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Wednesday, 13 March 2002
Page: 603


Senator PATTERSON (Minister for Health and Ageing) (9:31 AM) —I table the explanatory memorandum and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The purpose of the proposed amendments to the Plant Breeder's Rights Act 1994 (the Act) is to

· clarify the rights of plant breeders in certain circumstances where restrictions are imposed

· enhance the access of breeders to the Plant Breeder's Rights (PBR) scheme

· improve the administration of the Act and of the PBR scheme.

I take this opportunity to flag the simple fact that plants are indispensable to our daily lives.

Pharmaceuticals, fruit and vegetables, insecticides, industrial starch, field crops, essential oils, flowers, dyes, wine/beer, textiles, livestock forage, edible oils, timber, glues, rope, ethanol, varnish, paper—an endless list testifies to the importance of plant life to human life.

Of course, the benefits that derive from new plant varieties do not simply fall into our hands. They are the result of significant intellectual effort and the skilful application of knowledge.

Australia is fortunate to have innovative people skilled in the breeding of new plant varieties— because innovative varieties are essential to meet Australian and world demands providing, inter alia

· the building blocks for a diverse range of industries

· competitive, high quality food and fibre products to meet increasing world demand

· practical solutions to health and environmental concerns.

The Act is based on Australia's membership of the International Convention for the Protection of New Varieties of Plants (UPOV) 1991, a United Nations multilateral agreement establishing an internationally harmonised regime for exclusive intellectual property grants relating to new plant varieties. The UPOV system, built on uniform, clearly defined principles, encourages investment, innovation, multiplication and release of new plant varieties in, and between, member countries.

Australia's PBR scheme is a significant success story. One new variety is registered each day, with over twenty new major export crop varieties registered each year. PBR also stimulates a steady flow of new varieties from overseas bringing investment and technology—approximately 60% of all applications for registration are from overseas.

Australia's achievements in plant breeding are significant in their own right.

We need look no further than CSIRO which is leading the world with its seed retaining phalarises, high yielding, rust resistant winter wheats and starch-enhanced barleys. Similarly, the export flower industry is based on our unique native varieties, so well displayed in the 2000 Olympic bouquets.

However, in this competitive world, others are also capitalising on our plants. If we are to make the most of our unique mega-diverse flora, we have to encourage plant breeding. The PBR scheme provides such encouragement, directly promoting innovation by establishing a legal intellectual property right in a new plant variety.

The certainty of this legal ownership and the opportunity to commercialise the innovation stimulate the intellectual effort, private investment and technology transfer that Australia requires. The PBR owner is provided with opportunity for reward, subject to certain provisions which safeguard the public interest.

Under the Act, PBR is the right to disallow others from acts of production, reproduction, conditioning, offering for sale, sale, import, export, and stocking in relation to the above of propagating material of the plant variety.

It is not the right specifically to carry out those acts. This is because PBR is a form of patent legislation, as confirmed by a recent High Court ruling. Implicitly, PBR coexists with other laws of the land and those laws, may, for example, be capable of regulating PBR commercialisation activities. For instance, competition policy legislation may regulate PBR related commercial activities, or state legislation may regulate the sale and marketing of varieties. In other words, there are a number of potential public interest influences affecting the exercise of PBR.

All the proposed amendments are consistent with Australia's membership of UPOV and have wide industry and community support.

This Bill includes significant clarification to section 18 of the Act.

Section 18 was designed to protect public interest concerns regarding limitations that might be placed on the use of the propagating material. For example, reflecting the concern that the PBR owner should not be able to prevent, say, the making of bread or the brewing of beer from legitimately purchased grain.

However, it is not intended to deny the holder of PBR the opportunity to exercise their right of exclusion regarding normal commercial activities, including, for example, the first point of sale in the trading of food commodities.

Section 18 is misinterpreted by some parties who see the provision as a means of avoiding the PBR owner's right of disallowance in normal commercial circumstances. As a consequence, some 90% of PBR protected grain varieties in Australia pass through the commercial system without the PBR breeder having any opportunity to seek reward for their innovation.

The inequity of this is obvious. Moreover, it is a clear disincentive to investment in plant breeding and is a likely explanation why innovation in plant breeding in the field crops sector is lagging that of other sectors.

By deleting section 18 of the Act we remove the possibility of misinterpretation, promote investment in plant innovation and better align the Act with UPOV 1991. Public interest concerns related to preventing limitations on how propagating material may be used are picked up under the amended section 49 which empowers the Minister to set conditions relating to existing and proposed PBR grants.

A further amendment, to be inserted as new section 18, allows for certain public interest restrictions to be placed on the exercise of PBR. The amendment provides that when other laws of the land restrict the normal exercise of PBR, and when such legislation authorises a person to do an act that would normally be subject to the PBR owner's right of disallowance, `equitable remuneration' must be paid. For example, the amendment will ensure that statutory marketing authorities are able to exercise their legally enforceable rights regarding exports and that PBR owners will receive remuneration if their rights are restricted as a consequence. This restriction is entirely consistent with public interest considerations and with international best practice as exemplified in the international treaty on these matters, UPOV 1991.

In summary, section 18 amendments clarify that the PBR owner has the opportunity to exercise their right of disallowance in normal circumstances. They confirm that coexisting legislation, implicitly in the public interest, may modify the exercise of PBR, and, in certain circumstances, the breeder must be remunerated. They reaffirm the intent of the legislation; promote greater harmony with the UPOV international intellectual property system; provide more certainty for our international trading partners; and, thereby, facilitate the inflow of plant variety investment and technology transfer.

The remaining amendments are administrative. They are diverse and include:

· providing for equity between domestic and imported varieties in the use of synonyms and making the unauthorised use of a synonym an infringement;

· clarifying the circumstances in which the breeder's right is exhausted;

· providing discretion to cancel provisional protection in certain circumstances;

· correcting inequities regarding the payment of fees;

· further protecting commercially sensitive information;

· compelling the reasonable provision of materials for test growings;

· clarifying the priority date for lodgement of application;

· making explicit the grantee right to initiate infringement actions;

· extending Plant Breeder's Rights Advisory Committee appointments from two to three years;

· amending and making cross-references, correcting transcription errors, various clarifications and associated simplification of language.

I will not comment on each of these amendments. However, let me take as an example, the amendment that facilitates experimentation. I refer to the proposal to exempt on-farm testing and research as activities that could threaten the ability to register new varieties.

Researchers must enlist the help of farmers to test new varieties and products in normal farming situations. This practice is essential if the true potential of the innovation is to be realistically evaluated.

While in no way offsetting their contribution, farmers expect, in many cases, to harvest the residual material and to dispose of it in the market place along with their normal commercial product.

Under PBR this could qualify as a `sale' of the variety and start the `one-year' time clock within which a PBR application must be lodged. However, many varieties take more than one year of testing. Some take 2, 3, or more years before a decision can be made to register and the new variety can be released.

Activity enabling the registration of new varieties in the circumstances that I have outlined should be recognised as valid, and is consistent with what is envisaged under UPOV.

Therefore, the Government proposes to recognise extended periods for on-farm and experimental testing as valid pre-registration activities.

In conclusion, these amendments will clarify certain aspects of the legislation, enhance the access of breeders to the PBR scheme and improve its administration. The amendments underpin the broader initiatives announced by the Prime Minister in the Backing Australia's Ability package. They will further improve the environment for increased plant innovation and investment in Australia and for our exports of IP intensive products and services.

Ordered that further consideration of the second reading of this bill be adjourned to the first day of the next period of sittings, in accordance with standing order 111.