The Breeding Exemption in Patent Law: Analysis of Compliance With Article 30 of the TRIPS Agreement

• DOI: http://doi.org/10.1002/jwip.12014
• Author: Viola Prifti
• Published date: 01 December 2013
• Date: 01 December 2013

The Breeding Exemption in Patent Law: Analysis of

Compliance With Article 30 of the TRIPS Agreement

Viola Prifti

University of Hamburg

The breeding exemption limits the right of patent holders by allowing plant breeders to use freely patented biological

material for creating new plant variety types. Three European countries, France, Germany, and Switzerland, have

already adopted this type of exemption into their patent laws, and the Netherlands is expected to amend its patent law

by 2013. The debate in the Netherlands included the introduction of a “comprehensive breeding exemption” as well,

that is an exemption that allows the commercialization of plant varieties containing patented elements. The proposal

for amendments to patent law did not go unnoticed. The industry itself raised concerns with respect to the compliance

of patent exceptions with the European directive on the legal protection of biological inventions (98/44/EC) and the

TRIPS Agreement. Being all European Union (EU) countries signatories of the TRIPS Agreement, the EU directive

provisions ref‌lect the ratio and voluntas legis of TRIPS. Thus this paper focuses on article 30 of the TRIPS Agreement,

the only provision that explicitly provides for exceptions to patent rights at international level. In this context, the

analysis aims at proffering a solution to the high legal uncertainty characterizing the debate on patent exceptions for

the plant-breeding sector.

Keywords breeding exemption; patent law; TRIPS Agreement; plant variety rights

Explaining the Breeding Exemption in Patent Law

In order to promote activities in plant breeding, France, Germany, and Switzerland have introduced

an exemption for breeding purposes into their patent laws.

1

While the German and Swiss texts of

these legal provisions are identical, French law uses other similar terms to exempt the same activities.

Section 11.2.b of the German Patent law reads as follows “The use of a patent shall not extend to: […]

the use of biological material for breeding, or discovering and developing a new plant variety type.”

Under such an exception, breeders are allowed to use patented biological material only for

breeding purposes, not for commercializing the variety. But if the patented elements are not present

in the f‌inal variety, the variety can be put into the market without prior authorization from the patent

holder.

The breeding exemption has its origin in the 1961 Convention on the Protection of New Varieties of

Plants (UPOV),

2

which provides for a special form of intellectual property protection for new varieties of

plants. This system of variety protection was weakened after the establishment of patents on biological

material. Whereas UPOV provides for breeder’s rights on the plant variety as whole, patents provide for a

stronger protection by covering not only plants, but parts of plants, single genes, and breeding methods.

Based on the principle of dependence, patent protection extends to every plant containing the inventive

element or resulting from a patented process. As a consequence, the use of plant material under patent law

expressly requires the authorization of the patent holder. The transaction costs and diff‌iculties related to

patent licensing restricted breeder’s freedom to use all available genetic material in their breeding

programs (Louwaars et al., 2009).

Fearing a blockage of plant-breeding activities, breeders associations in the aforementioned countries

lobbied for the introduction of a breeding exemption into patent law. Last year, the same issue was

218 ©2013 John Wiley & Sons Ltd

The Journal of World Intellectual Property (2013) Vol. 16, no. 5–6, pp. 218–239

doi: 10.1002/jwip.12014

presented to the Dutch parliament, which is expected to adopt the same exemption by 2013. The debate in

the Netherlands distinguished between a “limited” breeding exemption (as already introduced in the

patent laws of France, Germany, and Switzerland) and a “comprehensive” breeding exemption, that is an

exemption that allows the commercialization of plant varieties containing patented elements. This last

type of exemption was proposed by Plantum, the Dutch association of plant breeders. As per now, the

Dutch parliament has accepted only the proposal for the introduction of the so-called limited breeding

exemption into patent law.

Explaining the Rationale of the Breeding Exemption into Patent Law

Exemptions to patent rights are not new. They were implemented in some national laws prior to the Trade-

Related Intellectual Property Rights Agreement (TRIPS) (Grosse Ruse-Khan, 2011). In legal terms,

they are def‌ined as ex post mechanisms that limit the scope of patent rights by broadening the area of

freedom to operate of third parties (Kur, 2011). This legal mechanism recognizes an inherent conf‌lict in

patent law. On one hand side, patents encourage innovation, but on the other, they impose social

costs associated with transaction costs of obtaining patent licenses and deadweight loss imposed on the

society. Whenever states decide to balance the interests of both parties, they adopt patent exemptions that

respond to public policy objectives in areas of public interest such as assuring a better access to scientif‌ic

research. From an economic perspective, patent exemptions should acknowledge the fact that the “welfare

costs of patents can be reduced without signif‌icantly diminishing incentives to invest in creation” (Bently,

2011).

In terms of the issue at hand, the adoption of a bree ding exemption stems from the necess ity to

facilitate access to genetic ge rmplasm, and consequently incr ease innovation in plant breedi ng.

3

Its introduction into patent l aw is a consequence of the impossib ility to apply the research exempt ion

already existing in the paten t laws of the aforementioned countries. The patent laws o f these

countries exempt only resear ch done on patented subject mat ter and not with patented subjec t matter.

Under article 613-5 of the French pa tent law, for example, acts done for ex perimental purposes on

the subject matter of the patented invention do not fall under the sco pe of patent rights. Similarly,

article 9.b of the Swiss patent ac t does not extend the scope of a paten t on experimental and research

activities done on the subject matter of th e patented invention. Experiment al use is usually understood

as aiming at determining the scope of a patented inventio n, determining its claims, how it works, s eeking

an improvement, inventing around th e patented invention or doing pure resea rch (Van Eecke

et al., 2009).

Breeding activities cannot fall under this exception because breeding of plant varieties is made

not only on plants, but most importantly, with plant material. Breeders make use of patented traits

and patented breeding methods in their breeding processes. For example, breeders may introduce a

patented trait on pest resistance into a new variety. This type of activity does not involve work on the

patented invention. It simply uses the patented technique as a tool for introducing a gene into the plant

genome. Thereby it is ineligible for an experimental use exemption “on” the patented material. Nothing,

however, prevents breeders from working on improving these tools (research on the patented subject

matter), but the most recurrent use is that of doing research and breeding with patented traits and

technologies. Exempting plant-breeding activities from patent scope would, thus, require research

exceptions to allow research “with” the patented subject matter. But this choice may create unintended

effects for other biotechnological sectors.

4

Thereby, a specif‌ic exemption for breeding activities appeared

as more appropriate. Using the knowledge disclosed by patents during the protection term is, however,

not a straightforward consequence of patent law. Patent exceptions should comply with international

standards.

The Breeding Exemption Under Article 30 of TRIPS Viola Prifti

©2013 John Wiley & Sons Ltd

The Journal of World Intellectual Property (2013) Vol. 16, no. 5–6 219