Enforcement of PVR in the Ornamental Sector
The Growers Point of View
Balázs Hamar
AIPH (International Association of Horticultural Producers)
Hungarian Chamber of Agriculture, Budapest
1. Introduction
This paper is fully based on the AIPH’s growers’ point of view on plant breeders’ rights, which was accepted in 2005 by the memberorganisations, and was written by Jan Hassing the chairman and Mia Buma the secretary of the AIPH Committee for Novelty Protection. The AIPH wants to stand up for the benefits of growers, so it decided to write a growers point of view to be sent to UPOV and other relevant organisations to inform them about AIPH’s standpoint to be adopted and that the authorities should take that into account when developing any new convention or regulation. The AIPH Committee for Novelty Protection wants to point out that AIPH has to fully endorse the UPOV plant breeders' right system and that the system plays a positive role in relations between breeders and growers.
2. Growers point of view: basis points of departure
The plant breeders' right is, in a nutshell, the legal codification of the rules that have been agreed to reward the various links that have exerted efforts in the plant and cut flower production chain in order to enable a high quality product ultimately to reach the market. Each link in the chain bears equal responsibility for the ultimate market value realised for the product at the end of the chain since in the long term each link ultimately has the most to gain. This means that the breeder needs to ensure that the propagation material he sells to his grower is of good quality. It can be argued that a great responsibility rests on the breeder because the quality of the propagation material is a key to the successful processing of the product in all the remaining links in the chain of production. In plant production, what counts are the interests of the entire chain and not the individual interest of specific links within the chain. Every one individual depends on all the others to ensure delivery of a good end product and this fact underpins the way people need to work together.
However, the breeders regularly behave as if the plant breeders' rights were developed for their benefits exclusively. It is true that breeders do deserve some kind of recompense for the efforts made developing new varieties. Plant breeders' rights are one way of achieving this via the payment of royalties by those purchasing quantities of propagation material supplied. Once these royalties have been paid, the breeder's role is complete and he has been rewarded for his efforts. The rights regarding the further production and marketing then lie in the hands of the grower and subsequently the dealers and retailers. But in practice breeders seem intent on pushing their rights even farther by including clauses in their delivery contracts stipulating how growers should cultivate and market the product. Their influence when lobbying for plant breeders' rights also betrays a desire on the part of breeders to broaden the scope of plant breeders' rights in favour of breeders and in order to better the position of breeders.
However, the plants breeders' right does not exist solely in order to protect the interests of the breeder, but also to ensure that the growers' interests are safeguarded. This is why growers also need to be involved in the development of plant breeders' rights. The AIPH, the international body representing the interests of growers, aims to campaign to this end and ensure all involved are fully aware of the current standpoint adopted by growers.
Growers often experience (not always) that it is in the interest of the breeder to sell as much propagation material as possible. Because the recompense for or return on the propagation material depends on how much they sell, some breeders do not hesitate to sell it off for dump prices. This is made even more likely by the fact that the risk of failed propagation or cultivation of any product dumped in this way lies with the propagator or grower and not with the breeder. The breeder therefore has little incentive to vouch for the quality of the propagation material. Growers in the floricultural sector have been subject to this downside of the system for years now. They are the ones that bear the brunt if cultivation fails and this is especially true in the case of certain flower bulbs where it takes many years until the end product can be harvested. In principle, the life cycle of any floricultural product is short because of the constant pressure in the market for exclusivity and new trends. This means that the damages incurred with products requiring a production period in excess of one year are all the greater.
AIPH is of the opinion that the launching of novelties must be decided by market forces in the form of supply and demand. By this, a realistic price can be obtained in proportion to supply, demand, quality, news value etc. Beyond this, there is, however, need for ensuring a form of trial/test of novelties under different climatic conditions. AIPH is in this connection of the opinion that such tests have to take place in a constructive correlation between growers and breeders. Such a positive partnership can ensure that each novelty is tested under different climatic conditions and by this it can give the growers a better basis for decision of investment in novelties. If such positive partnerships not can be established, there will as an alternative be a need of more formalistic and bureaucratic solutions with mutual restrictions.
3. AIPH pleads for strong and balanced plant breeders rights (PBR).
AIPH pleads for a clear use of the several predications used in the business such as plant breeders rights and trade marks. The verifiable (registered) breeder’s right name has always to be mentioned on (or with) the product in case of selling or trading. AIPH is in favor of mandating a logical order in the use of the several variety indications for more clarity in the business of protected varieties (for example the use of variety names and trademarks in pricelists, databanks, catalogues, on exhibitions etc.). AIPH suggests the following: First the complete botanical identification, then (if applicable) the variety name (between single quotation marks in accordance to the International Code, Article17.7) and finally (if chosen) the trademark, upon which to make it clear, the sign â could be attributed. So for example: Rosa L. ‘Champion’ Perfection ®. (By the way: in the USA the sign TM is used most of the time).
However AIPH notices the general problem that there is a lack of enforcement to control and to maintain the right’s of the PBR holder. This problem is the main reason for the PBR holder to be his own controller. The breeders find additional solutions like the use of trademarks to limit the selling and trade of a variety and to try to monopolize the trade in protected product.
AIPH underlines therefore that the scope of PBR however is restricted to propagating material and not to the final product, besides the nevertheless-condition as formulated in article 14, sub 2 of the UPOV-Convention 1991. In this article the principle is laid down that the protection is only extended to harvested material if the material was obtained through the unauthorized use of the variety constituents of the protected variety and unless the holder has had reasonable opportunity to exercise his right in relation to the said variety constituents. The whole UPOV Convention, the European PBR system and the national legislations are based on the principle that the scope of PBR however is restricted to propagating material and not to the final product.AIPH’s opinion is that as soon as PBR activities go into regulation to control and to limit thetrade chain, this is not allowed.
Trademarks
Concerning the use of trademarks AIPH wants to notice that such a mark is a sign todistinguish the product with regard to its origin and its producer. The trademark enables theowner of it to distinguish his own product from the products of another producer. When thenegotiations cover a variety that is only protected by a trademark this means that there isno protection of a breeders’ right. Such a variety can be multiplied and traded withoutlicense contract unless the trademark is not used in the further commercialization. Thetrademark says nothing about the product (variety) itself. AIPH states that it is important inselling and trading to identify cultivars by using the official registered variety name. Such isclear and avoids confusion and disappointment. Once a variety name is registered by PBRor by an international registration authority (for example several organizations underauspices of ISHS) it has to be considered as the name that indicates the variety for theperiod in which the variety is protected by plant breeder’s rights, and also after the PBRprotection has ended.
AIPH advises the grower (licensee) to request the breeder (licensor) to inform him aboutwhich trademark rights and plant breeders’ rights he has in the different countries. It wouldbe a help if a grower is aware of the rights which the breeder (with whom he is doingbusiness) has. Also to receive the information from which date the trademark- or PBRregistrationexists would be useful. AIPH pleads for the realisation of more transparencyabout the several rights in ornamental plant cultivation.
Coded denominations
An increasing number of breeders in horticulture are using "coded" denominations.CIOPORA mentions as an advantage of this that risks of a prior use are far more remotesince there can be practically infinite combinations of letters and/or syllables and/or figures.This enables the applicant to register his denomination normally at the same time as hefiles the application and thus avoid the costly procedure.AIPH understands the attraction for breeders of using codes in the above circumstances.But from a grower's point of view it is clear that the use of codes does not work forcommercial reasons. In horticulture it is very important that the grower can market hisproduct in an attractive way. In this perspective the use of codes works effectively neitherfor retailers nor for consumers. Codes make the product unrecognisable for growers,retailers and consumers.
More about variety indication and denomination
Regarding the use of variety denominations, Article 17 (1.) of Council regulation (EC) n’2100/94 states that ‘any person who, within the territory of the Community, offers ordisposes of to others for commercial purposes variety constituents of a protected varietycovered by the provisions of Article 13 (5), must use the variety denomination designatedpursuant to Article 63; (…)’. This article is also applicable when the holder applies a trademark on the variety in its marketing of the product. AIPH is very much opposed the practiceof some breeders giving the trade marks a much more important appearance in publicityand trade than the plant variety denomination.
In this respect AIPH mentions the trend or development to use trademarks by breeders forthe purpose of making the product recognisable further on in the chain. But in many casesspecific products are mixed up under one and the same trademark. This could be stated asimproper use of the trademarks and AIPH is not in favour of this. And in general AIPH isagainst combination of Plant Breeders' Rights and trademarks. The reason is that it leads tomaking the market less transparent and extends the protection to a higher level than is theintention in the individual system. In this respect AIPH refers to the logical order in the useof several variety indications which is already mentioned in paragraph 3 of this paper.
Contract law
The contract between licensor (plant breeders’ right holder) and licensee is covered bycontract law, which means parties are free to agree on the conditions. Only a fewexceptions exist, like conditions which are against the law or which are contrary to goodmanners. It is possible that the licensee (most of the times the grower) accepts far-reachingrestrictions because of commercial reasons and so agrees with a license agreement inwhich acts are excluded to which he has actually right to on the basis of the plant breedersright law (see article 14 of the UPOV Convention 1991).
AIPH made a checklist for breeder and grower to make a license agreement for the commercial exploitation of plant varieties. Any breeder and any grower who wants to make a license agreement for the commercial exploitation of plant varieties, which enjoy protection by national or international variety rights, can use this checklist. It can be downloaded from the AIPH website: