Clarification of 'sale' through a Federal Court case
The registrar decided that, pursuant to section 14 of the PVR Act, the company could not be granted rights because the grapevines had been sold, with the authorisation of the breeder, more than six years before the application. (Although this case involved interpretation of 'sale' under the PVR Act, it is also applicable to the plant breeder's rights (PBR) Act.)
Sun World appealed the decision in the Federal Court. The registra''s decision was affirmed by a single judge and costs were awarded. Sun World again appealed the decision. The full bench of the Federal Court heard the appeal on 20 March 1998.
Definition of 'sale'
The definition of 'sale' was the turning point for the registrar's decision. The registrar argued that goods (vines) had been exchanged for money and that such an exchange is a sale.
Sun World argued that:
- where the vines of the variety are exchanged as an element in a larger transaction (e.g. when the transaction also includes fruit marketing rights), there is no sale
- as restrictions have been placed on the sale of fruit and further distribution of vines, the general property of the vines has not been transferred
- the price paid for the vines was not the real 'commercial value', therefore no sale had occurred
- while documents are entitled 'Sales of Plants'; and the language is that of sale and purchase, the substance of the documents extends to other than the transfer of vines and therefore cannot be considered as conclusive evidence of sale.
The appeal was rejected again on the grounds that 'sale' had occurred more than six years prior to the application being lodged.
The definition of 'sale' was taken to include 'letting on hire or exchanging by way of barter'. The Federal Court rejected the notion that for the purposes of the Act 'sale' could only be in terms of the exchange of goods for money.
The court also found that the 'sale' of Sugraone vines was not invalidated by the fact that the sale agreements placed additional restrictions on the way the vines could be used.
Revision to the definition of 'sale' - excluding activities
On 19 December 2002 the PBR Act was amended to exclude certain activities from being considered as sales. The amendments were introduced inter alia to address the practice of testing varieties in farmers' paddocks before application lodgement.
Often farmers exchange the use of their land for the residue of the harvest once the experiment is completed and these (and other similar) practices may previously have qualified as 'sales'.
This led to the possibility that eligibility of varieties for PBR was endangered, even though such 'sales' are related to multiplication, research and so on. The PBR Act now provides that in certain circumstances the disposal of materials derived from multiplication, testing and research activities is not considered as a sale and therefore does not limit a variety's eligibility for PBR.
In addition, the exclusion is extended beyond propagating and harvested material to also include products obtained from harvested material.
Last Updated: 13/12/2012
