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Understanding the farmers’ privilege in ‘Monsanto Laws’

Viola Prifti*

Abstract

This paper clarifies the controversy on the implementation of UPOV 1991-compliant

laws in Chile, Colombia, and Guatemala as regards the farmers’ privilege. It examines

legal provisions as well as stakeholders’ interests in order to shed light on the issue and

gives reasons for broadening the farmers’ privilege under the framework of UPOV 1991.

1. Introduction

The terms ‘farmers’ privilege’ indicate the freedom of farmers to carry out traditional

farming practices such as sowing, replanting, and exchanging seeds with other farmers.

The right to exercise this freedom was institutionalized in 1961 with the International

Convention for the Protection of New Varieties of Plants (UPOV)1 and subsequently

limited in 1991 with the last modification of UPOV. with this amendment, UPOV member

states have the option to adopt a farmers’ privilege, which prohibits seed exchange but

allows farmers to save and replant seed under some conditions. This restriction does,

however, not apply to countries that adhere to UPOV 19782 and to non-members. This

* Viola Prifti holds a doctoral degree from the Graduate School “The economics of the internationalization of law” at the University of Hamburg. She has widely written on recent issues related to plant variety protection and is the editor of the blog https://plantvarietyprotection.wordpress.com/. ** The author is the sole responsible for the translation of documents from Spanish into English. 1 The convention entered into effect in 1968 and it was subsequently revised in 1972, 1978, and 1991. For more see the UPOV website http://www.upov.int/upovlex/en/upov_convention.html. Accessed 29 November 2015. It is to be noted that the farmers’ privilege in UPOV should not be confused with the political concept of farmers’ rights provided for in art. 9 of the International Treaty on Plant Genetic Resources for Food and Agriculture, despite similarities. UPOV and the Treaty are two different systems of protection. 2 Article 37.3 of the 1991 UPOV closed accession to the Act of 1978 after 31 December 1995 for

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situation can change if these countries sign free trade agreements (FTAs)3 with the US

or EU, which often impose the adoption of UPOV 1991.4

Legislative proposals aiming to transpose FTAs plant variety provisions into national

laws are commonly referred as ‘Ley Monsanto’ (Monsanto law) by populist movements.5

This metaphor is used to indicate the adaptation of national laws to the demands of the

plant breeding and biotech industry. Social movements have further emphasized the

imbalance in the parliamentary bills by alleging that strong property rights in the

proposed laws favor the concentration of the seed industry to the detriment of traditional

farming practices and indigenous peoples, and thus threaten food security.6 In Chile,

Colombia, and Guatemala, concerns on smallholder farming were followed by

mobilization of different social groups and mass protests, which sometimes resulted in

violent conflicts with the governments.7 This situation created unease among senators

themselves who asked to repeal the bills for the benefit of public interest.

The bills were eventually revoked, thus national laws do not comply with US FTAs

standards at present.8 Non-compliance is among the reasons for placing Chile in the

priority watch list and Colombia and Guatemala in the watch list as identified by the

Office of the United States Trade Representative.9 Listed countries face the threat of

developing countries and after 31 December 1993 for other countries. 3 These agreements find their legal basis in art. XXIV of GATT (General Agreement on Trade and Tariffs) and create a free trade area between at least two countries whereby import quotas and tariffs are reduced between member countries. 4 For a list of US agreements see https://ustr.gov/trade-agreements/free-trade-agreements. Accessed 20 August 2015. For EU see http://ec.europa.eu/trade/policy/countries-and-regions/agreements/. Accessed 29 November 2015. 5 La Via Campesina and Grain, Seed Laws that Criminalize Farmers. Resistance and Fightback, March 2015. Available at https://www.grain.org/article/entries/5142-seed-laws-that-criminalise-farmers-resistance-and-fight back#3 Americas resistance, accessed 28 October 2015. See also David J. Jefferson, ‘Development, Farmers’ Rights, and the Ley Monsanto: The Struggle Over the Ratification of UPOV 91 in Chile’ (2014) 55 (1) IDEA, p. 39. 6 Besides La Via Campesina and Grain (2015), see several articles under the respective countries’ pages on Bilaterals.org, http://bilaterals.org/?lang=en, accessed 28 October 2015. 7 La Via Campesina and Grain (2015, p. 14. 8 Under FTAs, Chile was required to ratify or accede to UPOV 1991 within 1 January 2009, 1 January 2008 for Colombia and 1 January 2006 for Guatemala. See art. 17.1 of the US-Chile FTA, art. 16.1.3 of the US-Colombia FTA, and 15.1.5(a) of the US-CAFTA FTA. 9 See pp. 3, 4, 57, of the 2015 Special 301 Report, available at https://ustr.gov/sites/default/files/2015-Special-301-Report-FINAL.pdf, accessed 27 October 2015. The US government may impose unilateral

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unilateral trade sanctions or lawsuits. Hence the necessity to adopt UPOV 1991-based

laws in the aforementioned countries. But the question remains: will UPOV 1991

incentivize or deter their agricultural development? This paper aims at finding feasible

solutions by balancing the main interests at stake, those of commercial breeders and

smallholder farmers. To achieve this goal, the paper is organized as follows. Section 2

clarifies the controversy by examining relevant legal provisions and explaining the

reasons that led to the withdrawal of plant variety laws. Section 3 provides an

understanding of stakeholders’ interests in plant breeding. Section 4 aims at finding a

common solution for different stakeholders by examining UPOV 1991 flexibilities and

section 5 provides reasons for taking account of relevant international agreements for

implementing the farmers’ privilege into national laws. Section 6 concludes.

2. The ‘Monsanto controversy’

2.1 Chile

Prior to the FTA with the US, Chile had adopted Law no. 19.342 ‘On the Rights of

Breeders of New Varieties of Plants’ implementing the provisions of UPOV 1978.10 This

law took effect on 3 November 1994 and continues to be in force despite the attempt to

abrogate it by the bill proposing to bring breeder’s rights in line with UPOV 1991. The

bill, named ‘the Plant Breeders’ Law’ or ‘Monsanto Law’ by populist movements,11 was

introduced by the Chilean President Michelle Bachelet on 3 March 2009.12

Subsequently, concerns on the effect of the ‘proposed law on agricultural communities

in Chile, and on heirloom seeds native to the country’13 led President Bachelet to

trade sections or initiate dispute settlement proceedings at the World Trade Organization (WTO) against countries included in the Watchlist. 10 See also the Implementing Regulation approved by decree no. 373 on 11 October 1996. The texts of the Law and of the Regulation are available at http://www.upov.int/upovlex/en/profile.jsp?code=CL. Accessed 17 June 2015. 11 David J. Jefferson, ‘Development, Farmers’ Rights, and the Ley Monsanto: The Struggle Over the Ratification of UPOV 91 in Chile’ (2014) 55 (1) IDEA, p. 39. 12 Message no. 1435-356. For a detailed account of the approval of this bill see House of Representatives of Chile, Bulletin 6426-10, available at http://www.diputados.cl/pley/pley_detalle.aspx?prmID=6819. Accessed 18 June 2015. 13 Jefferson (n 11), p. 42.

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withdraw the bill on 17 March 2014.14 Similar issues were also raised during the

approval process of the law. On 20 May 2011, 17 senators claimed the

unconstitutionality15 of UPOV 1991 in front of the Constitutional Tribunal of Chile,16 but

the Tribunal rejected their petition.17 The merit of the decision falls beyond the scope of

this paper. In order to gain a better understanding of the controversy on farmers’

privilege, it is necessary to compare the farmers’ privilege in the current PVP system

with that proposed by ‘Ley Monsanto’ (bill no. 8570).

Table 1: Law no. 19.342 vs Bill No. 8570

Law no. 19.342 Bill. No 8570

Art. 3: The breeder’s right shall not be

deemed violated by any use made by

a farmer, on his own farm, of the

harvest from properly acquired

reproductive material. On no account,

however, may such material be

advertised or transferred by any

legal title as seed.

Art. 48: Farmers can use for propagating

purposes the product of the harvest obtained

from the planting of a lawfully acquired

protected variety other than hybrid or

synthetic, on his own holdings. It is expressly

prohibited the sale or alienation by any title

of the propagative material.

This right can be exercised on the species

Solanum tuberosum L. (potato) and on

cereals; legumes and seed propagated

species determined by the regulation.

14 For a brief overview of the political vicissitudes accompanying the bill see Jefferson (n 11), pp. 38-43. 15 See the document ‘Requerimiento y acompañas documentos’, 20 May 2011, Tribunal Constitucional de Chile, Rol No 1988-11-CPT of 24 June 2011, available at http://www.tribunalconstitucional.cl/wp/expedientes. Accessed 15 May 2015. 16 The Chilean President Sebastian Piñera Echenique argued that UPOV is a non-self-executing act, and therefore cannot be declared unconstitutional. Nevertheless, the Constitutional Tribunal delivered judgment based on the probability of unconstitutional effects of the act implementing UPOV 1991. The Tribunal applied a preventive control in order to preserve the constitutional supremacy. For the President’s opinion see ‘Formula Observaciones’, pp. 15-18, whereas for of the decision of Tribunal see pages 32-38, of the decision of Tribunal Constitucional de Chile Rol No 1988-11-CPT of 24 June 2011. Both documents are available at http://www.tribunalconstitucional.cl/wp/expedientes. Accessed 15 May 2015. 17 See pp. 24-79 of the decision. Tribunal Constitucional de Chile, Rol No 1988-11-CPT of 24 June 2011.

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In the current plant breeder’s rights provided for in law 19.342, art. 3, last paragraph, the

farmers are allowed to make any use, on their own farm, of the product of their harvest

from properly acquired reproductive material. ‘On no account, however, may such

material be advertised or transferred by any legal title as seed.’ Despite law 19.342

implements UPOV 1978, this provision seems to implement the farmers’ privilege of

UPOV 1991. Its wording restricts seed practices only to own harvest in own farm,18 but

it allows sale of farmers’ products to third parties for final use or consumption.19 This

interpretation of the farmers’ privilege seems to outlaw informal credit practices. In Latin

America, farmers sell their harvest to grain dealers who provide it as a credit in kind to

other farmers. These farmers use the credit as seed and pay off with the double

quantity of the seeds obtained. 20 Under the farmers’ privilege, informal credit might be

considered illegal. This is because the sale of harvest to grain dealers is not intended

either for final use or consumption. Similarly, the payoff of the credit in kind would not

fall under the exemption.

With respect to the farmers’ exemption, the Monsanto law reaffirms the seed exchange

prohibition21 and puts further limitations. Whereas it continues to permit seed-saving

from the product of the harvest on farmer’s own farm, it explicitly excludes saving of

hybrid and synthetic seeds.22 The right to save propagated material can be exercised on

the species Solanum tuberosum L. (potato) and on cereals; legumes and seed

propagated species determined by the regulation.23 Although the provision allows seed

saving for potatoes, cereals, legumes and other seed-propagates species, its

18 From the wording of the provision, it may be questionable whether the farmer should be the sole proprietor of the holding or bear any kind of property title. 19 The farmers is however not allowed to save a larger quantity of seed than that originally acquired. For further explanations on this point see the decision of the Tribunal Constitucional of Chile, 24 June 2011, Rol no. 1988-11, pp. 62-63. 20 See Jeroen van Wijk, ‘How Does Stronger Protection of Intellectual Property Rights Affect Seed Supply? Early Evidence of Impact’ (1996) 13 Natural Resource Perspectives. For more on informal credit markets in the Chilean agricultural sector see Charles T. Nisbet, ‘The Relationship Between Institutional and Informal Credit Markets in Rural Chile’ (1969) 45 (2) Land Economics. 21 Note that Law 19.342 did not make use of the seed-saving exemption of UPOV 1978. 22 Although the Act does not define ‘synthetic’ seeds, conventional wisdom suggests that the terms refer to genetically modified seeds. 23 To author’s knowledge, the regulation has not been enacted given the withdrawal of the bill. See art. 56 of the bill establishing that the Regulation should be emanated within 180 days after the promulgation of the bill (law) in the Official Gazzette.

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applicability is more limited than it might appear. This is because many of the marketed

cereals and legumes are hybridized.24 The applicability of this provision would be further

reduced if marketed varieties were genetically modified. The consequence would be the

impossibility to save seed. Although this is not the present situation, it may be a

possibility in the future.25 Hence this provision may be deemed too restrictive, especially

for those farmers who need to save seed for their subsistence. In this specific context,

seed exchange is a must in order to enhance farmers’ livelihoods and food security. In a

more general context, seed exchange would enable technology transfer and broaden

the base of genetic variety for breeding new plants. This is not permitted by the

provision on farmers’ privilege in the revoked bill.

One important point to be mentioned in the debate on ‘Ley Monsanto’ are legal

provisions on offenses and sanctions. Whereas arts. 44-46 of Law 19.342 lay down

penal, civil, and administrative sanctions for acts that infringe the rights of the breeder,

arts. 51-56 of the revoked bill contained only civil sanctions26 but they add new

prohibitions such as the use of a different denomination for the protected variety;

omission of the denomination of the variety that corresponds to propagating material;

and labeling, classification, and indication of consumer products as seeds and/ or of

seeds as consumer products when they are not.27 While the absence of penal sanctions

in the ‘Ley Monsanto’ is to be praised, civil sanctions can be equally restrictive for

farmers. For example, civil sanctions on variety denomination infringement seem too

demanding for farmers as they are not always aware of the denomination of the variety

24 For an understanding of hybridized varieties see DuPont Pioneer’s list of hybridized products: https://www.pioneer.com/home/site/about/products/crops/canola/. Accessed on 20 June 2015. To be noticed that its canola and maize hybrids are already marketed in Chile. 25 Genetically modified crops are not allowed for domestic consumption in Chile, but they have been cultivated since 1987 and authorized for export in 1992. The main GM crops are maize, soybeans and canola. See Erika Salazar and Gloria Montenegro, ‘Genetically Modified Crops in Chile’ (2009) 36 (3) Ciencia e Investigaión Agraira, pp. 353 – 368. Available at http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-16202009000300003, accessed 2 July 2015. See also USDA Foreign Agricultural Service, Gain Report nr. CI1021, 15 July 2011. Available at http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Agricultural%20Biotechnology%20Annual_Santiago_Chile_7-15-2011.pdf, accessed 8 July 2015. For more information on the approved GM crops in Chile see the GM Approval Database, available at http://www.isaaa.org/gmapprovaldatabase/approvedeventsin/default.asp?CountryID=CL&Country=Chile. Accessed 8 July 2015. 26 Although art. 52 does not preclude the possibility of applying penal sanctions. 27 See art. 51 of the bill.

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or they may have their own informal denomination system. Imposing formal names may

go against their traditional cultural expressions (TCE).28 It appears thus that penal and

civil sanctions further limit the freedom of farmers to continue their traditional practices.

This means that these provisions indirectly affect the farmers’ privilege.

2.2 Colombia

Similar to Chile, Colombia had ratified UPOV 1978 in 1996.29 But prior to its ratification,

Colombia had implemented the Andean Community Decision No. 345 Establishing the

Common Regime on the Protection of the Rights of Breeders of New Plant Varieties30 in

1994.31 In 2010 the Colombian society sparked a heated debate when tons of rice

seeds produced from a group of farmers in Campoalegre were seized and destroyed

since breeders did not respect the phytosanitary measures required by Resolution 970

of the Colombian Agriculture Institute.32 A social activist and film producer, Victoria

Solano, made a documentary, ‘Documental 9.70’,33 which considered UPOV 1991 and

the US FTA as the cause of the events in Campoalegre.34 This situation indicates that

law 1518 of 13 April 201235 ratifying UPOV 1991 was proposed in contentious

circumstances.

28 Names are included in the TCE. For general information see http://www.wipo.int/tk/en/folklore/. Accessed 22 June 2015. 29 See the UPOV notification dated 19 August 1996, available at http://www.upov.int/upovlex/en/text_notification.jsp?id=53. Accessed 29 October 2015. 30The text is available at http://www.wipo.int/wipolex/en/details.jsp?id=9417, accessed 29 October 2015. 31 See Decree No. 533 of 8 March 1994, available at http://www.upov.org/export/sites/upov/en/publications/npvlaws/colombia/colombia.pdf. Accessed 29 October 2015. 32 See Resolución 970 of 2010, Diario Oficial No. 47.648 de 11 de marzo de 2010, Istituto Colombiano Agropecuario. For a legal understanding of the matter see Leyes de Semillas, Comercio de Semillas, Resolucion 970: http://www.leyesdesemillas.com/colombia/comercio-de-semillas/. Accessed 29 October 2015. 33 https://www.youtube.com/watch?v=kZWAqS-El_g. Accessed 29 October 2015. 34 Note that FTA negotiations had already started. See the various documents on the website of the Office of the US Trade Representative: https://ustr.gov/trade-agreements/free-trade-agreements/colombia-fta/advisory-group-reports-us-colombia-fta. Accessed 29 October 2015. 35The proposal is available at http://wsp.presidencia.gov.co/Normativa/Leyes/Documents/ley151813042012.pdf- Accessed 29 October 2015.

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Although the US FTA took effect on 15 May 2012, Colombia did not implement UPOV

1991. The Constitutional Court of Colombia36 decided on 5 December 2012 that law

1518 had violated Constitutional precepts since indigenous peoples directly affected by

the law had not been consulted.37 This ruling implies that law 1518 can be reenacted in

its entirety if indigenous groups will be previously consulted. In this case, societal

concerns on the legal disparities between commercial breeders and farming groups

would remain. To have a better grasp of the problems raised by ‘Ley Monsanto’, a

comparison between its farmers’ privilege and that of the current PVP system is

necessary.

Table 2. Andean Decision vs UPOV 1991

Andean Decision UPOV 1991 (law 1518)

Art. 26 Anyone who stores and sows for

his own use, or sells as a raw material or

food, the product of his cultivation of the

protected variety shall not be thereby

infringing the breeder’s right. This Article

shall not apply to the commercial use of

multiplication, reproductive or propagating

material, including whole plants and parts

of plants of fruit, ornamental and forest

species.

Art. 15(2) [Optional exception]

Notwithstanding article 14, each

Contracting Party may, within reasonable

limits and subject to the safeguarding of

the legitimate interests of the breeder,

restrict the breeder's right in relation to any

variety in order to permit farmers to use for

propagating purposes, on their own

holdings, the product of the harvest which

they have obtained by planting, on their

own holdings, the protected variety or a

variety covered by article

14(5)(a)(i) or article 14(5)(a)(ii).

36 Based on art. 241 of the Colombian Constitution, accession to UPOV 1991 must be approved by the Constitutional Court. 37 The Court recalled art. 6.1 of the Tribal Peoples Convention of the International Labor Organization (ILO) No. 169.

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The Andean decision allows farmers to use, save and exchange the seed of their

harvest provided that they do not engage in commercial activities. This freedom to

operate is significantly restricted by UPOV 1991. Under the farmers’ privilege in UPOV

1991, farmers can resow only the product of the harvest obtained in their own holdings

subject to reasonable limits and to the safeguard of the legitimate interests of the

breeder.38 Similarly to Chile, Colombia also provides for penal sanctions for infringers of

plant breeder’s rights. This was made possible through an amendment of art. 306 of the

criminal code by art. 4 of law 1032/2006.39 Various societal organizations claimed the

unconstitutionality of art. 4, but the Colombian Constitutional Court refused their claims

and partially amended art. 306 in order to exclude acts on varieties not clearly

distinguishable from those protected. The Court argued that the protection of ‘varieties

not clearly distinguishable from those protected’ violates the principle of legal certainty

since it is not possible to determine which acts and products are object of sanctions.40

Penal sanctions obviously put heavy burdens on farmers who lack the financial

resources to pay for the sanctions. Imprisonment further impedes them to work on their

fields and ensure their livelihoods.

2.3 Guatemala

The US FTA with Guatemala was signed as part of the regional Dominican Republic –

Central America Free Trade Agreement (CAFTA-DR).41 When the Congress of

38 Although UPOV Explanatory notes propose to consider a combination of several factors such as the type of variety to be exempted; the size of the holding, crop area, or crop value; proportion or amount of harvested crop; and remuneration when deciding on ‘reasonable limits’ and on the ‘safeguard of the legitimate interests of the breeder’, the Colombian legislator is free to interpret or select other criteria in order to respond to national needs for plant breeding development. See better Explanatory Notes on Exceptions to the Breeder’s Rights Under the 1991 Act of the UPOV Convention, UPOV/EXN/EXC/1, UPOV, Geneva, 22 October 2009. 39 http://www.upov.org/export/sites/upov/en/publications/npvlaws/colombia/colombia_1032_arts_4_5.pdf. Accessed 29 October 2015. 40 For a discussion on this decision see Leyes de Semillas, Régimen jurídico applicable: la Decisión 345 de la Comunidad Andina de Naciones, available at http://www.leyesdesemillas.com/colombia/propiedad-intelectual/. Accessed 29 October 2015. 41The text of the agreement is available here: https://ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta/final-text. Accessed 30 October 2015.

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Guatemala approved the agreement on 5 March 2005,42 street protests spread

throughout the country.43 The FTA entered into force on 1 July 2006,44 but civil

disobedience continued also during the approval of ‘Ley Monsanto’ in 2014.45 The law

took effect on 24 September of the same year. One day after its entry into force, on 25

September, ‘Ley Monsanto’ was revoked in its entirety by decree 21-2014.46 This,

however, does not affect protection of plant varieties in Guatemala since they can be

protected through patent rights provided for in arts. 93, 97 and 98 of the Industrial

Property Law.47 Various societal groups asked the Constitutional Court of Guatemala to

abrogate these articles in order to avoid monopolization of plant breeding and ensure

free access to plant varieties.48 On Court’s opinion, the abrogation of ‘Ley Monsanto’

rendered a decision unnecessary because the relevant subject matter was not in force.

Clearly, the Guatemala’s Highest Court committed an error in iudicando. Plant breeder’s

rights and patent rights are two different systems of protection though they may grant

rights on the same subject matter. Thus concerns on the patentability of plant varieties

in Guatemala remain unaddressed. More importantly, enactment of PVP as a condition

for complying with the US FTA is not yet resolved.

42 Decree 31-2005 of the Congress of Guatemala available at http://www.sice.oas.org/TPD/USA_CAFTA/Implementation/GUAratif_s.pdf. Accessed 30 October 2015. 43 Xuan-Trang Ho, ‘Protests Erupt as Guatemala Ratifies CAFTA’ (2005) Political Affairs, available at http://www.politicalaffairs.net/protests-erupt-as-guatemala-ratifies-cafta/. Accessed 30 October 2015. See also The Americas Program, Despite Ratification, Anti-CAFTA Protests Continue in Guatemala, available at http://www.cipamericas.org/wp-content/uploads/wp-post-to-pdf-cache/1/732.pdf. Accessed 30 October 2015. 44 Statement of the USTR Susan C. Schwab Regarding Entry into Force of the CAFTA-DR for Guatemala, available at http://www.sice.oas.org/TPD/USA_CAFTA/Implementation/EiF_GUA_e.pdf. Accessed 30 October 2015. See also Decreto Nr. 11-2006, Diario de Centro América, 29 May 2006, http://www.sice.oas.org/TPD/USA_CAFTA/Implementation/GUA_legislation/Dec_112006_s.pdf. Accessed 30 October 2015. 45 Decreto nr. 19-2014, Diario de Centro América, 26 June 2014. For societal concerns on the law, see Denuncia de la Ley Monsanto Ante el Procurador de los Derechos Humanos, available on Scribd: http://de.scribd.com/doc/237917583/20140825-Denuncia-Ante-PDH-de-Ley-Prot-Obtenciones-Vegetales-Con-Sello#scribd and Google Groups: https://groups.google.com/forum/#!topic/colectivosocialdha/MqI_u5KtPV8. Accessed 30 October 2015. 46 The text is available at http://old.congreso.gob.gt/archivos/iniciativas/registro4890.pdf. Accessed 30 October 2014. 47 Art. 93 allows patent protection for varieties that are new, distinct, uniform, and stable. Art. 97 establishes the case when a variety is to be considered new, while art. 98 explains the requirements of distinctness,uniformity, and stability. The Patent Act is available at http://www.wipo.int/ wipolex/en/details.jsp?id=2009. Accessed 30 October 2015. To be noted that unlike Chile and Colombia, Guatemala had not implemented plant breeder’s rights prior to the US CAFTA-DR. 48 Expediente 4192-2014, available at http://www.sistemas.cc.gob.gt/Sjc/. Accessed 30 May 2015.

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To shed some light on the controversy over the farmers’ privilege it is necessary to

compare its scope with that of patent rights on plant varieties. Although the Guatemalan

Patent Act does not provide for a farmers’ privilege, it establishes exceptions to patent

rights in its art. 130. For the purpose of this paper, art. 130 a) is relevant since it permits

third parties to infringe patent rights when they engage in private activities with no

commercial purposes. The differences between these exemptions are illustrated in the

following table.

Table 3. Decree 19-2014 vs the Guatemalan Patent Act

Decree 19-2014, art. 16.2, 3 Patent Act, art. 130 (a)

2. Within reasonable limits and subject to

the safeguarding of his legitimate interests,

the right of the breeder is not violated by

use for propagation or multiplication

purposes, on own holdings, the product of

own harvest obtained by planting, on own

holdings of the protected variety, essentially

derived variety or not clearly distinguishable

variety.49

3. It is exempted from the provisions of

paragraph 2 of the present article, the use

of multiplication, reproductive or

propagating material, including plants or

parts of plants, of fruit, ornamental or tree

species.

The patent right holder is not entitled to

impede acts done privately and for non-

commercial purposes.

49 Please, note that the original text in Spanish does not contain commas. This could lead one to think that only the harvest obtained by essentially derived varieties and not clearly distinguishable varieties is allowed. The author presumes that the absence of a comma is an error and believes that the Guatemalan law reflects the provisions of UPOV 1991.

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The exemption in the Patent Act appears to be broader than that in the plant breeder’s

rights. Under the Patent Act, farmers are free to save and exchange seed as long as the

acts are done privately and they do not aim at profit-making. The farmers’ privilege, on

the other hand, limits farmers’ freedom to use vegetable seed obtained from own

harvest on own holding, provided that reasonable limits and the legitimate interests of

the breeder are respected. The freedom of farmers to continue and preserve their

practices is further limited by penal sanctions both in the plant breeder’s and patent

rights. Art 50. of ‘Ley Monsanto’ sanctions whoever produces material of a protected

variety without the authorization of the right holder; commercializes material of a

protected variety acquired in violation of breeder’s rights; and, without a special

authorization from the right holder, transports reproductive material in a territory where

this law is not applicable.50 This last provision seems even more restrictive than patent

rights since it requires third parties to be informed on laws of other countries. This is

especially onerous for farmers and indigenous peoples who lack the knowledge and

often have no means to investigate on the matter. Prohibited acts under patent rights

are also numerous. Art. 275 (k) of the Guatemalan penal code sanctions the

manufacture, production, sale, offering for sale, circulating, storing, or the unlawful

possession of products covered by a patent whereas art. 275 (l) penalizes use of a

protected process or any of the above acts on products directly obtained by that

process.

The considerations on penal sanctions elaborated for Chile and Colombia find full

application here. Imprisonment prevents farmers from working on their lands,

developing their traditional knowledge, and generating income for their families. Penal

sanctions may penalize entire families as farming is usually a family activity among

smallholders and indigenous peoples. Considering that penal responsibility is always

personal, whoever participates in infringing acts will be punished. At this point, it is

questionable whether the aim of penal sanctions is that of deterring unlawful behaviors

or smallholders’ farming. It should be reminded that penal sanctions on farming

activities are not required by US FTAs, but imposed by single countries. It is interesting

50 To be noted, that civil sanctions are additionally applied. See also art. 49 of decree 19/2014.

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to note that ‘Ley Monsanto’ in Chile did not provide for penal sanctions on the contrary

of the current PVP law. Yet social concerns and legal petitions were focused on ‘Ley

Monsanto’. This indicates that society is often uninformed on laws and their socio-

impact. This, however, does not diminish the controversial effects of the repealed

‘Leyes Monsanto’. The controversy stems from a clash between two major interests in

plant breeding: those of commercial plant breeders and those of smallholder farmers.

An adequate solution requires national laws to understand and pay due attention to this

conflict of interests. The actors involved in plant breeding, their goals and type of

innovation will be clarified in the following section.

3. Stakeholders’ in plant breeding

3.1 Commercial breeders vs. subsistence farmers

Breeding activities can be undertaken by public research institutions, biotechnological

companies, companies dedicated to plant breeding and farmers. These different actors

in the plant breeding market may be located in different parts of the innovation chain.51

While fundamental research is usually carried out by public research institutions,52

applied research, seed production and planting, and marketing and sale is typical of

plant breeding firms. Plant breeding firms may differ as per their breeding interests as

well as their financial and technological resources. Accordingly, the type of plant

breeding activities and their position in the innovation chain varies. Multinational

biotechnological companies may perform all the necessary steps for developing and

marketing seeds; medium-sized firms may be involved only in variety development and

production, and others in marketing and sales. Seeds can also be developed, produced,

marketed and sold by farmers. Within the group of farmers it is also important to

distinguish between commercial and non-commercial/subsistence farmers.

51 The innovation chain in plant breeding involves the following steps: fundamental research; applied research; variety development; production of seeds and planting: marketing & sale. See section 2.1.3 of 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 2009–14) 52 The main institution for agricultural research in Chile is the Institution of Agricultural Research (Instituto de Investigaciones Agropecuarias), available at http://www.inia.cl/. Accessed 8 July 2015.

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Besides technological capacities, what distinguishes activities of subsistence farmers

from other farmers is the generation of profit. Whereas breeders aim at selling their

products for increasing their revenues, farmers are driven by the necessity to ensure

subsistence for their families. Most indigenous people53 are subsistence farmers.54

Thus, in general terms, we can distinguish between commercial breeders and

subsistence farmers. A first distinction regards the geographical market (and market

power). While subsistence farmers sell their products on local markets, plant breeding

firms have the financial and technological capacity to commercialize their varieties in

national or international markets. A further difference is noticed on the type of

innovation: commercial breeders produce improved varieties through biotechnological

methods while farmers limit their endeavors to simple processes of crossing, selection

and seed conservation.

3.2 Their different innovation models

Besides technical and financial disparities, this comparison between commercial and

non-commercial breeders denotes that their innovation models stand apart. The leading

work of Schumpeter on innovation suggests that companies innovate in order to grow.

Innovation is a cycle that involves ‘creative destruction’55 and involves decision-making

53 Indigenous Peoples are not defined in The UN Declaration on the Rights of Indigenous Peoples. See Resolution adopted by the General Assembly A/RES/61/295. For more on this issue see Peter-Tobias Stoll and Anja von Hahn, ‘Indigenous Peoples, Indigenous Knowledge and Indigenous Resources in International Law in Silke von Lewinski (ed), Indigenous Heritage and Intellectual Property: Genetic Resources, Traditional Knolwedge and Folklore (Kluwer Law International, Alphen aan den Rijn, 2008) pp. 7-52. See, in particular, pp. 10-14. For the indigenous peoples of Chile see Estanislao Gacitúa-Marió, ‘Indigenous People in Chile, Current Situation and Policy Issues’ in The World Bank, Chile’s High Growth Economy, Poverty and Income Distribution, 1987-1998, pp. 214, 215-217. For further explanations see http://www.educarchile.cl/ech/pro/app/detalle?ID=185562. Accessed 7 July 2015. The communities involved in the petition in front of the Constitutional Tribunal of Chile were those of the Mapuches, Aymara, Rapa Nui, Atacameños. 54 Gacitúa-Marió, supra note pp. 214-240. For the historical origin of campesinos’ poverty see Jose Bengoa, Haciendas y Campesinos, Historia Social de la Agricultura Chilena, Tomo II (Ediciones Sur, Santiago de Chile, 1999). 55 This is a concept first coined by Schumpeter in order to indicate the innovation mechanism by which new production units replace outdated ones. Joseph Schumpeter, Capitalism, Socialism and Democracy (Routledge: London, 2010).

15

between different stakeholders.56 This Western understanding of innovation does not fit

well with the concept of indigenous innovation. Contrary to the concept of modern

innovation which replaces old products with new ones, indigenous innovation relies on

peoples’ duty to custody and use wisely ancient knowledge and existing products in

order to adapt to change.57 Knowledge preservation is inherent in their culture where

connection to the ancestral world remains strong.58 This affiliation to the past does not

make them less innovative. Indigenous people have since time immemorial found,

developed, and preserved a wide range of medicinal and food plants as well as related

products.59 Their innovations serve as input in many biotechnological industries such as

the cosmetic, pharmaceutical, and textile sector60 and provide important inputs and

know-how in biodiversity conservation.61

This suggests the high actual and potential value of traditional knowledge (TK).62 The

actual value can be immediately captured when its use in the biotechnological industry

56 Bernd X Weis, From Idea to Innovation. A Handbook for Inventors, Decision Makers and Organizations (Springer: Berlin, 2015). 57 For the characteristics of indigenous innovation see Peter Drahos, Intellectual Property, Indigenous People, and Their Knowledge (Cambridge University Press, Cambridge, 2014) pp. 27-32. 58 For a better understanding see Drahos (n 57) pp. 7 – 19. Prof. Drahos’ research is specifically focused on Australian aboriginals, but general considerations on traditional communities remain valid for all indigenous peoples. 59 For examples of indigenous innovation see Drahos, supra note, pp. 28-48. See also Peter Drahos and Susy Frankel: ‘Indigenous Peoples’ Innovation and Intellectual Property’ pp. 1-28 and David J. Claudie, Susan J. Semple, Nicholas M. Smith and Bradley S. Simpson ‘Ancient But New: Developing Locally Driven Enterprises Based on Traditional Medicines in Kuuku l’yu Northern Kaanju Homelands, Cape York, Queensland, Australia’ pp. 29- 55 in Peter Drahos and Susy Frankel (eds.), Indigenous Peoples’ Innovation, Intellectual Property Pathways to Development (Australian National University E Press, Canberra 2012). 60 For an explanation and examples see Drahos (n 85) pp. 131-132; Sarah Laird and Rachel Wynberg, Access and Benefit-Sharing in Practice: Trends in Partnerships Across Sectors, CBD Technical Series No. 38, pp. 26-27. Available at https://www.cbd.int/doc/publications/cbd-ts-38-en.pdf. Accessed 9 July 2015. 61 Prof. Drahos argues that the distinctive feature of indigenous peoples’ innovation lies in their capacity to innovate at the level of ecological services. See Peter Drahos, ‘When Cosmology Meets Property: Indigenous People’s Innovation and Intellectual Property’ (2011) 29 Prometheus. See also Donna Craig, ‘Biological Resources, Intellectual Property Rights and International Human Rights: Impacts on Indigenous and Local Communities’ in Burton Ong (ed), Intellectual Property and Biological Resources (Marshall Cavendish Academic: Singapore, 2nd ed. 2005), p. 352, 353. 62 For the economic value of traditional knowledge see Graham Dutfield. ‘Legal and Economic Aspects of Traditional Knowledge’ in Keith E. Maskus and Jerome H. Reichman (eds.) International Public Goods and Transfer of Technology Under a Globalized Intellectual Property Regime (Cambridge University Press: Cambridge, 2005) p. 495, 504-505. It is also worth noting Prof. Drahos’ suggestion on using the

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leads to products that serve our needs such as foodstuffs, pharmaceuticals, cosmetics,

and textiles whereas its potential value lies in the future and unknown uses of traditional

knowledge. The value of traditional innovations can be monetized when such

innovations or the derived products are commercialized. Biotechnological companies,

indeed, reap large financial gains from the products and processes based on TK.

Indigenous people, instead, struggle to secure their livelihoods. The campesinos of

Chile, for example, lament that the profit they obtain from selling their products in local

markets does not pay for their hard work and sacrifice.63 Lack of financial resources and

technical capacities to develop commercial products is undoubtedly one reason.

Another important reason lies in the indigenous culture and its perception of ownership.

Indigenous people are not necessarily interested in profitmaking, but in living in

harmony with the laws of nature. Prof. Drahos explains that laws on ‘ownership of

ancestral plants represent an illegitimate interference in a cosmological system in which

indigenous people owe duties of care to their ancestors and to the living while making

decisions about future plant uses.’64 This understanding of ownership contrasts with the

Western view on property rights which considers individual rights as a prerequisite for

development in a free market economy.65 ‘Individual rights’ in the indigenous world

‘consist of freedom to exercise responsibilities towards others (…) without

interference’.66 When this concept of ownership is transferred in the context of plants,

group rights prevail over individual rights. Decisions on plant breeding are to be taken

by the whole community in respect of knowledge and duties transmitted by their

terms ‘traditional innovation’ instead of ‘traditional knowledge’. The first term better recognizes indigenous contribution. 63 They usually have to walk long distances to cities in order to sell their produce and dedicate sophisticated manual labor and skills. See better El Rincón del Vago, Recolección y Extración, en la Cultura Campesina. “Una Actividad Que Va Desapareciendo”. Available at http://html.rincondelvago.com/cultura-campesina-de-chile.html, accessed 8 July 2015. 64 Peter Drahos, Intellectual Property, Indigenous People, and Their Knowledge (Cambridge University Press, Cambridge, 2014) p. 20. 65 This is the main argument of classical economists. For an understanding see Gerald P. O’Driscoll Jr. and Lee Hoskins, Property Rights, Key to Economic Development, Cato Policy Analysis n. 482. Available at http://www.cato.org/pubs/pas/pa-482es.html, accessed 15 July 2015. 66 Dutfield (n 80) p. 503 citing Russel L. Barsh, ‘Indigenous Peoples and the Idea of Individual Human Rights’ (1995) 10 (2) Native Studies Review, pp. 35, 44-45.

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ancestors.67 It is apparent, thus, that intellectual property rights cannot fit the indigenous

innovation model.68 In terms of the matter at hand, this means that plant varieties bred

and preserved by indigenous communities, cannot be object of plant breeder’s rights.

This argument can be further justified by four main elements intrinsic to indigenous

innovation: 1. secrecy; 2 ancestral status (accountability to fulfill the duties handed by

previous generations); 3. role of place in the identity and function of a plant; 4. lack of

technical methods and knowledge about them as well as scientific and business

strategy expertise.69 UPOV takes account of these peculiarities of indigenous innovation

since it does not grant rights on indigenous plants.70 But concerns of indigenous

communities on UPOV still remain. The rights provided for by UPOV impede these

communities to continue their traditional plant breeding practices. This occurs when

PBRs do not allow farmers to save and exchange seed. The restriction of the possibility

to save seed may also have implications for commercial plant breeders. The reason lies

in the interdependency of plant breeding innovations. Commercial breeders need supply

of broad genetic germplasm in order to develop better varieties.71 Gene banks play a

role in providing genetic material, but often they do not substitute the benefits deriving

from in situ conservation.72

67 This does not exclude situations in which plants can be modified. If this occurs, the consent from indigenous people who have authority on the plant is a conditio sine qua non. See the example of indigenous groups in Hawaii contesting the authority of the University of Hawaii to patent genetically modified varieties of the taro plant. Peter Drahos, Intellectual Property, Indigenous People, and Their Knowledge (Cambridge University Press, Cambridge, 2014) p. 21. 68 For understanding this argument see Peter Drahos,’ Indigenous Developmental Networks and the Non-Developmental State: Making Intellectual Property Work for Indigenous People Without Patents’ in Ruth L. Okediji and Margo A. Bagley, Patent Law in Global Perspective (Oxford University Press, New York, 2014) pp. 287, 314-316. Collective intellectual property rights have been proposed, but they do not seem to have wide practical application. For an understanding of the proposal see Thomas Cottier and Marion Panizzon, ‘Legal Perspectives on Traditional Knowledge: the Case for Intellectual Property Protection’ (2004) 7 (2) Journal of International Economic Law pp. 371-399. 69 For more explanations see Drahos n (64) pp. 178-182. 70 UPOV promotes commercial crops. For more see UPOV report on the impact of plant variety protection. (Geneva: UPOV, 2005). 71 Viola Prifti, The Breeder’s Exception to Patent Rights. Analysis of Compliance with Article 30 of the TRIPS Agreement (Springer International: Cham, 2015) p. 14. 72 For more information see William J. Possiel, Richard E. Saunier, and Richard A. Meganck, ‘In-Situ Conservation of Biodiversity’ in Richard E. Saunier and Richard A. Meganck (eds) Conservation of Biodiversity and the New Regional Planning (Organization of American States and the IUCN--The World Conservation Union, 1995).

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Moreover, indigenous people are reservoirs of knowledge and undoubtedly contribute to

biotechnological innovations. This suggests a general interest in allowing traditional

communities to continue their plant breeding practices. The above analysis makes also

clear that penal sanctions in the context of plant breeding can be disproportionate. They

can put an unjustifiable burden on farmers who have traditionally engaged in seed

saving practices. Farming practices are indeed embedded in the traditions and culture

of a country.73 It is not easy for farmers to immediately change their behavior.

Traditional agricultural practices are handed down from generation to generation and

have become institutionalized in the society.74 A change in their behavioral patterns is

possible but it requires time.75 Moreover, farmers are often uninformed on legal changes

and thereby, unaware of IP rights on seeds or prohibitions of practices that they

consider ‘normal’. Hence it is necessary to find a solution that aligns commercial plant

breeder’s rights with the freedom of farmers to cultivate plant varieties.

4. Bridging stakeholders’ interests

A common solution requires parties to suffer ‘losses’ in order to obtain ‘gains’. In terms

of the matter at hand, losses are represented by the restriction of rights, whereas gains

consist in advancing one’s interests. Farmers loose when they are unable to use,

replant and exchange seeds as this limits their traditional farming methods. Hence their

interest to preserve the freedom to use seeds. Commercial breeders loose when their

rights are restricted since their profit might diminish.76 Thus their interest in broad rights.

A mutual answer to the controversy on farmers’ privilege, however, requires limits to

plant breeder’s rights. Some limits are already contained in art. 15 of UPOV 1991.

73 Niels Louwaars, Seeds of confusion: The impact of policies on seed systems. Ph.D. dissertation. (University of Wageningen, the Netherlands 2007). 74 For an understanding of this phenomenon in a general context see Peter Berger. and Thomas Luckmann, The Social Construction of Reality. A Treatise in the Sociology of Knowledge (Penguin Books, London, 1991) pp. 70-89. 75 For an explanation of social change see Wilbert E. Moore, Social Change, Foundations of Modern Sociology (Prentice Hall, Englewoods Cliffs, N.J., 2nd ed., 1974). The change for farmers can be caused both by technological (GM seeds) and economic (change of breeding processes) factors. 76 This can be further justified by neoclassical economic theory, which views exclusive rights as necessary incentives for innovation. For an understanding and a critical review of the theory see Prifti (n 71) pp. 66-74.

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Breeder’s rights do not extend to private and non-commercial use, experimental and

breeding activities, and to some farming practices. The question is whether the

contested farming practices fall under these exemptions to breeder’s rights.

4.1 The private and non-commercial use exemption77

An understanding of the private and non-commercial use exemption requires a

clarification of the terms ‘private’ and ‘non-commercial’. Among the several meanings

conferred to ‘private’, two are most relevant for the matter at hand: ‘Belonging to or for

the use of one particular person or group of people only’ and ‘Relating to or denoting a

transaction between individuals and not involving commercial organizations’.78

Traditional practices of saving, replanting, and exchanging seeds among farmers are

certainly ‘private’ acts as they are typical of a group of farmers and do not entail

commercial organizations. They are also ‘non-commercial’ since they are ‘not intended

to make a profit’.79 Obviously, farmers that engage in large scale production or sell their

products to obtain financial gain cannot be exempted from infringement acts. UPOV

FAQ confirm this reasoning by explaining that subsistence farming acts done

‘exclusively for the production of a food crop to be consumed by that farmer and the

dependents of the farmer’ are deemed to fall within the private and non-commercial

acts.80 The FAQ further allow subsistence farmers to exchange their seeds against

other vital goods within the local community, where the legitimate interests of the

breeders are not significantly affected. This clarification seems to consider seed

exchange with vital goods as a private act with non-commercial purposes. Seed sale,

however, seems to be not exempted.

77 See also the considerations elaborated by de Jonge and Munyi (n 89) pp. 13- 15 on African countries. 78 See the Oxford dictionary, available at http://www.oxforddictionaries.com/definition/english/private. Last accessed 25 August 2015. 79 For the definition of ‘non-commercial’ see the Oxford dictionary, available at http://www.oxforddictionaries.com/definition/english/non-commercial. Last accessed 25 August 2015. 80 http://www.upov.int/about/en/faq.html#Q13. Accessed 25 August 2015. Also note that the European Seed Association considers practices such as saving, exchanging and selling seed among subsistence farmers to be admissible under the private and non-commercial use exemption. See ESA Position on Plant IP Protection and Biodiversity, available at https://www.euroseeds.eu/system/files/publications/files/esa_11.0049.pdf. Accessed 25 August 2015.

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4.2 The experimental and breeding exemption

Traditional farming practices are also exempted under the experimental and breeding

exemption. Traditional farming practices may involve experiments, but their aim is that

of preserving and creating new varieties of plants for consumption and subsistence. The

experimental use exemption may, therefore, not be particularly useful for subsistence

farmers. The breeding exemption81 may, on the other hand, reveal advantageous when

farmers breed varieties and subsequently put them into the market. The exemption,

however, does not apply when a farmer’s variety is an essentially derived variety. In this

case, subsistence farmers must ask for a commercial license. Since the determination

of an essentially derived variety requires technical knowledge and tools, 82 this means

that it is difficult for subsistence farmers to recognize an essentially derived variety.

4.3 The farmers’ privilege

UPOV 1991 gives countries the option to adopt a narrow farmers’ privilege. Its art. 15(2)

limits the privilege to the use of varieties obtained by the farmers’ harvest on his own

holding and subjects it to two conditions: reasonable limits and legitimate interests of

the breeder. The curtailment that this provision imposes on the scope of breeder’s rights

will depend on the interpretation of its terms. UPOV explanatory notes can provide

some guidance in this respect.83 For the purpose of the issue at hand, the note on

exceptions to breeder’s rights clarifies that the farmers’ privilege aims at preserving

existing practices of saving harvested material for further propagation in the concerned

81 This exemption allows third parties to use the protected variety for breeding and subsequently commercialize the resulting variety provided that it is not an essentially derived variety (EDV). See art. 14 (5) of UPOV 1991 for an explanation of EDV. 82 For a thorough understanding see UPOV Seminar on Essentially Derived Varieties, October 22, 2013 (Geneva, Switzerland), available at http://www.upov.int/edocs/pubdocs/en/upov_pub_358.pdf. Accessed 19 June 2015. 83 Although explanatory notes are not legally binding both in domestic and international law, they are deemed to be an important aid in clarifying the meaning and purpose of legal provisions. For the influence of UPOV explanatory notes on domestic legislation see Federal Ministry for Economic Cooperation and Development, The UPOV Convention, Farmers’ Rights and Human Rights. An Integrated Assessment of Potentially Conflicting Legal Frameworks (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GMbH, Feldafing 2015), pp. 49-50.

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UPOV members.84 This means that if farmers in Chile, Colombia or Guatemala have

traditionally saved seed for a particular crop, they should be allowed to continue this

practice. The exemption allows only seed saving obtained by farmer’s own harvest for

replanting it on its own holding. Seed exchange is thus forbidden. UPOV notes further

explain that it may be inappropriate to introduce the privilege for varieties, ‘such as fruit,

ornamentals and vegetables, where it has not been a common practice for the

harvested material to be used as propagating material’.85

As concerns the understanding of ‘reasonable limits’ and ‘safeguarding the legitimate

interests of the breeder’, the notes propose to consider a combination of several factors:

type of variety to be exempted; the size of the holding, crop area, or crop value;

proportion or amount of harvested crop; remuneration; and changing situations.86

Attention should be drawn to ‘changing situations’ since it requires further interpretation.

The explanatory note recognizes that new varieties as well as evolution of farming

practices, breeding, propagation methodologies, and economic developments ‘could

lead to changes in the level of harvested material used for further propagation’.87 The

notes then suggest that a UPOV member could ‘limit the level of farm-saved seed to

those levels which had been common practice before the introduction of plant variety

protection.’ It is worth noticing that the rationale of such limit is not explained. It may be

hypothesized that new breeding techniques may increase crop yield and seed-saving

should be limited in order to allow the breeder to capture part of the profit. It appears,

though, that the purpose of the explanatory notes is that of conserving traditional

practices.

Following this reasoning, it could be argued that not only seed-saving but also seed

exchange should be permitted under the farmers’ privilege. Seed exchange is indeed an

ancient practice that precedes PVP. In this respect, it should be kept in mind that art.

15. (2) constrains its application only to use of seed on farmer’s own holding. This

84 See better Explanatory Notes on Exceptions to the Breeder’s Rights Under the 1991 Act of the UPOV Convention, UPOV/EXN/EXC/1, UPOV, Geneva, 22 October 2009. 85 Page 9. 86 Ibidem, pp. 9-10. 87 Page 10.

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implies that use of seed from another holding is disallowed. Some may also take the

view that the terms ‘changing situations’ do not cover farming traditions but simply refer

to the necessity to encourage plant variety creation despite variation in plant breeding

conditions. In this case, a counterargument could be that of broadening the amount of

farm-saved seed if particular events call for enhancing in-situ conservation or ensuring

food security. Nevertheless, this interpretation does not permit to include seed

exchange under the farmers’ privilege.

It appears thus that the private and non-commercial use exemption is more beneficial

for subsistence farmers despite its prohibition on seed sale. Seed sale denotes a

commercial activity, which can detract from breeder’s profit. In this context, however,

‘seed sale’ cannot be categorized as ‘commercial’ as long as the obtained profit is used

to satisfy basic human needs. Therefore, it is appropriate to broaden the understanding

of ‘private and non-commercial acts’ in order to include seed sale in addition to seed

exchange.

4.4 Reasons for weakening breeder’s rights

A benefit-cost analysis may help us better understand why breeder’s rights should be

weakened in order to accommodate farmers’ interests.88 Studies suggest that

exemptions are desirable when legal remedies for infringing actions bring more costs

than benefits and when high transaction costs impede bargaining. These reasons find

application in the context of a farmers’ exemption to breeder’s rights. If small farmers

and indigenous peoples use, save, and exchange protected seed, they detract profit

from the breeder. Since that they do not engage in commercial activities, the profit may

be insignificant compared to the costs of initiating an infringement action. This may

especially be the case when infringement has to be established with regard to

essentially derived varieties (EDVs). Establishing an EDV requires considerable

resources and will certainly overcome the ‘losses’ suffered from breeders. The price of

88 The importance of a cost-benefit analysis has previously been argued with respect to exceptions to patent rights with breeding purposes. See Prifti (n 71), pp. 82-83

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obtaining a license for farming purposes may also be prohibitive for these communities.

It is realistic to assume that licenses are a forbidden option not only because of fees but

also because of high transaction costs in identifying the relevant rights, negotiating

rights and enforcing rights. Farmers and indigenous communities have neither the

knowledge nor the instruments to search for legal rights on plant varieties. Very often

they lack the necessary expertise in negotiating commercial licenses with breeders.

Moreover, breeders may not have an interest in farmers’ and indigenous activities and

therefore, abstain from negotiating. Another element to consider in terms of the matter

at hand is the contribution of farmers’ and indigenous work in maintaining biodiversity

and sustainability for future generations. Limiting their traditional practices today may

create some financial benefits for the breeding industry, but it will come with the future

cost of losing on-farm seed conservation and supporting ecological biodiversity.89

Lastly, it is worth noting that the farmers’ privilege is an optional exception, while the

private and non-commercial exception is compulsory. Since UPOV itself admits that

subsistence farmers fall into this mandatory exception, it can be asserted that UPOV

exempts subsistence farmers from infringing acts to breeder’s rights and at the same

time permits them to decide on the farmers’ privilege if necessary to preserve and

encourage traditional farming practices for food crops. Given the diverse national

interests, the implementation of these exemptions may vary in different countries.90

Recently, proposals have been made to differentiate between different types of farmers

in order to take account of their incentives for innovation in separated legal

frameworks.91 It appears reasonable to implement these suggestions in order to take

account of the different innovation models characterizing indigenous peoples and

89 For a better understanding of this issue see the studies cited in Bram de Jonge and Peter Munyi, ‘A Differentiated Approach to Plant Variety Protection in Africa’, p. 12, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2619763, accessed 26 August 2015. See also GIZ (n 81) p. 27 arguing that farmers’ varieties perform better under marginal conditions and Carlos Correa, Options for the Implementation of Farmers’ Rights at the National Level (South Centre, Trade-Related Agenda Development and Equity Working Papers 8, 2000), pp. 10-11. 90 For recommendations in this regard see Dwijen Rangnekar, Access to Genetic Resources, Gene-Based Inventions and Agriculture, Commission on Intellectual Property Rights, Study Paper 3a, London, 2001, p. 32, Box 4. 91 De Jonge and Munyi (n 88).

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farmers. Similarly, it can be argued that penal on smallholders are inappropriate for the

reasons explained above. But penal sanctions can have a role as regards commercial

breeders that engage in anticompetitive behaviors. This would contribute to a healthier

plant breeding market, and thus bring gains to commercial breeders.

5. Linking UPOV 1991 with relevant international agreements

Acknowledging and respecting traditional farming practices in plant breeder’s rights is

further justified by the need to bring UPOV in line with other international agreements

relevant for subsistence farming and indigenous peoples.92 These agreements, the

International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA),93

the Convention on Biological Diversity (CBD),94 UN Declaration on the Rights of

Indigenous Peoples (UNDRIP),95 ILO Convention 169 on the Indigenous and Tribal

Peoples,96 Convention for the Safeguarding of Intangible Cultural Heritage97 have all

been recognized by Chile, Colombia, and Guatemala. An effective and coherent

implementation of UPOV 1991 thus requires countries to take account of their

provisions. The ITPGRFA puts emphasis on the preservation and development of

farming practices such as saving, resowing and exchanging seeds98 while the CBD

acknowledges the importance of local communities in promoting sustainable uses of

biological diversity.99 Its art. 8 (j) is most relevant:

92 For more see Federal Ministry for Economic Cooperation and Development, The UPOV Convention, Farmers’ Rights and Human Rights. An Integrated Assessment of Potentially Conflicting Legal Frameworks (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GMbH, Feldafing 2015) and South Centre, Towards a More Coherent International Legal System on Farmers’ Rights: The Relationship of the FAO ITPGRFA, UPOV and WIPO, Policy Brief no. 17, March 2015. 93 The treaty has been signed by Chile and Colombia but is in force only in Guatemala. See http://www.wipo.int/wipolex/en/other_treaties/parties.jsp?treaty_id=255&group_id=22. Accessed 8 November 2015. 94 All three countries are parties to the CBD: https://www.cbd.int/information/parties.shtml. Accessed 8 November 2015. 95 To be noted that Colombia abstained in the approval process. See UN resolution A/RES/61/295. 96 The Convention has been ratified by Chile, Colombia, and Guatemala. For more see http://www.ilo.org/dyn/ normlex/en/f?p=1000:11300:0::NO:11300:P11300_INSTRUMENT_ID:312314. Accessed 8 November 2016. 97 All three countries have ratified the Convention. See http://www.unesco.org/culture/ich /index.php?lg=en&pg=00024. Accessed 8 November 2015. 98 See in particular art. 9 of the ITPGRFA. 99 Art. 8 (j) of the CBD. See also art. 5 and 6 of the ITPGRFA.

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Subject to its national legislation, respect, preserve and maintain knowledge,

innovations and practices of indigenous and local communities embodying

traditional lifestyles relevant for the conservation and sustainable use of

biological diversity and promote their wider application with the approval and

involvement of the holders of such knowledge, innovations and practices and

encourage the equitable sharing of the benefits arising from the utilization of

such knowledge, innovations and practices; (emphasis added)

This article subjects its implementation to national legislation and at the same time

recognizes the role of traditional practices in biodiversity conservation. This means that

national laws prevail when applying the CBD, but they cannot disregard the respect,

preservation, and maintenance of indigenous knowledge, innovation, and practices. For

example, the provisions of Decision 391 establishing a Common Regime on Access to

Genetic Resources100 are applied in Colombia, but they should respect indigenous

practices. At this point, one may ask: what is the link with UPOV 1991? UPOV 1991

does not regulate access to genetic resources or indigenous knowledge. The link is

indirect. If PVP laws impair traditional farming practices, CBD provisions will not be fully

implemented. Hence the necessity to pay due consideration to farming practices when

providing for farmers’ rights. This will also further the objectives and the application of

other international agreements.

As noted above, the right of indigenous peoples to preserve their traditional practices

has been recognized in the UN Declaration on the Rights of Indigenous Peoples.101 Its

art. 31 is most relevant since it explicitly acknowledges that genetic resources and

seeds are object of protection under the right of indigenous peoples to maintain, control,

protect and develop their cultural heritage, traditional knowledge and traditional cultural

100 The text is available at http://www.sice.oas.org/trade/junac/decisiones/dec391e.asp. Accessed 8 November 2015. 101 Adopted on 13 September 2007 by the UN General Assembly. The text is available at http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf. Last accessed 12 August 2015.

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expressions.102 Importantly, its last paragraph requires the State to take effective

measures to ‘recognize and protect the exercise of these rights’. Since development of

cultural heritage, traditional knowledge and traditional cultural expressions for seeds

and genetic resources requires continuation of ancient practices such as saving,

resowing and exchanging seed, it seems appropriate to restrict breeder’s rights for the

benefit of indigenous culture.

Another important legal instrument also discussed in the aforementioned decision of the

Constitutional Tribunal of Chile is the ILO Convention 169 on the Indigenous and Tribal

Peoples.103 Important provisions for the matter at hand are those found in art. 5 and art.

7. Art. 5 recognizes and protects the social, cultural, religious, spiritual values, and

practices. Considering that plants form part of all of these values and indigenous

practices include saving, resowing, and exchanging seed, it appears reasonable for

legislators to take these characteristics into account despite the fact that plant breeder’s

rights do not apply directly to indigenous peoples. Another reason can be found in art. 7

of the ILO Convention which establishes the rights of indigenous peoples to ‘decide

their own priorities for the process of development as it affects their lives, beliefs,

institutions and spiritual well-being’. The practice of saving, replanting, and exchanging

seed has been at the center of their life since time immemorial. It has been vital for the

preservation and evolution of both their culture and genetic resources. Given the

importance of indigenous heritage and genetic patrimony, provisions that affect their

development shall take account of indigenous communities. Another binding instrument

for the protection of indigenous culture is the Convention for the Safeguarding of

Intangible Cultural Heritage.104 Indigenous knowledge and practices on seed saving can

be included in the definition of ‘cultural heritage’ when they are manifested as ‘social

102 Other relevant articles are art. 24 on the right to traditional medicines (given that many plants play a role in traditional healing) and art. 11 on the right to practice and revitalize their cultural traditions and customs (seed-saving and exchange are and indigenous custom). Art. 18 on the right to participate in decision-making is also important but irrelevant for discussing weaker rights for plant breeders. 103 Convention concerning Indigenous and Tribal Peoples in Independent Countries. Geneva, 76th ILC session (27 Jun 1989). The Convention entered into force in Chile in September 2009. See page 87 of the Constitutional Tribunal decision. 104 TRT/UNESCO10/001 available at http://www.wipo.int/wipolex/en/details.jsp?id=12715. Last accessed 12 August 2015.

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practices’ and/or as ‘knowledge and practices concerning nature’.105 In order to create

consistency in the legal order, national legislators should take all of the above

international instruments into account when drafting laws that affect indigenous peoples.

This would benefit society.

Another point to consider for the purpose of coherent implementation is the requirement

of US FTAS to provide for patent rights on biological material and plants. Under US

FTAs Chile, Colombia, and Guatemala are obliged to make ‘patent protection available

for any invention, whether a product or a process, in all fields of technology’.106

Colombia and Guatemala ‘shall make all reasonable efforts’ to grant patent rights on

plants and allowed to adopt exclusions to patentability for reasons of ordre public,

morality as well as exclude diagnostic, therapeutic and surgical methods for the

treatment of humans or animals or/and essentially biological processes for the

production of plants or animals from patent rights.107 If these countries adopt plant

patents,108 concerns on smallholders’ farming would persist since patent rights extend

to all varieties that contain the inventive element. An appropriate implementation of the

farmers’ privilege, therefore, demands the introduction of the privilege into patent law as

well.

An additional reason for adopting a farmers’ privilege to patent rights is the obligation to

provide for patent protection in all fields of technology. This means that patents shall

protect biological material. When protected biological material is inserted into a variety,

patent rights will cover the variety and seed saving will not be an option for farmers.

These considerations apply also to Chile. Despite an explicit requirement to adopt plant

patents, Chile should provide patent protection in all fields of technology without the

exclusions from patentability conceded to Colombia and Guatemala.109 Thus, similarly

105 See art. 2 of the Convention. For seed social practices see Garrett Graddy-Lovelace ‘Saving Seeds’ in Paul B. Thompson and David. M. Kaplan (eds) Encyclopedia of Food and Agricultural Ethics (Springer Dordrecht, 2014) pp. 1631-1716. 106 Art. 17.9.1 of the US-Chile FTA, Art. 16.9.1 of the US-Colombia FTA, and Art. 15.9.1 of the US-CAFTA. 107 Art. 16.9.2 of the US-Colombia FTA and art. 15.9.2 of the US-CAFTA for Guatemala. 108 To be noted that Guatemala provides for patent rights non on plants, but plant varieties. 109 It is clear that these provisions go beyond TRIPS standards.

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to Colombia and Guatemala, a farmers’ privilege to patent rights appears as a

reasonable suggestion for Chile.

6. Conclusions

The restriction of the freedom to save, replant, and exchange seed in plant variety

protection laws in Chile, Colombia, and Guatemala brings to light a contraposition

between two main stakeholders in plant breeding: commercial breeders and smallholder

farmers. This paper elaborates arguments for accommodating their divergent interests

under the legal framework of UPOV 1991, a mandatory model of plant variety protection

under free trade agreements with the US. A solution to the controversy on the farmers’

privilege thus requires an interpretation of exemptions to breeder’s rights as provided for

in UPOV 1991. Based on UPOV provisions and other international agreements relevant

in plant breeding, the paper justifies a broad farmers’ privilege in order to allow

subsistence farmers and indigenous communities to continue their traditional practices

of saving, replanting, and exchanging seed. In line with this purpose, it is suggested to

adopt a farmers’ privilege to patent rights and abolish penal sanctions for smallholders

and indigenous peoples.