Intellectual Property Rights

The AgAccord

The first of the commercial biotechnology events in the United States will be going “off-patent” and becoming “generic” in 2014. To prepare for the transition, ASTA and the Biotechnology Industry Organization (BIO) worked with the agricultural value chain to create the AgAccord℠. The AgAccord provides a predictable and transparent mechanism to address patent expiration for agricultural biotechnology events.

The AgAccord is now complete and will support a seamless transition to a marketplace that includes both proprietary and off-patent events. Creation of the AgAccord is a proactive milestone for the agricultural biotechnology industry. The number of events coming off-patent in the near future is small and won’t increase significantly until after 2020.

The AgAccord establishes a contractual framework to support business opportunities for those seeking to use off-patent events in the United States while ensuring important global regulatory commitments are maintained for off-patent events so that U.S. exports of products containing these events are not disrupted. The AgAccord comprises two separate agreements that cover the full spectrum of issues related to patent expiration — the Generic Event Marketability and Access Agreement (GEMAA℠) and the Data Use and Compensation Agreement (DUCA). The GEMAA was enacted in November 2012 and has 10 signatories. The DUCA opened for signature in December 2013.

Generic Event Marketability and Access Agreement (GEMAA)

Under the element of the Accord known as the GEMAA, “Proprietary Regulatory Property (PRP) Holders” – those companies that have developed proprietary regulatory information to support the authorizations for events globally — must provide access to the generic event at seed patent expiration. Three years before the last patent on the biotechnology event expires, PRP Holders are required to provide notice of patent expiration. At this point, the PRP Holder has a choice to:

• Independently maintain regulatory responsibility for the event at no cost to users of the generic event
• Seek to share regulatory responsibility; or
• Discontinue regulatory responsibility

Download the GEMAA Fact Sheet

Visit www.agaccord.org for more information.

Ag Accord
Beginning in 2010, the Biotechnology Industry Organization (BIO) and the American Seed Trade Association (ASTA) and their members engaged key stakeholders to address the opportunities and the challenges associated with patent expiration. The result of this dialogue was the development of a framework, called the Accord, a private-sector driven mechanism that provides for the transition of regulatory and stewardship responsibilities for biotechnology events, after patent expiration.

The International Seed Federation
The International Seed Federation represents the interests of the mainstream of the seed industry at a global level through interaction and dialogue with public and private institutions that have an impact on international seed trade.

US Plant Variety Protection Office
PVPO administers the Plant Variety Protection Act (PVPA), by issuing Certificates of Protection in a timely manner. The Act provides legal intellectual property rights protection to breeders of new varieties of plants which are sexually reproduced (by seed) or tuber-propagated.

US Patent and Trademark Office
The United States Patent and Trademark Office (USPTO) is the Federal agency for granting U.S. patents and registering trademarks.

UPOV
The mission of the International Union for the Protection of New Varieties of Plants is to provide and promote an effective system of plant variety protection, with the aim of encouraging the development of new varieties of plants, for the benefit of society.

• Why are intellectual property rights necessary for the seed industry?
• What types of intellectual property protection are available in the United States?
• What are the advantages and disadvantages of the different types of IP protection?
• Who determines what type of intellectual property protection is required?
• Can the public sector access patented seeds?
• Do intellectual property rights only benefit large companies with deep pockets?
• Why is it important for developing countries to adopt intellectual property laws?
• What are the risks of selling patented seed in countries that lack patent protection?
• What is ASTA’s position on mandatory licensing?
• What is ASTA doing to advance intellectual property rights protection?

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Why are intellectual property rights necessary for the seed industry?
Strong intellectual property protection allows developers of new plant varieties and improved seeds to be rewarded for their efforts. This promotes research and development, which ultimately enhances crop production and conservation of genetic resources. Research and development investments are generally long-term and require significant amounts of financial resources. In order to justify the size and scope of research spending necessary to develop new varieties, especially if genetically enhanced through modern techniques, companies must be able to recoup their original investment as well as make earnings on it. In addition, intellectual property protection underscores the phrase “good fences make good neighbors” by preventing duplication of research efforts. If breeders were all permitted to work with a small set of “popular” varieties, the germplasm base would be narrowed. Granting exclusive rights to specific varieties also gives a level of control to developers to enforce resistance management practices or other environmentally sound measures during their period of exclusivity.

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What types of intellectual property protection are available in the United States?
Several types of intellectual property protection are available in the United States that allow an inventor to match the form of protection with the value of the invention. One type of protection is offered by trade secret, whereby the inventor does not publicly disclose any information about the invention, but the invention is subject to being discovered and copied. Trade secrets may be enhanced with either license or use agreements, but still offer only limited intellectual property protection. More protection may be obtained through the 1994-amended Plant Variety Protection Act, which allows the breeder to control the commercial rights associated with a new variety for 20 years. Third parties can use the protected variety for research without infringement and grower-customers can save seed harvested from the protected variety for use on their own farm. Another form of intellectual property protection is utility patents. These patents allow the inventor to control both research and commercial uses of the invention as well as all forms of production and sales for 20 years. In addition, a special form of protection, a plant patent, may be obtained for asexually reproducing plants to protect against the unauthorized asexual reproduction of the protected variety for 20 years. Plant patents should not be confused with utility patents containing claims for plants.

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What are the advantages and disadvantages of the different types of IP protection?
Trade secrets can be powerful if the invention is not easily discoverable since they can last forever. However, if the invention is never disclosed, the public can never access it. The other forms of intellectual property rights protection guarantee that an invention ends up in the hands of the public in exchange for a limited period of exclusivity. This allows the inventor to obtain a return on the investment, encouraging further private research and development. Under a strong intellectual property rights system, a balance is struck between rewarding the innovator and giving the public access to new product or technology. Moreover, utility patents for plants and plant patents provide a mechanism to enforce resistance management practices and other forms of environmental stewardship through licensing agreements.

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Who determines what type of intellectual property protection is required?
In the United States, intellectual property protection, enforcement, and licensing for any invention is at the sole discretion of the inventor. The type of protection selected is generally directly related to the nature of the invention and perceived level of risk in the marketplace. For example, not all inventions related to plants meet the rigorous standards of utility patent laws, but they may meet the less restrictive requirements of Plant Variety Protection. Innovations are the private property of the inventor. ASTA believes that US seed companies have the right to protect their property to the fullest extent possible in order to make a return on their investments in research and development.

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Can the public sector access patented seeds?
Yes. Protection of intellectual property through utility patents and plant variety protection always puts the protected invention in the public domain since both are of limited duration. The public’s benefit for an exclusive period of protection for the inventor is public availability of the invention at the expiration of that period. To ensure that, seed deposits, or small samples, must be given to seed banks, which preserve the seed for public use upon expiration of protection. Samples from these deposits become available, subject to the rights of the patent owner, when the patent is granted and in some cases, even earlier. Compared to former practices, where new varieties could be held as trade secrets indefinitely and never disclosed to the public, the deposits made to obtain utility patents allow access to elite genetic pools not previously available.

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Do intellectual property rights only benefit large companies with deep pockets?
No. Intellectual property protection works for everyone for many purposes, not just for commercial companies making profits. Universities have an opportunity to benefit from their innovations by controlling the manner in which they are used and the terms under which they are made available through the Plant Variety Protection Act or patents. Since a fundamental mandate of all universities is to publish the results of their work, they cannot rely on trade secrets. Small companies and countries may also benefit from protection in licensing to larger companies and countries.

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Why is it important for developing countries to adopt intellectual property laws?
Developing nations need to establish and enforce intellectual property laws to improve the viability of their research and development activities and to gain access to innovations from other countries. Clearly, companies and universities spending money on seed research and development need to justify those expenses by being financially rewarded for their efforts. Hence, companies and universities are unwilling to go to the expense of transferring new technologies to countries that lack intellectual property protection. The result is that these countries tend to be denied access to much-needed new crop varieties and technologies. It is estimated that 80 percent of seed in developing countries is farmer-saved or supplied by the government, which provides limited numbers of old seed varieties and outdated technology.

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What are the risks of selling patented seed in countries that lack patent protection?
Black markets for patented seed may be created in countries lacking patent protection, resulting in unfair pricing differentials. Theft of new seeds and technologies can result in millions of dollars of lost revenue to investors, which discourages further investment. In addition, if countries allow mandatory licensing of intellectual property, its worth is devalued, thereby, decreasing future investment in seed research and development. Mandatory licensing allows those who did not contribute to the research to benefit from the successful projects without bearing the costs of any unsuccessful projects.

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What is ASTA’s position on mandatory licensing?
ASTA believes that inventors should be able to determine whether or not to license their innovations. Mandatory or compulsory licensing of intellectual property to companies or individuals not involved in the research devalues the worth of the innovation, thereby, discouraging further investment in seed research and development.

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What is ASTA doing to advance intellectual property rights protection?
ASTA is working with its members, farm groups, and international governments to advocate the establishment and enforcement of intellectual property laws worldwide. It participates in Congressional hearings on the topic and provides written comments on related policy matters.

1. One of the most pressing issues of our time is the development of crops that will enable farmers to feed the increasing world population in a sustainable fashion while protecting the environment. In the past, significant investments in crop breeding and development were primarily funded by the public sector. These investments took place through national and international research systems. For various reasons funding for these systems has decreased. There is, therefore, increasing reliance throughout the world upon crop breeding research and product development that is funded by the private sector. Strong intellectual property protection will encourage the investment needed to maintain continued crop improvement required to feed the world and add value to agriculture and society through new products.
2. In recent decades private companies have invested heavily in plant breeding to develop improved cultivars including hybrids. The advent of biotechnology, the entry of additional private companies into the agricultural arena and the subsequent development of crops that are modified with specific traits have contributed even more to agricultural productivity and genetic diversity. However, the improvement of crop germplasm remains an essential activity of plant breeding.
3. One of the key drivers of innovation within any industry is the capital that is invested in research. Research investments are generally long-term and many require significant amounts of capital resources and entail large risks. The level of investment in the seed industry is directly related to the effectiveness of the intellectual property protection available. In order to attract the size and scope of investment necessary to develop improved products, either varietal, hybrid, or from biotechnology, investors must have the opportunity to earn competitive returns on their original investment. Markets or countries that provide weak protection are unlikely to attract substantial investments for research and development.
4. Currently there are several ways that intellectual property resulting from such investment and risk taking can be protected by an inventor. One avenue is to rely on trade secret protection coupled with either licenses or use agreements. Unlike other forms of protection, as long as trade secrets are maintained, the intellectual property never enters the public domain.
5. A second way to protect intellectual property is through utility patents. Utility patents, which in most countries are granted for a term of 20 years from application, provide a broad and strong form of protection that in many ways is preferential to license or use agreements. As a result, utility patents generally encourage investments in all facets of plant breeding including germplasm, specific traits or genes and technologies more than any other form of intellectual property available to investors. However, plant varieties are ineligible for patent protection in countries other than the United States, Japan and Australia. In some countries, such as Mexico, utility patents are available, but patent examination has not been implemented for plant varieties.
6. Another approach to protection, limited to plant varieties, is through Plant Variety Protection. The current UPOV system as enacted in 1991 provides exclusive marketing rights for varieties, their harvested material, and, optionally, for products made directly from them. These rights extend for a fixed period of not less than 20 years from the date of the grant of the right. In some circumstances PVP also provides exceptions for experimental use by third parties for the purpose of plant breeding and new variety development. An optional exception for farmers permits them to save seed for propagating use on their own holdings within reasonable limits and subject to the safeguarding of the legitimate interests of the breeder.
7. Protection of intellectual property through utility patents and a UPOV-based Plant Breeders’ Rights (PBR) system ultimately puts the protected invention in the public domain because the protection of the invention is of limited duration. And, in the case of a utility patent, a public deposit is made; an important difference from the UPOV based PBR system, which puts the protected invention in the public domain for breeding use only if the protected invention is commercialized. Patent and PVP laws also provide a fair balance between the protection afforded and the disclosure to the public to stimulate further research in the field. However, open access to germplasm allowed under UPOV for breeding immediately upon commercialization has the effect of diminishing the developer’s opportunity to earn a competitive return on research investments.
8. ASTA believes that, worldwide, affordable intellectual property protection systems, including patents and PVP and other methods of protection including trade secret and contracts, should be available to allow new inventions to be protected in the most appropriate manner as determined by the inventor. The ASTA encourages voluntary licensing of protected intellectual property. However, any licensing should be at the sole discretion of the intellectual property owner consistent with the form of intellectual property associated with the germplasm.
9. ASTA further believes that advancements in genetic technologies such as markers, as well as the need to remain consistent with global agricultural needs, mandate that intellectual property protection systems in the United States and in other countries must be updated and improved if intellectual property protection systems are to continue to serve the public interest by attracting the research investment in plant breeding and biotechnology needed worldwide.
10. ASTA will work with and encourage others to provide global leadership in the improvement of intellectual property systems for the benefit of agricultural productivity and resource conservation. ASTA, in collaboration with other industry associations, will:
    1. Work to create affordable intellectual property systems including contracts, patents, trade secrets and PVP/PBR, for owners of intellectual property in all countries.
    2. Emphasize the importance and legitimacy of legally enforceable contractual terms in the protection and use of trade secrets including plant germplasm held as a trade secret.
    3. Maintain the effectiveness of the utility patent system.
    4. Strengthen the UPOV/PVP system by
       1. Providing compensation for and/or limits on saved seed in all countries.
       2. Making the EDV system more effective.
       3. Revising the breeders’ exemption to include a period of “x” years (where x varies by crop) for which the breeders’ exemption would not be available for PVP protected material.
       4. Moving all countries to the most current UPOV system and achieving consistency in administration and enforcement in all countries.
    5. Encourage all TRIPs signatory countries to meet their TRIPs obligations including:
       1. Protection of germplasm of plant varieties
       2. Patentability of other technologies
       3. Effective enforcement mechanisms
    6. Provide for global benefit sharing consistent with the International Treaty on Plant Genetic Resources for Food and Agriculture.
    7. Create a PCT like system to facilitate filing of PVP applications.

Approved by the Board of Directors on July 1, 2004