breeders exemption good?

Sven J.R. Bostyn 24, Associate Professor of Innovation Law at the Faculty of Law, University of Copenhagen. He also lectures at the Institute for Information Law (IVIR), 6/13/24, “Chapter 15: Patenting plants, plant variety protection and inclusion of plant breeders: Is it achievable?”, Research Handbook on Intellectual Property Rights and Inclusivity, kcab

Breeders’ Exemption is a Built-In Solution?

One could argue that the breeders’ exemption, which is a full one under the PBR system

already provides a built-in guarantee to access.

As we have seen earlier, genome editing is subject to a dense thicket of patents. Those

patents cover both the very technique of carrying out genome editing by means of for instance

CRISPR-Cas, as well as applications. Problems arise when the PBR system collides with the

patent system.

Indeed, there is first a preliminary issue which we must clarify. Each of the IP rights dis-

cussed here has its own breeders’ exemption system. As patent rights have the broadest scope

of protection, it is important to see how the full breeders’ exemption under the PBR system

is influenced/limited by the existence of such patent rights. Indeed, as we will make clear,

because the full breeders’ exemption has been devised for and under the PBR system, the fact

that under the PBR system the exemption can be taken advantage of without any limitation

(save as for the limitations set by the EDV system), does not necessarily imply that there are

no further IP right encumbrances.

79 That is also why I think that narrowing the EDV concept could become counter-productive,

see section 4.4 of this chapter and the literature cited there.

326 Research handbook on intellectual property rights and inclusivity

There are two types of encumbrances we want to discuss here. The first and most obvious

encumbrance is the fact that various aspects of plant related innovations can be protected by

both PBRs and patents. The breeders’ exemption can be invoked for what is covered by the

PBR system, but technology that is covered by the patent system will have to comply with the

rules and limitations set under the patent system. In other words, developing a new variety

with a specific trait will allow third parties to use this PBR protection variety for further breed-

ing and commercialise the ensuing new variety without consent of the PBR holder, save as for

the limitations set by the EDV system. If that trait is protected by the patent system, however,

and that could be in the form of a patent for a plant or plant cell comprising a genome editing

technique or system introducing a trait, for instance drought resistance, into a species of plants,

the rules under patent law will need to be complied with for that patent, which means that there

is a limited breeders’ exemption. That in turn implies that a third-party breeder may use the

protected biological material for further breeding but may not commercialise the new variety

without taking out a licence from the patent holder. This is so, despite the existence of a full

breeders’ exemption under the PBR system.

The second one is the existence of platform technology in the form of method patents for

carrying out genome editing. The principles set out in the preceding paragraph are of course

also applicable here. Even if the PBR protected plant variety constituents, which have been

developed with the use of the patented methods, could fall within the boundaries of the full

breeders’ exemption under the PBR system, the existence of the patents implies that a licence

is required under the patent system. Developing a new variety during which the patented

methods are being used, would have to be decided under the patent law rules, irrespective of

the existence of any full breeders’ exemption under the PBR system. And what is now the

case, this type of patents will arguably also not allow the limited breeders’ exemption under

the patent system to be invoked, leaving no respite from any exemption at all. That is also

why I think that introducing a full breeders’ exemption in patent law, making abstraction for

a moment of the potential legal hurdles, is not a solution that will solve access problems, as

some of the patented technology will not be caught by the exemption.

It is useful at this point to say a few more words about what falls under the breeders’ exemp-

tion in both legal IP regimes. The exemption under the PBR system allows third parties to use

plant propagating material for the purpose of breeding other varieties and commercialising

the same. The UPOV convention does not define what is meant by ‘propagating material’. But

it is generally accepted that it refers to ‘those parts of plants that are used (or at least could be

used) to produce the protected variety, such as grafts, cuttings, bulbs, layers, rhizomes, and

seeds. As a result, an apple containing seeds should be considered as harvested material, not

propagating material, because the seeds inside the apple cannot be used to produce plants with

the protected characteristics. On the other hand, a single plant cell, if capable of producing an

entire plant (and consequently capable of producing a variety), could also be considered as

propagating material.’80 The term ‘harvested material’, in contrast, refers to all products of

the harvest. Dependent on the variety in question, it includes fruit, vegetables, mushrooms,

flowers, cereals, fodder, and fibres.81

80 WÜRTENBERGER, VAN DER KOOIJ, KIEWIET, EKVAD, European Union Plant

Variety Protection, Second Edition, Oxford University Press, 2015, 130.

81 Ibid.

Patenting plants, plant variety protection and inclusion of plant breeders 327

In that regard, the use of a single plant cell containing a DNA construct or CRISPR-Cas

system would fall within the scope of the breeders’ exemption (provided the plant cell can

produce an entire plant) and would hence not require any prior authorisation or licence.

It is worth observing that, perhaps counterintuitively, the limited breeders’ exemption under

patent law seems to have a somewhat broader scope in some respects compared to the full

breeders’ exemption under the PBR system. Under the PBR system, the breeders’ exemption

can only be invoked for the use of propagating material, as defined above. Under the limited

breeders’ exemption under the patent law system, the statute refers to the use of biological

material for the purpose of breeding or discovering and developing other plant varieties. As

we have seen, biological material has been defined in the Biotech Directive as any material

containing genetic information and capable of reproducing itself or being reproduced in

a biological system. The term biological material seems to be broader than propagating mate-

rial, and hence suggests that activities with a broader range of material are allowed under the

limited breeders’ exemption in patent law compared to the PBR breeders’ exemption. The

above does not take away the fact, however, that the limited breeders’ exemption under patent

law always requires consent from the patent holder for commercialising any resulting plant or

plant variety for the development of which the limited breeders’ exemption has been invoked.

With a view to tackle some of the interdependency problems arising from the simultaneous

existence of patent rights and PBRs, a compulsory cross-licensing scheme has been devised,

which we will discuss later in this chapter (see section 5.7 below). I can already reveal that

the solution of compulsory cross-licensing, and how that system has been devised, will have

very limited practical use, also to ensure access for smaller businesses or those in lower- and

middle-income countries.

5.4 Abolish or Limit the EDV System Under the PBR System?

Making abstraction for a moment of the existence of patent rights, there are also tensions

within the PBR system relating to the full breeders’ exemption. That tension has been caused

by the introduction of the EDV system into the PBR system. According to the EDV system,

the PVR holder of the initial variety can claim a licence fee to the developer of the EDV.

The use of genome editing techniques will likely imply that, to the extent that the genome

editing induced/knocked out trait is still present in the EDV, there will be a dependency, and

consequently also a duty to pay a licence fee to the initial variety right holder. In practice, the

genome editing introduced or modified trait will likely be of considerable commercial value

also to the developer of the EDV and will hence be maintained in the EDV. Drought resistance,

water efficiency etc are traits which the EDV breeders will most probably want to retain, thus

triggering the EDV system.

Indeed, the friction arises from the policy rationale of the full breeders’ exemption on the

one hand, aiming at access for further breeding, and no encumbrance by licence fees, and

the right to a fair protection for the PBR holder of an initial variety on the other hand. The

latter starts from the premise that allowing third party breeders to use, without any obligation

to pay for such access, the fruits of (considerable) investment both in terms of financial and

technological resources and commercialise any variety which has obviously benefited from

the technological advancement embodied in the initial variety, is deemed unfair, and makes

the PBR system less attractive, forcing breeders to use the patent system. This is exacerbated

328 Research handbook on intellectual property rights and inclusivity

by the shortening of breeding cycles, leaving less time for the initial variety right holder to

benefit from exclusivity.82

Abolishing or severely limiting the EDV system might at first glance sound like an appeal-

ing option. The full breeders’ exemption, which is seen as foundational to the PBR system by

guaranteeing access, would in such a hypothesis be reinstated in all its glory.

Let us make the distinction here between abolishing and limiting the EDV concept. As we

have seen, there is a rationale for the introduction of the EDV system in PBRs. The rationale

is that, by not having an EDV system, third parties can fundamentally free ride on the efforts

of the breeder who may have spent considerable time and effort in developing a new variety

with a very desirable trait. Absent an EDV system, any third party can freely use the fruits of

that labour, eventually improve on it, and commercialise that improvement without paying

a single penny to the breeder who came up with the trait in that species in the first place. The

very reason for introducing the EDV system was exactly to ensure that the breeder of the initial

variety gets at least some reward for his efforts.

Abolishing the EDV system might kill innovation in breeding varieties with desirable traits

to guarantee food supply or help in developing sustainable farming from the very beginning.

We have not the time or the space to carry out empirical research, hence we do not exactly

know what the consequences would be, but it is not out of the ordinary to think that it might

have a stifling effect on innovation, make breeders go for the patent system for more important

innovations, and for those innovations which may not reach the threshold for patent protection,

revert to secrecy wherever possible, and whenever not possible, stop the innovation cycle.

Some authors have professed to interpret the EDV concept narrowly, thereby limiting its

scope to only phenotypical similarities. 83 We have explained in detail in earlier work why we

think this is not a good solution.84 One of the arguments to defend a narrow interpretation of

what is an EDV is that, by giving a broader interpretation to the very EDV concept, follow-on

innovation will be hampered. The reasoning is that, as there is no EDV from an EDV, the

scope of protection of the EDV will be narrower than the scope of protection of the initial

variety, as the former can no longer claim to any third party that there has been derivation. No

empirical evidence is provided for the claim that innovation will be hampered. We know from

the patent system that there is in many cases no such direct relationship. In computer sciences,

most innovation is follow-on, but it does not seem that innovation in computer sciences has

been hampered. I immediately admit that computer science is not plant breeding, the former

largely being the result of writing code, the latter being the result of painstaking effort and

investment, but today with artificial intelligence and quantum computing, all requiring huge

amounts of computational power (and energy), the idea that developing software is relatively

low cost is probably no longer tenable. But nevertheless, without any empirical evidence,

the claim cannot be readily accepted as is. There is moreover a somewhat logical flaw in the

82 According to some of the literature, breeding cycles have halved in the last 20 years. See,

KOCK, Intellectual Property Protection for Plant Related Innovation, cit. supra note 21, p. 147.

83 Ibidem, at 130 et seq.

84 See, BOSTYN, Towards a Fair Scope of Protection for Plant Breeders’ Rights in an Era

of New Breeding Techniques: Proposals for a Modernization of the Essentially Derived Variety

Concept, cit. supra note 58. Kock conveniently ignores this line of work, or perhaps deems it of

questionable value (which as the author I can never judge as being impossible).

Patenting plants, plant variety protection and inclusion of plant breeders 329

reasoning. Someone should not get a broader scope of protection, because otherwise the others

will not get an equally broad scope of protection.

It is undeniable, however, that the initial variety holder will attain a broader scope of

protection, and if the trait is very desirable for breeders, might be able to exert considerable

technology power. That is a concern indeed, but that is also the reason why I have introduced

a liability regime, with a view to ensure that access is always guaranteed, which is in my

view a better solution than an unduly narrow interpretation of the EDV concept, as this may

hamper initial innovation. And if there is no initial innovation, we do not have to worry about

follow-on innovation.

How does the above help in our quest to analyse how inclusion can be guaranteed? The

appeal of the argument to limit or abolish the EDV system is that it would re-instate the full

force of the full breeders’ exemption (and I make abstraction here of the existence of patents).

But breeders in lower- and middle-income countries want to gain access to technologies and

traits that assist them in their battle for food supply, drought resistance and other biotic and

abiotic stresses. It is hence necessary that those technologies are being developed. There is no

guarantee that in the absence of an EDV concept, or a very narrow and in practice not very

useful interpretation of that very EDV system, such innovation will be developed in the first

place. I cannot prove the one or the other, but what I have proposed with my liability regime

attempts to marry the two competing interests. By having a broader interpretation of the EDV

concept, breeders are stimulated to invest in developing new traits. By guaranteeing access to

follow on breeders, the access problem is being resolved. What my solution does not resolve

is that follow on breeders might have less incentive to innovate any further, due to the more

limited scope of protection of their new variety (the EDV), and the fact that they would have to

pay for the access. We need this follow-on innovation, but we also need the type of innovation

of the initial variety holder. So perhaps the solution is not in just a broad or narrow interpreta-

tion of the EDV concept, but in tailoring the EDV concept more to the interests of all breeders.

I must confess that I have no ‘oven-ready’ answer to this issue, but I invite myself and others

to contemplate how the EDV concept could be rethought with the above in mind.