LESSER, William H

Abstract: Based on the averages, there is a good chance that your country has decided to fulfill its TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement commitments by selecting an “effective sui generis system” over patents for plants, something more commonly known as plant breeders’ rights. This chapter attempts to explain what plant breeders’ rights are by describing the organization and function of the plant breeders’ rights system. Covering the objectives, scope, protection requirements, and examination provisions, the chapter compares the plant breeders’ rights system with the patent system and attempts to clarify specific puzzling issues. These include concerns that the latest UPOV Act does not address farmer seed savings (the choice is left to individual countries, with virtually all countries choosing to allow seed saving). Plant breeders’ rights are less puzzling once the intent and structure of the system are understood. The system is, in fact, one with very specific, if narrow, objectives.

Abstract: In this chapter, the revenue consequences of varying collection fees and royalties with regard to germplasm prospecting contracts are demonstrated. Principal factors are the uncertainty of finding marketable products and the value of these products. Negotiation factors are finding a good balance between collection (initial) fees as opposed to royalty (delayed) payments. Emphasizing collection fees reduces total payments except when national interest rates are very high. Reducing the risk of failure through in-country screening, including the use of indigenous knowledge, is a potentially valuable activity. Issues for contract negotiators are outlined and the implications for biodiversity conservation discussed. Conceptually, the highest valuation approach, royalties, will most encourage conservation, but as the future is typically heavily discounted, collection payments may get more attention and be most effective. Policy considerations for national governments, nongovernmental organization (NGOs), and development agencies are reviewed and it is concluded that grants/loans and training/equipment for in-country screening should be given a high priority as a potentially viable activity in the long term.

It should be noted that the figures and calculations in this chapter are merely for illustration. The valuation of samples, and by extension a country’s biodiversity, is a negotiation and will depend on many factors, including alternative investment options by a company, alternative technologies that could be used for lead compounds, interest rates, and a range of risk factors, such as the political situation in a given country surrounding the national debate on bioprospecting. The latter point is a key factor: valuation is always a calculation that has important political consequences. Another complicating factor is the need for confidentiality with which a country and company will hold its overall business estimates. Neither a company nor a country will be likely to share their valuation basis purely for negotiation purposes and because neither want to tip off other entities about the opportunity. It is therefore concluded that, from a practical perspective, the proper valuation is the one that (1) provides the country with compensation and other benefits such that it does not feel taken advantage of and can withstand criticism from its constituents and (2) provides the licensee (typically a company) with a reasonable cost of obtaining the crucial raw or semifinished goods it requires as an input to its business.