In recent years, research and development in Alberta’s agricultural sector has led to the generation of new plant and seed varieties with improved agronomic traits that make these varieties a competitive product in the marketplace. The development of new seed varieties with resilient traits are of particular importance in the face of unpredictable weather and a changing climate. This increase in the number of seed varieties has led to a corresponding need for increased protection of the intellectual property rights associated with these varieties. As such, the number of plant variety protection (PVP) certificates being issued has increased.

A PVP certificate gives the holder of a plant variety certain legal protection in the marketplace. An owner of a PVP certificate has the right to exclude others from marketing and selling that particular variety and to manage the use of that variety by other breeders. PVP certificates may also be referred to as plant breeders’ rights (PBR) certificates.

The Plant Breeders’ Rights Act, SC 1990, c 20 (the Act), is the main framework for governance of intellectual property rights within new plant varieties in Canada. These intellectual property rights allow plant breeders to protect their new varieties in the same way an inventor protects a new invention through obtaining a patent. The Act provides individuals, companies and institutions with a mechanism to receive royalties when they provide access to seed within the marketplace. Farmers must pay a royalty when purchasing PBR-protected varieties of seed, also known as “certified seed.” The Act also gives the plant breeder the exclusive right to propagate and distribute their certified seed. This means that holders of the protected plant variety must authorize the sale of the certified seed.

In order to qualify for protection under section 4 of the Act, the plant must be: (1) a new variety, (2) clearly distinguishable, (3) stable in its essential characteristics, and (4) a sufficiently homogenous variety. A “sufficiently homogenous variety” is a variety for which, in the event of sexual reproduction or vegetative propagation in a substantial quantity, any variations in its characteristics are predictable, capable of being described and commercially acceptable. 

The grant of plant breeder’s rights lasts for a term of 20 years, although trees, vines and other exceptional categories contained in the Act’s regulations are entitled to receive protection for 25 years. During the term of protection, the holder of the PBR-protected variety may enjoy the rights set out in section 5 of the Act, which include, for example:

• The right to produce and reproduce propagating material of the variety;
• The right to sell propagating material of the variety;
• The right to export or import propagating material of the variety; and
• The right to make repeated use of propagating material of the variety to commercially produce another plant variety.

Case Study

Dentons Canada LLP was recently contacted by a person (John Doe or John) who faced a significant challenge with illegal seed production.

John had obtained the exclusive license to produce, market, and distribute seeds from a new plant variety (the Variety), in Canada and the United States. An exclusive license refers to a person’s right to make use of intellectual property (e.g., the Variety), and the inability of a licensor or any third party to do the same without authorization from that person.

As part of the license, John was entitled to collect a user fee from third parties that he authorized to use the seed. Further, as part of this license, John owed a royalty to the original licensor (i.e., the “head licensor”) per kilogram of the seed sold.

John legally purchased, planted, and sold the seed, and then paid the appropriate royalties to the head licensor. However, John discovered a significant number of seeds from the Variety had been planted without John’s required authorization. He suspected a third party (or third parties) had illegally obtained some seed from fields where the Variety was legally growing and had harvested the seed to plant the Variety in other locations or to sell the seed to other parties. However, John did not know who this third party was, because the third party had not legally obtained the Variety from him. This type of thievery (called brown bagging) is an unfortunate reality of the farming world.

Many farmers purchase crop insurance, e.g., from the Agriculture Financial Services Corporation (AFSC), to protect their crops against events of bad weather. In order to purchase the crop insurance, the farmer must certify to AFSC what plant variety he or she is growing. AFSC would thus maintain a list of who is growing what variety and John hoped to cross-reference that list against a list of sales he had made. If the farmer wasn’t on John’s sales list, it would suggest the farmer had obtained the Variety illegally, which should void the relevant crop insurance. However, there were privacy issues whereby AFSC was only prepared to provide John with a redacted list, which would not have been useful for this exercise in identity.

The brown bagging of seeds from the Variety not only undermined John’s and the head licensor’s intellectual property rights, but also deprived them of user fees or royalty payments to which they were entitled. John’s inability to trace the source of the illegal seeds made it difficult to take action against those responsible for the brown bagging of the seeds, and to recoup his investment.

This brown bagging resulted in the infringement of plant breeder’s rights, likely diluted the quality of the Variety and it may have also resulted in insurance fraud (if the third parties obtained crop insurance on seeds that were obtained illegally).

Conclusion

Seed regulation and royalty payments are important for incentivizing innovation in plant breeding. Plant breeders invest significant time, effort, and resources into developing new plant varieties, and the Act is in place to protect their intellectual property rights and the intellectual property rights of others.

It is important for farmers and other stakeholders in the agricultural industry to be aware of the provisions of the Act and ensure they are only using seeds from authorized sources. By respecting plant breeders’ rights and paying any necessary royalties to the appropriate parties, stakeholders can support continued innovation in plant breeding and can positively contribute to Alberta’s agricultural sector.

For more information on this topic, please contact the authors, Heather Barnhouse, KC, Jaclin Cassios or Christina Basler.