DLA Phillips Fox Names Tony Holland New Chief Executive05 December 2012
Previously partner at Mallesons Stephen Jaques.
31 March 2020
Gone are the days when plants are just plants. These days plants have taken on a whole new form and significance with their many varieties that can be distinguishable in substance, style, and uniform. There’s nothing wrong with an assortment of plants growing differently from one another, but what happens when growing can land you in hot water?
Such was the case late last year when Australian blueberry grower Mountain Blue Orchards sued farmer Jason Chellew for producing and selling Ridley 1111 blueberries, a protected berry variety known for its firm berries and notable for its dark blue color, without the company’s permission. The Federal Court of Australia ordered Chellew to pay A$290,000 (US$168,000) in compensatory damages, additional damages, interest and costs to the company.
In September 2010, Mountain Blue Orchards obtained plant breeders’ rights (PBR) for the Ridley 1111 blueberries. In March 2019, the company filed a claim before the Federal Court that a farmer near Grafton in New South Wales had obtained, grown, and sold Ridley 1111 berries without authorization, shortly after amendments were made to Australia’s Plant Breeder’s Rights Act 1994 (the PBR act). The company eventually won and the court ordered Chellew to extinguish the infringing plants and to pay Mountain Blue such amount which included compensatory damages, interest and litigation costs, and other additional damages.
The case of Mountain Blue Orchards v. Jason Richard Chellew & Anor had become so sensational that many ordinary Australians started asking questions about intellectual property and the extent to which you can sue – and grow and sell plants. Who owns the plants that are commercialized in Australia and in other parts of the world? Who is allowed to grow them? If you are a company which grows such produce, how can you prove that someone else has “copied” your variety, and what can you do to prove it?
Humphrey Foote, principal at Davies Collison Cave in Wellington, New Zealand, and a plant breeders’ rights specialist, explains further this relationship between companies and plant growers: “There are multiple different owners, ranging from individuals to large corporations, and everything in between,” he says. “The breeder of the variety is the original owner, but the breeder may be obligated (for example by way of an employment contract), or may choose, to assign his/her rights to another individual or entity. One entity may also assign the rights in a variety to another entity. The owner of a plant breeders’ rights-protected variety can therefore make money by selling his or her rights (assigning ownership to another) or by licensing another to grow the variety for commercial gain.”
He adds, “If a variety is protected by plant breeders’ rights, only the owner of the rights, or someone authorized by the owner of the rights, can grow the variety for commercial gain, without infringing the plant breeders’ rights. If the variety is not protected by plant breeders’ rights, or some other intellectual property right, anyone can grow the variety for commercial gain.”
In 2018, amendments were made to strengthen the rights of plant growers. According to Stuart D’Aloisio, a partner at Ashurst in Melbourne, the amendments provided the court with the power to award additional damages to holders of plant breeders’ rights for infringement of their rights. He explains further: “The court may award additional damages based on a number of factors, including the flagrancy of the infringement, the need to deter others, the conduct of the infringing party and the benefit accrued to the infringing party,” he says. “Prior to the amendments, the court could only award compensatory damages for the actual loss that a plant breeders’ rights holder suffered as a consequence of the infringement. The amendments align the plant breeders’ rights act with other Australian statutory regimes for intellectual property rights, including patents, trademarks and copyright, which also give the court the power to award additional damages for infringement.”
D’Aloisio adds that there were a number of other changes to the plant breeders’ rights act with these changes not relevant to the Mountain Blue Orchards case. He says that these changes included:
Strengthening plant breeders’ rights protection for “essentially derived varieties.” The amendments closed a loophole in the previous regime that allowed a person (Person B) to avoid infringement of a PBR-protected variety by making minor changes to the variety and using it, without filing a plant breeders’ rights application. Now, in that situation, the plant breeders’ rights holder of the original variety (Person A) can seek a declaration that Person B's variety is an “essentially derived variety.” In practice, this will mean that Person B cannot grow its variety without Person A’s consent.
Exclusive licenses. The amendments provide exclusive licensees of plant breeders’ rights with standing to bring an infringement proceeding against a third party. This amendment aligns the plant breeders’ rights act with other Australian statutory regimes for intellectual property rights.
Joint ownership by multiple parties. The amendments make it clear that the plant breeders’ rights act permits ownership of plant breeders’ rights by multiple parties.
Unjustified threats. The amendments introduced the right for persons who receive threats of plant breeders’ rights infringement to apply to the court for a declaration that the threats are unjustified. The threatened party may also seek damages for harm suffered as a result of the threats. This amendment aligns the plant breeders’ rights act with other Australian statutory regimes for intellectual property rights.
Foote further highlights these amendments: “The Federal Circuit Court may include an additional amount in an assessment of damages for an infringement of plant breeders’ rights, if the court considers it appropriate to do so having regard to: (a) the flagrancy of the infringement; and (b) the need to deter similar infringements of plant breeders’ rights; and (c) the conduct of the party that infringed the plant breeders’ rights that occurred after the act constituting the infringement or after that party was informed that it had allegedly infringed the plant breeders’ rights; and (d) any benefit shown to have accrued to that party because of the infringement; and (e) all other relevant matters.”
With this amendment, the court’s power to award additional damages is contingent on the court first awarding compensatory damages for infringement. However, the explanatory memorandum for the amendments recognizes that the court may award nominal compensatory damages in order to enliven the power to award additional damages. This is the approach taken by the court under other Australian statutory regimes for intellectual property rights. In Foote’s words, “the additional damages can be awarded by the Federal Court and Federal Circuit Court in certain instances, such as where an infringement is flagrant.”
But why was there a need to amend?
“The amendments provide stronger rights for enforcement of plant breeder’s rights in Australia,” says Foote. “This therefore improves the position of the right holder in protecting against unauthorized use of their registered varieties. This also brings the plant breeders’ rights act into line with other intellectual property regimes in Australia which also provide for additional damages.”
D’Aloisio said much the same thing. “Prior to the amendments to introduce additional damages, the court could only award compensatory damages for the actual loss that a plant breeders’ rights holder suffered as a result of the infringement,” he says. “Compensatory losses can be difficult to quantify, and even if they are quantifiable, the amount of compensation may be low if the plant breeders’ rights holder has not yet entered the market, or has done so with only limited reach. Under the old law, in such situations there was little damages incentive for plant breeders’ rights holders to enforce their rights, and little to deter third parties from infringing plant breeders’ rights. This had been flagged as an issue in Australia since at least 2010, when the Australian government’s Advisory Council on Intellectual Property conducted a review of enforcement of plant breeders’ rights in Australia. The new law, including the power to award additional damages, will provide a greater incentive for plant breeders’ rights holders to enforce their rights and a greater deterrent to infringing behavior.”
Because the plant breeders’ rights act has already taken its full effect in protecting the rights of plant breeders, both D’Aloisio and Foote believe that this can have lasting and positive impact on community growers – both companies and individuals.
“The amendments are significant because they provide a greater incentive for plant breeders’ rights holders to enforce their rights and a greater deterrent to infringing behavior, thereby strengthening the position of PBR holders and their commercial partners,” says D’Aloisio. “This has the potential to increase investment in research and development leading to new PBR-protected varieties.”
Foote adds: “The benefit of this amendment to PBR holders was demonstrated in Mountain Blue Orchards v. Chellew & Anor. The amendments to the plant breeders’ rights act, and in this case, are significant, and provide a strong disincentive for growers to propagate PBR-protected varieties without authorization from the plant breeders’ rights holder.”
These new amendments, meanwhile, can benefit produce growers and individual when by strengthening the position of plant breeders’ rights holders and their commercial partners, the amendments have the potential to increase investment in research and development leading to new PBR-protected varieties. New varieties may potentially boost the productivity of fruit and vegetable growers, as well as producers of crops and other plant materials. This will in turn benefit consumers.
“The plant breeders’ rights system is designed to provide incentive to breeders to produce new varieties, because it allows them a period of exclusivity in marketing their PBR-protected varieties,” says Foote. “Thus, the amended law and the successful enforcement in the case discussed above, should reassure users of the plant breeders’ rights system. This should encourage further innovation in the breeding of new improved varieties, which should in turn benefit both growers and consumers. The amendment and case law should also encourage breeders to seek plant breeders’ rights protection for their innovative varieties accordingly.”
As for the challenges with regards to this amended right, D’Aloisio says that this is not a challenge associated with the amendments themselves, but one of the major difficulties associated with the enforcement of plant breeders’ rights rights is collecting evidence to prove infringement.
“Infringement of plant breeders’ rights most often occurs on private property without the knowledge of the plant breeders’ rights holder,” he says. “There are court procedures that the plant breeders’ rights holder can invoke to obtain evidence from an alleged infringer, but the procedures are expensive and have onerous requirements. The plant breeders’ rights holder may be able to rely upon DNA testing (as occurred in the Mountain Blue Orchards case) but this may not be conclusive. The amendments did not address these issues.”
Foote, meanwhile, says that challenges for the plant breeders’ rights holder in an infringement action seeking to enforce the amended plant breeders’ rights act include convincing the court that infringement has taken place, and establishing the value of damages suffered by the plant breeders’ rights holder.
“In addition, a right holder would need sufficient funds to take action in the first place,” he says. “However, the result of the case discussed above should reassure plant breeders’ rights holders that such rights are enforceable, and encourage them to take action against infringers.”
Foote says that several Asian countries, including China, are already seeking to strengthen protection provided by their plant breeders’ rights regimes for new varieties. “It is not clear whether this Australian amendment and case law will affect the process for strengthening rights in Asian countries,” he says.
D’Aloisio says that only a very limited number of PBR infringement cases have been brought in Australia, with the Mountain Blue Orchards case being the only one – so far – to be taken into court. He further states that now with the court having the power to award additional damages, there is a greater incentive for plant breeders’ rights holders to take on the cost and risk of litigation.
“In light of the amendments and the court’s recent decision in Mountain Blue Orchards, it will not be surprising if plant breeders’ rights holders initiate more infringement cases,” he says. “But we expect to see those who develop new plant varieties and obtain plant breeders’ rights protection being more active at enforcing their rights. We expect to see fruit and vegetable growers being more mindful of plant breeders’ rights infringement issues and more vigilant in ensuring any PBR-protected varieties they grow are licensed by the plant breeders’ rights holder.”
Any tips for plant growers? “Fruit and vegetable growers should be mindful of plant breeders’ rights infringement issues, and ensure that any PBR-protected varieties they grow are licensed by the plant breeders’ rights holder,” D’Aloisio says.
For those who find themselves embroiled in such a case, Foote says: “If you are the owner of a PBR-protected variety, you can sue someone who is growing the variety for commercial gain without your authorization. Such unauthorized use would be infringement of the plant breeders’ rights. To prove the variety someone else is growing is your PBR-protected variety, you would need to compare their variety to your variety and show that their variety is indistinguishable from your PBR-protected variety. In addition to morphological and physiological comparison, DNA fingerprinting can be useful to support your case that their variety is the same as your protected variety. To escape from infringement, the other party would need to demonstrate either that: that they were authorized to grow the variety, or that their variety was not the same as you PBR-protected variety.”
Previously partner at Mallesons Stephen Jaques.
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