Agribusiness In The Philippines: Protecting New Plant Varieties.

24 January, 2017

 

Underpinned by goverment’s support, the agriculture sector is rapidly growing and modernizing in the Philippines. This offers lucrative business opportunities for European agribusinesses as their technology becomes in high demand. However, IPR violations like counterfeiting are still a major problem in the Philippines and thus European SMEs need to have a robust IPR protection strategy in place when planning to do business in the Philippines. Today’s blog post is taking a look at new plant varieties protection, something that is of utmost importance to agribusinesses engaged in breeding plats. SMEs will learn what they can do to protect their new plat varieties in the Philippines and how to enforce their rights in case of an infringement. 

 

The agricultural sector is a major part of the Philippines economy: it makes up around 11% of GDP and employs about a third of the country’s workforce. The Philippines is home to a wide variety of indigenous agricultural products and constitutes a fertile environment that can host a diverse range of plant varieties. There also exists a large a gap in the application of innovative farming practices and the use of new specialised plant varieties, partly highlighted by the Philippines joining the ASEAN Free Trade Area (AFTA) which is now driving producers to adopt new practices to compete with imports and achieve profitable exports. Furthermore, the Philippines Agribusiness Strategy aims at transforming and upgrading the agriculture sector from traditional farming to agribusiness or industrial clusters to take advantage of opportunities in rubber, coconut, mangoes, bananas, coffee, palm oil, cacao, and other emerging high value crops[1].

 

Although, the Philippines is more popularly known for the production of regional tropical fruit (it is the world’s largest producer of both coconuts and pineapples), the Philippines has historically played a significant role in agricultural innovations. The International Rice Research Institute is based in Los Baños, Laguna, and took a prominent role in the development of new high-yield rice varieties during the Green Revolution, with the country now standing as the eighth largest producer in the world[2]. However, in recent years private enterprise has increasingly been the source of innovation and accordingly the need for adequate protection of innovations has been a growing concern.

 

IP in the Agribusiness Sector – Protection of Plant Varieties

 

In the context of intellectual property rights (IPR), foreign investment in agribusiness would typically consider the protection of machine technology through patents, and operational processes and procedures through trade secrets. Unique to agriculture, however, is the protection of plant varieties. Innovative plant varieties are the result of selective plant breeding with the most common aim being to achieve greater yields, though such processes may also seek to find varieties that are more resistant to environmental stress or result in better quality produce. It is estimated that 50% of European farm yield increases are the result of plant variety developments, and European companies now possess some of the most advanced and valuable varieties in the world.

 

The Philippines is a party to a number of treaties and agreements relating to plant varieties. It ratified the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA, or the ‘international seed treaty’) in 2004, and implements the Standard Material Transfer Agreement (SMTA) for the transfer and exchange of biological and genetic resources – essentially a set of agreed conditions for two companies to exchange plant variety materials. All of these demonstrate a willingness to grant international-standard protection for plant varieties, though for a foreign company it is perhaps most important to consider the protection provided under the Philippine Plant Variety Protection Act of 2002. Plant variety protection is subject to registration in the Philippines.

 

Registered plant varieties under the Philippine Plant Variety Protection Act might be considered similar to patents to some extent, with additional consideration of the level variation that can occur among particular plants. Plant variety rights allow for protection of varieties that are “new, distinct, uniform and stable” for 20 years (or 25 years for trees and vines).

 

• A variety can be deemed new if has not yet been commercially exploited (i.e. sold, or offered for sale) for at least 1 year in the Philippines or at least 4 years (6 years for trees and vines) in any other country;
• it can be considered distinct if it is clearly distinguishable from any commonly known variety;
• it can be defined as uniform if it’s relevant characteristics (i.e. its primary reasons for creation) are unchanged in mass application;
• and it can be deemed stable if its relevant characteristics remain unchanged when it is grown in mass.

 

The right holder must renew the rights every year (or in advance) after the fourth year of holding the right. It is also worth noting that the ‘first-to-file’ rule applies: the first individual or company to apply will be granted the right, irrelevant of who developed and used the variety first. So the importance of registering early, and certainly before entering the market, cannot be understated.

 

Enforcement

 

Civil action

 

Any plant variety registration holder or anyone possessing an infringed right may bring a civil action. Civil action could be initiated when the infringers: sell the novel variety, or offer it or expose it for sale; import the novel variety into, or export it from, the Philippines; sexually multiply the novel variety as a step in marketing; use the novel variety in producing (as distinguished from developing) a hybrid or different variety therefrom; use seed which had been marked “unauthorized propagation prohibited” or “unauthorized seed multiplication prohibited” or progeny thereof to propagate the novel variety.

 

In order for the court to take up the case, the owner of a plant variety must provide the Certificate of Plant Variety Protection, which is issued when applying for a plan variety registration in the Philippines. It is thus important to apply for plant variety registration in the Philippines to seek enforcement.

 

The court may award actual, moral, exemplary damages and attorney’s fees according to a proven amount including a reasonable royalty for the use of the protected variety. The courts can also issue injunctions to stop infringements and seize and destruct the infringing goods.

 

Criminal action

 

Contrary to patent rights in the Philippines, the infringement of plant variety rights constitute a criminal offense and thus registration holders may also take criminal action. The infringers can face 3-5 years in prison and a fine, for which the minimum is 100,000 Philippine Peso.

 

In general, European companies who aim to enter the Philippine market with innovative plant varieties should be aware of the significant risks they face if they do not fully protect their innovations. The ease with which other companies can gain access to samples of new plant varieties can literally be as simple as taking plants and seeds out of the soil in a field. Thus complete, relevant protection should be in place before any operations begin and should be complimented by monitoring of competitors and the threat of legal action wherever necessary.

 

[1] http://industry.gov.ph/category/agribusiness/

[2] GRAIN https://www.grain.org/article/entries/34-hybrid-rice-in-asia-an-unfolding-threat