, and possibly, the tightening of
compulsory license provisions. However, it is clear that the demandeurs want to wait to see
whether some of these issues can be sorted out through the shorter and more effective process of
dispute settlement before taking the negotiating route, where the outcome is relatively more
uncertain66.

This is borne out by the proposals made so far in the preparations for the 1999 WTO Ministerial
Conference. The US had made preliminary proposals on the built-in agenda on TRIPS in
November 1998. These proposals call for the expiry of the moratorium on non-violation in
January 2000 and an examination of the desirability of eliminating the exclusion for plants and
animals

64

https://www.researchgate.net/publication/247675146_Introducing_Plant_Breeders'_Rights_in_India_A_Critical_Ev
aluation_of_the_Proposed_Legislation, last accessed on 11/10/2018, 9:45pm
65
http://shodhganga.inflibnet.ac.in/jspui/bitstream/10603/148911/7/07_chapter%201.pdf, last accessed on
11/10/2018, 10:00pm
66
https://www.lakshmisri.com/Uploads/MediaTypes/Documents/plant_variety_protection_in_india.pdf, last
accessed on 12/10/2018, 1:00pm
and incorporation of the key provisions of UPOV on plant variety protection. The US has since
not pressed for any immediate modification to TRIPS on biotechnological inventions. These
initial US proposals were also not supported by the later submissions of Europe and Japan, which
seem to want only such modifications on TRIPS as will give them leverage with the US. They
want to see TRIPS oblige the first-to-file system for patent applications. The US is now the only
country in the world that does not follow such a system. Europe, perhaps, hopes to use this
lacuna, as it once did in the Uruguay Round, to secure protection for specific geographical
indications on its wines. On the other hand, Japan and the EU have found it necessary to
explicitly state in their formal submissions that there should be no attempts at lowering of
standards or reducing the current level of protection under TRIPS67.

This is because some developing countries are demanding exactly such changes in TRIPS:
weakening of the provisions on compulsory licences and longer transitional periods. In addition,
they want more technical and financial assistance for implementing TRIPS, including for the
promotion of domestic R&D and the transfer of technology; and new provisions related to
biodiversity, including the protection of indigenous peoples’ rights. India has been amongst the
first to demand in 1996, in the Committee of Trade and Environment, that TRIPS standards on
IPRs include transfer of technology and transparency in patent applications in the context of
multilateral environmental agreements. In that year, in the run up to the First WTO Ministerial
Conference at Singapore, it also demanded, in the TRIPS Council, the extension of additional
protection on geographical indications to other products. These demands have been repeated in
the preparations for the 1999 Ministerial Conference. The proposal on additional protection for
geographical indications other than for wines and spirits has wide support of some developing
and developed countries68. Paradoxically, given the lukewarm response of the demandeur
governments to any changes in the TRIPS provisions, developing countries may not be
successful in re-opening the provision on Article 27.3(b) to incorporate their interests and status
quo may well be maintained in the near future. The discussions on biotechnology, in the
negotiations on agriculture in the new round, could touch upon IPRs but, for the moment, there is
considerable uncertainty about the scope of such discussions. However, none of the substantive
issues relating to

67
https://www.iprsonline.org/ictsd/docs/SahaiBridgesYear5N8Oct2001.pdf, last accessed on 12/10/2018, 1:30pm
68
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.730.7117&rep=rep1&type=pdf, last accessed on
12/10/2018, 2:00pm
biotechnology or biodiversity raised by developed and developing countries are likely to
disappear from the TRIPS agenda and will probably resurface after the review of developing
country implementation of TRIPS has been completed in the next 2 to 3 years. Much will depend
on the political strength of environmental NGOs in the developed world at that stage and any
interpretations made through dispute settlement69.

In the end it appears that a satisfactory solution for all concerned, in the immediate short run,
would be to leave TRIPS untouched. This would be satisfactory for developing countries as
TRIPS already allows some degree of flexibility. This should also be satisfactory for developed
countries who, given the several ambiguities in the TRIPS text, would first like to see how
developing countries implement what was agreed to in the Uruguay Round, for which they have
time up to the end of 1999. In other words, not only is it unlikely that the WTO Conference at
Seattle would result in any programme of further negotiations intended to change the existing
TRIPS text but there may be no such move in the near future. However, there is the matter of the
built-in agenda and other issues on TRIPS to be dealt with by WTO members at some future
date. Article 71.1 calls for a review of the implementation of TRIPS in 2000 and every two years
thereafter, including reviews undertaken “in the light of any relevant new developments which
might warrant modification or amendment” of TRIPS

The Impact of Intellectual Property Rights in the Plant/Seed Industry

Evolution in science such as recent developments in biotechnology creates new challenges for
patent regimes, leads to reforms in laws and regulations, and has led to the creation of property
rights where none existed before. These new property rights imply new avenues of rents for
firms and new types of strategic behavior. In theory, intellectual property rights, by giving
inventors monopoly rights to their inventions, provide economic incentives for research and
development. In exchange for the monopoly rights inventors reveal the methods behind their
invention, which helps further the public good by fostering cumulative invention while imposing
a cost on the company from revealing their secrets. This work uses recent changes in the
intellectual property laws in the plant and seed industry as well as key agronomic
differences between corn and
69
Anitha Ramanna, Farmers’ Rights in India - A case study, FNI Report 2006, Norway, p.vii., last accessed on
12/10/2018, 2:30pm
soybeans to analyze firm decision making of whether to patent their technologies or keep trade
secrets70.

The present exponential growth in biotechnological research is a byproduct of changes in both

the technology and the availability of intellectual property rights for living organisms. The new
paradigm in biotechnology patenting started after the landmark Supreme Court’s 1980
Diamond
v. Chakrabarty71 decision that allowed the patenting of life forms. This decision opened the door
to the patenting of plants and animals as standard utility patents. In the case of plants certain
forms of property rights, for plant seeds the Plant Variety Protection Act (PVPA) and for tubular
form plants the Plant Protection Act (PPA), were already in place before the Supreme Court
decided this landmark case. The PVPA and PPA, however, granted weaker property rights than
utility patents because they allowed researcher and farmer exemptions.

The court decisions and changes in government policies created a menu of choice in plant
intellectual property rights for agricultural biotechnology firms. For seeds firms with new
research ideas they could either apply for a PVPA or a utility patent or they could apply for both.
Such menu choice in intellectual property rights is unique to plants. A theoretical model by
Hopenhayn & Mitchell (2001) suggests that a menu approach in patenting with different levels
of property rights can lead to strategic patenting behavior by firms leading to socially sub-
optimal investments in property rights. Our study will explore this issue of availability of menu
choice in plant patenting and its implications for strategic firm behavior in the corn and soybean
seed markets. New property rights also imply increased uncertainty in the interpretation of laws.

In such a dynamic scenario where laws and interpretations of them are changing rapidly, firms
need to be strategic in their patenting decisions, such that they can extract maximum rents from
their rights. Such strategic behavior of firms has been captured in the literature on patent lengths
and breadths (for example: Gilbert & Shapiro, 1990). Our goal in this paper is to explore another
important aspect of strategic patenting behavior: the implications of patenting rules on the
intellectual portfolio choice between patents and trade secrets. We explore this issue using data
on
70
Anitha Ramanna, India’s Plant Varieties and Farmers’ Rights Legislation : Potential impact on stakeholder’s
access to Genetic Resources, EPTD Discussion Paper No. 96 of 2003, Washington, USA., last accessed on
12/10/2018, 2:45pm
71
447 U.S. 303,100 S. Ct. 2204; 65 L. Ed. 2d 144; 1980 U.S. LEXIS 112; 206 U.S.P.Q. (BNA) 193
patents and other intellectual property rights in the plant/seed industry, which had a strong
tradition of using trade secrets to protect its innovations prior to the 1970’s. The chronology of
patent law changes allows us to also explore the behavior of biotechnology firms in plants.
Chronologically, in the case of plant patents the regulations, litigations and decisions
significantly strengthened the property rights available for plants. The following are the most
significant decisions and regulation changes on plant patenting72:
[1] Diamond v. Chakrabarty in 1980,
[2] ex-parte Hibberd in 1985,
[3] J.E.M. Ag Supply v. Pioneer Hi-Bred International in 200073.

We explore strategic behavior of firms in patenting given these events using an event study
methodology. The remainder of this work is divided as follows. The next section presents a brief
overview of the salient aspects of intellectual property rights in plants and a description of the
market for corn and soybean seeds. This is followed by a review of the economics literature on
intellectual property rights. The literature then informs a model of the strategic game played by
two firms choosing between intellectual property rights and keeping trade secrets, which is
presented in the fourth section. The fifth section tests the analytic model by presenting empirical
evidence from data on intellectual property rights in plants from 1981 – 2001. A concluding
section follows

Intellectual Property Rights for Plants

Up until the end of the twentieth century, US utility patent statutes were understood to exclude
patents on living organisms. The intellectual property needs/demands of the plant and seed
propagation industry led to a number of intellectual property rules to allow intellectual property
on plants despite this exclusion. After a series of complaints by nursery owners, the US Congress
created the Plant Patent Act (PPA) in 1930 to allow intellectual property protection of asexually
propagated plants, which are those that propagate by cuttings rather than seeds. Over the years
the court traditions construed this law quite strictly to apply only to asexual propagation and that

72
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/616256/gazette-
0517.pdf, last accessed on 12/10/2018, 3:00pm
73
534 U.S. 124 (2001)
infringement only occurs from the actual taking of shoots or plant material is proven but cannot
be proven merely by genetic similarity (Janis & Kesan, 2001)74.

In 1970 Congress created the Plant Variety Protection Act (PVPA) which allowed intellectual
property protection of plants propagated by seeds. While similar to utility patent statutes, the
PVPA has a research exemption and a farmer use exemption. The research exemption allows the
use of PVP protected seeds in research, while the farmer exemption allows farmers to replants
from PVP protected seeds he grew the previous year, "bin-run seeds". It does, however, exclude
the farmer selling those seeds to other farmers, a practice commonly called "brown-bag seeds".
Most studies of the effects of the PVPA (see e.g., Butler & Marion, 1985; and Lesser &
Mutschler, 2002) have concluded that the introduction of this type of intellectual property right
did not induce a significant increase in the amount of research conducted by the industry75.

In 1980, the Supreme Court stepped into the fray with its 5 to 4 decision on Diamond v.
Chakrabarty, which held that genetically modified bacteria could be patented within the scope of
the US patent statutes. This decision, which was the linchpin to the explosion of biotechnology
patents in the late 1980's and 1990's, was not clarified as being applicable to plants until 1985
when in ex-parte Hibberd, a utility patent application for a type of corn seed, the patent office's
board of appeals concluded that Chakrabarty did apply to plants. Note that utility patent statutes
have higher levels of standards for novelty and utility than the PVPA and have neither a farmer
or researcher exemption, such that farmers cannot "bin-run" seeds with utility patents and
researchers cannot use them without license. But on the other hand, because of the US patent
office infrastructure in publicizing utility patent application contents is better than that used for

PVPs, the utility patents provide much more exact information for the public domain76.
Given these changes, plant seed producers had after 1985 two methods to protect their
intellectual property a PVP and a plant utility patent (PUP) and could even apply for
protection on both

74
Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr.15, 1994, Marrakesh Agreement
Establishing the World Trade Organisation, Annex 1C, Legal Instruments – Results of the Uruguay Round, Vol. 1,
331.L.M 181 (1994)., last accessed on 12/10/2018, 3:15pm
75
Art 27(3), TRIPS Agreement 1994.
76
TRIPS Agreement Art 27, Sec. 5, states that "patents shall be available for any invention, whether product or
process, in all fields of technology provided that they are new, involve an inventive step, and are capable of
industrial application".
property rights. The issue of joint protection using both PVP and PUP was resolved in December
2001 by the Supreme Court decision J.E.M. Ag Supply Inc. v. Pioneer Hi-Bred Int'l Inc. which
held that concurrent protection under the PVPA and the utility patent statutes was fine.

This history of intellectual property rights has created a number of different regimes for plant
seed producers. The first regime which lasted until 1970 had no available intellectual property
except for keeping company secrets. In this period corn seed producers developed closely
guarded "closed pedigree" seeds that only partially protected their germplasm from use by rivals.
After 1970 they had the option of applying for PVPs for their seed varieties. In 1985 utility
patents were added to the intellectual property rights portfolio, but with some uncertainty as to
their validity when concurrent with a PVP. In 2001 this uncertainty was resolved with plant/seed
firms able to use a full menu of choices to protect their technologies77:

i) Trade secrets kept in hybrids,

ii) PVP certificates,
iii) Utility patents,
iv) Some combination of these three methods.

The Corn and Soybean Seed Markets

Corn and soybeans represent the two most important crops in the US seed market with the 2001
corn crop being worth $19 billion and the 2001 soybean crop worth $12 billion (U.S. Department
of Agriculture, 2002). Not surprisingly a large portion of the private research dollars for seed
development are in these seeds and have been the major crops to receive intellectual property
protection with just under 1/3 of all the PVPs issued out of the hundreds of crops eligible have
been for either corn or soybean varieties. The corn and soybean markets are both dominated by
the same two firms Monsanto and Pioneer/Dupont which in 1997 accounted for 56% of the corn
seed sales and 38% of the soybean seed sales (Hayenga, 1998) 78. These key differences imply
different values to the possible menu of firm strategies with respect to intellectual property
rights.

77
Geoff Tansey, Trade, Intellectual Property, Food and Biodiversity, A Discussion Paper, Quaker Peace and Service
London (1999)
78
Sophy K.J., Farmers’ Rights under Plant Variety Protection Legislation in India : A Critical Study,
(http://rostrumlegal.com/r dt. last accessed on 12.10.2018).
Such differences may lead to different firm strategies and market equilibriums as presented in the
theoretical model presented below. A key agronomic difference between corn and soybeans is
that corn hybrids if replanted the following year with saved seed will not produce reasonable
yields while soybeans will produce approximately the same yield when replanted. Thus soybeans
have more durable good properties than corn for which new seed needs to be purchased every
year. Anecdotal evidence suggests the soybean seeds sold in the market cover no more than three
quarters of the national acres with the remainder planted in saved seed. Thus the overall size of
the corn market is much larger and farmers make decisions about seeds each year rather than
perhaps every other year79. This every year demand for hybrid corn seed as well has the larger
overall size of the corn acreage planted has meant that more research dollars have gone into corn
research than soy. In addition greater marketing and advertising efforts as well as brand/variety
proliferation is present in corn seed than in soybeans. In part because of these higher levels of
technological change, marketing, and variety proliferation farmers tend to change their corn seed
variety every 2 years while in soybeans the turnover is every 4 or 5 years. Thus the effective life
of a soybean variety from a company's point of view is about twice as long as that of a corn seed
variety80.

CHAPTER - VII

79
4 Human Development Report, Oxford University Press, 2001, pp. 2-3, last accessed on 12/10/2018, 3:30pm
80
Regine Anderson, Protecting Famers’ Rights in the Global IPR Regime : Challenges and Options, Trade Insights,
2007, Vol. 3, No. 2, pp. 30-32, 12/10/2018, 3:45pm
SUGGESTIONS AND CONCLUSION

The plant breeders work for step-wise improvement of existing varieties, through crossing and
selection, to attain the desired properties. The recent molecular tools help in more efficient
selection of the desirable traits. Otherwise, the process of plant breeding is time-consuming and
difficult. Plant breeding is a form of technical advance that is particularly natural and it is proper
for a society to encourage it by providing protection by IPR In the next 40 years the world
population will be 8.5 billion and to feed it the world must triple the agricultural output to meet
the inevitable demand. Without higher yields and new developments, tripling farm output would
not leave any room for wild lands and habitats. Tripling and quadrupling the yields per unit in a
short span will require breakthroughs in plant breeding, pest control methods, and post-harvest
management and preservation81.

For long time, the IPR is already there in inventions of software, music, movies and books as an
incentive for the creator of these products. The world must protect the IPR in agriculture
effectively enough to encourage major new investments in the R & D by the private sector. The
world must marshal all of its agricultural potential if it wants to save its wild habitats in the 21st
century through effective protection for IPR in agricultural research82.

The plant breeders need protection for their varieties because of their effort and the with which
varieties developed and can be multiplied. In the developing countries like India the budgetary
constraints in public Sector encouraged plant-breeding research in private sector. Unless their
right is protected the survival of private seed companies in seed development and distribution
will be difficult. It is also important for the government to protect its own investment in the
public Sector R & D. The breeders exemptions should be maintained in IPR legislation as
progress in plant breeding has been possible because of free exchange of germplasm and its
restrictions will adversely affect further breeding progress. The farmers' privilege is also
essential because for centuries farmers have selected and conserved the land races, which serve
as basis for modern crop breeding. The PBR legislation must be simple and its implementation
cost-effective and fast as the

81
Elizabeth Verkey, ‘Law of Plant Varieties Protection’ 2007, Eastern Book Company, Lucknow, pp. 171, 197, 204.
82
Suman Sahai, 2003, India’s Plant Variety Protection and Farmers’ Rights Act, 2001, Current Science Vol. 84, No.
3, Feb. 2003, p. 407.
seed companies in developing countries are typically small, family- owned business the costly
system will not allow them to Compete with MNC. Without proper protection of the genetic
material no private sector seed company is going to put its effort and money in the R & D
because in that case the return cannot be assured.

In view of India’s Commitment to TRIPS Agreement, implementation of new patent act was a
must before the deadline fixed by WTO i.e., 22 October1999. The amendments in the Patent Act
are product patenting provisions from 1 January 1995 and exclusive marketing rights (EMR) to
the applicant for a period of five years. So far, the countries patent laws are not in tune with the
TRIPS nor accepted by the Dispute Settlement Board. The implementation date of TRIPS (19
April, 1999) for India has already expired which has put it in an Odd situation. Now, the country
has no choice excepting the amended Patent law and to abide by the guidelines83.

The growth of biotechnology has enormous implications for developing new varieties and
technologies, which have an impact on agriculture and medicine. Transgenic crop will play a
major role for food and nutrition security of the developing countries in the new millennium. The
private sector has to play the vital role to bring down the technology to the poorest farmers to
reap the benefits of this technology. Until and unless the rights of the product are protected,
private sector will not take any initiative. If India wants to take advantage from it, the proper
protection system and a clear understanding of the policy on what is and what is not patentable
are needed. The future of agriculture depends on the development of biotechnology and eco
friendly products such as biopesticides, biofertiliers, etc, and this is the area where India needs
much more attention regarding research and development as well as its proper protection
strategy. These technologies should be used to complement the traditional methods for enhancing
productivity and quality rather than to replace the conventional methods. This technology will
encourage the private Sector to motivate research on the so called ‘forgotten crops' and
traditional open - pollinated varieties and pure lines as most of the farmers use these seed and
save them for next season sowings. It may lead competition among the companies to invest more
in the research on these open-pollinated varieties and pure lines. It will also stimulate a diverse
and competitive market place of more
83
N.S. Gopalakrishnan, An “Effective” Sui Generis Law to protect plant varieties and Farmer’s Right in India – A
critique, Journal of World Intellectual Property, January, 2001.
improved varieties for farmers to choose from. It will ultimately benefit the farmers and the
nation in terms of food security.

The revised IPR situation may give boost to the scientific community, private seed industries and
put India in a respectable position in the global business arena by providing equal platform with
the developed nations. In the long run, the better protection of patent encourages inventions and
makes the Indian scientists competitive by exposing them to new challenges. Patenting is one
way to measure the efficiency of our research and development. The absence of proper patent
protection system may be one of the major limitations to get benefits in future. The probable
benefits are easier accessibility of latest technology and products of word standard, better
employment opportunities and proper utilization of scientific community as well as increase in
investment by foreign companies and the private sector. The biggest incentive that the policy
framework could provide is the removal of excessive multiplicity of legislation and a regulation,
which causes delay, increased unethical practices and adds cost to the detriment of the farmer’s
interest. The fact is that India must avoid taking extreme decisions if it has to integrate itself with
the world economy, otherwise we will be alienated in the global economy.

IPRs for agricultural biotechnological inventions pose complex problems relating to ethics,
morality, biosafety and biodiversity. In developing countries there are further perceived
problems of unfair exploitation of genetic resources and fair and equitable sharing of the
benefits. However, biotechnology is undisputable the revolutionary science of the next
millennium that promises to solve many of humanity’s most difficult problems relating to food,
health and the environment. Developing countries should not lose out on rapid and reasonable
access to these technologies and products in their zeal to preserve biodiversity from real or
imagined damage, control their genetic resources or gain a share in the benefits, however
laudable these objectives are. Although steps are necessary to preserve and enhance the existing
biodiversity in these countries, environmental and health threats from genetically engineered
crops may often be exaggerated. Certainly, it would be paradoxical if these countries forgo the
benefits of biotechnology to solve some of their most pressing problems of poverty, disease and
malnutrition on account of such fears. The benefits to be derived from transgenic plants and
animals should be dispassionately weighed against any possible disadvantages and governments
should attempt to educate the farmers and the public to make informed choices, while keeping
strict regulatory controls.
But in all this the more important objective of developing competitive skills in research in
biotechnology should not be lost. For this, local firms must be encouraged through the grant of
adequate and effective IPR protection up to the level obligatory currently under TRIPS. Yet
patents should not permit the blocking of research in these areas through overly broad grants,
nor should the global trend towards oligopolisation of the agricultural biotechnology industry be
encouraged. Given the existing technological gap between lead developed and developing
countries and the capital intensive nature of product development, the best way forward for
developing countries seems to be to increase spending on R&D to develop technologies and
products of interest to firms in developed countries so that further technological progress can be
made through collaborative arrangements, including cross-licensing. To safeguard against the
adverse effects of restricting competition, liberal use should be made of the flexibility available
under TRIPS to grant compulsory licenses in cases of egregious anti-competitive behaviour by
right holders or for gaining access to essential patents.
At present there is no need for most developing countries to go beyond TRIPS and grant patents
for plants and animals, but they will need to cover microorganisms and microbiological
processes and products directly obtained there from. Sui generis plant variety protection can also
take advantage of the flexibility currently allowed to include farmers’ privilege and breeders’
exemption. Indeed, developing countries do have counter demands in order to preserve their
obligations at the current level. They have rightly demanded that wherever patent applicants
base their inventions on genetic or biological resources or on traditional knowledge, they should
be obliged to reveal the country of origin and whether they have obtained prior informed
consent, if necessary, as a part of the requirements on patent disclosure. This is a substantive
demand linked with the goal of the international community on achieving sustained development
and maintaining or enhancing the Earth’s biodiversity. This would invariably form part of the
discussions on the review of Article 27.3(b) of TRIPS. Developing countries have also
demanded inclusion of special forms of protection for traditional knowledge and rural
innovations. More work needs to be done urgently in WIPO on this issue so that this issue can
also be included in future discussions on the review of Article 27.3 (b) of TRIPS.

However, some developing countries have already seen the wisdom of going on to the next stage
of granting patents for plants, genes and animals and many others may do so, once domestic
research capabilities in DNA technology improve. Since much of the research in agricultural
biotechnology is made by the public sector in these countries, collaborative arrangements should
be encouraged by the governments with other publicly funded research bodies as well as with
the private sector in lead countries. Private industry should also be encouraged to invest in
biotechnology. The fruits of such research could benefit from jointly owned IPRs with the terms
of enjoyment clearly laid down by mutual agreement. Grant of IPRs does not necessarily
preclude the dissemination of these technologies or products by these institutions to certain
groups or areas either free or at reasonable prices.

Multilateral developmental institutions should also be encouraged to help developing countries

make this transition to a higher level of capabilities in biotechnology through both financial and
technical assistance for R&D projects, mapping of genetic resources, documenting traditional
knowledge and local innovations as well as for training in related fields, including the legal one.
Such institutions could even consider the establishment of “technology rights’ banks” that
purchase core privately-developed IPR-covered technologies in essential areas, such as
important food crops, in order to ensure their widest dissemination, including adaptation to
local conditions, at reasonable costs. This could help resolve the conflict between rewarding
private innovations through IPRs for generating such useful technologies and ensuring their
widest possible use in and benefit to poorer developing countries. For the private IPR holder the
trade-off between volumes and value should make such open licensing beneficial. These are just
some of the avenues open for exploration on how to reconcile IPRs in biotechnology with the
needs of developing countries and much more research is required to fully explore all options.
In the end, however, private and public sector institutions in the more advanced developing
countries should envision themselves as future generators of IPRs and as competitors in
biotechnology to firms in developed countries, rather than as perpetual users. The time frame to
achieve this vision would certainly differ from country to country but the direction of the effort
should be clear.
Clearly more research is required to understand the role and effects of IPRs, on the economy as a
whole and in the agricultural sector in particular, in developing countries. A deeper
understanding of the problems and possible solutions can be gained by studying interalia
 The current market structure for seeds viz. the proportion of farm- saved seed to purchased
seed; the proportion of seed, including new varieties, commercialized by the public sector
as
 against the local/multinational private sector;
 The R&D expenditures of local/multinational private sector seed companies and public
sector agricultural research organizations;
 Market prospects for improved/transgenic animal breeds and their costs and benefits;
 PBRs/patents filed by and granted to private and public sector organizations in domestic
market/ other countries;
 Effects of PBRs/patents on availability, costs, productivity, returns to farmers;
 Effects of PBRs/patents on prices for and welfare of consumers;
 Implications for future research by public sector agricultural research organizations;
 Evidence of abuses of IPRs and effect of corrective measures such as the application of
compulsory licenses or competition law;
 Evidence of broad patent claims and effects on further R&D or follow-on innovation;
 Number and nature of public-private collaborations/joint ventures and terms negotiated on
transfer of technology;
 Costs and benefits of improved global protection for geographical indications for
agricultural products of interest to developing countries.
On many of these issues, data is already available for some developing countries while on many
others data will have to be generated some time after IPR laws are established. There is an
urgent need to put into place a mechanism for generating such data so that analysis of these
questions could be based on firmer ground than has been the case so far.

We find evidence that the changes in intellectual property rights in plants had significant effects
on firm strategies as to which type of property rights they chose. The utility patent had the
greatest effect, suggesting that PVPs were a lesser form of intellectual property. The evidence
with respect to corn and soybeans also shows the importance of understanding the differences in
R&D and technology types when analyzing firm strategies and the effects of intellectual
property. We also find that contrary to widely held expectations, utility patents in plants did not
make plant variety protection obsolete. On the contrary, the number of PVP’s and PUP’s seems
to increase at tandem, suggesting the decision processes of firms to apply for different types of
property rights were complex and strategic. We identified some of the potential strategic
variables affecting this decision process, namely, revelation cost, and effective patent lengths.
Empirical findings also
conform to the idea of patent thickets, where as firms applied for both types of patent protections
to avoid any loss due to rejection of any of the application.
Our work makes a start both theoretically and empirically in recognizing the important strategic
role of revelation loss in firm strategies of choice of intellectual property rights or trade secrets.
There are, however, many more issues that deserve further investigation. For example, it is
probable that the extent of revelation loss varies by the product category and the dynamics of
R&D within an industry. In such cases patent and property rights law might need to be amended
to take into account the different revelation losses from patenting in different industries. Another
possible solution might be to provide a menu of property rights similar to that existent in plants
so that innovating firms can choose between the extent of property rights and loss from
revelation from the patenting process.
While this work has demonstrated how changes in rules and laws can impact the strategic
choices within the plant industry, neither we nor the existing empirical literature have not
measured the welfare effects of all these new laws and Supreme Court decisions on farmers and
consumers. Larger numbers of claims of property rights do not imply farmers and consumers
gained from more property rights for the seed firms.

CHAPTER - VIII
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