IIC (2018) 49:636–655 https://doi.org/10.1007/s40319-018-0719-x ARTICLE

A Case for a Limited Breeding Exemption from Patent Protection Zhiqian Wan . Samuel Meng

Published online: 22 June 2018  Max Planck Institute for Innovation and Competition, Munich 2018

Abstract A breeding exemption in breeder’s rights law has not been specified in the patent laws of most countries. Since breeding exemption is not a part of research exemption, this paper argues that it is necessary and feasible to introduce into the patent system a limited breeding exemption. Compared with a comprehensive breeding exemption, a limited breeding exemption impairs patent rights less, conforms to the three-step test in Art. 30 of the TRIPS Agreement and is in the public interest. The liability rule is suggested to be used to facilitate the commercialisation of final varieties. Keywords Plant variety rights
Plant patent
Breeding exemption
Research exemption
TRIPS Agreement

1 Introduction The breeding exemption concept can be traced back to the 1961 Convention on the Protection of New Varieties of Plants (the UPOV Convention).1 The 1961 UPOV Convention granted breeder rights with regard to plant varieties and provided an

1

The UPOV Convention was first agreed in 1961. Subsequent amendments were made in 1972, 1978 and 1991. For further details, see Pardey (2013), pp. 25–29.

Z. Wan Associate Professor; College of Humanity and Law, Huazhong Agricultural University, Wuhan, China e-mail: [email protected] S. Meng (&) Senior Research Fellow; University of New England Business School, Armidale, Australia e-mail: [email protected]

123

A Case for a Limited Breeding Exemption from Patent…

637

exemption for using a plant variety for breeding purposes.2 The UPOV Convention was revised in 1972, 1978, and 1991.3 The breeding exemption was not only preserved in all revisions,4 but also been further embodied in UPOV 1991. Article 15(1) of UPOV 1991 states, ‘‘The breeder’s right shall not extend to: (1) acts done privately and for non-commercial purposes; (2) acts done for experimental purposes; and (iii) acts done for the purpose of breeding other varieties.’’5 UPOV 1991 also introduced an essentially derived varieties (EDVs) clause to restrict the breeding exemption.6 Article 14(5) stipulates that, in order to be exempted from the existing breeder’s rights with regard to varieties, a new variety must have a substantial distance from the initial varieties.7 This article defines EDVs as: (1) varieties which are essentially derived from a protected variety, where the protected variety is not itself an essentially derived variety; (2) varieties which are not clearly distinguishable from a protected variety; and (3) varieties whose production requires the repeated use of a protected variety.8 This clause prevents cosmetic breeding behaviour, i.e. using genetic engineering to change protected varieties slightly so as to circumvent the breeder’s rights. The breeding exemption is prescribed clearly with regard to the plant variety rights9 (hereinafter ‘‘PVR’’) system. However, there are no similar provisions in the patent system. With the establishing of patents on biological materials, patent law provides a much stronger protection with regard to biological materials than the UPOV, because patent law covers not only a plant variety as a whole, but also parts of plants, genes, and breeding methods. Consequently, the breeding exemption set forth in the UPOV is substantially weakened by the patent system: a breeder has to obtain permission from the patent holders for using patented genetic materials in its breeding activity.10 This situation has prompted breeders’ associations in some countries to lobby for a breeding exemption to be included in the patent system. As a result, France,11 2

Article 5(3) of the 1961 Act on the UPOV Convention states, ‘‘by the breeder or his successor in title shall not be required either for the utilisation of the new variety as an initial source of variation for the purpose of creating other new varieties or for the marketing of such varieties. Such authorisation shall be required, however, when the repeated use of the new variety is necessary for the commercial production of another variety.’’

3

For further discussion, see Heitz (1994), pp. 25–26.

4

UPOV 1961/1972, Art 5(3); UPOV 1978, Art 5(3); UPOV 1991, Art 15(1) (iii).

5

Article 15(1)(iii) of the UPOV 1991: ‘‘The breeder’s right shall not extend to: …(iii) acts done for the purpose of breeding other varieties, and, except where the provisions of Article 14(5) apply, acts referred to in Article 14(1) to Article 14(4) in respect of such other varieties.’’

6

It is worth noting that the stipulation on EDV was not seen in the previous UPOV 1978 Convention.

7

See Hsu (2016), p. 102.

8

UPOV 1991 Article 14.5(a): ‘‘The provisions of paragraph (1) to paragraph (4) shall also apply in relation to: (i) varieties which are essentially derived from the protected variety, where the protected variety is not itself an essentially derived variety; (ii) varieties which are not clearly distinguishable in accordance with Article 7 from the protected variety; and (iii) varieties whose production requires the repeated use of the protected variety.’’

9

In Europe, Australia and Canada this is often referred to as Plant Breeder’s Rights (PBR).

10

See Jo¨rdens (2002), p. 1.

11

Article L. 613-5-3 of the Code de la Proprie´te´ Intellectuelle 2004.

123

638

Z. Wan, S. Meng

Germany,12 Switzerland13 and the Netherlands14 have introduced a limited breeding exemption into their patent laws. Under that exemption, breeders are allowed to use patented biological material for breeding purposes, but not for commercialising the final variety. This type of limited breeding exemption should be included in patent laws in other countries and relevant international conventions and treaties. This paper is organised as follows. Section 2 examines research exemptions in both US and European patent laws and concludes that research exemptions in the patent system do not cover the breeding exemption. Section 3 demonstrates, from the legal, economic and public policy perspectives, the necessity of adding a limited breeding exemption to the patent system. Section 4 discusses the compatibility of a limited breeding exemption with the relevant clauses of TRIPS and shows that it is feasible to incorporate a limited breeding exemption into patent laws. Section 5 concludes this paper.

2 The Incompatibility of Research Exemptions and Breeding Exemptions The research exemptions in patent laws in most countries (especially in the US) have a limited scope, so they cannot completely cover all aspects of breeding activities. Research exemptions generally permit free use of patents for experimental or research purposes. It seems that breeding activity is similar to research activity: both are to create something new based on existing knowledge and technology.15 If breeding activity can be viewed as a type of research activity from the perspective of the patent system, breeding exemptions will be covered by research exemptions and thus there is no need to add breeding exemptions in patent laws. However, by scrutinising the definition of research activity exempted under patent laws the authors have concluded that breeding exemptions cannot be squarely covered by research exemptions. The conditions for research exemptions vary from country to country. In a country with a common law system the conditions are determined by the judges’ decisions in different cases, whereas civil law countries tend to provide research exemptions by way of statute law. In a country with a continental law system, the condition is stipulated in the relevant patent law but is interpreted by the courts. By and large, there are two criteria to determine whether a given research activity can be exempted from patent rights. One criterion is based on the purpose of the research: if the research is not for commercial purposes, it can be exempted from the patent rights; otherwise it is not eligible for exemption. The other is based on the research tools and research subject: if research is conducted on a patented invention, 12

Section 11.2.b of the Patent Gesetz, 2005.

13

Switzerland, Art. 9(e) of the Loi fe´de´rale sur les brevets d’invention, 2008.

14

Holland introduces ‘‘Breeders’ Exemption’’ in patent law (13 January 2014), http://www. brantsandpatents.com/EN/holland_introduces_lsquo_breeders_rsquo_exemption_rsquo_in_patent_lawNieuws-91#nieuwstitel. 15

Prifti (2013), p. 234.

123

A Case for a Limited Breeding Exemption from Patent…

639

it can be exempted from patent protection; but if research is conducted with a patented invention, the exemption is not applicable.16 2.1 Not-for-Commercial Purpose The use of research purpose criterion is exemplified well in the US. As a common law country, the US has established and developed research exemption based on judges’ decisions.17 As early as in 1813, in the Whittermore v. Cutter case, High Court Judge Story expressed in the obiter dictum the following opinion: the third party violates the patent right if that party uses a patent without permission from the patentee and has the intent to use it for profit; however, if the third party uses the patent for experimental purpose or to examine the effect of the patent, the party does not infringe patent law. The rationale behind this is that patent law should not punish a person for using a patent for philosophical experiment purposes or for the purposes of confirming the effect(s) of the patent as described in the patent.18 This is the beginning of research exemption in the US. In the same year, Judge Story expressed a similar opinion in the case of Sawin v. Guild.19 These court judgments became the foundation of the research exemption in patent law and were followed in later court judgments. In the case of Jones v. Pearce in 1832,20 the Court determined that the research involved was for amusement only and thus not for commercial purposes, so it did not constitute patent infringement. The above judgments have laid down the cornerstones for research exemption in the US patent system, which were later upheld by judicial practice.21 Court judgments based on common law also prompted the legislator to add to the patent law a clause to exempt research for specific purposes. The verdict in the 1984 case of Roche Prods., Inc. v. Bolar Pharm Co.22 indicated the requirement for a research exemption.23 The patent law was revised in the same year with Clause 271(e)(1) thereof stipulating that making, using, and importing patented animal drugs or veterinary biological products does not infringe a patent if it is for the purpose of providing information for the development and submission of information under a Federal law. The Court extended this condition to a medical device in the case of Eli Lilly & Co. v. Medtronic Inc.24 Later, in the case of 16

Prifti (2015), pp. 93–94.

17

Pate (2002), pp. 253–255.

18

Whittemore v.Cutter, 29F.Cas.1120,1121(C.C.D.Mass.1813). (No. 17600).

19

Sawin v. Guild, 21F. Cas. 554 (C.C.D. Mass. 1813) (No. 12391).

20

Jones v. Pearce, Webster’s Patent Case 122 (K.B. 1832).

21

See Mueller (2001).

22

Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858, 860 (Fed. Cir.1984).

23

35 U.S.C. § 271(e)(1) (2010) states: It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention other than a new animal drug or veterinary biological product in accordance with (the Federal Food, Drug, and Cosmetic Act of 4 March 1913). 24

Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 675–76 (1990).

123

640

Z. Wan, S. Meng

Intermedics, Inc. v. Ventriex, Inc.,25 the Court further ruled that the use of a patent for the purpose of providing information for the Food and Drug Administration does not infringe the patent law, regardless of whether the use of the patent has an intent for profit. However, later judgments have tightened the conditions for the research exemption. In the case of Deuterium Corp. v. United States in 1990,26 the Court ruled that the government having a patented product tested was for commercial purpose and so the government had infringed patent law. In the case of Embrex Inc. v. Service Engineering Corp in 2000,27 the Court ruled that using a patent for commercial purpose infringes patent law even if the commercial purpose is disguised under the cover of scientific research. In the case of Madey v. Duke University in 2003,28 the US Federal Circuit Court ruled that university research cannot be exempted from patent laws. University research can help a university to attract and educate academic staff and students, obtain research grants, and improve its academic reputation, so university research is not purely for the purpose of entertainment, curiosity or scientific discovery. This judgement was strongly criticised by US academics. Some scholars believe that the Court’s interpretation of the research exemption is too narrow and makes the application of the research exemption more difficult.29 After this court judgement the application of the research exemption seldom triumphed in court.30 Although there are loud voices in US legal circles to loosen the restrictions on the research exemption, the practical application of this principle is strictly confined to research for non-commercial purposes. Judged by the criterion with regard to research purpose, a breeding process using a protected variety appears to be of commercial purposes, since the process aims to develop other new varieties, acquire exclusive rights with regard to a patent or plant variety, and benefit from commercialisation. This is why not-for-commercial purposes are not a prerequisite for the application of a breeding exemption under the PVR system.31 Therefore, a not-for-commercial purpose excludes a breeding process from a research exemption. 2.2 Research on Patented Inventions The criterion of ‘‘research on or with the patented invention’’ is used in Europe. The research exemption was initially introduced to European patent law by judicial interpretation of the statutory exclusive right,32 and those judicial interpretations 25

775 F.Supp. 1269 (1991).

26

Deuterium Corp. v. United States, 19 Cl. Ct. 624, 634. (Fed. Cir. 1990).

27

Embrex Inc. v. Service Engineering Corp, 216 F.3d 1343, 1349. (Fed. Cir. 2000).

28

Madey v. Duke University, 307 F.3d 1351 (Fed. Cir. 2002), cert. denied, 469 U.S. 856. (U.S.2003).

29

Cai (2004), p. 190.

30

Pate (2002), supra note 17, pp. 261–262.

31

Davison et al. (2015), p. 683.

32

For cases in the U.K., see, e.g., United Tel. Co. v. Sharples, (1885) 29 Ch.D. 164, 1885 WL 17659; Frearson v. Loe, (1878) 9 Ch.D. 48, 1878 WL 17375.

123

A Case for a Limited Breeding Exemption from Patent…

641

have been subsequently incorporated into statute law by European national legislation.33 Clause 64(1) and (3)34 of the European Patent Convention (EPC) stipulates that the conditions for patent right and patent exemption are determined by the patent law of each country. However, in order to reduce the negative effects of regional patent protection on competition within the European Community, the European Community Member States signed a 1975 Community Patent Convention (CPC) which aimed at forming a unified patent system. Clause 27 of the 1989 CPC stipulates that a community patent will not extend to acts done for experimental purposes relating to the subject matter of a patented invention, namely an exemption to research on the patented invention.35 This research exemption does not distinguish between commercial purposes and non-commercial purposes. Considering the broad definition of ‘‘use for profit’’ under U.S jurisdiction, the European research exemption is regarded as relatively more generous to researchers.36 The legislative history of the CPC, in particular the memorandum on the Convention, differentiates between two cases: research on a patented invention, and research with a patented invention.37 The former can be exempted from a patent right, while the latter cannot. The reasoning behind that is that research on a patented invention can confirm or challenge the validity of the patent, improve the invention or discover a new application for the invention, and encourage inventions related to the patented invention.38 This type of research activity will not affect the commercial value of the patented invention. On the other hand, the use of a patented

33

Holzapfel and Sarnoff (2008), p. 24.

34

Article 64 EPC: ‘‘Rights conferred by a European patent. (1) A European patent shall, subject to the provisions of paragraph 2, confer on its proprietor from the date of publication of the mention of its grant, in each Contracting State in respect of which it is granted, the same rights as would be conferred by a national patent granted in that State. (2) If the subject-matter of the European patent is a process, the protection conferred by the patent shall extend to the products directly obtained by such process. (3) Any infringement of a European patent shall be dealt with by national law.’’ Available at http://www. european-patent-office.org/legal/epc/e/ma1.html#CVN. Accessed 2 August 2017. 35 Article 27 of CPC 1989 (Art. 31 of CPC 1975), addressed the ‘‘Limitation of the effects of the Community patent.’’ It provided that ‘‘the rights conferred by a Community patent shall not extend to:

(a) acts done privately and for non-commercial purposes; (b) acts done for experimental purposes relating to the subject-matter of the patented invention….’’ 36 Holzapfel and Sarnoff, A cross-atlantic dialogue on experimental use and research tools, Vol. 48 The Intellectual Property Law Review pp. 152, 153 (2008). 37

A German version of the memorandum of understanding regarding the CPC of 1975 is published in 1979 Blatt fu¨r Patent-, Muster- und Zeichenwesen [Bl.f.PMZ] pp. 325–349. The memorandum comments on Art. 31(b) of the CPC of 1975 (Art. 27(b) of the CPC of 1989) that all of the exceptions of Art. 31 of the CPC of 1975 should be applied restrictively, and: As is likely the case with most national patent laws, Art. 31(b) permits the use of the invention protected by a community patent for experimental purposes, e.g. in order to test usability and possibilities for enhancements. The chosen wording is intended to make it clear that the experiment itself must relate to the protected invention; i.e. the use of the protected invention within the scope of an experiment that relates to a different subject-matter shall not be permitted. 38

Van Eecke et al. (2009), p. 139.

123

642

Z. Wan, S. Meng

invention as a research tool is not to obtain information related to the subject itself, but instead uses the patented invention as a means to achieve other purposes, including for scientific work, such as cell lines, monoclonal antibodies, reagents, and growth factors.39 Since this scientific work may be used by firms for commercial products, research with a patented invention may be also for commercial purposes.40 Unauthorised use of research-tool patents may have significant public interest, because it may cause slower technological progress, which would have a significant negative social impact.41 Since research on a patented invention has a direct impact on the commercialisation of the original patented invention, the CPC does not exempt research with patented inventions. Although the CPC has not come into effect yet, the impact of Clause 27 of it cannot be underestimated, because most member countries have revised their patent laws to be consistent with the clause (Holzapfel and Sarnoff 2008).42 For example, Art. 60(5)(b) of the United Kingdom patent law states that an act for experimental purposes relating to the subject matter of an invention does not constitute an infringement of a patent for that invention. This provision does not set noncommercial purposes as a condition for the research exemption, but noncommercial purposes are emphasised with regard to private use of patents in (5)(a) of that article.43 In the case of patent infringement, the Court of the UK does not consider whether the exemption has a commercial purpose. The patent laws of France and Switzerland also do not emphasise non-commercial purposes with regard to research on a patented invention. Under Art. L 613-5 of the French patent law, acts done for experimental purposes on the subject matter of the patented invention are exempted from the scope of patent rights.44 Similarly, Art. 9(1)(b) of the Swiss patent act exempts experimental and research activities on the subject matter of a patented invention.45 Generally speaking, research activities relating to the subject matter of a patented invention include, but are not limited to, testing the validity of the invention, determining the scope of the patented invention, searching

39 A notice of the National Institutes of Health published in 1999 made the definition of a wide range of research tools, including cell lines,monoclonal antibodies,reagents),animal models,growth factors,combinatorial chemistry and DNA libraries,clones,cloning tools,methods and experimental device laboratory equipment and machines. 40

Mueller, supra note 21.

41

Strandburg (2004), p. 48.

42

Holzapfel and Sarnoff, supra note 36, p. 25.

43

Article 60(5) (a) and (b) of the United Kingdom patent law states: ‘‘(5) An act which, apart from this subjection, would constitute an infringement of a patent for an invention shall not do so if (a) it is done privately and for purposes which are not commercial; (b) it is done for experimental purposes relating to the subject-matter of the invention’’. 44 Article L613-5: ‘‘The rights conferred by the patent do not extend: (a) acts done privately and for noncommercial purposes; (b) experimental acts relating to the subject-matter of the patented invention;’’. 45 Art.(9)(b) of the Swiss patent law: The effects of the patent do not extend to: (a) acts undertaken within the private sphere for non-commercial purposes; (b) acts undertaken for research or experimental purposes in order to obtain knowledge about the subject-matter of the invention including its uses; in particular, any scientific research concerning the subject-matter of the invention is permitted.

123

A Case for a Limited Breeding Exemption from Patent…

643

for improved technology or developing alternative technology and so on.46 But acts using patented technology to test or prove other products or methods do not apply with regard to research exemption, as those acts are not related to a patent invention itself.47 Austria and Belgium are exceptions in setting a patent law consistent with the CPC. Austria has not added a clause similar to clause 27 of the CPC, while the 2005 Belgium patent law exempts both research on a patented invention and research with a patented invention.48 The criterion of research done on/with a patented subject matter disregards the commercial or non-commercial purpose of research, so it is consistent with that of the breeding exemption under the PVR system. However, breeding activities do not satisfy the criterion of research on patented inventions, because breeding of plant varieties is research not only on plant varieties but, more importantly, with plant materials. In most cases, breeders use biological materials protected by patents to develop new varieties, instead of using the breeding process. The patented traits may be removed in the breeding process or may present in the final variety. Therefore the breeding research is done ‘‘with protected subject matter’’, rather than ‘‘on protected subject matter’’.49 As a result, breeding exemption does not fall under the umbrella of research exemption. In short, breeding activity cannot be viewed as a type of research activity which can be exempted from patent protection. In terms of the research purpose criterion, breeding is clearly for a commercial purpose because breeding activity aims at developing new varieties and obtaining profit from the new varieties.50 In terms of the criterion of research subject and research tools, breeding is more likely research with a patented invention rather than research on a patented invention. The patents a breeder uses most are some features of a patented variety. These features may exist in the final variety or may disappear in the breeding process. Consequently, the second criterion cannot qualify breeding activity as research activity exemptible from patent rights.

3 The Necessity of Adding a Limited Breeding Exemption to Patent Laws Based on the discussion above, breeding exemptions are unable to be included in research exemptions in the patent system, so breeding activity could be hindered by patent law if no additional clause is added to address this issue.51 There may be 46

See Smith Kline & French Labs. Ltd. v. Evans Med. Ltd., (1989) 1 F.S.R. 513 (U.K.), 1988 WL 623784. 47

McMinn (2006), p. 221.

48

The Belgian Patent Act, Art. 28, § 1(b) (enacted 25 April 2005), available at http:/www.ejustice.just. fgov.be/cgi/summary. See Van Overwalle (2006), pp. 906–908. 49

Prifti, supra note 16, p. 95.

50

Trojan (2012), p. 9.

51

For more see Janis and Kesan (2002), pp. 727–729.

123

644

Z. Wan, S. Meng

other ways to promote breeding activities,52 breeding exemption is one of these. Breeding exemptions include limited breeding exemptions and comprehensive breeding exemptions.53 The former affect the patent right less, because they apply only to breeding activity, while a comprehensive breeding exemption results in larger impairment of patent rights because it is applicable to the commercialisation of final breeding varieties. Consequently, it is difficult to incorporate a comprehensive breeding exemption into patent law, instead adding a limited breeding exemption could be a more effective and efficient way with the fewest side effects from all perspectives.

3.1 The Legal Perspective There are two types of exemptions to patent rights: general exemptions and exemptions for a specific area.54 The research exemption in patent law is an example of a general exemption, while the Bolar exemption55 is an example of a specific exemption. Generally speaking, an exemption for a specific area is rare in legislation, due to the non-discriminatory nature of a law, but a breeding exemption is a necessary one from the legal perspective. Adding a limited breeding exemption in patent law can produce consistency between patent law and plant variety law and thus provide a ‘‘fair go’’ between patentees and breeders. Currently a patentee can freely use new varieties for breeding purposes, because of the breeding exemption in plant variety law. However, a breeder cannot freely use patented biological materials for breeding purpose if there is no breeding exemption in patent law. This gives an edge to the patentee and disadvantages the breeder.56 More importantly, the inconsistency between patent law and plant variety law may make a breeding exemption in plant variety law unfeasible. A patent law which does not have a breeding exemption gives a stronger protection to new varieties, and a breeder would be attracted by the patent law and patent their new variety. With the development of biotechnology more and more inventions of plant varieties will be protected by both plant variety law and patent law.57 Based on the principle of dependence, the use of authorised varieties for breeding can be exempted according to plant variety law. However, patent law explicitly requires the authorisation of the patent holder for any use of its patented material. As a result, breeding exemption in 52

For more see Straus (2002), pp. 82–88.

53

Prifti (2013), pp. 218–239.

54

See Correa (2000), pp. 75–76.

55

The limited exemption (also known as the Bolar provision or the Roche-Bolar provision) allows other parties to conduct studies, research and tests for drug regulatory approval and other related acts, such as manufacturing a drug. This provision or exemption originated in the US by virtue of the judgment in the Roche Products v. Bolar Pharmaceuticals case. 56

Jo¨rdens, supra note 10, pp. 15–20.

57

The variety protection system provides breeder’s rights on a plant variety as a whole, patents provide a broader protection by covering not only plants but also parts of plants, single genes, and breeding methods.

123

A Case for a Limited Breeding Exemption from Patent…

645

plant variety law cannot be realised if a new variety is patented; to promote breeding activity there should be a similar clause in patent law.58 There may be other legal solutions with regard to the promotion of breeding activity, but they are largely unfeasible or have significant side effects. One solution is to extend the coverage of research exemptions in patent law, e.g. to abolish the requirement for not-for-commercial purpose and/or the requirement for research on a patented invention, that is plant-specific legislation on experimental use.59 This broadly defined research exemption can solve the breeding exemption issue, but will have ramifications in other areas, especially in the fields of biology, medicine, chemistry, and cosmetics. It is evident that patent protection is vital for the prosperity of those fields.60 An extended research exemption will decrease the degree of patent protection and thus hinder development in those fields. Based on this,61 France, Germany, the Netherlands and Switzerland did not broaden the scope of their existing research exemption but introduced an exception for breeding purposes. The other solution is a substitutive arrangement for breeding purpose, such as informal breeders’ guidelines, or special permissions for breeders.62 However, this type of arrangement either has no legal power or involves high transaction costs.63

3.2 The Economic Perspective Breeding is an example of accumulative or sequential innovation. Most innovations are cumulative and sequential and are ‘‘on the shoulders of giants’’.64 Merges and Nelson support the stance that in the case of accumulative or sequential innovation strong patent protection will impede, rather than promote, innovation: strong patent protection on senior innovation obstructs the use of senior innovation and thus delays the advent of junior innovation.65 However, if patent protection is too weak to protect the benefits of a senior innovator, the senior innovation will not occur or will be delayed significantly. This dilemma poses a challenge for a patent system to stimulate innovation in a sustainable manner. Bessen and Maskin believe that mild patent protection may be desirable in this case, because patent protection which is too strong would hinder junior innovations, while patent protection which is too weak would discourage senior innovations. It is claimed that mild patent protection in the field of software, semiconductors and computers has a positive impact on 58

Straus, supra note 52, p. 85.

59

See Janis (2001), pp. 116–117.

60

See Harabi (1996).

61

The reason behind this choice lies in the worries that a broad research exception may be used for commercialisation by biotechnological sectors other than for plant breeding. See Trojan (2012), p. 11. 62

Janis, supra note 60.

63

The guidelines developed by breeders often do not have any coercive power and do not have any effect. Special permissions are also subject to royalties, unlike the free use of breeding exemptions. 64

See Scotchmer (1991), pp. 29–41.

65

Merges and Nelson (1990).

123

646

Z. Wan, S. Meng

innovation in these fields.66 Breeding activity is similar to innovation activities in these fields, because breeding a new variety (i.e. junior innovation) is based on existing varieties (i.e. senior innovation). Based on the reasoning of Bessen and Maskin, the authors of this paper suggest that mild patent protection achieved by including a limited breeding exemption may lead to sustainable and dynamic innovation. The argument for mild patent protection with regard to breeding is rooted in the concept of the ‘‘tragedy of the anti-commons’’. Intellectual property rights laws are based on the concept of the ‘‘tragedy of the commons’’ as expounded by Hardin.67 This concept points out that public goods are overused and underinvested in, due to the lack of a clear definition of property rights. However, the other side of coin is that too many exclusive rights on one property may lead to the underuse of the property and thus a waste of resources. This is the concept of the ‘‘tragedy of the anti-commons’’ as put forward by Heller.68 Although there is a lack of evidence of anti-commons effects in plant breeding,69 the potential materialisation of these effects should not be underestimated.70 One of the major factors that may lead to an anti-commons effect in plant breeding is the fragmentation of rights among various rights holders.71 In the case of plant breeding, one plant variety may be protected by patents owned by different patentees; without a breeding exemption, a breeder may thus have to obtain permission from more than one patentee. This will involve higher transaction costs and result in inefficiency. Moreover, if one of the patentees refuses to grant permission, the breeding program will be in jeopardy or abandoned and final varieties cannot reach the market, which will harm both breeders and consumers.72 As a result, the objection of one of the patentees could lead to an under-use of a number of patent technologies, a typical example of the tragedy of the anticommons. To overcome the tragedy of the anti-commons due to many patent rights on one product, patent pools73 are suggested. In that model all patentees of one product come together to negotiate their proportion of the royalty on the product so a licensee can pay a total sum and the patentees receive their shares according to that agreement. If successful, patent pools are an effective solution to the tragedy of

66 When innovation is ‘‘sequential’’ and ‘‘complementary’’, patent protection is not as useful for encouraging innovation as in a static setting. Indeed, society, and even inventors themselves, may be better off without such protection. Furthermore, an inventor’s prospective profit may actually be enhanced by competition and imitation. The sequential model of innovation appears to explain evidence from a natural experiment in the software industry. For more, see Bessen et al (2000), Moser (2013), pp. 3–22. 67

See Hardin (1968), pp. 1243–1248.

68

See Heller (1998). For a comprehension of the link between the tragedies of the commons and the anticommons, see Buchanan and Yoon (2000), pp. 1–13, Fennell (2004), pp. 829–898. 69

Zwahlen (2011). Previously, evidence of a modest anti-commons effect in molecular biology has been provided by Murray and Stern (2007), pp. 648–687.

70

Some studies suggest that this is a real concern in biotechnology. See Graff (2009), p. 34.

71

For concrete examples of this point, see de Jonge and Louwaars (2011), pp. 234–240.

72

Shapiro (2009), pp. 291–322.

73

For more, see Shapiro (2009), Van Overwalle et al. (2007).

123

A Case for a Limited Breeding Exemption from Patent…

647

the anti-commons.74 However, the formation of patent pools largely hinges on successful negotiations between patentees.75 Potential strategic behaviour by patentees will increase the costs and reduce the chance of reaching a sustainable and enforceable agreement. In the case of breeding activity these costs and the risk associated with negotiations between patentees can be avoided if a breeding exemption clause is added to patent law. Nevertheless, even limited breeding may have mild economic implications for a patentee, because the high possibility of commercialisation of the final varieties will partly deprive the benefit to patentees and thus discourage innovation of basic varieties. To protect the benefit of breeders of basic varieties, limited breeding exemptions are not applicable to commercialisation of final varieties, so breeders of the final varieties have to pay licence fees or royalties to breeders of the basic varieties upon the commercialisation of the final varieties. This would hinder the utilisation of final varieties. After all, it is more beneficial to society to have the final varieties commercialised as soon as they are improved. In order to facilitate the commercialisation of final varieties while compensating the breeders of basic varieties, a liability rule76 can be employed to allow the breeders of final varieties to pay royalties later and thus reduce their upfront costs. 3.3 The Perspective of Public Choice Public policy is a powerful tool for redistributing wealth.77 It is widely accepted that public policy must reflect the wellbeing of the majority of people, so public interest forms the basis for public choice. Clause 7 of the TRIPS Agreement on reflects the principle of putting public interest first.78 Patent law itself is based on public interest. The purpose of patent law is to encourage inventors to reveal information about their inventions, so that the public can benefit from that information.79 If patent protection conflicts with public interest, the relevant authority should give public interest priority.80 Breeding activity is closely related to the food security of society, so protecting and stimulating breeding activity is in the public interest. Since patent protection on biological materials will increase the entry barriers to breeding activity (Trojan, 2012), from the point of view of public interest it is necessary to introduce laws or policies to remove those barriers. Introducing a breeding exemption into patent law 74

Merges (1999), p. 5.

75

Nagaoka and Aoki (2006).

76

Liability rules mean that the rights holder cannot prohibit others from using its rights, but the user must agree to pay royalties upon the commercialisation of final varieties. See Guido and Douglas (1972), pp. 1089–1128. 77

Liu (2007), pp. 26–29.

78

Article 7 of TRIPS states: ‘‘the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.’’ 79

WT/DS/114R, para. 7.69.

80

See Anderson (2003), p. 135.

123

648

Z. Wan, S. Meng

is an effective mechanism, which allows breeders free access to breeding genetic material,81 stimulates innovation and competition in plant breeding, and protects the public interest.82

4 The Feasibility of Adding a Limited Breeding Exemption to Patent Laws Currently most countries do not have any breeding exemption in their patent laws. One reason for that is that the lawmakers worry that the commercial nature of breeding activity affects patent rights significantly. The opposition to patent law introducing a comprehensive breeding exemption is much louder compared with limited breeding exemption.83 Opponents claim that with a comprehensive breeding exemption patent licence revenue will decline too much to recover investments already made.84 So a comprehensive breeding exemption will be detrimental to the plant breeding sector itself.85 The other reason that most countries have not adopted a breeding exemption is that people have doubts as to whether or not a breeding exemption is compatible with the current patent system, especially the TRIPS agreement. After having discussed the necessity of including breeding exemptions in patent law in the previous section, this section considers whether or not adding breeding exemptions to patent laws is consistent with other laws. The most important law related to patent exceptions is TRIPS. Before considering the compatibility of a breeding exemption in patent law with TRIPS, two types of breeding exemption must be formally defined: limited breeding exemption and comprehensive breeding exemption. As stated earlier, a limited breeding exemption gives the breeder the right to use the patented biological material for breeding purposes but not for the commercialisation of plant varieties containing patented elements. However, if the final variety does not contain patented elements, the variety can be commercialised without the prior permission of the patentee. On the other hand, a comprehensive breeding exemption allows the free use of the patented biological materials not only for breeding purposes but also for commercialisation, even if patented elements are present in the final variety.86 81

See Louwaars et al. (2009).

82

See Moser (2013), pp. 3–22.

83

The interest groups Niaba and Nefarma, and a group of large companies (DSM, Philips, Shell and Unilever) belong to the group of opponents to radical changes to the system and, in particular, to a comprehensive breeding exemption in patent law. AKZO Nobel, Biofarmind, Dow Benelux, ENZA Zaden, Europa Bio, Keygene, Monsanto, Nunhems Zaden, NXP Semiconductors, Syngenta, Tata Steel Europe and the Association of the Dutch Chemical Industry (VNCI) are also among this group. A striking point is that the opponents to a comprehensive breeding exemption include several large seed companies. See Parliamentary papers II 2010/11, 27 428, No. 202. 84

For further details, see Trojan (2012).

85

Parliamentary papers II 2011/12 27428, No. 231, with appendix: ‘‘Plant Breeding: The Sector from the Patent Perspective’’. 86

Prifti supra note 53, p. 235.

123

A Case for a Limited Breeding Exemption from Patent…

649

4.1 Compatibility with Art. 30 of TRIPS Article 30 of TRIPS allows for exceptions to patent rights under the condition that the exceptions are ‘‘limited, do not unreasonably conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of the third parties’’.87 This description gives three conditions for exceptions to patent rights but provides no clear guidance to judge whether an exception is qualified. In the case of disputes, WTO panels have the duty to clarify the meaning of Art. 30. So far WTO panels have interpreted Art. 30 only once, when examining the EC v. Canada case.88 Based on the interpretation of the WTO panel, breeding exemptions are examined in accordance with Art. 30. Since the WTO panel suggested that the three conditions for exception should be satisfied cumulatively, breeding exemptions are scrutinised in three steps based on these three conditions.89 Step one: Is the breeding exemption a limited exception? The panel defined a limited exception as an exception that decreases only a small amount of the right of the patentee under Art. 28 of TRIPS.90 The panel also held that the degree of economic impact or the number of curtailed rights are not to be considered when assessing whether an exception is limited,91 only the level of impairment caused to patent rights in legal terms is relevant for determining the ‘‘narrowness of patent exceptions’’.92 Based on the above interpretation, the definition of patent right needs to be examined in order to judge whether a given breeding exemption is a limited exception. Article 28 of TRIPS gives the patentee the exclusive right to make, use, offer for sale, sell, or import patented products.93 Since a breeding exemption allows 87 Article 30 of TRIPS (Exceptions to Rights Conferred): Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. 88 On 19 December 1997 the European Community (EC) and its Member States asked Canada to hold consultations pursuant to both Art. 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and Art. 64 of TRIPS regarding the protection of inventions in the field of pharmaceuticals under the relevant provisions of the Canadian implementing legislation (in particular the Patent Act) in relation to its obligations under the TRIPS Agreement (WT/DS114/1). No mutually satisfactory solution was reached in these consultations, held on 13 February 1998 and 12 June 1998. In a communication dated 11 November 1998, the EC and its Member States asked the Dispute Settlement Body (DSB) to establish a panel to examine the matter (WT/DS114/5). WT/DS114/R (17 March 2000), https://www.wto.org/english/Tratop_e/dispu_e/7428d.pdf. Accessed 12 May 2017. 89 Prof. Kur argues that this might be particularly the case if the three conditions of Art. 30 must be cumulatively satisfied. See Kur (2011), pp. 239–240. 90

Report on Canada-Pharmaceutical Patents, para. 7.30.

91

Report on Canada-Pharmaceutical Patents, para. 7.31.

92

Report on Canada-Pharmaceutical Patents, para. 7.32.

93

Article 28 of TRIPS (Rights Conferred): a patent shall confer on its owner the following exclusive rights: (a) where the subject matter of a patent is a product, to prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product; (b) where the subject matter of a patent is a process, to prevent third parties not having the

123

650

Z. Wan, S. Meng

a breeder to use and make patented biological materials, it apparently curtails the exclusive rights of the patentee to make and use the patented materials. The second paragraph of Art. 28 grants the given patentee the right to assign or transfer the patent and to conclude licensing contracts. A breeding exemption clearly limits those rights with regard to breeding activities. However, according to the panel’s interpretation, the degree of economic impact and the number of rights curtailed are irrelevant when assessing whether an exception is limited, instead only the level of impairment is to be considered. With regard to a limited breeding exemption a breeder is allowed to use patented biological materials only for the purposes of breeding, discovering or developing new varieties. The breeder has to obtain permission from the patentee when the breeder commercialises a final variety with a patented element, so the impairment of the patentee’s right is insignificant. However, since the purpose of breeding eventually is commercialisation, breeding activity can create, or have the potential to create, new varieties, which may compete with the patent products, so this may cause economic impairment to the patentee. According to the panel, the first step of analysis only focuses on the legal aspect of the exception, so the economic effect can be ignored. Thus it is safe to conclude that, in terms of step one, a limited breeding exemption is a limited exception. Since a comprehensive exemption freely allows a breeder to use patented products not only in breeding but also in commercialisation, such exemption curtails all of the rights of the patentee. According to the panel, ‘‘in theory, the rights of the patent owner are generally viewed as a right to prevent competitive commercial activity by others, and manufacturing for commercial sale is a quintessential competitive commercial activity’’.94 In light of this, a comprehensive breeding exemption is totally against the spirit of patent laws and thus causes significant impairment to the patentee. As a result, a comprehensive breeding exemption is not compliant with Art. 30. Step two: Does a breeding exemption reasonably conflict with the normal exploitation of patents? There are two key phrases in this step: ‘‘normal exploitation’’ and ‘‘unreasonable’’.95 The panel explained the meaning of ‘‘normal exploitation’’ but did not explain the word ‘‘unreasonable’’, because the panel found that in the EC v. Canada case the exceptions did not conflict with the normal exploitation of a patent. The panel felt that normal exploitation should be based on what is common within a relevant community or based on the understanding of what is accepted by that community’s values. The panel further stated that ‘‘the normal practice of exploitation by patent owners, as with owners of any other intellectual property

Footnote 93 continued owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process. 94

Report on Canada-Pharmaceutical Patents, para. 7.35.

95

Report on Canada-Pharmaceutical Patents, para. 7.59.

123

A Case for a Limited Breeding Exemption from Patent…

651

right, is to exclude all forms of competition that could detract significantly from the economic returns anticipated from a patent’s grant of exclusivity’’.96 In terms of the panel’s interpretation, a limited breeding exemption itself does not create competition with the given patentee, because a breeder has to obtain permission from the patentee when the breeder commercialises its final variety which contains patented elements. However, a limited breeding exemption can reduce the profit of the patentee from issuing patent licences. Even so, the patentee’s loss of profit from issuing licences to the breeder can be recouped by requiring higher licence fees from the breeder when it commercialises the final variety. Thus a limited breeding exemption will not affect a patentee’s profits significantly. A comprehensive breeding exemption is quite a different story. Since this exemption allows the breeder to commercialise the final variety containing the patented elements without permission from the patentee, the patentee loses the part of revenue which it would otherwise be able to obtained from the breeders, so this exemption might conflict with the normal exploitation of the patent. Is this conflict reasonable? That needs to be assessed based on the goals and principles of TRIPS. The fifth paragraph of the preamble of TRIPS recognised ‘‘the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives’’. This statement is also included in Arts. 7 and 8 of TRIPS.97 Article 7 states that ‘‘the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations’’. Without any breeding exemption a breeder has to go through long and expensive negotiations with the relevant patentee and that will delay or hinder the transfer and dissemination of technology. From that point of view breeding exemptions can promote the transfer and dissemination of technology. Breeding exemptions can also improve the balance of senior and junior innovators, stimulate breeding activity and increase social welfare. This is also consistent with Art. 7. Article 8.1 of TRIPS stipulates that ‘‘members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this agreement’’. Breeding exemptions are important measures for increasing food supply and thus protecting public health and nutrition, so they are in line with Art. 8.1. As a result, it can be safely concluded that, in terms of both Art. 7 and 8.1, a comprehensive breeding exemption is in reasonable conflict with the normal exploitation of a patent. Step three: Does a breeding exemption unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interest of third parties? 96

Report on Canada-Pharmaceutical Patents, para. 7.55.

97

Yu (2009), p. 1020.

123

652

Z. Wan, S. Meng

‘‘Legitimate interests’’ is a key term in step three. The panel dismissed the interpretation of the European Communities that the ‘‘legitimate interests’’ is that defined in Art. 28.1 of TRIPS. The panel adopted a broad interpretation98 that the legitimate interest ‘‘must be defined in the way that it is often used in legal discourse as a normative claim calling for protection of interests that are justifiable in the sense that they are supported by relevant public policies or other social norms’’.99 The profits from patent transfer, assignment and licensing, and the selling of patented products, are is the legitimate interest of the patentee. A limited breeding exemption prevents patentees from profiting from issuing licences to breeders, so it does affect the legitimate interest of patentees. However, because a patentee can recoup this lost profit from the higher licence fees paid by breeders when they commercialise their final varieties, the impact on the patentee’s legitimate interests is insignificant and thus the level of impairment is reasonable. On the other hand, as a comprehensive breeding exemption freely allows breeders to use the patented elements in commercialisation, the impact on the patentee’s legitimate interest is significant and the level of impairment is unreasonable. In terms of the interests of third parties, the panel stated that a legal relationship with a patentee is not required. Consequently, third parties in terms of patent law include the follow-on innovators (e.g. researchers, research institutions, universities) and society as a whole, which benefits from innovations.100 The follow-on innovators are beneficiaries of breeding exemptions, so there is no confliction with their interests. Society as a whole can also benefit from exemptions, because they can access more plant generic resources provided by breeders,101 so breeding exemptions do not conflict with the interests of society as a whole. 4.2 Compatibility with Art. 27.1 of TRIPS Article 27.1 is a non-discrimination clause which requires that exceptions do not discriminate ‘‘as to the place of invention, the field of technology and whether products are imported or locally produced’’. In examining the EC v. Canada case, the panel distinguished between ‘‘de jure’’ discrimination and ‘‘de facto’’ discrimination, and between the word ‘‘discrimination’’ and the word ‘‘differentiation’’. The ‘‘de jure’’ discrimination relates to whether the exception is legal with regard to all products subject to marketing approval requirements,102 while the ‘‘de facto’’ discrimination concerns the actual effect of imposing differentially disadvantageous consequences on certain parties because those differential effects 98

Report on Canada-Pharmaceutical Patents, para. 7.68.

99

Report on Canada-Pharmaceutical Patents, para. 7.69.

100

The recognition of the legitimate interests of third parties re-dimensions the view on patent law. The latter, indeed, is a shift from its original narrow definition of private law towards a more social approach. See Schneider (2009), pp. 129–131. 101 One of the aims of the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) and the Convention on Biological Diversity (CBD) is to provide access to plant genetic resources. See Art. 5.2 and 6 of the ITPGRFA and Art. 1, 15.2 and 16 of the CBD. 102

Report on Canada-Pharmaceutical Patents, para. 7.99.

123

A Case for a Limited Breeding Exemption from Patent…

653

are found to be wrong or unjustifiable.103 The panel suggested that the WTO members can adopt different rules for particular product areas, provided that the differences are adopted for bona fide purposes.104 This statement indicates that if a differentiation is justifiable (for bona fide purposes), it is not discrimination. Breeding exemptions are to promote breeding activity, which is crucial for the food supply for our society, so such exemptions are clearly for bona fide purposes. This bona fide purpose is also significantly important. The Doha Declaration on the TRIPS Agreement and Public Health gives a differential treatment for patents related to public health, because of the importance of health for human life. By the same reasoning, the purpose of breeding exemptions is linked to the importance of health for human life, so breeding exemptions are justifiable. Article 27.1 also provides a statement directly related to the breeding industry. The article restricts the application of the non-discrimination clause to the provisions of the third paragraph, which allows for patents or a ‘‘sui generis’’ system or a combination for the protection of plant varieties. Although TRIPS does not define what is a ‘‘sui generis’’ system, in the case of breeding the UPOV is widely regarded as a system required by Clause 27.3(b).105 As such, the breeding exemption in the UPOV should not be limited by patent law. Since member states have the right to exclude plants from their patent system, they can of course restrict plant patents in patent law (Janis, 2001).106 Moreover, TRIPS allows a ‘‘sui generis’’ system that can be combined with the patent system to protect plant varieties. Since ‘‘any combination’’ of patent and ‘‘sui generis’’ protection for plant varieties can be permitted by TRIPS, it is legitimate to add a breeding exemption to patent law so that the two systems are consistent.107

5 Conclusions The breeding exemption in the UPOV cannot cover a situation in which biological materials are protected by patent law. Since breeding is clearly for commercial purposes, it cannot be covered by the research exemption in the US patent system. On the other hand, since breeding activity uses existing biological material as a tool (i.e. is research with the biological material), a breeding exemption cannot be covered by the research exemption in European patent law. From the legal, economic, and public policy perspectives, it is necessary to introduce a breeding exemption into patent laws so as to provide a consistent framework to promote breeding activity. Adding a limited breeding exemption to patent law is feasible because it complies with Art. 30 and Art. 27.1 of TRIPS. Moreover, liability rules can be introduced to reduce barriers to the commercialisation of the final new breed 103

Report on Canada-Pharmaceutical Patents, para. 7.101.

104

Report on Canada-Pharmaceutical Patents, para. 7.92.

105

See Dutfield (2011).

106

Janis, supra note 60.

107

See McManis (2002).

123

654

Z. Wan, S. Meng

with patented features and, in the meantime, to compensate patentees of basic varieties. Acknowledgements The authors would like to acknowledge the support of a grant from the National Planning Office of Philosophy and Social Science of China (No. 16BFX168).

References Anderson JE (2003) Public policy-making: an introduction. Fifth edn. Houghton Mifflin Company, Boston Bessen et al (2000) Sequential innovation, patents, and imitation. Harvard University and Massachusetts Institute of Technology, Working Paper Department of Economics, pp 00–01 Buchanan JM, Yoon YJ (2000) Symmetric tragedies: commons and anticommons. J Law Econ 43:1–13 Cai M (2004) Madey v. Duke University: shattering the myth of universities’ experimental use defense. Berkeley Technol Law J 1:190 Correa CM (2000) Intellectual property rights, the WTO and developing countries: the TRIPS Agreement and policy options. Zed Books, London, pp 75–76 Davison MJ, Monotti AL, Wiseman L (2015) Australian intellectual property law. Cambridge University Press, Cambridge, p 683 Dutfield G (2011) Food, biological diversity and intellectual property, the role of the international union for the protection of new varieties of plants (UPOV). Quaker United Nations Office Intellectual Property. Issue Paper, p 9 Fennell LA (2004) Common interest tragedies. Northwest Univ Law Rev 98:829 Graff GD (2009) The political economy of agricultural biotechnology policies. J Agrobiotechnol Manag Econ 12(1):34 Guido C, Douglas M (1972) Property rules, liability rules and inalienability: one view of the cathedral. Harv Law Rev 85:1089–1128 Harabi N (1996) Patents in theory and practice: empirical results from Switzerland. Munich Personal RePEc Archive. http://mpra.ub.uni-muenchen.de/9606/. Accessed 12 May 2017 Hardin G (1968) The tragedy of the commons. Science 162:1243–1248 Heitz A (1994) The history of the UPOV convention and the rationale for plant breeders’ rights. In: 1991 seminar on the nature and rationale for the protection of plant varieties under the UPOV convention (UPOV, 1994), pp 25–26 Heller MA (1998) The tragedy of the anti-commons: property in the transition from Marx to markets. Harv Law Rev 111:621–688 Holzapfel H, Sarnoff JD (2008) A cross-atlantic dialog on experimental use and research tools. Intell Prop Law Rev 48(151):2–96 Hsu SL (2016) A comparative study on research exemptions in plant breeding under intellectual property rights protection. Queen Mary J Intell Prop 1:92 Janis MD (2001) Sustainable Agriculture, Patent Rights, and Plant Innovation. Indiana J Glob Leg Stud 9(1):91–117 Janis MD et al (2002) The future of patent law: U.S. plant variety protection: sound and Fury…? Houst L Rev 39:727–778 Jonge B, Louwaars N (2011) IP practices in the Netherlands: IPRs and technology transfer to developing countries. In: Genugten WV, Meijknecht A (eds) Harnessing intellectual property rights for development objectives: the double role of IPRs in the context of facilitating MDGs Nos 1 and 6. Wolf Legal Publishers, Nijmegen, pp 234–240 Jo¨rdens R (2002) Legal and technological developments leading to this symposium: UPOV’s perspective. In: WIPO-UPOV symposium on the co-existence of patents and plant breeders’ rights in the promotion of biotechnological developments. Geneva 25 Oct Kur A (2011) Limitations and exceptions under the three-step test: How much room to walk in the middle ground? In: Kur A, Levin M (eds) Intellectual property rights in a fair world trade system: proposals for reform for TRIPS. Edward Elgar, Cheltenham, pp 239–240 Liu WZ (2007) On the predicament of realizing public interest of public policy. Chin Public Adm 8:26–29

123

A Case for a Limited Breeding Exemption from Patent…

655

Louwaars N et al (2009) Breeding business. The future of plant breeding in the light of developments in patent rights and plant breeder’s rights. Centre for Genetic Resources, The Netherlands, CGN Report, p 14 McManis CR (2002) Are there TRIPS-compliant measures for a balanced co-existence of patents and plant breeders’ rights? Some lessons from the U.S. experience to date. http://14.139.60.114:8080/ jspui/itstream/123456789/809/1/007_Are%20there%20TRIPS%20%20Compliant%20Measures% 20for%20a%20Balance%20Co-Existence.pdf. Accessed 12 May 2017 McMinn A (2006) Judicial interpretation of 35 USC Sec 271(e)(1): an improper expansion beyond the legislative intent. Albany Law J Sci Technol 16(195):197–230 Merges RP (1999) Institutions for intellectual property transactions: the case of patent pools. University of California, Berkley, p 5 Merges RP, Nelson RR (1990) On the complex economics of patent scope. Columbia Law Rev 90:839–916 Moser P (2013) Patents and innovation: evidence from economic history. J Econ Perspect 27(1):3–22 Mueller JM (2001) No ‘‘dilettante affair’’: rethinking the experimental use exception to patent infringement for biomedical research tools. Washington Law Review, p 76. https://papers.ssrn.com/ sol3/papers.cfm?abstract_id=1346545. Accessed 12 May 2017 Murray F, Stern S (2007) Do formal intellectual property rights hinder the free flow of scientific knowledge? An empirical test of the anti-commons hypothesis. J Econ Behav Organ 63:648–687 Nagaoka S, Aoki R (2006) Economics of research exception. IIR working paper 06-04, Institute of Innovation Research, Hitotsubashi University. http://ideas.repec.org/p/hit/iirwps/06-04.html.% 20Accessed%205%20May%202017, http://ideas.repec.org/p/hit/iirwps/06-04.html. Accessed 5 May 2017 Pardey P et al (2013) The evolving landscape of IP rights for plant varieties in the United States, 1930–2008. Nat Biotechnol 31:25–29 Pate GN (2002) Analysis of the experimental use exception. NC J Law Technol 3:253–270 Prifti V (2013) The breeding exemption in patent law: analysis of compliance with Article 30 of the TRIPS Agreement. J World Intell Prop 16(5–6):218–239 Prifti V (2015) The breeder’s exception to patent rights. International law and economics. Springer, Cham, p 96 Schneider I (2009) Can patent legislation make a difference? Bringing parliaments and civil society into patent governance. In: Haunss S, Shadlen KC (eds) The politics of intellectual property: contestation over the ownership, use, and control of knowledge and information. Edward Elgar, Cheltenham, pp 129–157 Scotchmer S (1991) Standing on the shoulders of giants: cumulative research and the patent law. J Econ Perspect 5(1):29–41 Shapiro C (2009) Navigating the patent thicket: cross licenses, patent pools, and standard-setting. In: Heller MA (ed) Commons and anticommons, vol II. Edward Elgar, Cheltenham, pp 291–322 Straus J (2002) Measures necessary for the balanced co-existence of patents and plant breeders’ rights – a predominantly European view, WIPO-UPOV Symposium on the Co-existence of Patents and Plant Breeders’ Rights in the Promotion of Biotechnological Developments, 25 October 2002 Strandburg KJ (2004) What does the public get? Experimental use and the patent bargain. Wisconsin Law Review, Madison, p 123 Trojan CG (2012) Problem-solving approaches to the issue of the overlap between patent law and breeders’ rights in the plant breeding sector. Report Submitted to the Dutch Ministry of Economic Affairs. Agriculture and Innovation 31 July, p 20 Van Eecke P et al (2009) Monitoring and analysis of technology transfer and intellectual property regimes and their use. In: Results of a study carried out on behalf of the European Commission (DG Research). Brussels, Dublin, p 139 Van Overwalle G (2006) The implementation of the biotechnology directive in Belgium and its aftereffects: the introduction of a new research exemption and a compulsory licence for public health. Int Rev Intell Prop Compet Law 37:889–920 Van Overwalle G et al (2007) Dealing with patent fragmentation in ICT and genetics: patent pools and clearing houses. First Monday, p 12. http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/rt/ printerFriendly/1912/1794. Accessed 12 May 2017 Yu PK (2009) The objectives and the principles of the TRIPS Agreement. Houst Law Rev 46:1020 Zwahlen R (2011) Gene patents’ stifle research? Patently biotech. http://www.biotech-now.org/publicpolicy/patently-biotech/2011/06/gene-patents-stifle-research#. Accessed 12 May 2017

123