Canada: Updating Plant Breeders’ Rights, Part IV – The Farmer’s Privilege and How Bill C-18 Would Affect the Right to Save Seed

Last Updated: November 26 2014
Article by David Gerecke and Aimee Schalles

The Series So Far

This is our fourth post on Bill C-18 and its and its proposed amendments to the Plant Breeders' Rights Act (PBRA)

In our first post, we set out the context of development of seed varieties in Canada.

In our second post, we examined the current PBRA and the rights conferred on a breeder by obtaining registration.

In our third post, we began a detailed examination of Bill C-18 and the way it would alter the scope of rights afforded to the owner of a registered variety.

The Farmer's Privilege – Current Practice and Policy Considerations

In this post, we will discuss how the exclusive rights afforded to plant breeders in Bill C-18 may be restricted in certain circumstances to permit farmers to save seeds of registered varieties and use them to grow subsequent crops, without the need for a license from the plant breeder. This exception to the exclusive rights of plant breeders is commonly known as "farmer's privilege".   

Traditionally, the practice in Canada has been that, unless precluded by contract, farmers would have the right to save seed from a crop of a registered variety, and replant that seed, and to repeat that process indefinitely.  This practice has not been governed by regulation: the current version of the PBRA is silent with respect to whether farmers are entitled to save seeds of registered varieties in light of the exclusive rights afforded to plant breeders. This is likely because UPOV 78, the international convention on plant breeders' rights that the current version of the Act seeks to implement, is also silent when it comes to the conflict between the ancient practice of seed saving and modern intellectual property rights. 

Nonetheless, farmers who wish to purchase proprietary seed for planting are often required to agree to contractual restrictions on their ability to save and re-plant seed from the crops that they grow. As well, many crop types are now dominated by hybrid varieties which, by nature, cannot simply be replanted.  As a result, the right to save seed is more limited than a simple description of the right to save and replant seed might suggest.

In considering the scope of the farmer's privilege, and how broad the scope should be, one must consider competing interests.  On the one hand, it has been a traditional right of farmers in Canada to be able to save seed and replant it. The National Farmers Union and others have expressed concern about the increased costs that can be passed along to producers if seed companies have the power to impose royalty obligations on generations of seed that they did not sell.

On the other hand, the seed industry (and many farmers and farmer groups) recognize that without protection of intellectual property, there is little incentive for plant breeders to invest in creating improved plant varieties. Improvements can include better nutritional value, disease, herbicide and pest resistance, better climate tolerance, shorter growing seasons and other variations that lead to better performance or more specialized (and higher value) end-uses.  Plant breeding is time consuming and expensive, as is the process of obtaining regulatory approval for new plant varieties.

How Would Bill C-18 Affect the Farmer's Privilege?

The "Act of the International Union for the Protection of New Varieties of Plants", which was enacted in 1991 and is commonly known as UPOV 91, is the international convention which Bill C-18 seeks to implement through amendments to PBRA.  UPOV 91 gives contracting nations the option to restrict plant breeders' rights in order to allow farmers to exercise farmer's privilege. UPOV 91 is clear, however, that farmer's privilege should be subject to reasonable limits and that efforts should be made to safeguard the legitimate interests of breeders.

Canada has decided to incorporate farmer's privilege into its regulatory scheme for registered seed varieties. The relevant provision proposed in Bill C-18 is as follows:

5.3 (2) The rights [to exclusively produce and reproduce propagating material of a registered variety and to exclusively condition propagating material for the purpose of propagating a registered variety] do not apply to harvested material of the plant variety that is grown by a farmer on the farmer's holdings and used by the farmer on those holdings for the sole purpose of propagation of the plant variety.

On the face of the provision, there are several criteria necessary for farmers' privilege to apply. Firstly, the privilege applies only to harvested material from crops grown by a farmer on his or her holdings and by that farmer on their own holdings to grow another crop. The privilege cannot be acquired from nor transferred to another person through gift or sale. A "farmer's holdings" presumably includes both leased land and owned land, although the provision is unclear in this regard as "holdings" is not defined. It is particularly unclear whether farmer's privilege may be asserted with respect to crops grown under a "crop share" leasing arrangements.

Secondly, the privilege, and the consequent exception to plant breeders' exclusive rights that would normally exist, applies only if the harvested material saved is used to grow a second generation crop, and no other purpose. The only exclusive plant breeder rights that are displaced by the privilege are the rights to produce propagating material and the right to condition for the purpose of producing propagating material.

Essentially, the farmer's privilege provision allows farmers to:

  • purchase and plant seed of a registered variety under license from the plant breeder;
  • harvest propagating material from the first generation crop grown from registered seed; and then:
    • condition that harvested propagating material so that it may be planted; and
    • plant the harvested propagating material to grow a second generation crop (and store the propagating material in the meantime),

without license or authorization from the plant breeder, who ordinarily would have the exclusive right to produce, reproduce, and condition propagating material of their registered varieties.

It is important to note that the farmer's privilege does not grant any exceptions to a plant breeder's right with respect to harvested materials from the second generation crop. Plant breeders may, and almost certainly will, attempt to enforce their exclusive rights against farmers selling second generation harvested material grown from "farmer's privilege" propagating material. Plant breeders will likely demand a royalty from the farmer on the second generation harvested material.

Of course, plant breeders may avoid the hassle of dealing with enforcing their rights against crops grown from farmer's privileged propagating material by prohibiting farmers from saving propagating material in the first place. Plant breeders may (and frequently do) include such a term in the initial licensing contract. Another way of contractually preventing farmers from saving propagating material is to require them to sell 100% of the materials harvested from registered seed back to the plant breeder under what is commonly known as a "closed loop" contract.  This is already a common practice for certain varieties used to make specialized products, such as specialized canola used to make high Omega-3 canola oil.

The Big Unknown – What Will the Regulations Say?

It is impossible to know at this stage precisely what the farmer's privilege scheme in Canada will entail. Pursuant to Bill C-18, the Governor in Council (cabinet) would be empowered to make regulations respecting:

  • the classes of farmers or plant varieties to which farmer's privilege would not apply; and
  • the use of harvested material with respect to farmer's privilege, including any circumstances in which that use is restricted or prohibited and any conditions to which that use is subject.

Thus, any regulations that modify the farmer's privilege are likely to do so in a manner that restricts its availability. Draft regulations have not yet been produced, although it may be likely that they will follow the guidelines set out by UPOV council. UPOV suggests that the size of a farmer's holding is a relevant consideration in establishing reasonable limits and safeguarding breeders' rights1. It is conceivable that certain farmers – perhaps those with large holdings or high profits – will be altogether prevented from exercising farmer's privilege.

UPOV cautions that farmer's privilege should not be universal, and that it may be inappropriate to extend farmer's privilege to certain agricultural or horticultural sectors – such as fruits, vegetables, or ornamentals – where farmers have not traditionally saved harvested materials2.  Rather, UPOV suggests that farmer's privilege should apply only to crops where farmers have historically saved seeds for the purpose of propagation, such as cereal crops like wheat.

Cabinet may also place restrictions on the amount of harvested material which may be saved for future propagating use or the frequency in which this may be done. It is also possible that the regulations may establish a specific royalty scheme as a condition to the exercise of farmer's privilege – it is simply too early to tell.

It will be interesting to see what form the regulations take. They are certain to generate controversy, no matter their contents.

Update on Status of the Bill

Bill C-18 has proceeded through:

  • First Reading: December 9, 2013
  • Second Reading and Referral to Committee: June 17, 2014
  • Presentation of Committee Report (Standing Committee on Agriculture and Agri-Food): November 5, 2014
  • Concurrence at Report Stage (November 19, 2014)

Status of the Bill can be followed here.

The next step would be third reading.  When a bill passes through third reading, it is considered to be passed by the House of Commons.  The subsequent steps would be consideration and passage by the Senate, passage of any Senate amendments by the House, Royal Assent and coming into force (on a date selected by Cabinet, which would not occur until after the relevant Regulations are finalized).  Because Bill C-18 is comprised of amendments to many existing Acts, it likely would not all come into force at the same time; rather, when the government is ready to bring amendments to a particular Act into force, it would proclaim that portion of Bill C-18 as it has been passed.

Unless there are significant amendments, this concludes our planned examination of the proposed amendments to the PBRA. We will post updates as the Bill continues to progress. If there are aspects of the proposed amendments not covered in this series that readers would like us to examine further, please contact the writers and we would be pleased to consider further posts.

Footnotes

1. International Union for the Protection of New Varieties of Plants, "Guidance for the Preparation of Laws based on the 1991 Act of the UPOV Convention", at page 73.

2. Page 72.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
David Gerecke
Aimee Schalles
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions